Can Musk and Ramaswamy’s DOGE Plan Really Slash $2 Trillion—or Is It All Bark?
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Hey, everybody. Welcome back to the Elon Musk podcast. This is a show where we discuss the critical crossroads that shape SpaceX, Tesla, X, The Boring Company, and Neuralink. I'm your host, Will Walden. How do Elon Musk and Vivek Ramaswamy plan to cut $2 trillion from federal spending?

And will their Department of Government Efficiency, DOGE, bypass Congress to achieve its goals? Well, Elon Musk and entrepreneur-politician Vivek Ramaswamy presented their proposal to shrink federal spending and reduce government inefficiencies in Washington this week.

Dubbed the Department of Government Efficiency, their initiative proposes saving $2 trillion in federal spending. Those specifics were notably scarce at this point, and the pair met with members of Congress, primarily Republicans, to gauge support and discuss the viability of their plan. Among those in attendance was Representative Tom Cole, a seasoned Republican from Oklahoma and the incoming House Appropriations Committee chair who offered measured skepticism.

Cole, who reflected on his conversations with Musk and Ramaswamy, noted their effort to understand, quote, the full scope of their proposal and the extent of executive authority they may wield. His remarks hinted at the constitutional limitations the duo could face. He said, how much would be done by executive action? He asked, quote,

And the prescriptions remain at the heart of federal spending, requiring Congress's active involvement. And legislation attempts to bypass this process, such as impoundment, often encounter resistance from the judiciary and from Congress itself.

So in 1974, the Budget Control and Impoundment Act, a legislative response to President Nixon's unilateral actions during his impeachment crisis, fortified Congress's role in spending decisions.

Musk and Ramaswamy's DOGE initiative must therefore navigate not just political but also legal constraints for their actions. History suggests that lofty goals to overhaul federal spending have faced immense challenges. To propose $2 trillion in savings is very ambitious, but the absence of specific strategies raises doubts about its feasibility.

To understand the hurdles facing DOGE, it's crucial to examine the lessons passed efforts to reform government spending.

Efforts to reform federal spending have long been central to Republican policy agendas. During his 1980 presidential campaign, President Reagan criticized the ballooning federal debt, which was nearing a trillion dollars at the time, a figure that seemed unthinkable then. And Reagan entrusted his first Office of Management and Budget Director, David Stockman, with implementing steep budget cuts.

Stockman targeted social programs with fervor, equating budget excesses to moral failings. Yet Stockman's efforts quickly ran into opposition from Democrats and even some Republicans.

Now, Reagan's broader fiscal policy, which included large tax cuts and increased military spending, further undermined his administration's deficit reduction goals. By the end of his first term, the national debt had doubled, and by the time Reagan left office, it had tripled.

Stockman, disillusioned, exited the administration and later published a memoir, The Triumph of Politics, Why the Reagan Revolution Failed, Chronicling His Frustrations.

Now, Reagan's later attempts to streamline government included appointing J. Peter Grace to lead a commission on government efficiency. Though the commission unearthed useful recommendations, its impact was marred by revelations about Grace's company, W.R. Grace & Company, having paid minimal taxes. These optics undermine public confidence in the commission's efforts.

Reagan's successor, George H.W. Bush, took a more pragmatic approach, negotiating a bipartisan deal in 1990 that combined spending cuts with tax increases. The agreement helped stabilize the budget, but at a steep political cost for Bush. Breaking his campaign pledge of no new taxes alienated his conservative base, emboldening primary challenger Pat Buchanan and contributing to Bush's defeat in the 1992 election.

And the fallout from Bush's tax compromise cemented an anti-tax orthodoxy within the Republican Party. And since then, even modest tax increases have become political erythema, limiting avenues for meaningful fiscal reform.

Now, in 1992, billionaire H. Ross Perot emerged as a third-party candidate, framing himself as a plain-spoken businessman who could tackle Washington's dysfunction.

His proposals to run government like a business resonated with voters. And at one point, Perot led both major party candidates in national polls. Though his campaign in 1992 and 1996 ultimately failed, Perot's populist rhetoric influenced both parties, pushing deficits and spending to the forefront of public discourse. Now, other...

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Terms and points cap apply. Learn more at AmericanExpress.com slash business dash platinum. Amex Business Platinum, built for business by American Express. Figures such as audio executive Lee Iacocca similarly championed the idea that private sector efficiency could transform public sector governance. While some proposals often gained initial traction, they rarely translated into substantial reforms.

President Bill Clinton and Vice President Gore sought to streamline federal operations through the National Performance Review, often referred to as Reinventing Government, or EGO. Borrowing from earlier initiatives like the Grace Commission, EGO aimed to reduce bureaucracy, cut spending, and modernize federal agencies. Gore touted six-figure reductions in the federal workforce as proof of the initiative's success.

Yet these measures barely made a dent in overall spending, which continued to climb due to major outlays on military conflicts and economic crises. Now, Clinton's 1996 declaration that the era of big government is over proved more radical than substantive. Federal spending surged during the subsequent decades, driven by the War on Terror, the Great Recession, and most recently, COVID-19.

Now the national commission of fiscal responsibility and reform established by Obama in 2010 and co-chaired by Alan Simpson and Erskine balls, uh, exemplified a bipartisan approach to budget reform. The commission proposed cuts to entitlement programs, reductions in defense spending and modest tax increases. Despite widespread praise for its balance recommendations, uh,

Political gridlock stymied their implementation. A supermajority of the commission failed to endorse the package, leaving its proposals unfulfilled.

Doge's emphasis on reducing waste and inefficiency echoes past efforts like the Grace Commission and RICO. While such initiatives can yield incremental savings, they seldom address the fundamental drivers of federal spending. Without bipartisan cooperation or public support for significant changes to entitlement and budgets, large-scale fiscal reform remains very elusive.

Whether Doge can succeed, where similar efforts have faulted, remains uncertain right now. Musk and Ramaswamy's ability to build political consensus will be crucial. History suggests, however, that their ambitions will face formidable resistance, not only from entrenched interests, but also from voters reluctant to sacrifice popular programs.

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