US President-elect Donald Trump aims to significantly reduce federal government spending, going so far as eliminating the Department of Education, ceding its functions and budget to the individual states with federalist purity. To achieve these goals, he will create a new federal agency, named the ‘Department of Government Efficiency’.
A DOGE against spending
Suggested by Elon Musk, the agency’s acronym is DOGE, like the joke cryptocurrency popularised by Musk. DOGE will not be a real department, i.e. a ministry, because these can only be created and dissolved by Congress. Instead, Trump has announced that the new spending review agency will be term-limited and dissolved on 4 July 2026, on the two hundred and fiftieth anniversary of the Declaration of Independence.
The new agency will be headed by Elon Musk - and former Republican presidential candidate Vivek Ramaswamy. While its operating procedure is still unclear, its creation could be facilitated through the Federal Advisory Committee Act, a 1972 law that allows the president to seek input from committees composed of public and private sector participants. Musk and Ramaswamy seem to envision a more independent structure: “We will serve as outside volunteers, not federal officials or employees,” they wrote in the Wall Street Journal. Trump could establish such a committee by executive order, in which case it would become one of the approximately 1,000 federal advisory committees, which cost a total of $399 million last year.
Musk has indicated a target of $2 trillion in cuts out of total federal government spending of $6.5 trillion annually, partly driven by slashing the federal workforce. Many people were enthusiastic about the fierce staff cuts at X (formerly Twitter) made by Musk soon after his arrival. However, drawing parallels to this case would overlook the fact that many Big Tech social platforms are significantly overstaffed, and that public administration operates under entirely different principles.
Putting Musk and Ramaswamy on a federal advisory committee would make them so-called ‘special government employees’. This would subject them to federal ethics laws requiring them to recuse themselves from discussions and decisions impacting them personally. This can complicate the possibility of trusting Musk blindly, given his status as a contractor for the federal government: SpaceX alone has over $15 billion in federal contracts outstanding. Moreover, Musk's companies are regulated by a score of federal agencies: which could stop regulating them - and perhaps even cease to exist - under Musk’s influence.
According to Trump, DOGE will - “provide advice and guidance from outside of Government and will partner with the White House and Office of Management & Budget to drive large-scale structural reform and create an entrepreneurial approach to Government never seen before.” He called the initiative “The Manhattan Project” of our time, referring to the World War II-era program that led to the development of the atomic bomb.
A History with Few Successes
It must be noted that nothing revolutionary has been proposed. Washington has been littered with spending-reduction plans that never got fully implemented. Spending reviews fail almost everywhere, in democracies and beyond. In the past, the 2010 Simpson-Bowles Commission proposed $4 trillion in cuts over about a decade, postponing the retirement age for Social Security, limiting health care costs, and cutting tax breaks. Strangely, nothing was implemented.
Then, a new congressional committee, known as ‘Supercommittee’, attempted the ‘grand bargain’ between President Barack Obama and Congressional Republicans in 2011. Again, nothing came of it. At regular intervals, the psychodrama of the debt ceiling to be adjusted is staged in Washington, with some temporary shutdowns of the federal government, but so far, they have only been very short-lived and never proposed decisive solutions. Trump himself promised in 2016 that he would balance the budget ‘fairly quickly’, but when he left in 2021, the US debt was at a record high.
The challenge lies in the fact that the most significant areas of federal government spending are also the most popular among Americans, including those who advocate cutting other areas to the bone. Social Security, Medicare, Medicaid and veterans' benefits are the so-called ‘entitlements’, the non-discretionary social spending, which together with interest payments now account for 53 per cent of federal spending.
Another popular policy mantra is to cut ‘waste, abuse, and fraud’—as long as it involves voters other than one's own. The Government Accountability Office (GAO) estimates that federal agencies lose between $233 and $521 billion annually to fraud. In recent years, the main culprit has been the Covid-19 spending packages that Trump authorized in 2020; an Associated Press audit in 2023 found that 10 percent of the $4.2 trillion in pandemic aid was improperly spent.
The concept of waste, as mentioned, is the most subjective one. Since 2011, the GAO has sent 14 reports to Congress containing 2,018 recommendations to reduce or eliminate duplicative programmes or reduce costs in the federal government. Congress has adopted about two-thirds of them, saving about USD 667.5 billion.
Federal law requires advisory committee meetings to be open and Musk has promised that all actions of the DOGE will be “posted online for maximum transparency.” He has also hinted that there might be a game-like public input: “We will also have a leaderboard for the most insanely stupid spending of your tax money. It will be both extremely tragic and extremely funny”.
Unpopular cuts
Trump can therefore proceed by executive order, bypassing the Republican-controlled Congress, but Congress has the final say on spending. However, he believes that he has identified an alternative approach, which involves challenging a key provision of a 1974 law that underpins the modern federal budget process. This component, the Impoundment Control Act, mandates that the president is required to spend allocated funds unless Congress explicitly rescinds the appropriation. “Bringing back impoundment will give us a crucial tool with which to obliterate the deep state, drain the swamp, and starve the warmongers,” Trump said last year.
Beyond the institutional budgetary mechanics and the dialectic between the presidency and Congress - central to the checks and balances system that will shape the future of the American oligarchy in the coming decades - there is one critical point: spending revisions are unfavourable, and the federal spending items to be affected are the most popular ones. For someone like Trump, deeply concerned with being liked and popular, accepting proposals to cut pensions and healthcare spending will be a tough call. In such a scenario, Musk's efforts could be shelved, potentially putting the two on a collision course.
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