The Department of Government Efficiency Is Inefficient
Last week, Donald Trump announced that self-christened first buddy Elon Musk will head a newly established Department of Government Efficiency (DOGE) alongside Vivek Ramaswamy. The assignment is an obvious reward for Musk's extensive support of the president-elect's campaign, deepening the world's richest man's already considerable influence over the federal government. As notes , Musk's companies were promised $3 billion after inking nearly 100 different contracts with 17 federal agencies last year.
It's safe to assume that these contracts will be exempt from the initiative's mission to "dismantle government bureaucracy, slash excess regulations, cut wasteful expenditures, and restructure federal agencies"—supposedly a long-held goal of conservatives and their private-sector allies. While targeting the jobs of career public servants, Musk aims to staff the initiative with "super high-IQ small-government revolutionaries willing to work 80+ hours per week on unglamorous cost-cutting."
It's similarly reasonable to suspect that Musk is a large holder of the cryptocurrency Dogecoin, which he regularly hypes ; hence the decision to name the initiative DOGE to keep the coin in the news cycle for the next couple of years. Considering the irrational nature of meme coins and Musk's promise of affiliated merchandise, the attention from the appointment alone could easily net a relatively modest wealth increase; the price of Dogecoin is already growing .
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While details of the enterprise are still vague, Musk and Ramaswamy have made a number of pledges that would be disastrous for almost every American. These include Musk's vow to cut $2 trillion in federal spending over an amorphous time frame, and Ramaswamy's call to eliminate allocations to programs with expired authorizations such as veterans' health care, which lapsed in 1998.
One wonders if Musk and Ramaswamy have even a passing familiarity with the federal budget. The only possible way to achieve Musk's cost-cutting goals would be to take a wrecking ball to entitlement programs, particularly Social Security, Medicare, and Medicaid. The budget for federal discretionary spending, which is determined annually in the congressional appropriations process, was $1.6 trillion in fiscal year 2024, or about 26 percent of spending. Even if that figure were zeroed out— abolishing, for instance, the and NASA—Musk would be well short of his goal. A further 13 percent ( around $800 billion ) of the federal budget went toward interest payments on the country's debt, which would be economic suicide to stop paying. Mandatory outlays, in the form of automatic spending for Social Security, Medicare, Medicaid, military pensions, and income security programs like the Earned Income Tax Credit, take up 61 percent ( around $4 trillion ).
Musk presumably does not actually want to delete agencies that give him multibillion-dollar contracts. The only way to make the cuts he's talking about would be to gore Medicare and Social Security. What's most likely to happen is Musk and Ramaswamy will leverage Twitter/X to deceive the public into believing that disastrous cuts to important but trivial federal expenditures are emblematic of widespread government waste.
Musk's Government-Squeezing Predecessors
Trump's administration is not the first to bring private-sector cost-cutting strategies to bear on the federal bureaucracy, despite the ends of the federal government being decidedly different from the profit-seeking pursuit of corporations.
Back in 1982, then-President Ronald Reagan instructed industrialist Peter Grace to recommend ways to eliminate government inefficiency. Grace helmed the president's Private Sector Survey on Cost Control, aka the Grace Commission, which was established by executive order to " identify opportunities for increased efficiency and reduced costs by executive action ." The commission was motivated by the wrongheaded belief that the federal government needed to adopt the private sector's strategies for survival and success. Grace assembled 161 top executives, organizing them into 36 task forces to either examine specific agencies or study overlapping functions such as personnel management and data processing. The task force leaders met with agency heads, and staff were stationed at agency offices.
The commission produced over 2,000 recommendations, which it claimed would have reduced government spending by enough to eliminate federal deficits at the time (around $400 billion in 1983 dollars). However, public management expert Steven Kelman's analysis of the headline recommendations found that most of the projected savings reflected either a misunderstanding of the federal government's processes or gross exaggerations of specific outlays, à la Musk.
Now, there are some ways in which the American government is extremely inefficient—namely through policy complexity and means-testing. While Nordic-style universalist social democracy is simple and therefore cheap to administer, American programs typically have elaborate eligibility rules, requiring an expensive bureaucratic apparatus. Medicaid, food stamps, WIC, EITC, and so forth all spend a lot of money and time making sure applicants are eligible, while many who are eligible fail to fill out the right forms and lose out on benefits. But neither previous efficiency reports nor Musk's DOGE plan show any awareness of this problem.
Musk may also use the new efficiency initiative as a vehicle for vengeance.
Additionally, as consumer protection advocate Ralph Nader contended following the commission's report, task force members regularly waded into sensitive policy efforts where they had potential conflicts of interest despite the mandate to focus on operational measures. This is another dynamic Musk is likely to recreate, considering his deep involvement with numerous federal agencies. So even in situations where cuts are off the table, Musk and his allies would glean information on agencies' internal deliberations as it pertains to regulations, enforcement, and procurement. In practice, insider knowledge like this could privilege Musk's SpaceX over competitors such as Boeing in future dealings with NASA, for example. What's more, if there are insufficient firewalls, he could learn more about the multiple investigations into his companies. An obvious example is the National Highway Traffic Safety Administration's probes of Tesla for various complaints, including Tesla vehicles' unexpected braking and loss of steering control.
Musk may also use the new efficiency initiative as a vehicle for vengeance. Seeing how deeply Musk has ingratiated himself with Trump—and the president-elect's obsession with loyalty—a plausible outcome is regulators putting the kibosh on any investigations or regulations that would trouble Musk's business interests out of fear of retribution. Clearly, the sprawling nature of Musk's contracts with the federal government should preclude him from DOGE's wide-ranging assignment. While there are laws prohibiting outside advisers from engaging in matters affecting their financial interests, enforcement has been inconsistent, so it's a hurdle Musk could scale with relative ease.
Following in Reagan's footsteps, the Clinton-Gore administration's National Performance Review also sought to introduce private-sector techniques to the federal government's operations. The project, which was led by a rotating cast of federal employees, proposed 1,200 changes to improve federal services. More than half of the changes were implemented, generating $136 billion in savings . Some recommendations, such as electronic filing of tax returns, agency performance targets, and utilization of the internet to provide federal information, were impressive reforms. However, an enduring element of the Review was the decision to cut just over 420,000 federal jobs , pushing core governmental functions into the hands of contractors.
This hollowing out of government capacity is an area in which Musk, Ramaswamy, and Trump are likely to find common ground with the Clinton-Gore project. When Trump first entered office, he instituted a 79-day federal government hiring freeze as part of a similar mission to reorganize agencies in a more efficient manner. This freeze exacerbated already-present gaps in the federal bureaucracy and ultimately resulted in workforce cuts in all departments other than Homeland Security, Veterans Affairs, and Defense. At the agency level, only the Small Business Administration and National Science Foundation were spared from the Trump administration's downsizing.
Trump's attack on civil servants also took the form of three executive orders aimed at checking the power of federal employee unions. Taken together, these orders shortened the window for collective bargaining, reduced use of work hours for union activities, and significantly weakened workers' protections during disciplinary proceedings. In addition to this, the Trump administration also created by executive order a new classification for federal workers—Schedule F—which would have stripped workers' protections and allowed Trump to fire them for being insufficiently loyal. The Biden administration reversed this EO and instituted a rule clarifying the application of merit system principles to the federal civil service.
DOGE is a new weapon in Trump's ongoing war against the administrative state. But it's important to remain clear-eyed about the value federal civil servants provide. These individuals help ensure the safety of our food, medicine, transportation, air, and water. They are also the backbone of our education, health care, and financial regulatory systems. There is no doubt that many Americans feel burned by their recent interactions with these systems, but federal employees are the wrong targets of their ire. If we want a government that is readily equipped to challenge the corporate villains who are committed to padding their bottom line regardless of the consequences to ordinary Americans, then protecting civil servants and government services must remain top of the agenda.
