Elon, Vivek, and the Department of Government Efficiency want to cut $2 trillion from the federal budget. A libertarian says the only way to do that is to eliminate aid programs altogether. This episode was produced by Haleema Shah, edited by Amina Al-Sadi, fact-checked by Kim Eggleston, engineered by Patrick Boyd and Rob Byers, and hosted by Sean Rameswaram. Transcript at vox.com/today-explained-podcast Support Today, Explained by becoming a Vox Member today: http://www.vox.com/members A photo illustration of Elon Musk's X account and a Dogecoin cryptocurrency. Photo by Jakub Porzycki/NurPhoto via Getty Images. Learn more about your ad choices. Visit podcastchoices.com/adchoices
Chapter 1: What inspired the creation of Dogecoin?
Elon Musk is a funny guy. You can tell because his favorite cryptocurrency is based on a cute dog, a Shiba Inu, which inspired the Doge meme, which inspired Dogecoin. I'm sorry if I'm losing you. The point is, it's Elon's fave. In 2021, he hosted Saturday Night Live and plugged it over and over.
Chapter 2: How has Elon Musk influenced Dogecoin's value?
And lately, prices have been soaring for cryptos like Bitcoin, Ethereum, especially Dogecoin.
Oh!
He also said he would fund a moon mission entirely with Dogecoin and incessantly tweeted about the crypto. And for a minute, Tesla was accepting Dogecoin. In 2022, investors got tired of the antics and sued Elon Musk for manipulating the price of the coin. They lost, Elon won, and then Kamala lost.
So Elon won again, and now our future president has rewarded Musk's loyalty with an entire government agency named for his favorite meme coin. And as you've probably heard, it's called the Department of Government Efficiency, or DOGE, on Today Explained.
Chapter 3: What is the Department of Government Efficiency?
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The first thing you need to know about the Department of Government Efficiency is that Trump's put two people in charge of it, so it's off to a great start. Elon is one of them. The other is Vivek Ramaswamy. No relation. We asked Vox's Dylan Matthews to help us understand what they intend to do, but first we asked him where he stands on the federal government.
Any sufficiently large organization is going to have inefficiencies, and there are definitely inefficiencies in federal spending. But almost everything that the federal government spends money on is pretty non-controversial, which is why we keep spending money on it.
But that's not how Elon and Vivek feel. No.
It's no secret that it is a fourth branch of government, the administrative state that makes most of the rules, that creates a federal bureaucracy that's hampering our economy.
If the current trend of strangulation by overregulation is not turned around, we will never get to Mars. It just will be illegal.
I mean, they're private sector guys, right? Like, they're all about arguing that old sectors are inefficient and need to be disrupted.
How much do you think we can rip out of this wasted $6.5 trillion Harris-Biden budget?
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Chapter 4: How much of the federal budget is spent on social programs?
And when you think about what this Doge outfit wants to do, they're not talking about getting rid of Social Security, are they?
No, they're very insistent that they're not and that they're not trying to aim for Social Security and Medicare, which is the second biggest program. Those are big programs for seniors.
We're not touching Medicare. We want to keep Medicare. We're not touching Social Security.
One thing that was unusual about Donald Trump, both in 2016 and 2024, is he promised not to cut them after you had Paul Ryan talking about, like, very serious plans to cut them.
Do you consider it possible to arrive at a fiscal policy and plan that reduces the deficit without touching Medicare and Social Security or military spending?
No, you can't.
It's just a mathematical impossibility.
And so Trump wanted to be this different kind of Republican who wouldn't threaten these programs. The reason that people like Paul Ryan wanted to cut them is that together they make up about a third of the overall budget. And it's just very hard to make serious cuts while declaring them off limits.
If you do not tackle the drivers of our debt, which are entitlements, you cannot balance the budget in the future and pay down the debt. It's just not possible.
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Chapter 5: What are the key targets for budget cuts?
That would be a quite radical expansion of presidential power. And I bring it up only because senior members of Trump's team have been very vocal that they think he has this power. But it will require a pretty dramatic assertion of authority, a very long court battle before anything like that comes up.
So what do you think that means for Doge and their goal to cut $2 trillion?
They are not going to cut $2 trillion. Like, I will bet any amount of money. If Elon wants to sort of set up a crypto deal with me and say, like, I bet $5 million that I for sure don't have, but I bet you $5 million that we're going to pass $2 trillion in annual spending cuts, I will sign that and, like, take out whatever loan shark loan is necessary because I will win that bet.
I think they will come up with a list of smaller appropriations that they think are wasteful or ill-advised. They'll come up with government contracts that they think are for too much money or wasteful. I will say this for Elon, that he does have a lot of experience with government procurement through SpaceX.
I would guess that the quantity of cuts we're going to be looking at is in the tens of billions rather than hundreds or trillions. But one thing I have learned is that I felt like I was able to predict what Joe Biden would do. I felt like I was able to predict what Barack Obama would do. I felt like I was able to predict what Paul Ryan would do.
I have been wrong again and again about what Donald Trump will do and his team. And so while $2 trillion I'm ruling out, there's a wide range of possibilities here.
You can read Dylan Matthews at Vox, I certainly do. When we're back on Today Explained, someone who is a glass half full kind of guy when it comes to cutting two trillion.
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Chapter 6: Can the president cut federal spending unilaterally?
How much would these cuts be felt by people across the country, by voters, by Americans? You know, cuts to housing, community development, highways. I mean, I realize that states have their own budgets and can fund these things, but not all states are created equal. Not all states have surplus funds to use to pick up the slack for the federal government, right?
Chapter 7: What role does Congress play in federal budget decisions?
No, that's right. And every state would respond in a differential source of ways. Diversity, I think that's a good thing. You know, if the federal government cut a welfare program like public housing, you know, New York might decide to fund its own public housing, but say Texas might decide, hey, we're going to privatize our public housing.
But I think those differential kind of responses by the states would be a good thing. I think that when the federal government cuts aid to the states, it should phase it in. It should, you know, phase it in over, say, five years to give state legislatures the time to plan, you know, how they're going to respond and whether they're going to cover the funding for these programs themselves.
But, you know, currently the federal government has 1,300 different federal aid to state programs. This is a massive web of programs that has grown particularly since the 1960s. I don't think these programs have worked particularly well. They're extremely bureaucratic when you involve two or three levels of government in funding programs.
I think we'd have a much more efficient government at all levels if we got the federal government out of these properly state activities.
We know you libertarians love to eliminate programs. Are you envisioning a United States that maybe doesn't have programs that support public housing, maybe doesn't have, you know, a federally funded transit or maybe doesn't have a corporation for public broadcasting? Is that what you'd really like to see?
I would like to see that. And over the last century, power has become centralized in Washington, in my view, for no particular reason. And I'll give you a story about that, Sean. So I grew up in Canada. Canada is a high-income democracy. It's a much more decentralized federation than United States. In rough terms, government spending in United States is two-thirds federal and one-third state.
Canada is the flip. Canada is only one-third federal and two-thirds provincial. As an example of that, Canada has no federal department of education. And on international test scores, Canadian students do substantially better than American students. So I don't believe you need to centralize some of these activities to have well-functioning government.
And I think Canada, it's not a great model for some things. I think the current prime minister has had lots of problems. However, I think the basic governmental structure of being a decentralized federation is a good model for us to look at.
And you heard Dylan say that the one thing he's always expecting with Trump and let's say now Doge is the unexpected. Does the unexpected factor here mean that these business minded drain the swamp? Let's Go to Mars types could actually pull something out of the bag to get rid of these programs, to even maybe eliminate things that have so far seemingly been political third rails in this country.
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