GOVERNMENT WASTE

FEBRUARY 7, 2025 – The phrase “Government waste and inefficiency” was copyrighted by Republicans when their standard bearer, Ronald Reagan, arrived in Washington in January 1980. The most memorable line from his first inaugural speech was, “Government is not the solution to our problem. It is the problem.” In his popular wisdom, government was synonymous with waste and inefficiency, and, you could just as well have injected “fraud,” since surely where waste and inefficiency existed, fraud lurked close by.

On June 30 of the next year (1982), Reagan issued an executive order establishing the Private Sector Survey on Cost Control (the “PSSCC”), which was thereafter commonly called the Grace Commission[1].  Eighteen months later at a cost of $75 million (funded entirely by private sector contributions[2]), the Commission presented its 47-volume, 23,000-page report to Congress. The report claimed that if its recommendations were implemented, a savings of $424 billion (out of a budget of $745 billion) could be achieved in three years, and $1.9 trillion each year by the end of the century. The report also estimated that if the recommendations were ignored, the national debt would hit $13 trillion by 2000, versus $2.5 trillion with the proposals.

I wonder if anyone in the Trump-Musk Administration has consulted the history of the Grace Commission—how it operated, the data it gathered, the analyses it applied, and what happened to its recommendations. I’m willing to bet $5 billion (Co-President Trump’s purported net worth)—make that $500 billion (Co-President Musk’s estimated net worth)—that neither of the current presidents has read the actual Grace Commission Report, let alone what ensued and didn’t ensue from it.

Nevertheless, for us voters, a comparative study of the processes followed by Reagan and Trump/Musk is instructive. At the inception, the tone and direction of each looked similar. Reagan initiated his effort with great fanfare. The Trump/Musk approach to the same objective was also proclaimed with great noise, albeit from the percussion section, with lots of drum beating and cymbal crashing. After the proclamatory phase, however, the Reagan – Trump/Musk paths diverge. The latter two presidents are relying on a handful of unvetted tech nerds looking for some excitement, and without much analysis, the DOGE initiative is deploying a meat cleaver, a chainsaw, and a sledgehammer to knock the entire federal government off its rails before this year’s annual National Cherry Blossom Festival (starting around mid-March) in Washington. . . Except . . . wait! Will the 90-year-old festival even occur this year? It receives significant funding from . . . that’s right, the federal government. (I sure hope none of those kids takes a chainsaw to any of the cherry trees.)

By contrast, 43 years ago the Grace Commission took a far more methodical approach. It involved 160 CEOs and other senior corporate executives, who chaired 36 task forces that reviewed federal agencies from A to Z. Two thousand corporate executives served as lieutenants, combing through files, records, and data and interviewing personnel. But granted, no one back then had an iPhone, email, text messaging technology, or backpack bearing a laptop. Who’s to say five young computer nerds in a few weeks in 2025 can’t do the work of 2,000 middle-aged white corporate guys over 18 months back in 1982-84?

To its credit, the Grace Commission did uncover many inefficiencies (a $436 claw hammer and $511 light bulb purchased by the Department of Defense caught the attention of reporters) and supplied just under 2,000 recommendations for making the federal government more efficient. Dig below the surface, however, and you find that the work and result of the effort was a mixed bag.

In the first place there were conflicts of interest, since the corporate army that was turned loose on the project included representatives of corporations that were regulated by the very agencies they were investigating for inefficiencies. (Hmm—a precedent, I suppose, for Co-President Musk to slash personnel who would be in a position to regulate his companies.) In addition, many of the inefficiencies that were uncovered by the Grace Commission had been previously identified by the agencies—with corrective measures already in the works. Without researching in depth, I don’t know how the overlap can be quantified, but objectively speaking, it would constitute a reduction in the savings estimated by the Commission. Finally, many of the recommendations required a change in law or policy by legislation, which, I remind my readers, is the purview of Congress, not the Executive Branch of government. In the end, only a portion of the recommendations were ever implemented. By the time Reagan left office in January 1989, the annual deficit and total national debt had tripled over the eight years of his presidency.

In any event, “waste,” and even its assumed companion, “fraud,” are contextual. In the case of Co-President Trump, there is no such thing as “fraud” when it comes to him. In his mind—and apparently in the minds of Republicans in Congress—he can lie, distort, fabricate, and misrepresent with reckless abandon and it will never approach “fraud.” On the other hand, according to Trump and election deniers, Biden committed “fraud” simply by having garnered more electoral votes (and popular votes, as it turned out) than Trump in 2020.

“Waste” is likewise often relative. For me it would be a total waste of money to spend $100 on a nosebleed ticket to hear an aging rock star croak into a VERY LOUD SOUND SYSTEM at his retirement-fund road show concert in the Xcel Center. Yet, the next person might think it to be a complete waste of resources to pay $50 for the best seat in the Ordway Music Hall next door to Xcel to hear Steve Copes perform the Brahms violin concerto with the Saint Paul Chamber Orchestra.

One person’s “waste” is another’s “gift from heaven.”

Or in the context of USAID, in the minds of some voters, sending aid to war and famine victims in Sudan—a million miles away—might seem like a total waste of American taxpayer money, when we’ve got our own problems at home, such as unwelcome immigrants seeking to enter our fair land. But to someone who understands that large-scale famine is what drives people to migrate—to such places as America!—spending a few million bucks on famine relief to avoid spending tens of millions on “immigration control” provides an excellent ROI.

A similar dichotomy of opinion arises around vaccines. To the anti-vaxxer, spending millions on Covid vaccinations was a “waste.” To people who believe in peer-reviewed science, that kind of “waste” was a life-saver.

Turning to national security, the curmudgeon in Missouri might think it’s a waste of his precious tax dollars to be educating children in Malawi, but it’s a cheap way to counter China’s grand strategy to control precious earth metals in Africa.

I readily stipulate that USAID, as well as other federal agencies, blow dough on things that constitute “complete waste” according to my subjective lexicon. But there’s another aspect to “waste” that rarely moderates the stridency of conservatives so hellbent on eliminating it—from government.

If you’re a human being who has an abode, owns stuff, buys more stuff, and goes places, I can guarantee that even without the assistance of a 20-something computer nerd, I could identify lots of waste going on in your life. (I know, because I have an abode, own stuff, buy stuff and go places.) I’d start with that plastic container of yellow mustard on the shelf of your refrigerator door. Unless you cut the dispenser open when the mustard runs low, you’re going to be wasting 1% to 2% of the mustard that is simply unextractable. Certainly we can agree that that’s “waste.” But what countermeasures are reasonable in that instance? Never buy mustard—since mustard seems to be sold only in containers designed to result in at least 1% to 2% waste?[3]

Proceed up the society’s organizational pyramid, and the volume of “waste”—by any definition of the concept—increases. If you’re married with young kids, I can again guarantee there’s lots of waste going on. Start with food, move on to electricity, and conclude with gas with all the shuttling that goes on. Or is that just the price of raising a family in the modern age?

Now look at your local church, school, city hall. Donuts for Monday staff meetings? Really? Your donation/tax dollars going to Dunkin’ Donuts so people can consume sugar-frosted fried grease? Or messing up the copy machine and not making employees pay out of their own pockets for wasted paper? Or copying on one side only when every sheet of paper comes with two blank sides? Or using paper in the first place? Where’s the organizational oversight?!

Now let’s jump to the corporate scene. I worked for two different public companies and two large law firms, and believe me, I was wading in waste at the same time those entities were rolling in revenue (and profits). Among the biggest forms of waste were one- and two-day “off-site” corporate group meetings led by pricey consultants who was all about “leading us to greater productivity.” Neither the consultants nor the executives who’d approve payment of the consultant fees saw the irony in taking a dozen or more employees “off the line” for a whole day (or two) and feeding them high-end food and beverages—all we could eat. Talk about loss of productivity! (Yet, on some level such expenditures opened the door to useful ideas and improved esprit de corps. Did the intangibility of those benefits render the costs a “waste”? Perhaps. Perhaps not.)

As the new Presidents—so-called “businessmen”—wield their cleavers and chainsaws through the “swamps” of governmental agencies, I wonder now why stock analysts or mutual fund managers didn’t just show up unannounced at our corporate offices to inspect our operations for “waste” and “inefficiencies.” If they had, they’d surely have claimed that if their recommendations were implemented, our share price would’ve increased by 10% to 20%.

By any empirical measure we should be more upset with our household waste and corporate waste than with government waste. But what unleashes the bees in our bonnets is the government version. It’s a winner in the rhetoric of anyone running for elective office. After all, who’s in favor of “waste”? Exactly. No one. Who’s in favor of eliminating it? Exactly. Everyone, and all the better if it can be done with a meat cleaver or chain saw that leaves lots of blood on the ground. It makes for great TV . . . and political rallies, especially of the Republican variety.

Ultimately, however, when it comes to “waste” and “inefficiency,” some frame of reference must be applied before the wrecking balls are unleashed. A person can rightfully denigrate all “waste” and “inefficiency” that goes on in government—just as shareholders could do in the corporate world. But before all 12 chickens in the barnyard are summarily executed to reduce the farm’s livestock feed budget, an inventory must be taken of all the animals on the farm, their requirements, their value, and so on. Maybe one of the dozen chickens is eating twice the corn that should be allotted each chicken—and worse, the offending chicken lays only rotten eggs. Okay fine, but your job as cost-cutter in chief is to figure out how to reduce the overall budget on a farm with 1,000 head of cattle. You can’t accomplish your mission simply by killing the chickens. More thought and analysis—fed by data—need to be dedicated to the project; not the wild wielding of cleavers and chainsaws by two men—one of whom is neither elected by the people nor vetted/confirmed by the senate—who know all too little about wrangling cattle and know all too much about how government could block their schemes and designs to line their own pockets.

The bottom line here is that as with most things in our complex world, impulsive actions triggered by simplistic conclusions based on invalid assumptions rarely produce desirable solutions. Drastic action for the sake of bold show is rarely more beneficial than shooting oneself in the foot—or a scapegoat in the hoof. If every single person in the Republic can agree that “waste” and “inefficiency” in concept are bad, at a minimum can we also agree that we should look, examine, aim, and shoot—in that order and not the other way around?

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© 2025 by Eric Nilsson

[1] Named after W. Peter Grace, CEO of W. R. Grace & Co., a large chemical manufacturing company. At the time of his appointment, he was the longest serving CEO of an American public company (48 years), a position he inherited from his father. W. Peter Grace was also a Democrat.

 

[2] Hello, you billionaires who attended the inauguration . . . especially you, Co-President Musk! I sure hope you and your nerds aren’t on the federal payroll. While I’m at it, I find it painfully ironic that the Co-Presidents—two Billionaires, capital “B”—are so fixated on “government waste.” It’s doubly ironic in the case of Co-President Trump, who, as a classic real estate developer, has been on the bleeding edge of tax avoidance, if not full-on evasion, for many years. By way of the disproportionate tax advantages of investment real estate, much of Trump’s wealth has been subsidized by “big, bad government,” thanks to the Internal Revenue Code. I’m guessing that Co-President Musk too has availed himself of the best tax advice that money can buy. Again, tax avoidance by him via mechanisms not applicable to households with average taxable income, equates to an enormous “government subsidy.”

[3] Since Republicans love to tie “fraud” to “waste,” let me refer to the well-known story of the genius at Proctor-Gamble who, to boost sales, came up with the idea of designing toothpaste tubes with the intent of causing waste. For the same retail price and the same volume of toothpaste, consumers would by necessity buy more toothpaste if it were now harder to squeeze all of it out of tube! I call that nothing short of a corporate “scam on consumers” synonymous with “fraud,” but it’s entirely within the private sector, not a problem with “government.” (Unless you’re in favor of fine-tuned government regulation of such practices. I’m not, by the way.)