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Two Billionaires’ Big Plan to Shrink Government

The Daily

Published: Wed Dec 04 2024

Elon Musk and Vivek Ramaswamy have called the federal bureaucracy an “existential threat to our republic.” Now, President-elect Donald J. Trump is empowering them to drastically shrink it, by whatever means necessary. David A. Fahrenthold, an investigative reporter for The New York Times, discusses their plans — and what it would look like if they were actually carried out.

Summary

Podcast Summary: "Two Billionaires’ Big Plan to Shrink Government"

Podcast Information:

  • Title: The Daily
  • Host/Author: The New York Times
  • Hosts: Michael Barbaro and Sabrina Tavernise
  • Episode Title: Two Billionaires’ Big Plan to Shrink Government
  • Release Date: December 4, 2024

Introduction

In this episode of The Daily, hosted by Sabrina Tavernise, journalist David Farenthold delves into a bold proposal by two prominent billionaires, Elon Musk and Vivek Ramaswamy, aiming to drastically reduce the size of the federal government. The discussion explores the feasibility of their plan, the strategies they intend to employ, and the significant challenges they are likely to face.

Overview of the Billionaires’ Plan

Elon Musk and Vivek Ramaswamy have introduced a concept they dub the Department of Government Efficiency—a nod to a popular dog meme favored by Musk. Although no such department currently exists, they propose its establishment to spearhead efforts in trimming the federal budget by a staggering $2 trillion (approximately one-third of the current federal budget).

Key Objectives:

  • Cutting Federal Budget: Aiming to reduce government expenditure by eliminating inefficiencies and redundant programs.
  • Regulatory Reduction: Significantly decreasing the number of federal regulations to streamline governmental operations.
  • Workforce Reduction: Proposing the downsizing of the federal workforce to align with the reduced budget.

Notable Quote:

"We're going to get the government off your back and out of your pocketbook."
— Elon Musk, 00:49

Strategies to Achieve Budget Cuts

Farenthold explains that Musk and Ramaswamy plan to leverage recent Supreme Court decisions, specifically Loper Bright, to dismantle existing regulations. This approach involves:

  1. Identifying Overreaching Regulations: Using the diminished deference courts now have over federal agencies to challenge and revoke regulations deemed unnecessary or unconstitutional.
  2. Ceasing Enforcement of Eliminated Rules: Halting the implementation of these regulations would, in theory, decrease the need for federal employees dedicated to enforcing them.
  3. Downstream Budget Cuts: With fewer regulations, the government would require fewer employees, leading to reduced spending on salaries and operational costs.

Notable Quote:

"The courts now have the power to strike down these regulations if they feel like they have overstepped the bounds."
— David Farenthold, 07:42

Challenges and Obstacles

Despite the ambitious goals, several formidable obstacles stand in the way of successfully implementing such extensive cuts:

  1. Protected Budget Areas:

    • Medicare and Social Security: Accounting for roughly one-third of the federal budget, these programs are off-limits as both Musk and Ramaswamy have pledged not to alter them.
    • National Defense: With about 13% of the budget allocated here, significant cuts are unlikely given President Trump's historical support for a strong military.

  2. Congressional Resistance:

    • Constituency Loyalty: Many federal programs, even seemingly minor ones like the National Sheep Industry Improvement Center, have dedicated supporters in Congress who resist budget cuts.
    • Legislative Hurdles: Successfully reducing the budget requires congressional approval, which is challenging given the diverse interests and lobbying from various sectors.

  3. Federal Workforce Complexity:

    • Size and Structure: The federal workforce comprises approximately 2.3 million civilian employees, a number that has remained relatively stable. Additionally, the extensive use of federal contractors complicates direct workforce reductions.
    • Retention and Relocation Strategies: Proposed methods to reduce workforce size, such as mandating office returns or relocating agencies out of Washington, face practical implementation issues and potential pushback from employees.

Notable Quote:

"We're in a situation where a couple of very rich people are sort of putting themselves in the place of identifying what the people want."
— David Farenthold, 06:24

Historical Context and Skepticism

Farenthold draws parallels between Musk and Ramaswamy's plan and previous attempts by various administrations to curtail government size. Historical efforts, such as those led by industrialist Peter Grace under Ronald Reagan or Al Gore's reinvention initiatives in the 1990s, have often fallen short due to the intricate nature of federal governance and entrenched interests.

Notable Quote:

"Nobody's excited about this spending. Nobody gets any benefit out of this spending."
— David Farenthold, 15:48

Potential Outcomes

The episode concludes by contemplating the possible ramifications of Musk and Ramaswamy's initiatives:

  • Best-Case Scenario:
    • Targeted Efficiency Gains: Successfully identifying and eliminating significant inefficiencies within major programs like Medicare could result in substantial budget savings and improved governmental operations.
  • Worst-Case Scenario:
    • Minimal Impact with Perceived Success: Small-scale cuts might be implemented, giving the illusion of progress while the overarching issues remain unresolved, thereby deferring the problem rather than addressing it comprehensively.

Notable Quote:

"The best case scenario is that Elon Musk really dives into one of these, like, really thorny, ugly, complicated federal government bureaucracies and finds a way to make it more efficient."
— David Farenthold, 26:46

Conclusion

Farenthold emphasizes the critical need for a serious and thorough conversation about federal spending and efficiency. While the ambition behind Musk and Ramaswamy's plan is noteworthy, the complexity of government operations and political realities pose significant challenges to achieving the proposed reductions.

Final Thoughts:

"It's a hugely important conversation. Just in the last few years, we've added $12 trillion to the national debt."
— David Farenthold, 26:09

Key Takeaways

  • Ambitious Goals: Musk and Ramaswamy aim to reduce the federal budget by $2 trillion through regulatory and workforce cuts.
  • Significant Barriers: Protected budget areas, congressional resistance, and the complexity of the federal workforce make such cuts highly challenging.
  • Historical Precedents: Past efforts to shrink government size provide context for the potential difficulties ahead.
  • Future Implications: The success or failure of this plan could set a precedent for future governmental reforms and fiscal policies.

This comprehensive exploration by The Daily provides listeners with an in-depth understanding of the proposed plan to shrink the government, highlighting both its innovative approach and the substantial hurdles it must overcome.

No transcript available.