US President-elect Donald J. Trump has tapped Elon Musk and Vivek Ramaswamy to lead his Department of Government Efficiency, a new initiative aimed at cutting federal spending and eliminating waste. However, experts warn that the department’s efforts will be limited by the complexities of Congress and the size of the national debt.
The Congressional Budget Office projects that the national debt will reach 166 percent of gross domestic product by 2054, up from about 99 percent in 2024. The federal government has become increasingly sprawling, making it difficult to curb spending. Mr. Trump’s proposed $2 trillion reduction in federal spending over time is almost as large as the projected deficit for 2024 alone.
House Republican leaders pledged to enact $2.5 trillion in spending cuts early next year, but experts suggest that this may be overly ambitious given the political and policy hurdles ahead. The Committee for a Responsible Federal Budget estimates that Mr. Trump’s policies could add up to $15 trillion to the debt over a decade.
The Department of Government Efficiency will not have formal power to cut federal spending, but it plans to work with lawmakers in Congress and the Office of Management and Budget to look for rules that can be changed to reduce spending. The group is also combing through Government Accountability Office reports to identify areas where taxpayer money is being mismanaged.
Despite Mr. Trump’s recent interest in shrinking government, he has not shown a propensity for fiscal restraint. His first term saw significant tax cuts and increased government spending, which contributed to the national debt growing by nearly $8 trillion.
Fiscal hawk Republicans rebuffed President-elect Trump’s suggestion to suspend or eliminate the debt limit, but it remains an option that could be explored in the future. One economist noted that if Congress were able to abolish the debt limit, it would likely have a positive effect on fiscal policy.
Source: https://www.nytimes.com/2024/12/24/business/trump-musk-ramaswamy-doge-government-spending.html