Donald Trump has pledged to cut wasteful federal spending by hiring two billionaires – Tesla CEO Elon Musk and entrepreneur Vivek Ramaswamy. Department of Government EfficiencyOr DOGE.
The appointments announced by President Trump on Tuesday raise many questions about this effort, including whether Musk and Ramaswamy will have the authority to change federal spending now that Congress has approved it and where the entrepreneurs will look. . To reduce spending. Meanwhile, the plan calls for DOGE to not be an official government department, raising questions about its authority and how it operates.
This announcement comes a week after Trump’s. won a second term As president, voters have expressed dissatisfaction with the Biden administration’s economy. Trump promised to cut government spending as part of his campaign platform. Musk’s bio on X, the social media platform he purchased in 2022, now reads, “People voted for major government reform.”
“You have to look at everything every few decades because, frankly, you have to do it again,” said Elaine Kamarck, a senior fellow in governance studies at the Brookings Institution who managed the Clinton administration’s National Performance Review. Government spending in the 1990s told CBS MoneyWatch.
But Kamarck has doubts about Musk and Ramaswamy’s authority. Especially after Musk recently suggested it could save more than $2 trillion. That’s nearly one-third of the federal government’s $6.7 trillion in annual spending. Two-thirds of that spending is mandated through programs including Social Security and Medicare, while most of the discretionary spending goes to defense.
“This is the first warning sign that this operation is going to fail,” Kamarck said. “That’s crazy.”
Michael Morris, a professor at Columbia University’s Columbia Business School, talks about transformational change within governments and organizations, noting that there are two models: bottom-up grassroots efforts and top-down strategies (sometimes called impact change approaches). DOGE likely falls into the latter category, according to Morris, who is also the author of “Tribal,” a nonfiction book about how people form and relate to each other through group dynamics.
“Few people respond well to shock therapy unless there is a new leader with incredible legitimacy and a status quo with no legitimacy,” he said. “It’s hard to see that happening in this case. I don’t think Musk will be able to develop deep knowledge of the government.”
The Trump campaign did not immediately respond to a request for comment.
Here’s what you need to know about the Department of Government Efficiency.
What is the Ministry of Government Efficiency?
President Trump announced the governorship in a statement Tuesday, describing it as an effort to “remove excessive regulation, cut wasteful spending and restructure federal agencies.”
The name is a nod to Musk’s support for a cryptocurrency called dogecoin. This cryptocurrency was created as a joke by two software engineers and uses an image of a smiling Shiba Inu. (Dogecoin has more than tripled in price in the last month and is currently trading at 38 cents.)
President Trump said Musk and Ramaswami’s research will be completed no later than July 4, 2026, or the 250th anniversary of the Declaration of Independence.
Trump only outlined the plan but did not disclose how it would be staffed or funded. The Trump campaign did not respond to a request for funding from the governor or whether Musk or Ramaswamy would be paid for their efforts.
According to DOGE’s X account on Thursday, the group is: Submit resume “Very high IQ small government revolutionaries willing to work 80+ hours a week for unglamorous cost savings.” “The compensation is zero,” Musk said in a separate post.
Can the governor actually cut federal spending?
For now, that seems unlikely, given that DOGE is not an actual government department and would have to be created with congressional approval. Federal spending is approved by Congress, and senators and representatives may be hesitant to support cuts to the military or major programs like Social Security or Medicare that are popular with millions of voters.
It is also not clear how the organization will operate. This could come under the Federal Advisory Committee Act, which dictates how outside groups that provide advice to the government operate and be accountable to the public.
Trump described Musk and Ramaswami’s role as providing “advice and guidance from outside the government.”
Kamarck said that’s not a huge amount.
“They don’t have the authority. They don’t have any,” she added, noting that the president’s support could help persuade lawmakers to support efficiency efforts.
But Trump aides are exploring ways to enact some of the governor’s spending recommendations without requiring congressional approval, the Washington Post reported.
What did Musk and Ramaswamy say about federal spending?
Musk, who is the world’s richest person with a net worth of $319 billion according to the Bloomberg Billionaires Index, said the U.S. government was bloated and its spending was unsustainable. The Tesla founder also said he wants to reduce the number of federal agencies from more than 400 to 99.
“There are too many agencies that people have never heard of and that have overlapping areas of responsibility,” Musk said earlier this month.
While campaigning with President Trump, Musk said he might cut “at least $2 trillion” from the annual budget. “Your money is being wasted and the Department of Government Efficiency is going to fix it,” Musk said.
Musk is famous for cutting costs at his company. Most of X’s workforce He has focused on Tesla’s manufacturing costs since acquiring the company two years ago. Nonetheless, these efforts yielded mixed results, with X’s value falling approximately 80% since its purchase. Meanwhile, Tesla’s stock price has surged 48% over the past year, taking its value to over $1 trillion.
Ramaswami, whose net worth is about $1 billion according to Forbes, was eliminated from the presidential election in January. Running with “Prevent Wake” work out. He also advocated cutting government by abolishing the Department of Education, a goal shared by President-elect Trump.
Has the administration tried to cut costs before?
Yes. Both Republican and Democratic presidents have made efforts to cut government spending.
In 1982, President Ronald Reagan created the Grace Commission, headed by J. Peter Grace, a wealthy businessman and CEO of the chemical company WR Grace & Company. About 150 businessmen volunteered for the committee, which ultimately recommended 2,500 reforms, according to the Ronald Reagan Presidential Library.
“Most of the recommendations, especially those that required legislation by Congress, were never implemented,” the library wrote. “But the committee’s work provided the starting point for many conservative criticisms of the federal government.”
In the 1990s, President Bill Clinton created the National Performance Review with the goal of creating a government that worked better and cost less, Kamarck said. The group had civil servants who understood bureaucracy, many of whom were dissatisfied with it, she added.
The group had some success streamlining operations and cutting costs, ultimately cutting more than 300,000 jobs, according to a study by the Congressional Research Service. Kamarck also noted that the group focused on integrating technology into the department at a time when the Internet was just emerging, creating efficiencies such as filing taxes online.
Where can the Trump administration cut spending?
Experts are skeptical of Musk’s claims that he can cut $2 trillion in spending, but they note there are also opportunities to look at efficiencies.
Rooting out Medicare fraud is one area that could result in cost savings, according to Citizens Against Government Waste, a nonpartisan group that examines government spending. Recommendations also include reducing the country’s contribution to the United Nations and ending subsidies for some agricultural products such as dairy and sugar. Projected savings are $377 billion in the first year, or about 19% of the $2 trillion that Musk is eyeing.
But efficiency goes beyond cost savings, Kamarck noted. It’s also important to understand how bureaucracy works.
“Everything in the federal government is big and complicated and has many layers of complexity,” she said. “Al Gore and I have asked hundreds of experienced public officials to tell us how this works. If you don’t do this, which we think they won’t do because Musk is an arrogant billionaire, you will fail.”
Does Musk have a conflict of interest?
Yes, according to the New York Times, Musk’s SpaceX is working with the Department of Defense and NASA, and the federal government pledged $3 billion to his company last year. Meanwhile, Tesla has been investigated by the National Highway Traffic Safety Administration and other agencies.
Federal employees are generally required to disclose financial assets and entanglements to avoid potential conflicts of interest and to divest significant holdings related to their work. Musk and Ramaswamy would not face such requirements or ethical restrictions because they are not official federal employees.
And given that Musk runs multiple businesses, from Tesla to SpaceX, there are also questions about whether he has the ability to take on another major role, Columbia Business School’s Morris noted.
“The whole question that Elon is going to come into government and be a traveling efficiency expert, like a McKinsey consultant running the entire government, is absurd on many levels,” Morris said. “He’s already the CEO of a company that puts a lot of time into it.”
“Doing this kind of government work requires you to be process-oriented in a way you’ve never been before,” he added.
contributed to this report.
