DOGE Can Succeed by Scaling Back Its Ambitions

With great fanfare and stratospheric ambitions, President-elect Donald Trump has unveiled his new Department of Government Efficiency (DOGE). Trump declared DOGE the “Manhattan Project of our time” that will “dismantle Government Bureaucracy, slash excess regulations, cut wasteful expenditures, and restructure Federal Agencies.” While such exuberant confidence may be exciting, Trump and his appointed DOGE co-directors Elon Musk—who is also already promising DOGE-related merchandise—and Vivek Ramaswamy are inflating expectations well beyond any plausible outcome.

Despite its name, DOGE will not be an actual government department—or even a White House office. Rather, it will function as a private advisory group with no formal investigative or administrative powers within the federal government. All it can do is research government waste and send a report of policy recommendations to the White House and Congress. And while Trump will have the authority to implement modest administrative reforms unilaterally, any major savings or agency reorganizations will require an act of Congress with bipartisan support to overcome a potential Democratic filibuster.

The question is whether DOGE will make a serious effort to dive into the weeds of administrative waste or just become the ideological vanity project of two billionaires possessing little familiarity with the federal budget and even less time to divert from their more important endeavors. Musk, in particular, is already running Tesla, SpaceX, and X and is thus unlikely to spend much time overseeing an analysis of Medicare payment policies.

DOGE’s Discouraging Start

Musk and Ramaswamy’s public pronouncements thus far do not inspire confidence. Musk’s promise to save “at least $2 trillion” annually—approximately one-third of all (noninterest) federal spending—suggests a lack of familiarity with the federal budget. Roughly 75 percent of all federal spending goes to Social Security, Medicare, Medicaid, defense, veterans, and interest, and the final quarter includes priorities such as infrastructure, justice, border security, health research, national parks, unemployment benefits, disaster aid, and disability benefits.

Trump has already taken much of this spending off the table for cuts, and Congress is highly unlikely to gut these functions. Last year, congressional Republicans failed to specify enough reforms to meet their $130 billion in targeted discretionary spending cuts, and Trump’s last GOP Congress failed to pass any spending cuts whatsoever.

Instead, Musk’s America PAC recently shared on X an image of Sen. Rand Paul’s (R–Ky.), “The Waste of 2023″ as its new target. In between minor waste examples costing as little as $8,395 was Musk’s pledge to “fix” the $659 billion spent annually on interest on the debt—a figure that (under current interest rates and bond maturities) can be reduced only by running colossal budget surpluses to pay down the $28.6 trillion federal debt. Not to be outdone, Ramaswamy publicly pledged to target the $516 billion spent annually on programs with expired authorizations—seemingly unaware that this would mean eliminating funding for veterans health care, the Department of Justice, NASA, and all U.S. embassies.

Ramaswamy has also recommended laying off 75 percent of all federal employees, using what is essentially a random lottery to determine which employees are laid off. Yes, the federal government is excessively bloated—the Department of Agriculture bursting with nearly 100,000 full-time equivalent employees is particularly egregious. However, it is also noteworthy that federal civilian employment has remained around 2 million for at least 40 years, even as the demands on the federal government have soared. Targeted staffing reductions across certain agencies are much more workable than equally laying off a huge percentage of civilian workers at the Department of Defense, Department of Veterans Affairs, and Social Security Administration. Nor is it realistic to lay off most Border Patrol agents, federal prison guards, and staff at U.S. embassies abroad. Determining layoffs by a random lottery is, to quote P.J. O’Rourke, the kind of half-baked nonsense found in a “dorm room bull session.”

The budget savings from a massive reduction in the federal work force are also smaller than commonly believed. Full-time, permanent, civilian federal employees cost $300 billion in annual salaries and benefits. Removing one-quarter of these jobs would therefore save around $75 billion, or a little more than 1 percent of federal spending—and many of those savings would likely be reprogrammed into new federal contractors to plug the gaps. Musk significantly reduced costs at X by laying off employees. However, the overwhelming majority of federal spending goes not toward bureaucracy, but rather mailing benefit checks and state reimbursements for Social Security, Medicare, Medicaid, veterans benefits, and other aid programs. It’s true that even modest budget savings are worth enacting, however, the bulk of deficit reduction must come from benefit programs.

The push for bold and flashy savings may also lead fiscal conservatives to dust off the same old proposals to close down federal departments (such as education, commerce, labor, and housing and urban development), or to privatize all transportation spending, drastically reduce welfare spending, and end all foreign aid.

If I were in Congress, I would vote in favor of several of these proposals—which is one reason I could never get elected to Congress. Think tank conservatives (myself included) have spent the past four decades pushing Congress to aggressively terminate major spending categories—without ever coming close to succeeding. Not even the mid-1990s Gingrich Congresses, early 2010s Tea Party Congresses, or Trump’s unified Congress in 2017 and 2018 ever came close to passing even a scaled-down version of these terminations. Closing full departments has occasionally been popular with conservatives in the abstract, yet as soon as voters learned the specific programs that would be eliminated (the Labor Department runs the federal side of the unemployment insurance system; the Education Department runs Pell Grants, student loans, and aid for disabled students), the overwhelming public opposition forced even conservative lawmakers to abandon such ideas. We’ve seen this movie too many times.

So, is DOGE doomed to fail? Not if its architects take a more realistic approach to cutting government. Fundamental reform of Social Security, Medicare, and Medicaid will require delicate, bipartisan negotiations that are already taking place within parts of Congress. Senate Democrats will not back down from filibustering a partisan GOP Social Security plan just because Musk and Ramaswamy recommended it in a report. Nor will Congress suddenly drop its longstanding opposition to eliminating entire federal departments.

Republicans need to stop overpromising and underdelivering on federal budget policy. Congressional Republicans unrealistically promise to balance the budget within a decade while not even attempting to pass any actual legislation slowing the growth of spending. Musk promises to zero out one-third of federal spending, and Ramaswamy pledges to fire three-quarters of federal employees. It’s all bluster to compensate for ultimately doing nothing.

Focus on Efficiency, Not Ideology

The focus of the Department of Government Efficiency should be found within its own name: Government Efficiency. Instead of undertaking a doomed ideological quest to eradicate government functions that remain broadly popular with voters, DOGE should focus on combatting true government waste in order to help Washington perform its functions more cheaply and efficiently.

The Government Accountability Office (GAO) recently estimated that fraud costs the federal government between $233 billion and $521 billion annually. The Office of Management and Budget estimated that payment errors alone totaled $191 billion in 2023. During the recent pandemic, as much as $400 billion in assistance was lost to fraud and waste, mainly within the Small Business Administration and unemployment insurance system. 

Government duplication also wastes resources. Washington runs dozens (and sometimes hundreds) of overlapping programs addressing economic development, drug abuse, K-12 education, and other areas. As mentioned, the Department of Agriculture should not need nearly 100,000 employees in 4,500 locations to deliver farm subsidies to 300,000 full-time farms.

Republican lawmakers have proven quite adept at highlighting these and other examples of government waste. Yet as soon as the press releases are sent, the cameras turn off, and the congressional hearings end, virtually no lawmakers are doing the complicated and thankless work of designing solutions to stop the waste. Congress has largely abandoned its oversight role because, for example, designing a new set of Medicare Fee-For-Service oversight controls to combat the $31 billion lost annually to payment errors can be monumentally complicated without providing any political payoff. No lawmakers cruise to reelection on their tireless efforts to consolidate duplicative housing grants and save $1 billion in administrative costs.

Rooting out administrative waste is quite resource-intensive. Washington runs roughly 10,000 federal programs, nearly all of which have their own payment systems, technology, accounting, oversight, and procedures. And each federal program faces its own unique administrative challenges that require unique solutions. Congress does not have the attention span nor the resources to move from diagnosing these problems to solving them. The GAO and the agency inspectors general produce countless oversight reports that mostly go unread and ignored on Capitol Hill. Within health care alone—the fastest-growing category of federal spending—Washington wastes an extraordinary sum on provider payment policies that are inconsistent, reward excessive medical procedures, and even encourage outright fraud.

This is where DOGE can make a difference. It can build on the GAO’s work and recruit management consultants, accountants, I.T. experts, and others to design cheaper and more efficient methods of delivering public services. While Congress is not interested in an ideological crusade to eliminate entire functions of the government, it may provide bipartisan support for a detailed set of blueprints to rein in overpayments, serve program recipients more efficiently, and save taxpayers money.

Cutting true waste may also lay the groundwork for bolder budget savings later. By publicly picking the low-hanging fruit of government waste, lawmakers build more public credibility to reform more sensitive and popular programs. The “broken windows theory” famously claims that police crackdowns on vandalism, public drunkenness, and other smaller but visible public nuisances build a culture of law and order that ultimately dissuades more serious crimes.

Similarly, a Washington war on waste shows a respect for taxpayer dollars and fiscal responsibility that can build momentum for bolder fiscal reforms. Put more succinctly, lawmakers must have an answer for voters who ask why they should be singled out for painful tax hikes or benefit cuts while growing government waste consumes those savings with little oversight.

DOGE can potentially save taxpayers hundreds of billions of dollars by reducing government waste and improving program efficiency. This hard work will require deep expertise in public administration across multiple subfields. More importantly, it will require DOGE’s leaders to set aside their egos, ditch the gimmicks, and not waste time recycling the same old dead-on-arrival proposals to shutter cabinet departments and terminate most government jobs.

At some point, Congress and the White House may finally be ready for a bipartisan “grand deal” to reform entitlements, address taxes, and scale back lower-priority federal functions. But a partisan report vaguely overseen by a duo of GOP billionaires will not provide the spark that finally convinces skeptical lawmakers of both major parties to take the most dangerous political vote of their lives. Instead, a war on waste is a war that DOGE can actually win.

The post DOGE Can Succeed by Scaling Back Its Ambitions appeared first on Reason.com.

Source: https://reason.com/2024/11/21/doge-can-succeed-by-scaling-back-its-ambitions/