On the 2024 campaign trail Donald Trump has promised that in a second administration he would create a “government efficiency commission.” Its big task: a “complete financial and performance audit of the entire federal government and making recommendations for drastic reforms.”
This exercise, Trump said, would save “trillions,” “within six months.” The cost-cutter in charge would be Elon Musk, who recently claimed he could find “at least $2 trillion in cuts” from the federal budget as secretary of a “Department of Government Efficiency.”
We’ll come back to that in a moment. But it’s worth noting that the Trump/Musk pledges are part of a long history of attempts to run the federal government like a business and to frame fraud, waste, and abuse as big-ticket contributors to federal spending. We can go back at least as far as 1905, when Theodore Roosevelt created the Keep Commission (named after its chair, the assistant treasury secretary) to examine the administrative methods of the executive branch.
William Howard Taft doubled down five years later with the more expansive President’s Enquiry in Re-Efficiency and Economy (later the Commission on Economy and Efficiency), with directions to each department secretary to appoint a “committee on business methods.” The idea of importing private sector insights to public sector management were key to the Budget and Accounting Act of 1921 (which created a presidential budget, and budget agency) and later to the two Hoover Commissions. (For an excellent survey of these efforts, see Peri Arnold’s ”Making the Managerial Presidency.”)
Ronald Reagan made a similar move with the Grace Commission
Probably the closest quasi-recent parallel is the President’s Private Sector Survey on Cost Control in the Federal Government, convened by Ronald Reagan in 1982. PPSSCCFG was hardly a mellifluous acronym, so the body was usually known as the Grace Commission, after its chair, J. Peter Grace of the W.R. Grace & Co. chemical manufacturing firm. In the end, public administration professor Charles Goodsell later wrote, “some 2,000 business executives, managers, experts and special consultants were brought into the project, probably the biggest army of outside help given the government since World War II.” Goodsell concluded that some of the 2,478 proposals that resulted (after duplicates the number was closer to 2,160) were quite useful. One legacy, arguably, was the federal base closing process adopted in 1988.
But (Goodsell continued) the overall effort was of “decidedly mixed quality” and the amount saved by adopting these proposals fell far short of the $424 billion over three years that Grace himself claimed. Indeed, a joint GAO-CBO analysis put the figure at closer to $98 billion. In 1986, Reagan himself said the U.S. government had accepted 1,741 of the recommendations, but most still required congressional action – which would save just under $70 billion over five years. (At this point the federal budget was about $930 billion, so the savings would have been about 1.4% of each year’s spending.)
The Grace Commission exercise, then, had its analytic uses. But its contribution to cutting the budget deficit was greatly exaggerated. Further – as none other than John Roberts (yes, the current chief justice, then serving in the White House Counsel’s office) noted in two 1985 memos – the “Commission itself presented an unending parade of legal problems.” Indeed, “serious conflict of interest problems were presented … as corporate executives on the Commission scrutinized the internal workings of agencies charged with regulating their businesses.” (And yes, the potential Musk task force raises similar legal concerns – especially since Musk companies have $3 billion in federal contracts, according to the New York Times.)
Bill Clinton also tried to make government more efficient
In 1993, the Clinton administration’s National Performance Review (NPR) tried again, though with a very different approach. Under Vice President Al Gore’s leadership, this exercise used federal employees rather than outside executives to “create a government that works better and costs less.” Clinton’s press secretary touted the initiative, saying “It takes on big problems within government, it makes some very significant changes, and it’s going to save the American taxpayers a lot of money.” The NPR did indeed streamline various governmental processes, and improved customer service (in part by taking advantage of the early internet). Gore aide Elaine Kamarck testified that the NPR achieved some $136 billion in savings over time – of course, annual federal budgets were pushing $1.5 trillion by that point. Many of the cuts came from shrinking the federal workforce, mostly through a buyout program.
However, as Sean Michael Newhouse recently noted in Government Executive, federal employees who took the buyout were not necessarily those the NPR had identified as surplus staff. Thus if the U.S. government cost less, it didn’t necessarily work better.
Again, these two examples suggest that attention to administrative processes can yield improvements – but not necessarily save a lot of money. As Reagan aides pondering successor efforts to the Grace Commission concluded, what was left were “not cosmic questions and they raise management, rather than grand policy issues.” These might be insufficient “to engage the interest of … prospective [Commission] members.”
So how do governments save money?
Fun fact: If you want to save a lot of money, you need to cut a lot of programs. Here’s what the federal budget actually looks like: In fiscal year 2024, which ended on Sept. 30, 2024, the federal government spent about $6.75 trillion (with another $2 trillion obligated, but not yet spent – for instance on contracts for weapons systems or infrastructure projects). Since tax and other receipts were “only” about $5 trillion, the United States ran a FY2024 deficit of about $1.8 trillion.
So $2 trillion-ish is indeed the amount that would need to be cut in order to immediately balance the federal budget. But in terms of money actually spent last fiscal year, the top recipients were … old people and soldiers. Here are the top five categories of federal spending. Note these include spending categories the Trump campaign has promised not to cut:
| Social Security | $1.46 trillion |
| Health care (including Medicaid) | $912 billion |
| Interest on the national debt | $882 billion |
| Medicare | $874 billion |
| National defense | $874 billion |
| Total: | $5.002 trillion |
That totals just over $5 trillion. Cutting another $2 trillion, then, would eliminate all remaining federal spending, both discretionary and mandatory. That includes veterans’ benefits, farm subsidies, transportation aid, income support (such as Temporary Assistance for Needy Families and the Supplemental Nutrition Assistance Program – formerly known as food stamps), etc., etc., etc.
You can decide whether Musk is actually a successful private sector executive with good managerial advice to share with federal agencies. But either way, he certainly doesn’t seem to know what is in the federal budget or how it works. Those $2 trillion in cuts would not be governmental efficiency but governmental elimination.
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