Musk’s Slashing of the Federal Budget Faces Big Hurdles

 

Musk’s Slashing of the Federal Budget Faces Big Hurdles

 

The so-called Department of Government Efficiency, with Elon Musk as co-leader, has advantages that past budget-cutters did not, but laws and court challenges can still make change slow and difficult.

 

Any effort to slash the federal government and its 2.3 million civilian workers will likely face resistance in Congress, lawsuits from activist groups and delays mandated by federal rules.

 

David A. Fahrenthold Alan Rappeport Theodore Schleifer Annie Karni

By David A. Fahrenthold Alan Rappeport Theodore Schleifer and Annie Karni

Reporting from Washington

https://www.nytimes.com/2024/11/27/us/politics/elon-musk-federal-budget.html

Nov. 27, 2024

Updated 3:58 p.m. ET

 

These are frenzied times for the nascent Department of Government Efficiency.

 

In Silicon Valley, tech leaders are eagerly seeking positions or introductions to the department, even though for now it is not an actual part of government, but a loose grouping that Elon Musk named after an internet meme. On his social media platform, X, Mr. Musk posted a “Godfather”-style photo of himself as the “Dogefather,” asking government employees, “What did you get done this week?”

 

And in Washington, a House subcommittee has been announced to help push through President-elect Donald J. Trump’s vision, announced on Nov. 12, for a department that would slash the $6.7 trillion federal budget.

 

Members of Congress — even Democratic ones — have been offering up ideas for where to cut what Mr. Musk said could be $2 trillion out of the budget.

 

“It’s going to be very easy,” Elon Musk’s mother, Maye Musk, told Fox News on Tuesday, after she sat in on some of her son’s meetings. Mr. Musk will lead the department along with Vivek Ramaswamy, a former Republican presidential candidate.

 

The coming months will show if her prediction proves right.

 

When Mr. Trump takes office, Mr. Musk’s group will face a daunting reality. An entire apparatus has developed over the centuries that allows the government to keep marching on in the face of economic shocks, wartime hardships, or — as in this case — political vows to diminish its size and spending.

 

Any effort to slash the federal government and its 2.3 million civilian workers will likely face resistance in Congress, lawsuits from activist groups and delays mandated by federal rules. Unlike in his businesses, Mr. Musk will not be the sole decider, but will have to build consensus among legislators, executive-branch staffers, his co-leader and Mr. Trump himself. And federal rules ostensibly prevent Mr. Musk and Mr. Ramaswamy from making decisions in private, unlike how many matters are handled in the business world.

 

Meetings would have to be open and minutes made public, said Brian D. Feinstein, a professor at the University of Pennsylvania who studies administrative law.

 

“All of this would have to happen in the sunlight,” Mr. Feinstein said.

 

A 1972 law says federal open-records laws apply to advisory committees. If a committee does not follow those rules, it could be sued — and a judge could order the committee to stop meeting, or order the government to disregard its advice.

 

A spokesman for Mr. Trump’s presidential transition team, Brian Hughes, declined to answer detailed questions about the effort. He sent a written statement, saying that Mr. Ramaswamy and Mr. Musk “will work together slashing excess regulations, cutting wasteful expenditures, and restructuring federal agencies.”

 

  Mr. Musk and Mr. Ramaswamy laid out plans for their department in an guest editorial in The Wall Street Journal last week.

 

The two men said their effort would include “a lean team of small-government crusaders” working inside Mr. Trump’s administration. Mr. Musk and Mr. Ramaswamy would remain outside government, offering advice as volunteers.

 

“Unlike government commissions or advisory committees, we won’t just write reports or cut ribbons. We’ll cut costs,” the pair wrote in the editorial.

 

A spokeswoman for Mr. Musk’s effort — which he calls DOGE for short — declined to say if Mr. Musk and Mr. Ramaswamy would make their meetings open. She also declined to say if the department would be set up as a separate legal entity, or how many people were already working for it.

 

The DOGE effort remains fairly informal for now. Mr. Musk has been openly tapping his network of Silicon Valley friends and business associates to begin assembling a team of advisers, and the group has been recruiting and interviewing candidates for full-time positions.

 

Mr. Musk has solicited employees on X, saying the job would involve more than 80 hours of work per week. “This will be tedious work, make lots of enemies & compensation is zero,” he wrote.

 

The spokeswoman for the effort did not answer questions about how many staff members the group has now, and who — if anyone — is paying them.

 

In their op-ed, Mr. Musk and Mr. Ramaswamy also said that in slashing regulations, they would rely on a pair of recent Supreme Court decisions that limited federal agencies’ power to issue rules.

 

They plan to compile a list of regulations that they believed stemmed from agencies having exceeded their legal authority.

 

“DOGE will present this list of regulations to President Trump, who can, by executive action, immediately pause the enforcement of those regulations and initiate the process for review and rescission,” the men wrote.

 

Mr. Musk and Mr. Ramaswamy said that cutting rules would allow them to cut staff, allowing “mass head-count reductions” across the government.

 

Yet many of those employees have civil-service protections, meaning they generally cannot be fired without cause, or for their political beliefs. In his first term, Mr. Trump tried to shift thousands of employees into a different category, where they could be fired at will. President Biden rescinded that order, called Schedule F, when he took office.

 

Ripe for Legal Challenges

Jonathan H. Adler, a professor at the Case Western Reserve University School of Law, said that many of the ideas mentioned by Mr. Musk and Mr. Ramaswamy would be ripe for legal challenges and noted that many of Mr. Trump’s previous efforts to expansively use executive powers had been struck down by courts.

 

Mr. Trump’s advisers have suggested that the Supreme Court’s ruling in a landmark case involving Chevron earlier this year will make it easier for the executive branch to nullify rules and regulations that appear to go beyond the legislative intent of laws.

 

However, Mr. Adler noted that the ruling actually means that agencies should not be able to make such determinations, suggesting that it would require litigation and court rulings to quash the regulations. Ignoring or eliminating rules without the following the proper procedures is also likely to trigger lawsuits from those that benefit from the status quo.

 

“There’s litigation risk that they’re not adequately accounting for,” Mr. Adler said, adding that the Trump administration would have to be extremely strategic if it tries to take legally creative steps to rescind regulations or shrink agencies.

 

Law firms have already been bracing clients for legal fights.

 

In a briefing this week, lawyers from Pillsbury Winthrop Shaw Pittman said that companies need to start warning members of Congress and the Trump administration about the potential fallout if government contracts are cut and if certain payments or benefits stop flowing as part of an efficiency effort.

 

“While the Republican-controlled Congress will very likely work in lockstep with the Trump White House, it is equally likely that Republican members of Congress will be uncomfortable with delayed payments and spending cuts to programs favored by constituents,” they wrote. “In particular, government contractors are likely to push back against proposals from DOGE leaders to temporarily suspend payments to contractors while large-scale audits are conducted.”

 

Robert J. Kovacev, a lawyer at Miller & Chevalier who specializes in tax disputes with the federal government, said that the Trump administration’s ambitions were reminiscent of efforts by the Reagan administration to roll back regulations in the 1980s.

 

At that time, President Reagan issued an executive order to freeze regulations that were in process and established a task force to review regulatory burdens more broadly, but it fell short of its ambitious goals.

 

But Mr. Musk’s team has advantages that Reagan’s allies did not: a Republican-controlled Congress, and a 6-to-3 conservative majority on the Supreme Court.

 

“I think what DOGE will bring to the table is a focus on identifying regulations that pushed the envelope and expanded regulatory power too far,” said Mr. Kovacev.

 

Still, Mr. Kovacev said, the process of rescission — formally removing a rule from the books — can take years, because it requires the government to solicit and respond to public comment.

 

If it does hit legal obstacles, Mr. Musk’s group could borrow from another approach Mr. Trump used during his first term: disruption. For example, after the Department of Agriculture’s Economic Research Service unit published research that showed some tax cuts proposed by Mr. Trump would flow mainly to rich farmers, the Trump administration relocated that team from Washington to Kansas City.

 

Because many of the staff members did not want to move halfway across the country, the move caused the unit to shrink in size — and become less productive, according to a 2022 Government Accountability Office report.

 

Protected Status

The success of gutting the budget might also be determined by whether Congress, and even the president, have enough resolve especially when it comes to certain programs and departments. Some of the largest parts of the budget have gone to causes Mr. Trump has vowed to protect, such as Medicare, Social Security and the military.

 

Those sectors also likely have strong support in Congress.

 

Capitol Hill has always been the place where ambitious efforts to slash the budget — from one started by Theodore Roosevelt to the commission under Reagan run by industrialist J. Peter Grace — have run aground. Members of Congress have been reluctant to cut even small programs they think help their constituents, and the law says presidents must spend all the money that Congress allocates.

 

Still, in recent weeks, some members of Congress have shown enthusiasm for Mr. Musk and Mr. Ramaswamy’s ideas.

 

Senator Joni Ernst, Republican of Iowa, took to social media this week to outline what she called “easy” steps to cut $2 trillion in spending. But even those steps showed the complexity of the task awaiting Mr. Musk and Mr. Ramaswamy.

 

Some of Ms. Ernst’s recommendations would be relatively manageable but for negligible savings — at least in proportion to the immense size of the federal budget. She said, for example, that the government could save $16.6 million by no longer providing campaign help to long-shot presidential candidates.

 

And one of her ideas directly clashes with one of Mr. Musk’s and Mr. Ramaswamy’s. The billionaires’ idea is to force federal workers to work five days a week in the office, with the idea that they will become more efficient or quit. But Ms. Ernst wants to take the opposite tack: allow federal employees to work from home and sell off the office space they no longer visit.

 

In the House, Representative Marjorie Taylor Greene, Republican of Georgia, will head up a House Oversight subcommittee to “support the DOGE mission.” So far, she has been vague about her plans but has said in a statement that she intends to hold hearings that will help DOGE “gut useless government agencies” and “expose people who need to be FIRED.”

 

Ms. Greene also plans to push forward legislation like the REINS Act, which would require congressional approval for all regulations issued by federal agencies for them to go into effect.

 

For now, activist groups like Public Citizen, a left-leaning advocacy group, said that there was nothing about Mr. Trump’s victory, or Mr. Musk’s role at his side, that allowed them to ignore the slow legal process set up to make — or unmake — rules.

 

“We will use those structures to complain — and sue, if we need to," said Lisa Gilbert, Public Citizen’s co-president. “We’ll see where they start, and we’ll use every tool in our tool set to push back.”

 

David A. Fahrenthold is an investigative reporter writing about nonprofit organizations. He has been a reporter for two decades. More about David A. Fahrenthold

 

Alan Rappeport is an economic policy reporter, based in Washington. He covers the Treasury Department and writes about taxes, trade and fiscal matters. More about Alan Rappeport

 

Theodore Schleifer is a Times reporter covering campaign finance and the influence of billionaires in American politics. More about Theodore Schleifer

 

Annie Karni is a congressional correspondent for The Times. She writes features and profiles, with a recent focus on House Republican leadership. More about Annie Karni