President Donald Trump campaigned to reduce our federal government's size and scope, and millions of Americans support that position.
Of course, the devil is in the details.
Our federal bureaucracy is bloated, often unresponsive, and more than occasionally duplicative. A recent Trump edict to the U.S. Treasury and Mint makes perfect sense … end minting/production of copper pennies. Depending on fluctuating copper commodity prices, the one-cent piece costs two to three cents apiece to mint — and that’s before the costs of placing them in circulation.
There will be a few bumps in the transition away from the penny, but the change makes sense and will save cents by the millions.
U.S. government debt is now approaching our annual Gross Domestic Product (GDP), and annual interest payments on the debt will quickly equal our yearly defense spending. Continuing spending resolutions and the status quo are not the answer.
When President George W. Bush attempted to begin a discussion of income and means testing for Social Security benefits, as well as potentially raising the retirement age to 70 (in part due to increasing life expectancies at the time) — as well as a similar scope/scale review of the exploding costs of Medicare and other transfer payments (still the fastest growing and largest parts of the federal government budget) — he was lambasted and shot down almost immediately not only by the leadership of his own party, but by the opposition, too.
The fourth rail in American politics has taken away a program/ entitlement or new benefit, once established and given.
Repeatedly, Elon Musk’s Department of Government Efficiency (DOGE) has stated a federal budget reduction target of $2 trillion.
The entire federal budget discretionary spending is currently at $1.7 trillion (2024 FY budget). Federal government outlays, discretionary and non-discretionary spending (national defense, transfer payments, and entitlements) totaled $6.75 trillion, and revenue and tax collections totaled $4.92 trillion, leaving a 2024 deficit of $1.83 trillion.
Hence, creating Musk’s target of $2 trillion in spending cuts.
Nearly 50,000 federal employees accepted a buyout offer. It remains to be seen whether or how they will all be paid.
Yet, our federal civil service has three million employees, and the Department of Defense another three million.
Even reducing five percent of those combined would result in the loss of 300,000 jobs. However, the U.S. economy typically creates about half that number of new jobs each month — though likely at lower pay and benefits.
Musk and his young tech cohorts then took another page from the typical tech company downsizing playbook.
Last hired, first fired.
New federal government agency employees are on a 90-day probationary period before they become full-time and have protected status, as well as before their health and retirement benefits and leave time begin to accrue. DOGE has put out notices of termination of position to all probationary employees at the Centers for Disease Control, the Veterans Administration (VA), and other federal agencies.
Unfortunately, probationary employees also include those who accept promotions or transfers to a new agency or position, often after otherwise exemplary service.
Probationary employees also include individuals on performance plans or awaiting adjudication of a workplace complaint, who typically cannot be terminated, if or until the complaint is investigated and fully adjudicated, including appeals.
There is a clock on the time length of service for a Special Government Employee (Musk), and the DOGE recommendations and complete report are expected by July 4, 2026 — our nation’s 250th birthday, coincidentally.
But every program and spending bucket has a fan, audience, or constituency.
Our veterans certainly deserve quality healthcare. The VA now has a headcount (pre-DOGE) of more than 400,000, roughly equivalent to the standing troop strength of the U.S. Army. Does the VA need a bigger budget, more employees, or better management and productivity? The operating rooms of the Atlanta VA campus were shut down for several years due to persistent staph infections.
Have you heard of anything similar at any other central for-profit or nonprofit health system?
There needs to be at least one pair of experienced federal budget hands in this cutting mix, perhaps someone like Paul Ryan, with some institutional memory and insights. If not, the ride is likely to be bumpy, the complaining voices will only get louder and larger in number and frequency, not to mention fast-rising litigation costs.
One final tip: Don’t sell or cash in all those pennies. Whether or not they become collector items, copper still has intrinsic value as a conductor, as plumbing/ piping/cable and in computers and elsewhere. Even the lowly penny may eventually hold its value better than the current Dogecoin crypto.
As they say, pennywise, pounds foolish.