Scott Bertram (3:57)

Grover, speaking of not being allowed, some of these moves and maneuvers have been challenged in court. There have been some temporary stays placed upon some of these cuts, some of these efforts by Doge and the Trump administration. How do you think that those arguments will fare the deeper we get into the court system and perhaps if they even reach the Supreme Court?

Grover Norquist (4:20)

Well, you can chew on anything in this town. And the federal government is set up so that lawsuits keep lawyers employed and rich and can tie things into to knots. But it doesn't speak to, oh, my goodness, there are a lot of lawsuits. Something must be wrong. No. Somebody's doing something that somebody else doesn't like. Lawsuit. My goodness. A judge in Chicago agreed with the lawsuit. Yeah, there are plenty of Democratic judges who might as well be Democratic precinct workers. That's the way they view their job. It does not mean that the law's on their side. It does not mean they're right. It just means you picked the right judge. So right now, it seems to be knocking down most of these criticisms and things are moving forward. And some of it, the president is deliberately saying, I have the right to fire somebody who's on the FCC commission. Okay. And that was a. It is a debated point. Courts have ruled one way, and it's now believed that they're likely to rule the other way in favor of the president's position. So, oh, my goodness. He's doing something that the court, you know, 50 years ago said you can't do. Yes. On purpose. That is what he's doing because he wants to go back to the court and say the original decision is wrong. And a number of the folks on the Supreme Court have commented, if I was asked again, it would be nice if somebody brought up a case like this because it was wrongly decided before. Sometimes the Supreme Court judges hint at cases they'd love to see brought up and revisited.

Scott Bertram (6:04)

Grover Norquist with U.S. president of Americans for Tax Reform. More@ATR.org We've seen now multiple attempts with these offers of buyout for federal government Employees, something we see in the private sector quite often, but not often in the public sector. Our buyouts, our offers like this, an effective way to trim the size of government. And are the employees taking the buyouts? Generally. Generally the ones we would want to take the buyouts.

Grover Norquist (6:37)

It has been done before, sometimes in the 27th paragraph of 1 of the news stories announcing, this is outrageous. It's never been done before. They do mention that Bill Clinton did it on a much larger scale than the President Trump is doing it. But you do have to get to the end of the story. They don't lead with it and mention, just like Clinton did, Trump is doing this. So, yeah, it can be done. It is, in fact, one of the few ways where you can do things in terms of significant numbers in the private sector. During the 80s, when we were having our major companies challenged by Japanese companies, there were of the Fortune 500, 800 major restructurings. Okay, so more than one. Yeah, they're all restructured some more than once. And the federal government had. Perhaps you could look at the welfare reform package the Republicans passed and made Clinton sign towards the end of his first term. So one government restructuring, 800 private sector restructuring, a big successful company. These are the biggest companies around. These are not little companies struggling and failing. These are big companies that in theory were on top of all this stuff and then realized, no, we're not on top of this. As much as we'd like to think, this is a very important set of projects. Yes. The way the civil service is set up, it's difficult to fire people. It shouldn't be. It shouldn't. I think it should be difficult to hire people and very easy to fire people. And we're making more progress. But you're talking now 200,000. This is a number in the newspaper the other day. 200,000 federal employees leave each year. If you only replaced half of them, that's 100,000 people leaving. That's pretty substantial. You can do that in addition to what we're up to. But there are a couple million civilian employees and the Pentagon. This from the comptroller of the Pentagon, Deb Zakhon, comptroller under Bush. He said, at the height of the Cold war, we had 700 civilian employees at the Pentagon. And we win the Cold War, Soviet union falls back 1,000 miles, becomes less threatening. And we downsized the number of ships and the number of airplanes and the number of pilots and the number of soldiers and all of these things that weigh down number of bureaucrats still 700,000. Okay. No decline in overhead costs. When the military was downsizing everything, all the important bits of the military were being downsized. Doves.com made the comment that we could go to 500. You could drop 200,000 civilian employees in the Pentagon, in the Defense Department and not miss them. That's a lot of money. That is a lot of staff that we need to go through. And the challenge with that is, under present rules, there's a union in the Pentagon. And if you try and say, okay, I don't want you to do this job anymore, this job is not useful, I want you to go over here, they say, oh, you have to talk to the union about that. Maybe give me more money or give the union something to do that. I did talk to all of the Republicans who are heads of the Defense Department. One of them commented, I never ask a civilian employee to do anything important because for just that reason, if you bring him in to work on a project, you can't then send them back to where he was. So I bring in somebody in uniform that I can have come in for three months or three years, then go back to do when the project's over or I hire somebody in the private sector consultant to do it. Because you don't have to pay them a pension. You can say, I want you to do this for three months and they're happy to do that. They don't sit in your house and decide, I'm now staying here, you have to pay me forever. I only want you for three months. No, you have to pay me forever. Civilian employee in the Pentagon unionized. These are ridiculous rules. One of the things you're going to find out more and more is why there should be no unions in the federal government. Is a big mistake that Jimmy Carter got a law passed that they would. There's a solution, though. That law itself has a paragraph that says, any department the President says is important to national security, he can ban a union there. The President of the United States, with a stroke of a pen, could say, no union in the Pentagon. And that would be a good idea.

Scott Bertram (11:17)

Grover Norquist with us. Grover, we have a large deficit. We have an even larger debt. Of course, this is a big, big ask. How far can DOGE go? How much of its mission can be accomplished without looking at Social Security, Medicare, defense spending, the non discretionary numbers in Washington?

Grover Norquist (11:40)

Well, they're certainly allowed to look at areas of fraud and misuse. When the federal government sends out checks, they estimate that 15 or 20% are incorrect. When they were sending out checks for Covid everybody who sent in a note and said I want one of those checks. The number was something like 20 to 25% were fraudulent. A lot of hard working people in Nigeria were getting checks and they report this all the time and never do anything about it because every once in a while you read in the Washington Post a new study has said that 20% of food stamps is sent out fraudulently and Medicaid and focusing on fraud or people who aren't citizens or sending out two checks to the same person, sending checks to people after they passed away. There is a number there that is not non zero and that could save a significant amount of money. So that's important. Ultimately there are things that you might want to do with Medicare and Social Security, but right now people do pay in for that. And the President said we're not touching that in terms of changing the law there. What we may do is block grant Medicaid to the states. We were within one vote of doing that. Don McCain said no because he was mad about something that day that would have saved about a trillion dollars over a decade simply by saying, okay, states, what we gave you, here's what we're going to give you from now on. Same amount plus inflation. But you get to police for fraud and you get to police for whether people should have these checks. And you decide how to get the best price and the best return on your investment. We do One thing in D.C. we'll never get any better. You do 50 things in the states, somebody will do it really stupid that California's job and somebody will do it smart and the 50 states will move towards less expensive and less stupid.

Scott Bertram (13:46)

Grover, there's talk about a doge dividend perhaps returning some of the savings back to U.S. taxpayers. Is that a good idea or should the savings be funneled all of it toward our deficit and potentially toward our debt down the line?

Grover Norquist (14:01)

Well, every time you save money that you're not spending, you don't need to tax as much. So in point of fact you can either take that in less deficit and debt and that saves people money and lower taxes, or you could cut taxes directly, just take the income tax and cut it 5% or 1% or something. I think it's getting the number on how much you're saving is such a guesstimate. So I would not want to be budgeting around estimates on how much you intend to save. I think in the rearview mirror you'll be able to understand how many tax dollars were saved. There's nothing technically wrong with the idea other than who knows, you'll be overstating or understating it. Since the true cost of government is how much you spend. This is Milton Friedman's observation and many other people. Whether you take that money in taxes or inflate the currency or borrow that money, it's gone. That's the money that's gone from the people who earned it and disappeared into government. So the cost of government is total spending. So when you spend less, the American people benefit by not having the government borrow that money, by not having the government inflate currency or by having them not raise taxes to pay for money that they're no longer spending. It will be saved by the American people. That's fine. That's good. That's exactly what we do. I think it's probably best to take it and lower inflation and less debt.

Scott Bertram (15:45)

One final question for Grover Norquist. Part of the mission here is not just to change things for the next three years or for this administration, but to change the way that government and government agencies operate long term. In Washington. Are the efforts by Doge enough or will that necessitate some sort of legislative or congressional action to make more permanent changes in Washington?

Grover Norquist (16:11)

It is necessary to change some laws. We need to invoke the law that says you can decide that unions will not be allowed in important parts of government in order to have the flexibility to make the reforms. I think the exposure of the nonsense we're seeing, the exposure of the bureaucrats screaming bloody murder. You're not allowed to look at this. This is our thing. This is la Costa Nostra. This is our thing. We do this. You don't get to interfere with this. It's not democratic. If elected officials have some say in how the government's run. I mean, they just sound crazy in their defense of the indefensible and what makes this effort. There have been efforts in the past to have commissions to look at saving money. This one has Twitter behind it. This one doesn't have to say, pretty please, Washington Post, would you write an article about this? And they write an article about how unfair it is because somebody who got laid off, this, that, or the other thing, sob story about one person. I'm sorry, taxpayers never had sob stories about taxpayers who are paying for this nonsense. But if you reduce the number of employees in the private sector, sometimes something doesn't work and a company drops. It goes bankrupt completely or it drops its salaried workers by 10, 20%. When Musk came in, he dropped what, 70, 80% of the people who are working or at least getting paid at Twitter, and nothing stopped getting done. Why was that company out of shape? I'm not sure. The federal government's 80% nonsense, but it's not zero percent nonsense. That's what we know. And the defenders of the status quo are saying, nothing's wrong, stop looking. So I think DOGE has already altered the correlation of forces about. Can you stand there in this town and say, there's nothing wrong? We need more employees, not fewer. They're not making any mistakes. That person would now be laughed off the stage just because of what we found so far. And we have two years of this investigation into federal spending rules that apply, policies that keep people who shouldn't be employed, that have them way overpaid compared to what people in the private sector make that better. More expensive pensions, more expensive pay. They work fewer hours in the day, they work fewer days in the week, they work fewer years in their lives, and they have a pension that you and I will never see because it's so expensive. All of that stuff is now up for discussion, negotiation and rethinking. And I don't think you can put that back together again. I think that fake sense that this is the way the world has to run has been shattered.

Scott Bertram (19:12)

Grover Norquist is president of Americans for Tax Reform. You can find him there@atr.org also on X at Grover Norquist. Grover, thank you so much for joining us here on Future of Freedom.

Grover Norquist (19:26)

Thank you.

Scott Bertram (19:26)

Now, to hear another side of the argument about the Department of Government Efficiency, we talk with Jessica Riedel, Manhattan Institute Senior Fellow on budget, tax and economic Policy. Jessica, thanks so much for joining us.

Jessica Riedel (19:38)

Glad to be here. Thank you for having me.

Scott Bertram (19:40)

Talking on the subject of doge, the Department of Government Efficiency, I want to ask first, you've spent years studying the federal budget, the ins and outs. Based on what you've seen so far, what do you think is a rough estimate of the tangible, real savings perhaps realized through the efforts of Dogecoin?

Jessica Riedel (20:05)

Well, despite claims of saving initially 55 billion, I believe the number they claim is now approaching $100 billion. The number, the verified numbers that they have been able to show is closer to $2 billion. And even that might not ultimately materialize. So we're looking at anywhere between zero to $2 billion. To put that in context, $2 billion is 1 35th of 1% of the federal budget. So, you know, try not to go by tweets that talk about, we've saved 100 billion, we've saved 50 billion they've really only verified possibly $2 billion in savings.

Scott Bertram (20:54)

So, as you mentioned, there are larger numbers being discussed. So I guess why and where are they falling short? Why do they think they're saving more than perhaps they actually will be able to?

Jessica Riedel (21:07)

Well, first, simply because the amount they're claiming far exceeds the amount they're. They are actually posting on the website for Doge for their wall of receipts. Initially, they claimed 55 billion, but their wall of receipts only included 16 billion. And then if you dive into the 16 billion, you have such huge errors, like mistaking an $8 million contract for an $8 billion contract or triple counting the same grant. In some instances, they took credit for canceling a contract that had ended 20 years ago. Some of the other ones actually haven't been canceled or already spent all the money. So if you actually fix the accounting errors, the math errors, the misreading errors, you really only find about $2 billion in true canceled spending. And even that may not actually reduce spending, because legally, the agencies are required to reprogram the money into other contracts and spending if they find such saving.

Scott Bertram (22:23)

There are various cases now moving through the legal system that also might affect the ability to save or not spend some of the money claimed by doge. And I mean, anyone can file a lawsuit and there are allegations, or at least people say they found a friendly judge in this particular district in D.C. what kinds of legal issues do you think are likely to stick that might prevent, again, the ability to realize the savings being promised?

Jessica Riedel (22:52)

The main challenge is something called impoundment. Impoundment is part of the Constitution. It's part of the 1974 Budget act, and there are Supreme Court cases that forbid this act. Impoundment is when Congress passes a law appropriating a certain level of spending, and the President or executive branch just refuses to spend it. That is not legal. If Congress appropriates $100 billion, the agency is required to spend exactly 100 billion. Not up to 100 billion, but exactly. And like I said, the Constitution, the 1974 Impoundment act, and Supreme Court decisions have all ensured that impoundment is not allowed. So we're already seeing courts express concern that the White House cannot unilaterally cancel USAID spending. They can't unilaterally cancel contracts and pocket the savings. The other issue they're having is things such as canceling DEI contracts has been shot down by a few federal courts as viewpoint discrimination. The government cannot discriminate among certain viewpoints when distributing grants or contracts. So that's an issue, too, but again, the bigger one is impoundment. The executive branch can implement the law. They can move money around, but they can't just decide not to spend money.

Scott Bertram (24:32)

Jessica Riedel with us here on FUTURE of freedom. You have written about this in the time since Doge has started and said, you know, you're all for finding ways, but you can't really do anything unless you're willing to touch Social Security, Medicare, defense spending, veterans benefits. We hear often about when Democrats have power, they're not afraid to spend that capital on government expansion, be it Obamacare or other programs. Should it be the responsibility of one party of the Republican Party to spend political capital to shrink programs like those which might not be politically popular?

Jessica Riedel (25:16)

Well, you got it right on the amounts. 75% of federal spending goes to six items, Social Security, Medicare, Medicaid, defense, veterans and interest. Again, that's 75% of the budget. Moreover, those programs are responsible for about 90% of spending growth projected over the next decade. So really, Social Security, Medicare, Medicaid, defense, veterans and interest are the whole ball game. And the fact that Doge isn't really doing anything about those sides of spending, in part because they can't you need Congress to pass a law is one reason why Doge cannot seriously reduce spending. They're not going to balance the budget. They're not going to save a trillion dollars because the only way to do that is to go into the aforementioned programs. I do think you need both parties to address the growth of these programs. If one party tries to do it by themselves, it's political suicide. They're going to get demolished. We're seeing that right now in Congress, where even a push to restrain Medicaid is running into a lot of political roadblocks from Republicans. But ultimately, if you're concerned about deficits, 1.8 trillion this year, heading towards 4 trillion in the next decade. If you're concerned about interest costs tripling in the last four years and heading towards 30% of tax revenues in the next decade, you're going to have to address these programs. And like I said, the only real way to do it is in a bipartisan way where you put everything on the table, taxes and spending. Because when one party tries to do it themselves, they get clobbered and they give up, which is kind of what we're seeing now with Republicans in Congress.

Scott Bertram (27:10)

I understand that this answer could go on a while. So perhaps as briefly as makes sense, how did we ever balance the budget and find a surplus in the Clinton gingrich years. Because as you explain as you lay it out, it seems nearly impossible at this point to get back to that stage. How did we do it back then?

Jessica Riedel (27:35)

That's a great question. First off, in the 1990s, deficits were just smaller to begin with. We didn't have Social Security and Medicare costs nearly as high as they are right now. The baby boomers hadn't retired yet, so the challenge was a lot smaller. And it wasn't as politically sensitive. Where to fix the budget, you had to go into Social Security and Medicare. But ultimately, the budget was balanced by two factors. First off, the end of the Cold War brought a massive reduction in defense spending from about five and a half percent of GDP to 3% of GDP. And then in the late 1990s, we had a stock market and revenue bubble where a lot of Internet euphoria raised stock prices so high and the government started collecting a lot of taxes on all those investment profits. Those two temporary factors were responsible for nearly the entire balanced budget. It wasn't massive entitlement reform. It was Cold War defense savings and a revenue bubble. It was a temporary accident. And the problem was by 2001, the bubble had burst. And then 9, 11 pushed up some of the defense spending. And so those two factors reversed. And then since then, we've also just had Social Security, Medicare and Medicaid costs go through the roof.

Scott Bertram (29:09)

Jessica Riedel with us from the Manhattan Institute, senior Fellow on budget, tax and economic policy. You made a point in one thing you wrote about whether or not the public even has an appetite for getting back to a balanced budget. Have we done a poor job of convincing the American public writ large that this is something that needs to be addressed? When they look every year and see a trillion dollar deficit? Two trillion. That number is too big for most people to even understand or comprehend. Do we have to do a better job of convincing people that this is an issue that must be addressed?

Jessica Riedel (29:49)

We have to address deficits. We're not going to get to a balanced budget, but we can't have the debt growing as fast as it is now. And when you look at polling and surveys, people rank cutting the deficit. Third, after increasing my spending and cutting my taxes. The problem is, I think most Americans recognize that deficits are unsustainable, but they're just not willing to accept any of the reforms to fix it. And a big part of the problem is people on both sides of the political spectrum are seduced by their one cool trick to fix the deficit. If you talk to people on the right they'll tell you, oh, we can fix the deficit. Just cut foreign aid and Ukraine and welfare and immigrant, immigrant spending, and that'll fix everything. The reality is that stuff is a rounding error. If you go to somebody on the left, they'll say, oh, just raise taxes on the rich and cut the fence and that'll fix everything. That couldn't even get you close. And as long as both sides are married to their one cool trick where if we just do this one policy that I already like anyway and that won't touch me, we can fix everything. They're not going to be willing to do the true sacrifices. The reason we have deficits is because the American people want deficits by voting for politicians who will increase their spending and cut their taxes. And most of the benefits go to the middle class. We have met the enemy, and it is us.

Scott Bertram (31:33)

I want to ask about Elon Musk, the face and driving force behind Doge. Is he simply the wrong man for the job? Is it the wrong approach to try to treat government in the same way that Elon Musk might have treated a business like X or Tesla or anything else he's. He's run in his past?

Jessica Riedel (31:54)

What we have found with Elon Musk and Doge is that for whatever brilliance they have in Silicon Valley, running businesses, starting companies, building rockets, that expertise has not been transferable to the federal budget or federal accounting. Musk and his people seem way over their head, making the most basic mathematical and counting errors. And also, as you mentioned, there is a concern that when Musk is running a company, he has a lot more flexibility to just go in and fire people and run the place how he wants, as long as the shareholders and the board, who often are on his side, don't mind. Where the federal government is different, you have a. You have laws, you have regulations, you have Congress, and instead of some shareholders, you have 330 voters. You don't have the power to go in and just remake a company yourself. I would have preferred Doge be run by someone such as Mitch Daniels, who budget nerds will know was a former head of the Office of Management and Budget, former governor of Indiana, executive at Eli Lilly, and known as a genius budget cutter. Wherever he has gone, he would have gone right in on day one and found ways to cut even more spending than Elon Musk, but done it legally, competently and with minimal disruption.

Scott Bertram (33:29)

There's also an argument that part of what Doge is doing is, yes, finding waste, fraud, finding ways to save money, finding ways to be efficient, but in its efforts, it's also accomplishing this goal of sort of reshaping government and the way it works, and to use the language again, the bureaucratic state, this unelected, unaccountable fourth branch of government. And if there's a way to sort of reshape that aspect of how government operates, that's another worthy goal of doge, I guess. Can that be done, and can that be done in a way that is effective without finding the savings that they've promised?

Jessica Riedel (34:14)

Well, again, the. The spending they're going after, I call it spending cut theater. There's not real savings, but it is cultural totems, DEI contracts, Politico subscriptions, foreign aid, government employment. There's not a lot of money in any of these relative to the size of the deficit. But it excites the MAGA base to go after, which is why I would say DOGE is not about cutting spending or cutting the deficit, no matter what they tell you. It is more about a cultural takeover of the federal government. And I think you can absolutely make a case that parts of the bureaucracy have become a bit of a fifth column in terms of resisting laws and directives from the chief executive. I think there's something to be said for reforming the bureaucracy that way, but I'm concerned about going in and essentially firing people who. Where it goes over what Congress intended, it goes over what Congress required a program to do to accomplish its objectives. And we have to be careful that we don't replace perhaps a liberal civil service with a biased, conservative civil service. I think if we can do a better job making it easier to fire incompetent government employees, reducing the biases you see from federal employees in certain agencies, and creating more nimble agencies that truly just implement the law and can be fired if they do a bad job, that's progress. I'm not sure that's where we're going to end, but that would be progress.

Scott Bertram (36:15)

One final question. In your eyes, has the Trump administration and DOGE already blown whatever opportunity there may have been to enact these changes, or is there still time to recalculate.

Jessica Riedel (36:30)

If they actually went after true government waste? There's $191 billion a year lost to payment errors. What the Government Accountability Office calls true waste, fraud and abuse is up to $500 billion a year. These are true inefficiencies. Payment errors. DOGE could save significant money in ways that Congress would embrace and actually reduce the spending levels for to accommodate and save money. And that's, interestingly, what the executive order creating DOGE was supposed to do. The executive order said that DOGE shall, quote, modernize federal technology and software to maximize governmental efficiency and productivity, end quote. If DOGE goes into that fixing the payment systems, fixing overpayments, they can save hundreds of billions of dollars legally, legitimately, and without going over the heads of Congress. I'm not sure I see an interest in doing that, but the opportunity is there.

Scott Bertram (37:46)

Jessica Riedel at the Manhattan Institute Senior Fellow in Budget, Tax and Economic policy more@manhattan.instute Jessica, thank you so much for joining us here on Future of Freedom.

Jessica Riedel (37:58)

It's been fun.

Scott Bertram (37:59)

We thank both of our guests for joining us. Grover Norquist, President of Americans for Tax Reform, on X Rover Norquist and Jessica Riedl, Manhattan Institute Senior Fellow on Budget, Tax and Economic Policy, on Xessicab Riedle for additional episodes of the Future of Freedom podcast and other fine podcasts from America's Talking network, check out americastalking.com or anywhere you find your audio. Thank you for listening to Future of Freedom, presented by America's Talking Network.