-
Trump May Succeed Where Others Failed in Personnel Cutting
Disclaimer: Then-Vice President Al Gore awarded my State Department team in Seoul in the mid-90’s a Hammer Award for helping “reinvent government.” Gore was in charge of the Clinton-era plan to create a government that costs less and works better. The plan mostly depended on us run-of-the-mill employees to come up with cost saving hacks and strategies within our own offices.
The award, a mounted gold-painted hammer, was supposed to remind us of the expensive, wasteful procurements by the military, in this case an ashtray that would break into no more than three pieces when hit by a hammer. It’s true! So while as a Gore team award-winner I might seem a bit biased toward what Donald Trump and Elon Musk are doing, the truth is actually the opposite. And that’s because one strategy failed while the other still has a decent chance of succeeding.
Trump is far from the first president to want to reform the Federal government. Ronald Reagan in 1982 launched a group led by 150 private sector CEOs to review federal agencies and make recommendations to reduce waste. “Be bold. We want your team to work like tireless bloodhounds. Don’t leave any stone unturned in your search to root out inefficiency,” the president told commission members. Officially called the President’s Private Sector Survey on Cost Control in the Federal Government, it was better known as the Grace Commission after its chair, Peter Grace. Grace was well-known at the time for a speech where he said food stamps were basically a subsidy for Puerto Ricans.
In due time, the Grace Commission issued a report suggesting over 2,500 recommendations to increase government efficiency. Most of them required Congressional action and so in the end not much was done.
As mentioned, led by former Vice President Al Gore, the National Performance Review had similar aims as the Grace Commission, but went about achieving them in a different way. Rather than bringing on private sector outsiders like Reagan, the Clinton administration relied on federal employees. “It is career bureaucrats who know, better than anyone else, what works and what doesn’t,” said a Gore aide. “A successful reform effort cannot take place without their wisdom and without their participation.”
Part of that wisdom was my team out in Seoul. We were then the busiest visa issuing embassy in the world, and were literally struggling for air amid Korean visa applications for travelers to the United States. Our rewarded hammer wisdom was to couple a hiring blitz with a range of kinda-makes-sense administrative changes to our workflow. Because we were processing close to a million visas a year, even small adjustments could have a big impact (a small thing times one million is a big number.) It made it all seem dramatic, and we wrote it up nicely, hence the award from Gore. We hung it on the wall near the restrooms where everyone could see it daily.
Gore’s program got a little help, I mean, besides from my team. Between January 1993 and September 2000, the federal workforce shrunk by 426,200, making it the smallest one since the administration of Dwight Eisenhower. The reduction was brought about through a large-scale buyout program and about 25,000 layoffs. Still, overall only $136 billion was saved and the workforce grew back again under subsequent administrations. A 2013 Government Executive article criticized how the shrinkage was achieved. “The reduction didn’t happen in a way that matched workforce needs because they used a strategy for downsizing to hit a target. The effort got in the way of the ‘making government work better’ piece. Many with special skills left, and people who stayed might have been those we’d have wanted to leave.”
Here’s where with lessons learned Trump may have a chance to succeed where Reagan and Clinton did not.
— No commissions or blue ribbon panels. One of Reagan’s mistakes was to create a commission with the power to peer into all aspects of government without the power to do anything about the problems they uncovered. A report was produced (purposeful use of the passive tense there) and dumped onto Congress’ lap where it slowly faded from memory. Though the wire diagram is a bit fuzzy here in 2025, Elon Musk clearly has more power in his hands than simply to produce a report. His ability to act, whether by ordering in Trump’s name actual de facto closures of agencies like USAID, or by offering government-wide buyouts ahead of a RIF, is significant. That alone may make DOGE more successful than its predecessors.
— Understanding people are the problem, unlike Gore. Gore made the mistake of handing over uncovering waste to the very people perpetuating it, trusting them to hack themselves into efficiency. Musk, instead of encouraging workers to flush out waste, assumes those employees are actually the drivers of it. The hammer this time is a pink slip. Gore did produce some nice optics and had a publicity-forward edge to it all, but resulted in little actual money-saving change or added efficiency. But contrast the media response to Gore’s approach versus Musk’s on-purpose bully-in-a-china shop tactics as an indicator to how long he’ll get away with what he is doing.
— But without some guidance as to who to cut, Musk risks the same problem Reagan and Gore had, throwing out the good, needed employees with the bad ones when the only criteria is headcount. You can bet that nearly every employee inside government is considering how to bail out right now. The problem is that given lucrative government retirement and pension plans, anyone close to “real” retirement is going to try and tough it out. These may not be the best employees, or maybe they are, but they’ll be the ones to cling to their jobs for another six months or a year or whatever. Statistically they are more likely to have a coronary at their desk then to leave without a fight.
The second group of government employees who will hang on like a dog with a turkey leg in its mouth are the worst of the worst, those employees who have no transferable skills into the private sector. They have nowhere to go and nothing to lose and unless identified and micro-targeted by RIFs may be who is left to turn out the lights in many government offices a year or two from now, the true Deep State, dug in even deeper.
Musk needs guidelines in his efforts beyond “move fast and break things” and creating some commission a la Reagan which will spend a year creating a report of little value. With that said, so far so good. Unlike Gore, who also just used crude headcount goals, Musk will need to engage departmental leadership for those agencies he hopes to redeem and make informed choices over which employees to RIF and/or which sub-departments to close. Of course none of that matters if your goal is to delete an entire agency, as with USAID or Education. The wood chipper has its uses, too.
Copyright © 2024. All rights reserved. The views expressed here are solely those of the author(s) in their private capacity.
Tough Times at Foggy Bottom
The DOGE tsunami is about to strike the U.S. Department of State, as well as other agencies. Let’s see what that means.
The day the music died was January 28, when nearly everyone at State, along with over two million other federal civilian employees, received an email referring to “A Fork in the Road.” The email offered qualifying diplomats and civil servants a choice ahead of planned Reductions in Force (RIFs, layoffs): resign now under a special program, don’t come to work for a few months while being paid, and then in September become eligible for whatever retirement benefits you would otherwise be eligible for, if any. State offers its diplomats a full retirement with pension after age 50 and 20 years of service, similar to the military, and after 30 years for civil servants, all with exceptions of course.
Despite the general sense the buyout was some sort of trick (workers questioned what legal authority allowed State and other federal agencies to pay people who technically resigned, then bring them back into the system to retire), across the government some 77,000 people signed up for the deal before it was brought to a pause by court action. For those with a long way toward formal retirement, it seemed like good enough; ahead of being RIFed, they’d pocket some seven months’ salary on top of whatever severance package might await them when actually let go. The Fork program, as it was commonly now called (alongside the new expression “to get forked”), acquired a formal name, “deferred resignation,” and the paid time off without working became “administrative leave.” An involuntary retirement is called the Orwellian “Discontinued Service Retirement.”
The American Federation of Government Employees (AFGE) and others sued to block the “deferred resignation” program, arguing that its chaotic rollout and shifting legal justifications constituted violations of the Administrative Procedure Act’s protections against “arbitrary and capricious” decision-making, and the promise to pay employees past the March 14 possible government shutdown deadline could constitute an Anti-Deficiency Act violation.
On February 12 the federal judge who had temporarily blocked the plan reversed course, ending the temporary restraining order upon concluding he lacked jurisdiction in the case. The deferred resignations would be allowed to go forward (though the sign up deadline has now passed) reducing head count at State and other federal agencies if everything went as planned. In his decision, U.S. District Judge George O’Toole wrote the unions’ challenges are of the type Congress “intended for review within the statutory scheme,” referring to the need to file administrative appeals before going to court. There were doubts the Trump administration would or legally could follow through as stated. Everett Kelley, president of the American Federation of Government Employees, called the plan “an unfunded IOU from Elon Musk.”
Then things started to get really interesting at State.
Trump issued an Executive Order (EO) February 12, stating inter alia “The Secretary [of State] shall, consistent with applicable law, implement reforms in recruiting, performance, evaluation, and retention standards, and the programs of the Foreign Service Institute, to ensure a workforce that is committed to faithful implementation of the President’s foreign policy… In implementing the reforms identified in this section, the Secretary shall, consistent with applicable law, revise or replace the Foreign Affairs Manual and direct subordinate agencies to remove, amend, or replace any handbooks, procedures, or guidance… Failure to faithfully implement the President’s policy is grounds for professional discipline, including separation.”
Many at State read this as implementation of a “loyalty test” for continued employment. The full scope of the EO will depend on the actual steps taken after its signing, especially the admonition to revise or replace the Foreign Affairs Manual, the set of rules State functions under administratively and policy-wise. It could pave the way for a massive restructuring of State, consolidating power under political appointees and away from diplomatic staff.
Then things got really interesting.
Nearly concurrent with the February 12 EO, Foggy Bottom HQ sent out a message to all embassies and consulates warning outposts around the world to start planning for staff reductions, according to ABC News. Senior embassy officials were asked to provide comprehensive lists of all employees and their employment status as part of the process, sources said, explaining the request includes tenured, untenured, and temporary duty assignments. Embassies will be required to cut both American staff and employees hired locally, sources added. The edicts followed a decision by Secretary of State Rubio to not extend contracts for civilian personal services contractors (PSC) who provide housekeeping and maintenance at embassies. But PSCs also supplement diplomatic security; roughly half of the Bureau of Diplomatic Security’s contractors fall under the new directive. Contracts in the process of being signed are to be halted and any job postings made after the inauguration of Donald Trump are to be rescinded. Only State’s domestic passport PSC operations staff are exempted (a smart move in that it limits direct public impact from an otherwise nearly totally foreign-facing organization.)
Trump wasn’t finished. In another EO, he declared “Agency Heads shall promptly undertake preparations to initiate large-scale reductions in force (RIFs), consistent with applicable law, and to separate from Federal service temporary employees and reemployed annuitants working in areas that will likely be subject to the RIFs. All offices that perform functions not mandated by statute or other law shall be prioritized in the RIFs, including all agency diversity, equity, and inclusion initiatives; all agency initiatives, components, or operations that my Administration suspends or closes; and all components and employees performing functions not mandated by statute or other law who are not typically designated as essential during a lapse in appropriations as provided in the Agency Contingency Plans on the Office of Management and Budget website. This subsection shall not apply to functions related to public safety, immigration enforcement, or law enforcement.” The uniformed military and postal service employees are also exempt.
That means State, along with other agencies, is going to have to soon start firing people.
The EO led directly to State’s diplomatic union issuing an urgent message to its members explaining “Agencies have 30 days to submit reorganization plans to the Office of Management and Budget (OMB). The implementation of these plans will include RIFs. The executive order does not specify when RIFs will begin… Section 611 of the Foreign Service Act allows for RIFs. This section also requires the creation of rules for letting go of career and career candidate members under Chapter 3 of the Act. The regulations note that the retention hierarchy in the event of a RIF should be based on the following: organizational changes; employee knowledge, skills, or competencies; tenure of employment; employee performance, and military preference.”
Regulations allow for 120 days notice to the RIFed employee though note under some special circumstances the notice need be only 30 days. They go on to say while an employee may file a grievance against the RIF, the grievance will not delay separation and is limited only to cases of reprisal, interference in the conduct of the member’s official duties or similarly inappropriate use of RIF authority. The current understanding is that RIFed employees, if otherwise eligible, can receive their retirement pensions. Ineligible RIFed employees will likely lose their healthcare and life insurance as best as things are understood. But this is far from over and no one knows how it will end.
“We do need to delete entire agencies, as opposed to leave part of them behind. Just leave part of them behind. It’s easy. It’s kind of like leaving a weed,” Elon Musk said. “If you don’t remove the roots of the weed, then it’s easy for the weed to grow back.”
Everything is in flux at present and no one should make any decisions based on this or any other article. But what is clear is that this time Trump means business. Unlike the small-scale RIF which took place at State during the Clinton administration, this time it’s for real, a seemingly determined effort to downsize the State Department both at home and abroad while at the same time likely increasing the authority of political appointees. It is both a paradigm shift and a power shift away from a more-or-less independent State Department (and other agencies) toward a concentration of power deeper inside the Executive Branch.
Copyright © 2024. All rights reserved. The views expressed here are solely those of the author(s) in their private capacity.
Showdown in DOGE City
The leaders of President-elect Trump’s new Department of Government Efficiency (DOGE), Elon Musk and Vivek Ramaswamy, have been meeting with Republican lawmakers recently. None of those involved shared details from their meetings, which was by design to allow for brainstorming. House Speaker Mike Johnson (R-LA) did say “Government is too big. It does too many things, and it does almost nothing well,” adding Musk and Ramaswamy would help usher in change. But how will Elon and Vivek actually seek change? What are their tools to bring to bear?
In an op-ed laying out their strategy, the duo said they would link administrative reductions, regulatory rescissions, and cost savings.
Cutting back on the sheer numbers of government employees is a fine starting point for Elon and Vivek. Using the controversial Schedule F, they hope to do away with the unofficial lifetime employment most Civil Servants enjoy. Civil service rules make firing for cause extremely difficult, and grind broader layoffs to a crawl if not a full stop. If Schedule F could be implemented early in Trump 2.0 (the plan was started in Trump 1.0 but failed to get any traction) it would be a decisive tool in clearing out civil service deadwood. They will not go easily, and the terms are tough; Vivek has vowed to cut 75 percent of the federal workforce. “This will send shockwaves through the system, and anyone involved in government waste, which is a lot of people,” Elon added.
Another strategy for lowering government headcount is attrition. Trump could impose a government-wide hiring freeze, as he did when he took office in 2017, though many feel this may be too blunt an instrument. Musk and Ramaswamy suggest the Trump administration lean instead on separation incentives to get federal workers to retire early or accept buyouts. Elon and Vivek also plan to relocate some agencies out of D.C. and to offer generous severance packages to drive workers into retiring instead of moving.
An attrition move which has widespread Republican support in Congress is to end or curtail telework, back to at least pre-Covid levels. Ramaswamy predicted requiring more federal workers to go into their offices more frequently would cause many of them to quit. “If you require most of those federal bureaucrats to just say, like normal working Americans, you come to work five days a week, a lot of them won’t want to do that,” Ramaswamy said. “If you have many voluntary reductions in force of the workforce in the federal government along the way, great. That’s a good side effect of those policies as well.” How many Feds telework is itself the subject of much discussion; Speaker Johnson puts the figure at 99 percent of regular office workers, while the Office of Management and Budget claims 80 percent of the federal work hours are currently spent in-person and more than half of federal employees do not telework at all.
As for regulatory rescissions, the federal bureaucracy generates thousands of regulations and rules each year, another target for Elon and Vivek. Rep. Aaron Bean (R-FL) who will co-chair the House DOGE Caucus, quoted Musk as suggesting the United States is “no longer a democracy, it’s a bureaucracy” and his commission would work to ensure Congress, not “unelected bureaucrats,” dictate regulation. Changing things will not be easy. Agencies generally must go through notice-and-comment rulemaking to amend or revoke rules, though Musk and Ramaswamy suggest Trump may be able to revoke some rules unilaterally via executive order. Musk and Ramaswamy also believe Trump could direct agencies not to enforce some cumbersome regulations or those he believes are unlawful in light of recent Supreme Court precedent. The duo says “we will focus particularly on driving change through executive action based on existing legislation rather than by passing new laws.” “He might get away with it,” said William Galston, a senior fellow at the Brookings Institution. “Congress’ power of the purse will turn into an advisory opinion.”
One obstacle the duo cannot overcome is the math of the federal budget. Roughly 60 percent of the budget is mandatory spending — things like Medicare, Medicaid, and Social Security. Trump promised to protect those programs. Another 10 percent of the budget is spent on paying interest on the national debt. That leaves around 30 percent of the budget “discretionary,” though roughly half of that goes to defense spending, which Trump also vowed not to cut. That remaining 15 percent of the budget, non-defense discretionary spending, is already at its lowest level ever as a percentage of GDP.
That said, Musk and Ramaswamy identified a number of potential reductions. These include several specific appropriations or federal grants they consider to be wasteful, such as for NGOs, DEI training, PBS, NPR, Planned Parenthood, and $1.5 billion in grants to international organizations. Musk previously advocated removing subsidies from all industries. Ramaswamy said DOGE will closely review CHIPS Act contracts, especially those the Biden administration accelerated.
More generally, law firm Gibson Dunn notes Musk and Ramaswamy have said Trump may decline to spend appropriations for which Congress’s authorizations have expired (called impoundment, confounded by the 1974 Impoundment Control Act.) The Congressional Budget Office has identified $516 billion in appropriations for 2024 associated with 491 expired authorizations of appropriations across a range of agencies, including a number of appropriations administered by the Department of Veterans Affairs, State Department, Department of Education, National Institutes of Health, Federal Aviation Administration, and NASA. Withholding such funds is subject to legal challenge. It would be politically unpopular to cut a number of these programs, such as veterans’ healthcare benefits and Pell Grants.
Musk and Ramaswamy will also scrutinize federal contracts that have “gone unexamined for years,” and conduct “large-scale audits during a temporary suspension of payments.” Ramaswamy said to expect “massive cuts among federal contractors… who are overbilling the government.” Everyone has a list. Sources of potential cuts could also be the Government Accountability Office High Risk List, which identifies programs particularly subject to waste, fraud, and abuse, and a list of thousands of proposed cuts Senator Rand Paul (R-KY) sent to Musk and Ramaswamy.
Copyright © 2024. All rights reserved. The views expressed here are solely those of the author(s) in their private capacity.
Buy Peter’s Books on Amazon!
