Elon Musk will succeed in cutting trillions in federal government waste, but only if he moves boldly and learns from the past.
The Federal bureaucracy has fended off countless reform efforts.
President Ronald Reagan initiated the Grace Commission to identify and eradicate waste.
Its 2,478 recommendations outlined $424 billion ($1,243 billion in 2024 value) to be saved in three years. Congress ignored them all.
Every year, the Government Accountability Office (GAO) and 73 Inspector General Offices report over $650 billion in ongoing waste to Congress and provide recommended actions. Virtually none of them are implemented.
One example: Improper payments (payments that are made incorrectly) cost the U.S. over $200 billion a year. The GAO estimates that the U.S. government has lost almost $2.4 trillion in simple payment errors over the last two decades. No action has been taken.
Every year outsiders expose government waste.
Sen. Rand Paul, R-Ky., issues his Annual “Festivus Report” each December. It focuses on dubious grants and contracts. His 2023 report revealed the U.S. government paid $900 billion for worthless research, fraudulent claims, and subsidies to domestic millionaires and foreign tyrants.
Sen. James Lanford, R-Okla., issues his “Federal Fumbles Report” that highlights laughable waste.
Citizens Against Government Waste’s annual “Pig Book” illuminates questionable earmarks (now called Congressionally Directed Spending).
The challenge is not finding the waste, but actually doing something about it.
Some steps should be taken.
Step 1: Clean House
Only the Reagan Transition of 1980-81 completed this task. It is not enough to ask for resignations from every political appointee from the prior administration. Many will not comply. Others will have found career positions. Some will have created consulting arrangements.
The listing of policy positions, known as the “Plum Book” lists around 8,000 personnel who have limited or no career protection. The number is actually 50,000.
As Director of Personnel for the Reagan Campaign and Transition, I looked at organizational charts for all career personnel who directly reported to policy officials or worked in policy offices.
There were also hundreds of agency and programmatic advisory boards and committees with their own support staff. All of these can be transferred or reassigned to clear operational pathways.
The executive branch is awash with contractors. Many of them owe their allegiance to prior administrations and all have a vested interest in garnering more money for themselves.
A detailed review of these contracts and contractors can empty out large swaths of the unwilling. Many of these contracts may be poorly written and administered. Some may have no real value. Ending these contracts will save billions.
Step 2: Take Control
Bringing in new people who are loyal and competent is vital. So is finding and promoting their career counterparts.
Whistleblowers exposed many problems during the Biden-Harris Administration. They should become key advisers for identifying career allies and ferreting out resistance.
Step 3: Follow the Money
Approximately $1.028 trillion remains unexpended among general accounts and $461 billion remains unspent in trust funds. While these funds are technically obligated, the fact that they have languished for years raises questions about their use and management. These funds can be reclaimed and reused.
Look for the accounting code “1941” on federal agency accounts. This code is for “unexpired unobligated balances."
Another database is expired grant accounts. The GAO uncovered 7,500 just in HHS’s Payment Management System, all with funds that will never be used and can be reclaimed.
Another code is the “Current Services Budget,” or “Baseline” budget. This outlines how much it costs to maintain existing services at current levels. It factors in various cost drivers — cost-of-living increases, escalation clauses in contracts, etc.
Funding above “Current Service” is a spending increase. This is a built-in “ratchet effect” to expanding government.
Step 4: Eliminate Programs
Congress is the headwaters of expanding government. Every year new programs, entities and reporting requirements are established.
Members from both parties jealously guard their progeny. Reviewing which ones are obsolete and duplicative may shame some in Congress to let them fade away.
Some may have lost their protection as their creator has left Congress. It took years for the Base Realignment and Closure (BRAC) process to eliminate obsolete facilities.
Abolition opportunities abound for those programs directly created by the executive branch.
Eliminating agencies and departments requires more courage than exists in Congress.
Step 5: Reduce Personnel
Instituting a real hiring freeze will rapidly drop numbers through retirements and “churn." Do not conduct “Reduction in Force” (RIFs).
This triggers an array of procedural impediments and legal actions. Reagan’s General Services Administration (GSA) cut nearly two-thirds of its workforce in three years without a RIF.
Congress establishes programs but rarely details how they are managed. De-layer, reduce and consolidate aggressively.
Americans deserve value from every dollar spent.
Musk can make it happen.
Scot Faulkner is the best-selling author of "Naked Emperors: The Failure of the Republican Revolution." He also served as the first chief administrative officer of the U.S. House, and was director of personnel for the Reagan campaign and went on to serve in the presidential transition team and on the White House staff. During the Reagan administration, he held executive positions at the FAA, the GSA, and the Peace Corps. Read Scot Faulker's reports — More Here.