DOGE and the Budget Battle
Ronald Reagan perfected attacks on "waste fraud and abuse" in federal spending to divert attention from more weighty problems. Now, DOGE has adopted this tactic with a disruptive twist.
Photo by Olga DeLawrence on Unsplash
Usually, when a president embarks on a campaign against “waste, fraud, and abuse” in federal spending, as President Donald Trump has since assuming office, he’s trying to divert public attention from a more pressing problem.
This time, we see the same thing but with a different twist.
The president faces issues more severe than just misspent federal dollars. Indeed, he has vowed to eliminate the federal debt, a promise that will be impossible to uphold without cutting large programs such as Social Security, Medicare, Medicaid, and veteran benefits, subjects he strives to avoid.
By introducing Elon Musk into the equation, though, Trump has diverted attention from his more significant problem while also altering the dynamics of the federal budgetary battlefield, which date back to the era of the late Republican hero, President Ronald Reagan.
“We’re here to cut back on waste and mismanagement, to drain the swamp of overtaxation and overregulation.” Such a quote may sound like marching orders from Trump or Musk. Reagan conveyed that message with pomp and circumstance in 1982 when he institutionalized the process of attacking “fraud, waste, and abuse” in federal spending. The campaign against abusive federal spending helped Reagan divert attention from one of his major problems: a soaring budget deficit created when he simultaneously cut taxes and increased defense spending.
The success of Reagan’s highly publicized campaign provided his Democratic and Republican White House successors with a well-traveled playbook. Indeed, America has experienced over forty years of commissions, reorganizations, panels, overhauls, and initiatives – all aimed at achieving the same goal: saving American taxpayers billions of dollars misallocated by allegedly incompetent or malicious federal programs and their supervisors.
Now, we have Musk and his Department of Government Efficiency (DOGE) ascension in Washington. Musk brings a new mentality to the budgetary process in Washington—a “tear it down and see what happens next” approach that draws many headlines. His tactics may be dogma in Musk’s Silicon Valley, where “disruption” is like a religion, but, for better or worse, they’re getting mixed reviews in Washington and on Wall Street.
In all fairness, Musk should be given his due. Like many of the industries Silicon Valley has disrupted, the federal government needs to change its operations. Decades of deficit spending have driven the nation’s federal debt from $998 billion in 1981, when President Reagan occupied the White House, to $36.2 trillion. Every president, particularly Trump during his first term, enacted policies that contributed to the astonishing increase in debt, except for President Bill Clinton.
A strong economy, tax increases, spending restraint, and escalating taxes on stock market profits enabled Clinton to run a budget surplus for four consecutive years, reducing the national debt by $453 billion. Economists quibble over the details of Clinton’s achievements, but his policies unquestionably were an exception to Washington’s fiscal status quo.
Whether Musk, who has vowed to cut $1 trillion in federal spending, and Trump will succeed in their austerity exercises remains to be seen. If the past is any indication, they face a stubborn challenge to achieve the promised savings by cutting “waste, fraud, and abuse,” the issue they crow about.
To begin with, the federal bureaucracy that DOGE regularly demonizes is likely the most scrutinized payroll in the world. Just look at history.
Reagan created the Grace Commission in 1982 to study government spending. Like Trump, he appointed a private businessman, the late J. Peter Grace, then the long-serving chairman of W.R. Grace and Company, to lead the effort, and directed him to uncover wasteful spending and send any crooks to jail.
Grace assembled a privately funded team of seasoned business pros, making Musk’s squad look like something out of Junior Achievement. The team included 161 executives, including many CEOs, plus 2,000 volunteers to conduct a sweeping audit of federal operations for two years. Overall, the commission identified 2,478 recommendations projected to save $424 billion over three years, with cumulative savings of $10.8 trillion by 2000.
The Grace Commission shared its findings with Reagan’s Council on Integrity and Efficiency, a consortium of inspectors general from various government agencies. Overall, the inspectors general reported 16,000 successful prosecutions over Reagan’s two terms that recovered $70 billion for American taxpayers.
Yet, by the end of Reagan’s presidency, the federal civilian payroll had grown by 95,000 employees, reaching about 2.2 million. Federal budgets increased by nearly seventy percent, and the national debt almost tripled to around $2.8 trillion. A non-profit established by Grace and the late Jack Anderson, a nationally syndicated columnist, later estimated that the Grace Commission fell significantly short of its projected long-term savings.
Of course, that was more than forty years ago. Nevertheless, Reagan’s attack on government waste proved such a public relations bonanza that each of his White House successors initiated similar efforts. Some of the programs saved money, and others didn’t. All presidents, including Trump, have railed against wasteful spending. The “waste, fraud, and abuse” refrain is nothing new.
So, how will the Musk-Trump team now succeed where many others fell short? DOGE is adopting the classic Silicon Valley tactic of shooting now and aiming later, the destabilizing practice of disruption that already is showing signs that it could backfire. Wall Street’s initial enthusiasm for the DOGE is rapidly fading.
DOGE’s opaque and secretive operations don’t help; they foster chaos by disregarding federal transparency practices. Unlike Reagan’s teams of seasoned executives, many initial DOGE employees are relatively young Silicon Valley acolytes of Musk, including several who draw six-figure salaries from taxpayer money, according to Wired magazine, which provides excellent reporting on DOGE. Various media reports estimate the total DOGE workforce to be between fifty and sixty.
Trump hasn’t made their job any easier. Soon after taking office, he issued an executive order to eliminate the people responsible for raising flags about fraud and abuse. His order fired at least seventeen inspectors general, watchdogs from more than a dozen federal agencies.
Instead of mimicking Grace by going through each agency to look for instances of misbehavior or malfeasance, Musk’s team is applying the disruptive ethos of Silicon Valley. Exhibit A is USAID, the federal agency responsible for administering foreign aid and development assistance.
Musk eliminated the department and then began determining which employees, if any, needed to be rehired to do jobs that were still required. If disruption eliminates or diminishes a valued public service, the Silicon Valley ethos suggests that the target company or agency should not have allowed itself to become vulnerable to disruption. In other words, too bad.
The structure of the DOGE teams suggests it will function similarly in other departments and agencies targeted for extinction, such as the federal Department of Education. Trump’s executive order establishing the DOGE mandates that each federal agency form a DOGE team that includes a team leader, an engineer, a human resources specialist, and a lawyer.
Government employees have been fired for resisting DOGE engineers' efforts to access sensitive data, including private company vendors' payrolls and financial information. Everyone knows why the teams include human resources specialists and lawyers: They are needed for mass firings like those at the FBI and IRS.
A ProPublica investigation says DOGE has overseen the termination of more than 200,000 federal employees across various agencies, or about eight percent of the federal workforce. The White House has also imposed a federal hiring freeze and issued a government-wide email offering a deferred resignation program. Even if DOGE tried to eliminate the entire civilian federal payroll, which it has not suggested, such a move would save only five to six percent of federal spending, nowhere near Musk’s $1 trillion target.
That suggests DOGE will need to explore other savings options. One entity Musk has started to scrutinize is the Social Security Administration. In a recent podcast, he referred to Social Security, which nearly seventy million Americans depend on for retirement and disability payments, as “the biggest Ponzi scheme of all time.” He and Trump have also reiterated numerous discredited criticisms of Social Security, eliciting fierce backlash from Democrats.
In a sense, Musk is correct. Given its current financial condition, Social Security cannot meet its future obligations without new revenue or spending cuts- steps taken once before to avert dreaded benefit reductions. Moreover, it is difficult to see how Trump can eliminate the federal debt without violating his pledges not to reduce funding for Social Security, Medicare, or Medicaid. Trump is already cutting funding for a large department that serves a group he consistently praises: military veterans.
Neither President Trump nor his alter ego, Musk, has articulated an endgame for DOGE, generating a sense of chaos that leaves officials across Washington feeling uneasy. After rallying following Trump’s election, Wall Street is also beginning to feel unsettled, which could represent the ultimate disruption for Musk and DOGE.
James O’Shea is a longtime Chicago author and journalist who lives in North Carolina. He is the author of several books and is the former editor of the Los Angeles Times and managing editor of the Chicago Tribune. Follow Jim’s Substack, Five W’s + H here.
Outstanding!