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 Neurolink. I'm your host, Will Walden.
How do Elon Musk and Vivek Ramaswami 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, an
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
Ramswami, noted their effort to understand, quote, the full
scope of their proposal in the extent of executive authority
they may wield. His remarks hinted at the
constitutional limitations that Duo could face, he said.
How much would be done by executive action?
He asked. And perspirations 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. Now, Musk and Ramaswamy's DOGE
initiative must therefore navigate not just political but
also legal constraints for their actions.
Now, 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 now. To understand the hurdles facing
DOGE, it's crucial to examine the lessons past efforts to
reform government spending. No 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. Now, 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 While the Reagan Revolution Failed, chronicling
his frustrations. Now, Reagan's later attempts to
streamline government included pointing 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, WR Grace
and Company, having paid minimal taxes.
These optics undermine public confidence in the commission's
efforts. Now Reagan's successor, George
HW 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
at a FEMA, 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. You know.
Other figures, such as audio executive Lee Iacocca, similarly
champion the idea the private sector efficiency could
transform public sector governance.
While some proposals often gained initial traction, they
rarely translated into substantial reforms.
The president, Bill Clinton and Vice President Gore sought to
streamline federal operations through the National Performance
Review, often referred to as Reinventing Government, or REGO,
or Rigo. Borrowing from earlier
initiatives like the Grace Commission, Rigo aimed to reduce
bureaucracy, cut spending, and modernize federal agencies.
Now, Gore touted 6 figure reductions in the federal
workforce as proof of the initiative 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 reticle than
substantive federal spending surge 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 Bowles,
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,
political gridlock stymied their implementation.
A super majority of the Commission failed to endorse the
package, leaving its proposals unfulfilled.
Now, Doge's emphasis on reducing waste and inefficiency echoes
past efforts like the Grace Commission and REGO.
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 budgets, large scale
fiscal reform remains very elusive now.
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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