President-elect Trump has tapped Elon Musk and Vivek Ramaswamy to lead the new Department of Government Efficiency (DOGE), with the goal of cutting $2 trillion from the federal budget. (While none of the protagonists have been specific, they appear to be suggesting that the $2 trillion would be annual reductions, not cumulative savings over a number of years.) This will likely prove impossible to effectuate.
The challenge is that much of the federal government’s expenditures are off limits for cutting for one reason or another. For example, Trump has declared Social Security and Medicare off limits (although he has been conspicuously silent about Medicaid, which represents about 10% of outlays. As for defense, while some savings could probably be achieved, most experts believe the overall defense budget needs to become larger, not smaller. And of course, interest on the national debt is sacrosanct — the federal government can’t default. All of that leaves just 25% of the budget — $1.5 trillion of annual expenditures – available for cutting.
Undaunted, Musk and Ramaswamy have identified a list of government programs totaling $516 billion of annual expenditures that they believe could be eliminated without congressional approval due to a questionable legal quirk. Topping this list would be health care for veterans, which costs $119 billion a year, and the National Institutes of Health, which receives funding of $47 billion a year.
But consider the consequences. As of 2021, the most recent year for which there is complete data, the federal government provided health care to 6.2 million veterans, up from 5.4 million in 2010. That number is almost surely larger now because the bipartisan PACT act passed in 2022 expands and extends health care for veterans exposed to burn pits and other toxic substances. The PACT Act is a good example of what DOGE will be up against: It passed both houses of Congress with broad bipartisan support.
Then there’s the NIH, which conducts and funds early stage research that the private sector has historically not been willing to support. All told, the NIH is the largest public funder of biomedical research in the world and has made particularly substantial contributions to reducing death rates for cancer. While the decline in lung cancer relates principally to smoking cessation, the NIH deserves significant credit for the fall in deaths from many other forms of cancer such as colon, breast and prostate.
The DOGE leaders also talk about trimming the federal workforce; Ramaswamy has talked about cuts of 50% to 75%. Doubtless, there are cuts that can be made. But the number of civilian federal employees today is only slightly higher than when Ronald Reagan took office while the population of the U.S. has risen by 47%. Note also that the size of the civilian workforce has grown under every Republican president since Reagan while it fell precipitously during the presidency of Bill Clinton.
Nor is the pay of federal workers out of line. Back in 2011, the average civilian federal worker made about 6% more than a similarly qualified private sector employee. But political pressure has kept raises for federal workers below those awarded to private sector workers so as of 2022, the average federal worker made 8% less than his civilian counterpart.
