Monday, February 17, 2025
-Bill Crane
President Donald Trump campaigned on reducing the size and scope of our federal government. Millions of Americans support that position, the devil of course will be 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. The one-cent piece is costing, depending on fluctuating copper commodity prices, 2-3 cents each to mint, PRIOR to the costs of placing them in circulation. Not to say there won’t be a few bumps in the transition away from the penny, but the change makes both sense and by the millions, will save cents.
U.S. government debt is now approaching our annual Gross Domestic Product (GDP), and annual interest payments on the debt will quickly equal our annual defense spending. Continuing spending resolutions and the status quo are NOT the answer.
Since President George W. Bush attempted to begin a discussion of income and means testing for Social Security benefits, as well as raising the retirement age, potentially 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 by the leadership of his own party, as well as the opposition. The fourth rail in American politics has become taking away a program/entitlement or new benefit, once established and given.
Elon Musk’s DOGE has repeatedly stated a federal budget reduction target of $2-Trillion. ALL of the federal budget discretionary spending is currently $1.7 Trillion (2024 FY budget). Federal government outlays, discretionary and non-discretionary spending (national defense, transfer payments & entitlements) totalled $6.75 Trillion, revenue and tax collections totalled $4.92 Trillion, leaving a 2024 deficit of $1.83 Trillion, and hence creating the Musk target of $2-trillion in spending cuts.
Nearly 50,000 federal employees accepted the buyout offer, if/how they all get paid out remains to be seen. Yet, our federal civil service has 3-million employees. The Department of Defense (DOD) another 3-million. Even cutting 5 percent of those combined is 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 CDC, VA and other federal agencies.
Unfortunately, Probationary Employees also include those accepting promotion or transfer 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 is expected by July 4, 2026, coincidentally our nation’s 250th birthday.
But every program and spending bucket has a fan, audience or constituency. Our veterans certainly deserve quality healthcare, and the VA now has a headcount (pre-DOGE) of more than 400,000, roughly equivalent to the standing troop strength of our U.S. Army. Does the VA need a bigger budget and 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 in those ORs. Heard of anything similar at another major 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 a 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, as well as the 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, plumbing/piping/cable and in computers and elsewhere. Even the lowly penny may eventually hold its value better than the current Dogecoin crypto. Pennywise, pounds foolish.
