December 10, 2024 - 6:45pm
Carrying his young son on his shoulders, Department of Government Efficiency (DOGE) co-chair Elon Musk toured Capitol Hill late last week in a kind of bureaucratic triumph. The tech mogul met with enthusiastic delegations from the House and the Senate. Yet DOGE risks falling into the austerity trap that has ensnared Republicans before — and which could foil Donald Trump’s pivot to a more populist GOP.
DOGE appears to be, at once, both about cutting the federal budget and slashing red tape. But budget cuts have been a dangerous topic for Republicans. During the Tea Party era, austerity politics was an anchor around Republican necks, and Democrats cunningly transformed the 2012 election into a referendum on the ambitious entitlement-reform proposals of Paul Ryan, the GOP vice-presidential nominee.
While Trump to some extent broke with the Ryan era, he was also burned by austerity politics during his first administration. Democrats claimed that Republican efforts to repeal and replace the Affordable Care Act would lead to cuts in healthcare subsidies and a loss of protections for pre-existing conditions. As a result, Trump’s approval rating tumbled during the failed attempted repeals of the healthcare law in 2017, sinking to almost -20 by August of that year.
Though Republicans can certainly wring some savings out of the federal budget, there are limits to how much they can cut before they start targeting popular programmes. According to the Congressional Budget Office, almost half of the $6.1 trillion 2023 budget went to three programmes: Social Security ($1.3 trillion), Medicare ($839 billion), and interest on the debt ($659 billion). Add in the $800 billion for Defense, and almost 60% of the federal budget is accounted for. Income-support programmes, including Medicaid, constituted about $1 trillion of spending in 2023, but proposing major cuts in these areas could endanger Republican standing with working-class voters.
The federal deficit for 2023 was $1.7 trillion, but all non-Defense discretionary spending only came out to a little over $900 billion. Zeroing out every other part of the federal government — from the FBI to foreign aid to the national parks — would barely cut that deficit in half. Musk famously took a chainsaw to the staffing numbers at Twitter to drive down costs, but personnel are not the big driver of federal spending; instead, it is entitlement programmes, such as Social Security, which are locked on autopilot.
DOGE is so clearly tied to the Trump White House that Democrats would be even more enthusiastic to turn it against Republicans if it becomes identified with unpopular cuts. This suggests that DOGE becomes more of a political liability than an opportunity if it aims for cuts that are too sweeping.
The scope of the federal bureaucracy, though, means that there are plenty of opportunities for tightening and reforms. For instance, the sheer complexity of Washington’s overlapping systems for making provider payments on everything from healthcare to education is an invitation for overpayment. A report from the U.S. Government Accountability Office found that the country loses between $233 and $521 billion a year to fraud. Developing new protocols to streamline federal payments and track them more effectively could shave billions off the overall budget. Advocating for permitting reforms could speed up the construction of factories and energy facilities.
Even seemingly arcane changes, such as making its datasets open-source — as suggested by economist Samuel Hammond — could help make government more transparent. To some extent, economic growth can also pay fiscal dividends. While cuts to income-support programmes could be politically perilous, efforts to boost incomes for working families could lower the need for such programmes.
Americans, including Trump voters, do not want a government that they can drown in a bathtub, but they do want one that is efficient and accountable to them. While tweaking the trajectory of the federal budget might require a political breakthrough among key stakeholders, DOGE’s whiz-kid wonks might be better equipped to identify the technical barriers to efficiency.
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SubscribeI’ve come to realize that no matter who wins American elections, Bernie Sanders’ supporters will claim a mandate to expand the government.
The Department of Government Efficiency is not a department. It’s not a thing. Musk warns the average American (but not the rich) that there will be some pain and hard times while he takes a machete to the government. That will go over like a lead balloon.
Maybe Trump is willing to take the chainsaw to ‘benefit’ programmes being that this will be his last Presidency.
If he could cut the welfare programme that is destroying their economy he would leave a great legacy.
Indeed, but JD Vance will need to distance himself from much of this in 28.
Americans are lazy as well as fat, and most want as much as they can get from our government regardless of the effect on the health of the country.
They ask not what they can do for their country, they ask what the country is going to do for them.
Either he does it now or a future Administration will be obliged to do it when the s*** hits the fan in the next ten years as most of those welfare programmes become effectively bankrupt by the mid 2030s.
The grim truth is nobody really has any idea how to run an advanced urban society without the kind of Kafkaesque, massively inefficient and grift-ridden bureaucracies we’ve all come to know and hate. https://grahamcunningham.substack.com/p/take-me-to-your-experts
In the 1980s Margaret Thatcher and Ronald Reagan set their political stall around reining it in and they really did try – and tried hard……but they failed anyway.
I wonder if they could simply give these various departments a target of, say 5% of all regulations as an amount that needs to be identified as least necessary, and then removed. Each year. Budget/pay cuts for failures.
Doing that every year would be a bonfire of red tape, and shouldn’t on the face of it cost more, since less regulation would require less enforcement. The bureaucracy would have targets, and the people who met them get promoted.
In five years time, you’ve got better bureaucrats, fewer regulations, and shouldn’t have increased your costs (quite the opposite). Most people would get behind that.
‘No sh*t Sherlock, just set them a target and bob’s your uncle, genius’
Regulations need legislators to change the law. That can be done, but it ain’t about asking the administrators to decide with no accountability. You seem to forget that basic.
What’s on your list as can go though and do you see DOGE driving it so Congress concurs?
Or, as Author suggests, techo’s Elon and Vivek use their IT savvy and knowledge to re-design some processes that release headcount? Or too difficult for them as they want headlines not hard graft? Of course Trump pushing them into the DOGE was to neutralise them.
Author touches on the obvious – this was all about Trump giving two ‘competitor’ ego’s a poisoned chalice. Clever, funny and predictable.
Of course there will be efficiencies. All large organisations/bureaucracies will have opportunities. But as Author states the big drivers of expenditure aren’t quite the narrative often painted.
Welfare pressure has increased as society become more unequal. Trump and his Billionaire cronies ain’t going to tackle that. The ‘con’ job was to get the ‘left behinds’ and ‘little guy’ to think otherwise and it worked. Not that the Democrats much better of course.
Welfare pressure increased as America got obese, got addicted to opioids (let’s hope RK Jr can tackle these crises because no-one else is even talking about them), and Biden let in millions of undocumented illegal immigrants.
The Trump team is making the right noises. At least they have changed the status quo by pushing these issue out in the open. Let’s see if they can deliver.
‘May’ hurt?!?!???!?!!!?
Nobody will weep for the bureaucracy class, low paid and high paid. I don’t know how many are employed by Federal Agencies. Some really duplicate state agencies, education is the easiest example.
Interesting article. But the 490 odd agencies, are they such a trifle in the budget?
Anyone who believes Musk is genuinely interested in government austerity is either uninformed or lacking critical thinking skills (apologies). Musk’s primary focus is on one thing: technological monetary systems, which challenge the traditional power of the banking system.
Trump will likely face impeachment (yes by his own party) if he returns to power and provokes the establishment. However, Musk and his tech allies are more interested in stirring up disruption in key areas before such an event occurs. Musk and bank oligarchs are about to face each other soon. Cannot wait January 20th!
Musk’s ultimate goal for Twitter is to transform it into something akin to WeChat before the midterms! at least reach a point of no return…As of October 2024, WeChat was $50.3 billion revenue!