Will DOGE Finish What Clinton Administration Started?
Lots of ink has been spilled over the past three weeks regarding the newly formed Department of Government Efficiency (DOGE). This isn’t the first time a new administration has attempted to address what it saw as government bloat. Most recently, the Clinton administration tasked then-Vice President Al Gore with the job. Unlike the positive press received by the former vice president and his reinventing government initiative, the media has principally focused on the intentional ham-handedness of Elon Musk and his band of boy geniuses.
To be fair, Al Gore was more focused on generating positive press than the DOGE crew seems to be. To punctuate the absurdity of many government regulations and their impact on spending, Al Gore went on late-night TV and broke an ashtray with a hammer. Apparently, to qualify to be purchased by the government, the ashtray couldn’t break into more than three pieces. Not surprisingly, this meant only one supplier was able to meet the specification – making those awfully expensive ashtrays. Setting aside the irony of the administration that took on Big Tobacco using a receptacle for their wares to prove their point, the hammer bit stuck and gave rise to the Hammer Awards that Gore bestowed upon members of government that restructured their departments for the benefit of taxpayers.
DOGE has taken a decidedly different approach. Instead of encouraging the involvement of government employees in the efforts to root out waste, fraud, and abuse, they’re assuming those very employees are the reason for it. The hammer, as it were, isn’t being used as an award but rather a cudgel.
Many believe that DOGE’s cruelty is intended as retribution against those government employees who likely voted for Biden in 2020 and Harris in 2024. The administration, on the other hand, insists they’re merely expressing the will of the people who, they assert, gave Trump a mandate to get spending under control and root out the “deep state.” Setting aside their misunderstanding of what constitutes a mandate, if we take the administration at their word and assume they’re trying to get the government’s finances in order, they are going about it in a very odd and likely ineffective manner.
Don’t get me wrong, I don’t have a problem with focusing on government efficiency. In some departments of the federal government, an employee is more likely to die than to be fired. A combination of civil service protections and a lack of rigorous performance standards ensures a somewhat lethargic federal bureaucracy.
There are two problems, however, with their approach. First, wholesale approaches, like Musk’s, are often counter-productive, as they are likely to eliminate many productive, high-value-added functions and employees. Second, it’s just not enough money to make a real dent in federal finances. Eliminating 20% of the 3 million federal employees, an employment level not seen since Donald Trump’s 15th birthday, would reduce federal spending by 1%. This doesn’t mean a more targeted approach to downsizing the federal bureaucracy isn’t warranted, eventually. DOGE should start, however, by looking at areas of the federal budget that would actually move the needle.
If Musk really wants to get deficit spending under control, he should point his team of big brains at making our healthcare system more efficient. The United States spends twice as much money per capita as the rest of the industrialized world on healthcare and gets worse results. DOGE should get to the root cause of this inconsistency and have the courage to fight for a fix. A 10% savings on healthcare costs would shave $200 billion annually from federal spending.
Healthcare care costs are also a drag on private sector wages and employment. If the Trump administration is really looking to create a positive supply shock, as Trump believes will happen with more domestic energy production, he’d be wise to realize that healthcare is a much more powerful lever. The amount we spend on oil and its byproducts pales in comparison to the burden placed on our economy by our bloated and inefficient healthcare system. That same 10% savings in healthcare costs would be equivalent to cutting oil prices in half for American businesses and citizens.
Accelerating prescription drug price negotiations and fixing the legal issues in the current law that pharma companies are using to fight to maintain their high prices would be a good start. If the U.S. paid the same price as Canada for prescription drugs, we’d save well over half a trillion dollars in Medicare Part D payments over 10 years.
And if Trump really aspires to balance the budget as he mentioned in a recent social media post (“Balance budget now??? Let’s give it a shot. Lots of money coming in from tariffs. Do it!”), he needs to abandon his efforts to extend all of the expiring 2017 tax provisions. Limiting the extensions solely to the increased child tax credit would insulate most Americans from a tax increase and would cost $4 trillion less over 10 years.
The combined effect of fixing the broken American healthcare system and allowing many of the expiring 2017 tax provisions to expire would send a powerful message to the debt markets that the U.S. is serious about getting its fiscal house in order. The capital markets would reward the behavior with lower U.S. debt costs. A 1% decline in interest rates would save the U.S. government roughly a trillion dollars over 10 years on just the debt that it has to issue in 2025 alone.
Yes, you’ll have to take on big pharma and healthcare. But, if you want to prove your manhood, which seems to be one of the goals of the current DOGE exercise, prove it by taking on the biggest kid on the block.
It’s been said that no one is braver than a former member of Congress. Without the need to run for reelection, politicians can become leaders again. Second-term presidents have the same opportunity but rarely have the coattails to get anything done. Trump may be different. With his loyal following and Bond villain accomplice, he can keep Republicans in line and push through much-needed reforms. Time will tell whether he has the courage to fight for Americans and take on difficult targets like the Clinton administration did with Big Tobacco or merely continue a pattern of bullying easy perceived foes.