Vivek Ramaswamy and Elon Musk didn’t know each other a little over a year ago. Then they got on X Spaces with David Sacks, a startup capitalist. RAMASWAmy was running for president as a Republican at the time. Musk told him, “I’d like to know more about you.”
The two men have now agreed to cut $2 trillion a year in government spending, which is more than 30% of the federal budget, in just two years.
The people who will be president in January have been told to run DOGE, a service that focuses on “government efficiency.” The advisory group, which will not be a real federal government department, says it will shake up the federal government’s bureaucracy and cut spending by a huge amount.
Many successful entrepreneurs from Silicon Valley have come to Washington, D.C., to help with the shift to the new Trump government. Many of them know the billionaire venture capitalist Peter Thiel.
In 2017, the tech industry was a stronghold for liberals. Thiel was one of the few billionaires in Silicon Valley to publicly support Trump, which was not the norm. But by 2025, the tech hub will have become a feeder program for a bold White House that wants to drastically shrink the U.S. government and change the way international trade works so that it benefits the U.S.
Elon Musk and Vivek Ramaswamy’s DOGE is the best way to show how things have changed. Both Musk and Ramaswamy are strong backers of Trump’s presidential campaign. They have promised to bring to Washington the strict cost-cutting strategy that Musk has used to great effect at high-tech companies like Tesla TSLA +2.18% and SpaceX.
“Politicians have helped the bureaucracy grow for too long, and it poses an existential threat to our republic,” Musk and Ramaswamy wrote in an opinion piece for the Wall Street Journal two weeks after Trump’s victory. “We are not federal employees or officials; we will be there as volunteers from outside the area.” We won’t just write reports or cut ribbons like government commissions or advisory groups do. We’ll spend less.
DOGE has doubts
There are people in Washington who don’t think Musk and Ramaswamy’s plan has a good chance of succeeding.
One person who worked for President Clinton in the 1990s and ran the National Partnership for Reinventing Government said, “Absolutely no one who knows anything about the federal government can imagine cutting that amount of money in that amount of time.”
An independent study done at the time said that Clinton’s efforts to cut spending and update government services saved $112 billion over eight years and led to big cuts in the number of federal employees, government buildings, and rules.
This is very different from the so-called Grace Commission that President Reagan had. Like DOGE, it was run by business leaders who had little to no experience with the government. Over the course of two years, the group of 161 business leaders put together a report with thousands of suggestions that Congress mostly ignored and never put into action.
One big difference between the two was that Clinton’s method wasn’t hostile; it used the advice of federal employees as well as consultants and business leaders from outside the government.
“You need the support of the people who work for the government,” Kamarck told MarketWatch. “They are the only ones who can see where the waste is.”
She also said that Musk and Ramaswamy’s hostile treatment of the civil service might not be helpful in the long run. She asked if a career civil servant would want to teach DOGE about policy details if its leaders have been calling them “lazy and good-for-nothing for two years.”
People asked Ramaswamy, Musk, and the Trump transition team for comment but didn’t reply.
The tech entrepreneurs are, in fact, being aggressive with the civil service. One of their goals is to reduce the size of the federal workforce by making it illegal for government workers to work from home.
“Musk and Ramaswamy wrote that making federal workers come to work five days a week would lead to a wave of voluntary terminations that we welcome.” “American taxpayers shouldn’t pay federal workers to stay home during the Covid era if they don’t want to show up to work.”
There are 800,000 federal workers represented by the American Federation of Government Employees. Their policy head, Jacqueline Simon, said that if federal workers’ right to work from home is taken away, it will probably be the best and most in-demand workers who leave.
“If there’s another company down the street that pays the same amount and lets people work from home a couple of days a week, some people will say, ‘Forget about this, I can get a better hybrid deal elsewhere,'” she told MarketWatch.
The leaders of DOGE may also be wrong about how much remote work is happening. The Office of Management and Budget says that 54% of government workers can’t do any work from home. This includes regular military workers, VA hospital nurses, and border patrol agents. The OMB also said that for government workers who can’t fully work from home, 79.4% of their regular work hours were spent in person.
Those who disagree
DOGE is also a sign of Thiel’s power and influence, as well as his brand of right-wing nationalism, which was once seen as strange in the tech world but is now being embraced by most people in the field.
“Sometimes Thiel is seen as the tech industry’s token conservative, which is a view that greatly understates his impact,” wrote Max Chafkin in his 2021 book “The Contrarian” about Thiel. He came up with the idea that scientific progress should be pushed forward no matter what, without thinking about the costs or risks to society. This idea has come to define Silicon Valley more than any other entrepreneur.
Before they were well-known, both Ramaswamy and Musk were linked to Thiel. When their payment companies combined to make PayPal in 2000, Musk and Thiel connected with each other in business. On the other hand, Ramaswamy was one of many young, conservative businesses that Thiel has backed. Thiel’s venture capital business put money into Ramaswamy’s biotechnology company, Roivant Sciences Ltd., early on.
Last year, Musk and Ramaswamy met virtually for the first time on the X Spaces discussion. Ramaswamy said that “our mutual friend, Peter,” was also a seed investor in another Ramaswamy company, Strive Asset Management, which provides ETFs. The other person in that conversation, Sacks, has been friends with Thiel for a long time. In 1995, they co-wrote a book together called “The Diversity Myth,” and Sacks is currently the chief operating officer of PayPal, the company that Thiel and Musk started. Trump has put Sacks in charge of AI and crypto at the White House.
In an interview in November, Thiel spoke in revolutionary terms, comparing the Democratic Party to “the empire” in Star Wars. He and the other billionaires in Silicon Valley, on the other hand, are a “ragtag rebel alliance” made up of a “diverse and heterogeneous group” that is fighting to overthrow stifling orthodoxy.
Another question is whether or not the people of the United States voted in November for a change or even for the federal government and the services it provides to be cut back in a way that has never been done before.
Kamarck said that Americans don’t want to make changes when they think about the services that would have to be cut in order to drastically shrink the government.
In 2024, almost 44% of all government spending went to Social Security, Medicare, and Medicaid. About 13% went to debt payments, 14% to national defense, and 6% went to veterans’ benefits. There isn’t much left to cut, and what’s left includes spending on things that Republicans want, like border patrol and building up road infrastructure.
Kamarck said, “Everyone hates government in general but likes it in this case.” “And they will make everyone very angry if they go after Social Security and Medicare, which they have to do to reach their numbers. The president will be the first person to be angry at them.”
