Elon Musk Says Goodbye to DOGE and D.C.
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Optimism isn't sunshine and rainbows. It's fixing things, changing the way we fix things. It's running the world on smarter energy. Because if optimism never stops, then change can't either. G.E. Vernova, the energy of change. From the opinion pages of the Wall Street Journal, this is Potomac Watch. Elon Musk wishes Washington goodbye as he steps back from his Doge effort during an Oval Office press conference with President Trump.

Meantime, the Supreme Court narrows federal permitting reviews after a lower court ruled that a 3,600-page environmental study still wasn't enough. Welcome, I'm Kyle Peterson with The Wall Street Journal. We're joined today by my colleagues, columnist Alicia Finley and editorial board member Colin Levy.

Four months after President Trump's inauguration, the Department of Government Efficiency, or DOJ, is losing its leader, Elon Musk, who originally hatched the idea, as well as one of its top DOJ lieutenants, Steve Davis. But the DOJ goes on, or at least that's the promise. Here is Elon Musk about an hour or two ago in the Oval Office sizing up his tenure.

This is not the end of DOGE, but really the beginning. My time as a special government employee necessarily had to end. It was a limited time thing. It's 134 days, I believe, which adds in a few days. So...

So that comes with the time limit. But the Doge team will only grow stronger over time. The Doge influence will only grow stronger. I liken it to a sort of boost of Buddhism. It's like a way of life. So it is permeating throughout the government, and I'm confident that over time we'll see a trillion dollars of savings and a reduction in a trillion dollars of wasted fraud reduction.

The calculations of the Doge team thus far, in terms of an FY25 to FY26 delta, are over 160 billion and that's climbing. We expect that number will probably go over 200 billion soon. So I think the Doge team is doing an incredible job. They're going to continue doing an incredible job.

And I'll continue to be visiting here and be a friend and advisor to the president. And I look forward to, you know, times being back in this amazing room. By the way, isn't this incredible? Alicia, Musk pointing to the fact there that there are these Doge teams that are still scattered throughout the federal government. But that aside, what do you make of this Doge effort so far and Musk's contribution, this different way of trying to approach reforming the federal government? Yeah.

Well, I think they had very laudable goals. They want to make government more efficient by implementing some technological upgrades that should have probably been done, to be honest, 20 to 30 years ago, as we've been discovering with the continuing problems at the Newark airport. Many government systems are out of date, and Elon Musk has helped shine a light on that.

including at the Social Security Administration and some of the people who are supposedly getting checks who are dead. I mean, maybe he overstated the numbers, but he did help at least illuminate the problems of this outdated technology.

Another thing he has pressed is for layoffs at some of these agencies to become more efficient. And there is a lot of bloat in some of these agencies. I think one of the problems is how they went about firing some of these federal employees at the agencies without really regards to necessarily what they were doing, how long they had been there and such. And some of these layoffs or reductions in forces have actually been challenged.

in court and blocked. Now, I think the administration is ultimately likely for bail, but it is a concern that when you get some brain drain from agencies like the FDA, that some of the goals of the Department of Government Efficiency may end up actually being undermined, as in you may actually get slower approvals for drugs and such.

So I guess my total big picture overview is I'm a little conflicted. I think that they accomplished some things that they sought to do, but fell short in some other areas. And we probably really won't know how successful they are for another few years when we look back and see, oh, is government actually working much more efficiently? Colin, I guess that's my read too, is laudable goals, but they seem to be sort of making it up.

as they went, not a fully baked alternative reform project for Washington. So remember, Doge originally named after an internet meme. Vivek Ramaswamy was going to be part of it at one point, but he seemed to have different focus than Elon. Elon was focused on government

computer systems and so forth. Vivek Ramaswamy really wanted to go after regulations. Then Vivek was out even kind of before the thing got set up. Musk, meantime, was overpromising, talking about maybe $2 trillion in savings we can find, or maybe $1 trillion. That might be more realistic. The number he is citing now is about $150, $160 billion. And you can find analysts poking holes even in that number in terms of the receipts and contracts and so forth.

that Doge has canceled. And then in the meantime, also tension between this Doge effort and the cabinet agency heads that were nominated by President Trump and then confirmed for those departments. One obvious example being that email that went out demanding that all the federal employees reply, explaining five things they had gotten done last week, which was pretty quickly countermanded by at least some of these agency heads, the Department of Defense,

The FBI saying we have some security concerns with our employees replying back exactly with specifics what they are working on to some open email channel. And then one final thought I would add is the difficulty this underlines, I think, of doing a lot more.

of these kinds of reform and cutting efforts without help from Congress. Because I get that President Trump and Education Secretary Lyndon McMahon are on a mission to close down the Department of Education, and I would support that as a goal. But that's a department that is created by Congress, and there are limits to what you can get done without having Congress come in and say there is no more Department of Education. And so to my eye, I guess it seems like

Musk and the Doge effort were running up against the limits of what you can really do as an outsider, someone with a business mentality coming into Washington. I think that's right. I mean, what do you say about Elon? I was driving around earlier this week thinking about the fact that he reminds me mostly of the famous character in Pulp Fiction. I don't know if you remember the wolf who was played by Harvey Keitel in one of his signature Quentin Tarantino roles.

The wolf is a cleaner. He comes in to solve problems for gangsters. He gets rid of stuff that needs to be gotten rid of and then he leaves and you don't really hear anything else from him. I kind of think that's

what Elon did here, although I don't think Elon was quite that discreet. You know, he came in, he waved his chainsaw around, and then he leaves, and we'll see how much we hear from him going forward. As for his impact, you know, in sort of a long-term way, look, I mean, we're all here for streamlining and saving, you know, creating savings for the federal government, creating efficiency. And he definitely accomplished plenty in terms of cutting the waste, fraud, and abuse that President Trump is always talking about. There

certainly he was digging through, it was more than layers. It was like the strata of the earth, you know, where you could see all the way back to the Pleistocene age, you know, in terms of the bureaucracy that he was dealing with. And I think that that was certainly a salutary exercise. But he also messed up a lot of things. I mean, getting rid of departments wholesale lacks sophistication and nuance. And in a lot of cases, he did

I think, as much harm as he did good. You know, just getting rid of USAID might have made for some good soundbites on, you know, random federally funded, you know, LGBTQ programs in South America that didn't really seem to have a solid national security or soft power angle. But it also canceled an incredible amount of very good and important work

that the U.S. has done overseas to, you know, endear itself to countries on a really retail basis, person to person. At risk of staying on my soapbox too long here, I think the same applies to the instances where Doge targeted refugee aid groups as well as the targeting of Radio Free Asia. I mean, you know, there's a case where you had a program that was really important for decades trying to provide a counter-narrative, an American narrative,

In countries where citizens only get the government view through their own official state media, no free press and no other efforts to tell local stories. China obviously comes to mind there, although certainly other countries in Asia, Tibet, North Korea, Vietnam, Cambodia, all those places have benefited for years from the American reporting. And Doge just came in and shut a lot of that down. And I think that was very damaging as well. Hang tight. We'll be right back in a moment.

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Welcome back. Alicia, I'd second the point that you made about upgrading of government systems, and maybe that is some of the work that will continue and these Doge teams can keep doing in these agencies even after the departure of Musk. It's hard to see always from the outside what of that is going on, but if some of these

Coders can come into the federal government and help them push through upgrades in ways that have not been successful before. That would be a pretty significant advance. Meantime, the other half of the story is that Elon Musk is still the head of pretty successful companies, but companies that have not benefited significantly.

from his political participation, the protests against Tesla's. And don't forget that all of, I guess not all of, but many of Elon's and Tesla's customers before this Doge effort were progressives and liberals who are feeling a little bit less enthusiastic about the Tesla brand lately. Yeah.

Right. So I think to your point about the first on the technology, one of the issues in terms of doing these upgrades has always been able to attract and hire workers to oversee the upgrades. And that's partly because of government pay scales limit how much you can actually pay people. So you can't compete with the big tech companies or other engineering firms, right?

So at least getting this started, getting the ball rolling, all these technological upgrades will help. And in the long term, you're still going to need to be able to attract or retain people who can continue to oversee them. And so I think that you need to have a larger discussion, probably in Congress, about allow some agencies to pay attention

employees more for special workers who have special skills. That has been a widespread problem in agencies in being able to attract people for instance of the FDA scientists who can't review the drug makers applications. Many then would prefer to work in the private market because they can earn more, not to say that they can also help in advanced innovation there too. Now going to your point also about Tesla and its travails as a result of

Elon Musk's political involvement. There's no doubt that Elon Musk's political advocacy, not just his involvement in the White House, has hurt its sales. But I would also add that I think its sales were destined to decline anyways as more automakers entered the EV market and has become a bit of a glut. EVs aren't selling in China because there are so many, and Elon Musk made a big bet on the Chinese market.

So that's one issue. His other enterprises, Neuralink, SpaceX, boring companies, sure, they may benefit from Elon Musk paying more attention to them. But I think one of Elon Musk's big contributions to his companies has been able to find and put in place lieutenants who can oversee and manage them without him. I mean, really, for Tesla, it was a branding exercise.

His affiliation with the company had bolstered and buoyed its stock price. It is really the people who we put in charge that had made it successful to the extent that it is. Hang tight. We'll be right back in a moment. ADP imagines a world of work where smart machines become too smart. Copier, I need 15 copies of this. Printing. By the way, irregardless, not a word, Janet. Yeah, I know. Page six should be regardless of or irrespective of. Just print them, please.

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Welcome back. Meantime, on Thursday, the Supreme Court issued what could be a consequential unanimous ruling on the size and scope of environmental studies for federal permits. The

The 1970 National Environmental Policy Act requires projects to get environmental studies done if they need federal permits or have federal funding that are used in them. But there has been long debate about whether these studies have gotten out of hand. And the one in this case,

Looks like it has to me. This is a proposed 88 mile railroad. And the intent, Colin, is to connect an oil rich area of Utah that is pretty rural with the rest of the national network. Currently, there's oil drilling that's being done. That oil has to go out by truck, which is not efficient. It's not climate friendly. And so this is a railroad that is proposed to meet that need.

The agency here that studies this did a 3,600-page environmental review focused on everything from air pollution to wildlife effects and then approved the project. So the project was going to go forward. That was in 2021. It still has not been any construction on it because the D.C. Circuit Court of Appeals said that that 3,600-page review was not enough.

that the agency also needed to analyze what if this railroad leads to more oil drilling in that region? Or what if this railroad leads to more oil refining? Because the oil that comes out of Utah has to go somewhere. It might go to the Gulf Coast. It might be refined there. That would have some environmental effects. And that should have been part of the agency study. Colin, what do you make of this, particularly the fact it's a unanimous ruling, so no dissents from even the liberal justices?

Yeah, I think that was significant, Kyle. I mean, look, NEPA was a bureaucratic sinkhole and a major obstacle to economic development, I mean, to energy projects, to infrastructure projects.

forcing federal agencies to assess the environmental impact of major projects before approval was just such a slow rolling process. And these studies were just endless. As you said, they would go on and on and on before any sort of decision could be made. And I think that really has been an enormous waste of time and effort. It's almost a parable of over-regulation run amok.

In many cases, I think for environmental groups, that was probably the point. And the more questions they could ask, the more they could tie up projects with red tape and further investigation, the longer they could delay any of these projects that they ultimately didn't want actually to just ensure were proper. They would actually have preferred to prevent altogether, right?

And of course, all of this regulatory review provides corresponding opportunities for litigation. It just really was a sinkhole for any innovation or development or progress. The one thing that did occur to me as I was reading a little bit about this is that one thing that's worth noting is that the NEPA decision comes at quite a good time because once

One of the drivers, I think, for the need for fewer restrictions is to facilitate the increase of energy sources that are going to be needed to power AI and power data centers. You know, that's a massively growing area and something that's going to require fairly exponential growth in coming years. You know, that's the same reason, by the way, that the president recently

issued the executive order on increasing the speed of nuclear development. So those two things do sort of dovetail nicely. I think it comes at an opportune moment. Alicia, how much of effect do you think this ruling will have? Let me read just a few segments of the court's opinion. This is written by Justice Brett Kavanaugh. He says that NEPA is supposed to let federal regulators weigh environmental consequences as the agency reasonably sees fit and

He emphasizes repeatedly that NEPA is a procedural law. It's not a substantive law. The intent of NEPA is to make federal agencies that are reviewing projects for these kinds of permits consider the environmental effects.

It is not to require them to consider the environmental effects in a certain way or to require them to weigh one environmental effect over another. It is just to make sure that the process is in place for these kinds of reviews.

And so he emphasizes that when these lawsuits inevitably arise, challenging these projects from green groups often, he says the central principle of judicial review in NEPA cases is deference, unquote. And again, Alicia, he says that more than once. And so I'm wondering whether that message will get across to these lower judges who are then asked,

to review these challenges by these green groups saying, well, but block this project over here or block that one over there. Right. So, I mean, this has been an ongoing problem for decades. The Supreme Court has essentially reaffirmed that the agencies don't have to consider the unpredictable impacts or indirect impacts of agency actions. Most recently, in 2004, there was a Department of Transportation v. Public Citizen and Justice's

held in that case that agencies need only consider the environmental impact with a quote-unquote reasonably close causal relationship and over which they have a statutory authority and which they can prevent. Now Justice Kavanaugh reaffirmed it again and said it one more time for emphasis that NEPA does not impose substantive obligations on

One issue is that lower court judges, as you point out, have been essentially ignoring the Supreme Court's ruling on this matter and have been going their own way, nitpicking environmental reviews and vacating them instead of just actually remanding them.

them to the agencies for fixing. Now, the Kavanaugh opinion also suggests that do not vacate the opinions just if there's a small little flaw. Instead, send them back to the agencies to fix them. In the meantime, projects can proceed, which I think is useful guidance for

The question is whether lower court liberal judges, they're particularly concentrated in the Ninth Circuit, but also the D.C. Circuit, which hears a lot of the challenges, have ignored them. And so I think that it's ultimately really going to lie in Congress, the fix, whether

which would be to pose some kind of limitations on judicial review, statute of limitations in terms of that plaintiffs have to file within a certain amount of time, or impose very hard guidelines to judges that you are only allowed to consider this or that, rather than using your discretion to consider the various project impacts and things.

The other issue is that democratic administrations in particular, and I guess I'm really focusing more on the Biden and Obama administrations, have imposed their own obligations on agencies to consider indirect impacts, such as the carbon emissions or environmental justice communities.

that aren't required, obviously, anywhere in NEPA and do extend the analysis and also open up opportunities for outside groups to litigate or challenge. So I think more direction from Congress, excluding any kind of indirect impact, saying that federal agencies cannot...

consider these indirect impacts in their analysis would be helpful. I would welcome that kind of legislation by Congress. I think there is still a need for it. But Colin, a couple of last thoughts here for me. One is just the incentives that this NEPA litigation has created.

agencies knowing that the lawsuits are coming act defensively. So that is why you have an 88 mile railroad that in the first place ends up with a 3,600 page review because the agency is trying to cover every single tiny base because it knows this is probably going to court eventually. And then two, I mean, you mentioned construction projects for data centers and so forth, but I also think it bears noting that this is

a neutral law that applies to all kinds of projects, even projects favored by green groups. There have been a lot of talk about the need for new transmission lines to get new renewable energy to cities and population centers where it can be used. Those are also projects that get tangled up in this NEPA stuff. And it is not always...

green groups that are doing the suing. Sometimes it's groups that just don't want that transmission line in their backyard. And I understand why, but the ultimate outcome is it adds a kind of sludge to this decision-making process. And here, I think the justice has recognized that Justice Kavanaugh says it means fewer and more expensive railroads, airports, wind turbines, transmission lines, dams, housing developments,

highways, bridges, subways, stadiums, arenas, data centers, and the like. He also says that that means fewer jobs as new projects become difficult to finance and build in a timely fashion, unquote. So Colin, we'll give Kavanaugh the last word and then you the last word, but it's a neutral change and it's,

No matter what kind of building project you want to happen, if you want any building to happen, it's better if you can get this kind of approval from a federal agency without having to spend five or 10 years in court afterward. I totally agree with that, Kyle. I think the point on litigation is a great one. I mean, the sludge of decision making is a great phrase.

I think it's just it's great to see more of these core efforts for reducing bureaucracy come through the court's efforts to dismantle these regulations, because ultimately getting rid of the government with doge slash and burn efforts aren't enough. And they can't last as long as getting rid of these major regulatory red tape efforts that remain so punitive and so damaging within the federal government.

Thank you, Colin and Alicia. Thank you all for listening. You can email us at pwpodcast at wsj.com. If you like the show, please hit that subscribe button. And we'll be back next week with another edition of Potomac Watch.

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