Tag Archives: Fourth Branch

Choosing DOGE Over a Prodigal State Apparatus

03 Thursday Apr 2025

Posted by in Big Government, DOGE

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I prefer a government that is limited in size and scope, sticking closely to the provision of public goods without interfering in private markets. Therefore, I’m delighted with the mission of the Department of Government Efficiency (DOGE), a rebranded version of the U.S. Digital Service created by Barack Obama in 2014 to clean up technical issues then plaguing the Obamacare web site. The “new” DOGE is fanning out across federal agencies to upgrade systems and eliminate waste and fraud.

A Strawman

For years, democrats such as Barack Obama and Joe Biden have advocated for eliminating waste in government. So did Bill Clinton, Al Gore, Bernie Sanders, Chuck Schumer, and Nancy Pelosi. Here’s Mark Cuban on the same point. Were these exhortations made in earnest? Or were they just lip service? Now that a real effort is underway to get it done, we’re told that only fascists would do such a thing.

I’m seeing scary posts about DOGE even on LinkedIn, such as the plight of Americans unable to get federal public health communications due to layoffs at HHS, while failing to mention the thousands of new HHS employees hired by Biden in recent years. As if HHS was particularly effective in dispensing good public health advice during the pandemic!

Those kinds of assertions are hard to take seriously. For reasons like these and still others, I tend to dismiss nearly all of the horror stories I hear about DOGE’s activities as nitwitted virtue signals or propaganda.

Many on the left claim that DOGE’s work is careless, and especially the force reductions they’ve spearheaded. For example, they claim that DOGE has failed to identify key employees critical to the functioning of the bureaucracy. The tone of this argument is that “this would not pass muster at a well-managed business”. A “sober” effort to achieve efficiencies within the federal bureaucracy, the argument goes, would involve much more consideration. In other words, given political realities, it would not get done, and they really don’t want it to get done.

The best rationale for the ostensible position of these critics might be situations like the dismissal of several thousand provisional employees at the FDA, a few of whom were later rehired to help manage the work load of reviewing and approving drugs. However, thus far, only a tiny percentage of the federal force reductions under consideration have involved immediate layoffs.

Of course, DOGE is not being tasked to review the practices of a well-managed business or a well-managed governmental organization. What we have here is a dysfunctional government. It is a bloated, low productivity Leviathan run by management and staff who, all too frequently, seem oblivious to the predicament. Large force reductions at all levels are probably necessary to make headway against entrenched interests that have operated as a fourth branch of government.

Thus, I see the leftist critique of Trump’s force reductions as something of a strawman, and it falls flat for several other reasons. First, the vast bulk of the prospective reduction in headcount will be voluntary, as the separating employees have been offered attractive severance packages. Second, force reductions in the private sector always feel chaotic, and they often are. And they are sometimes executed without regard to the qualifications of specific employees. Tough luck!

Duplicative functions, poor data systems, and a lack of control have led to massive misappropriations of funds. The dysfunction has been enabled by a metastasization of nests of administrative authority inside agencies with “incomprehensible” org charts, often having multiple departments with identical functions that do not communicate. These departments frequently use redundant but unconnected systems. A related problem is the inadequacy of documentation for outgoing payments. Needless to say, this is a hostile environment for effective spending controls.

It’s worth emphasizing, by the way, DOGE’s “open book” transparency. It’s not as if Elon Musk and DOGE are attempting to sabotage the deep state in the dark of night. Indeed, they are shouting from the rooftops!

Doing It Fast

Every day we have a new revelation from DOGE of incredible waste in the federal bureaucracy. Check out this story about a VA contact for web site maintenance. All too ironically, what we call government waste tends to have powerful, self-interested, and deeply corrupt constituencies. This makes speed an imperative for DOGE. In a highly politicized and litigious environment, the extent to which the Leviathan can be brought to heel is partly a function of how quickly the deconstruction takes place. One must pardon a few temporary dislocations that otherwise might be avoided in a world free of rent seeking behavior. Otherwise, the graft (no, NOT “grift”) will continue unabated.

The foregoing offers sufficient rationale not only for speedy force reductions, but also for system upgrades, dissolution of certain offices, and consolidation of core functions under single-agency umbrellas.

The Bloody Budget

It’s difficult to know when budget legislation will begin to reflect DOGE’s successes. The actual budget deficit might be affected in fiscal year 2025, but so far the savings touted by DOGE are chump change compared to the expected $2 trillion deficit, and only a fraction of those savings contribute to ongoing deficit reduction.

Uncontrolled spending is the root cause of the deficit, as opposed to insufficient tax revenue, as evidenced by a relatively stable ratio of taxes to GDP. The spending problem was exacerbated by the pandemic, but Congress and the Biden Administration never managed to scale outlays back to their previous trend once the economy recovered. Balancing the budget is made impossible when the prevailing psychology among legislators and the media is that reductions in the growth of spending represent spending cuts.

Federal spending is excessive on both the discretionary and mandatory sides of the budget. Ultimately, eliminating the budget deficit without allowing the 2017 Trump tax cuts to expire will require reform to mandatory entitlements like Social Security, Medicare, and Medicaid, as well as reductions across an array of discretionary programs.

DOGE’s focus on fraud and waste extends to entitlements. At a minimum, the data and tracking systems in place at HHS and SSA are antiquated, sometimes inaccurate, and are highly susceptible to manipulation and fraud. Systems upgrades are likely to pay for themselves many times over.

But all indications are that it’s much worse than that. Social security numbers were issued to millions of illegal immigrants during the Biden Administration, and those enrollees were cleared for maximum benefits. There were a significant number of illegals enrolled in Medicaid and registered to vote. While some of these immigrants might be employed and contributing to the entitlement system, they should not be employed without legal status. Of course, one can defend these entitlement benefits on purely compassionate grounds, but the availability of benefits has served to attract a massive flow of illegal border crossings. This illustrates both the extent to which the entitlement system has been compromised as well as the breakdown of border security.

On the discretionary side of the budget, DOGE has identified an impressive array programs that were not just wasteful, but by turns ridiculous or politically motivated (for example, the bulk of USAID’s budget). Many of these funding initiatives belong on the chopping block, and components that might be worthwhile have been moved to agencies with related missions. In addition, authorized but unspent allocations have been identified that seem to have been held in reserve, and which now can be used to reduce the public debt.

Research Grants?

Of course, like the initial scale of the FDA layoffs, a few mistakes have and will be made by DOGE and agencies under DOGE’s guidance. Many believe another powerful argument against DOGE is the Trump Administration’s 15% limit on indirect costs as an add-on to NIH grants. Critics assert that this limit will hamstring U.S. scientific advancement. However, it won’t “kill” publicly funded research. As this article in Reason points out, historically public funding has not been critical to scientific advancement in the U.S. In fact, private funding accounts for the vast bulk of U.S. R&D, according to the Congressional Research Service. Moreover, it’s broadly acknowledged that indirect costs are subject to distortion, and that generous funding of those costs creates bad incentives and raises thorny questions about cross-subsidies across funders (15% is the rate at which charities typically fund indirect costs).

No doubt some elite research universities will suffer declines in grants, but their case is weakened politically by a combination of lax control over anti-Semitic protests on campus, the growing unpopularity of DEI initiatives in education, and public awareness of the huge endowments over which these universities preside. Nevertheless, I won’t be surprised to see the 15% limit on indirect research costs revised upward somewhat.

More DOGE Please

I’ve criticized the numbers posted on DOGE’s website elsewhere. They could do a much better job of categorizing and reporting the savings they’ve achieved, and they have far to go before meeting the goals stated by Elon Musk. Be that as it may, DOGE is making progress. Here is a report on a few of the latest cuts.

As I’ve emphasized on numerous occasions, the federal government is a strangling mass of tentacles, squeezing excessive resources out of the private sector and suffocating producers with an endless catalogue of burdensome rules. There are many examples of systemic waste taking place within the federal bureaucracy. For example, since its creation by Jimmy Carter, the Department of Education has managed to piss away trillions of dollars while student performance has declined. The Small Business Administration has doled out millions of dollars in subsidized loans to super-centenarians as well as children. The U.S. Postal Service keeps losing money and mail while deliveries slow to a crawl. Big projects become mired in endless iterations of reviews and revisions, such as Obama’s infrastructure plan and Joe Biden’s infrastructure and rural broadband initiative.

And again, regulatory agencies are often our worst enemies, imposing burdensome requirements with which only the largest industry players can afford to comply. Indeed, the savings achieved through the DOGE process might pale in comparison to the resources that could be liberated by rationalizing the tangle of regulations now choking private business.

A significant narrowing of the budget deficit would be a major accomplishment for DOGE. Even one-time savings to help pay down the public debt are worthwhile. In this latter regard, I hope DOGE’s work with the Department of Interior helps facilitate the sale of dormant federal assets. This includes land (not parks) and buildings worth literally trillions of dollars, and sometimes costing billions annually to maintain.

Administrative Supremacy, Lost Checks and Balances

16 Friday Jun 2017

Posted by in Regulation

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The two-for-one regulatory order issued by the Trump White House in January raises some practical difficulties in implementation. It requires that federal agencies eliminate two regulatory rules for every new rule promulgated, both in terms of the number of rules and any incremental regulatory costs imposed. Two out for every one in. Questions surrounding the meaning of “a regulation”, how to define incremental costs, and whether a particular rule is actually mandated by legislation are not trivial. Nevertheless, the spirit of this order is admirable and it serves as the leading edge of the Administration’s attempt to roll back the scope and impact of excessive government authority.

The cost of regulation is vast. Economists at the Mercatus Center at George Mason University have estimated the total cumulative cost of regulation in the U.S., finding that regulation has reduced economic growth by 0.8 percent per year since 1980. Without the additional regulatory growth since 1980, the U.S. economy would have been about 25 percent larger than it was in 2012. That’s a $4 trillion shortfall, or roughly $13,000 per person.

While regulation and administrative control over the private economy takes an increasing toll on economic growth and human welfare, the problem goes beyond economic considerations: administrative agencies have “progressively” usurped not just legislative but also judicial power. The concentration of executive, legislative and judicial power constitutes a “fourth branch of government“, a development inimical to the principles enshrined in our Constitution and a prescription for slow-boil tyranny. It facilitates rent seeking and corporatism just as surely as it creates a ruling class of individuals who act on their personal and arbitrary inclinations. We are ruled by men backed by police power, not impartial laws.

Glenn Reynolds writes that unelected rule makers and central planners are able to manipulate decisions across a broad swath of the economy and society. He quotes a new book by Philip Hamburger of Columbia Law School called “The Administrative Threat“:

“Government agencies regulate Americans in the full range of their lives, including their political participation, their economic endeavors, and their personal conduct. Administrative power has thus become pervasively intrusive. But is this power constitutional?

A similar sort of power was once used by English kings, and this book shows that the similarity is not a coincidence. In fact, administrative power revives absolutism. On this foundation, the book explains how administrative power denies Americans their basic constitutional freedoms, such as jury rights and due process. No other feature of American government violates as many constitutional provisions or is more profoundly threatening. As a result, administrative power is the key civil liberties issue of our era.“

Two previous posts on Sacred Cow Chips have dealt with Hamburger’s work. The first, “Hamburger Nation: An Administrative Nightmare“(1) provides the following explanation of his position:

“Hamburger examines the assertion that rule-making must be delegated by Congress to administrative agencies because legislation cannot reasonably be expected to address the many details and complexities encountered in the implementation of new laws. Yet this is a delegation of legislative power. Once delegated, this power has a way of metastasizing at the whim of agency apparatchiks, if not at the direction of the chief executive. If you should want to protest an administrative ruling, your first stop will not be a normal court of law, but an administrative review board or a court run by the agency itself! You’ll be well advised to hire an administrative attorney to represent you. Eventually, and at greater expense, an adverse decision can be appealed to the judicial branch proper.“

The exercise of rule-making authority, and even extra-legal legislative action by the administrative state, has economic costs that are bad enough. Hamburger also emphasizes the breakdown of the separation of executive and judicial powers inherent in the enforcement and adjudication of disputes under administrative law. This was the subject of the second Sacred Cow Chips post referenced above: “Courts and Their Administrative Masters“. It reviewed an unfortunate standard established by court precedent involving judicial (“Chevron”) deference to administrative agency fact-finding and even interpretation of law. While the decisions of administrative courts, which are run by the agencies themselves, can be appealed to the judicial branch, such appeals often amount to exercises in futility.

“…courts apply a test of judgement as to whether the administrative agency’s interpretation of the law is “reasonable”, even if other “reasonable” interpretations are possible. This gets particularly thorny when the original legislation is ambiguous with respect to a certain point.

…the courts should not abdicate their role in reviewing an agency’s developmental evidence for any action, and the reasonability of an agency’s applications of evidence relative to alternative courses of action. Nor should the courts abdicate their role in ruling on the law itself.“

This paper on Judicial Deference to Agencies by Evan D. Bernick of Georgetown Law makes the case that judicial deference is a violation of the constitutional separation of powers, concluding that:

“… in cases involving administrative deprivations of core private rights to ‘life, liberty, or property,’ fact deference violates Article III’s vesting of ‘[t]he judicial power’ in the federal courts; constitutes an abdication of the duty of independent judgment that Article III imposes upon federal judges; and violates the Fifth Amendment by denying litigants ‘due process of law,’ which requires (1) judicial proceedings in an Article III court prior to any individualized deprivation of ‘life, liberty, or property’; and (2) fact-finding by independent, impartial fact-finders.“

Inez and Jarrett Stepman in Townhall note that there are almost three million well-paid federal employees with job security that would make most private sector workers envious.

“Though the abolishment of the spoils system [which allowed civil service hiring and firing based on political party] was meant to mitigate corruption and incompetence, it has resulted in a toxic combination of enhanced agency power and an entrenched civil servant class with its own institutional—and frequently political—interests, virtually unaccountable to the president or any other elected official.“

The Stepmans discuss legislation that might stem the usurpation of lawmaking power by the administrative state. They are convinced that the administrative state must be reigned-in. Ironically, expanded executive authority means that the process of reversal is not that difficult in many cases. By way of example, here’s a piece on the ease of undoing certain Obama era regulations. Executive orders, or “the pen and the phone” in Obama’s charming parlance, lack legitimate legislative authority and can be reversed by new executive orders. I firmly believe that reversing the earlier orders is the right thing to do at the moment, but the unchecked authority that makes it possible (and the supremacy of the administrative state) is a source of economic instability, and it must end. Eric Boehm makes this point eloquently in Reason at the last link above:

“New policies that affect wide swaths of the economy and reshape entire business models should go through Congress, or at the very least should be subject to the public rulemaking process. Guidance documents and other ‘dark matter’ regulations that by-pass those processes can be un-made as quickly as they were made, leaving businesses to deal with an ever-changing and unpredictable regulatory state that does not really help anyone, no matter which side you’re on in any individual policy fight.“

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(1) The principle title “Hamburger Nation” was intended as a play on Glenn Reynolds’ paper “Ham Sandwich Nation: Due Process When Everything Is a Crime“, in which he discussed the judicial implications of over-criminalization and regulatory overreach.

 

Hamburger Nation: An Administrative Nightmare

04 Friday Mar 2016

Posted by in Big Government, Judicial Branch, Legislative Branch, Regulation

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nanny-state

By what authority do unelected bureaucrats in administrative agencies increasingly make laws, enforce those laws and adjudicate violations? The fact that all of these activities take place within the executive branch of government appears to be an obvious contradiction of the separation of powers required by the first three articles of the Constitution, the principle of “Rule By Consent” of the governed, and protections of individual liberty. In a strong sense, the regulatory apparatus has grown so unwieldy that the powers routinely exercised by administrative agencies today seem beyond even the reach of elected executives. The rules promulgated by this “fourth branch” of government are essentially extralegal, a point discussed at length in Philip Hamburger’s “Is Administrative Law Unlawful“. He has also explained these issues at the Volokh Conspiracy blog in “Extralegal power, delegation, and necessity“, and “The Constitution’s repudiation of extralegal power“.

Hamburger examines the assertion that rule-making must be delegated by Congress to administrative agencies because legislation cannot reasonably be expected to address the many details and complexities encountered in the implementation of new laws. Yet this is a delegation of legislative power. Once delegated, this power has a way of metastasizing at the whim of agency apparatchiks, if not at the direction of the chief executive. If you should want to protest an administrative ruling, your first stop will not be a normal court of law, but an administrative review board or a court run by the agency itself! You’ll be well advised to hire an administrative attorney to represent you. Eventually, and at greater expense, an adverse decision can be appealed to the judicial branch proper.

This adds up to a dangerous lack of accountability and power. Marginal Revolution points out that critics of Hamburger’s book overlook the potential for harm that could be done by a “vindictive” president. But we should not lose sight of the fact that bureaucrats themselves, at any level, can be vindictive, as the IRS targeting scandal has shown. But that is only one motive for abuse of power; another motive may be more pervasive: the ability to reward those in a position to promote the self-interests of those who populate the administrative state. These are dangers that are endemic to big government. In a post entitled “Are Government Regulators More Virtuous than Everyone Else” (No!), Ivan Carrino highlights the weakness of arguments like those made by George Akerlof and Robert Shiller in “Phishing For Phools“, who call for greater government regulation on the grounds that consumers are vulnerable to manipulation by businesses. Carrino says:

“One can’t help but notice the central contradiction in this analysis. On the one hand, it is assumed that markets fail because of ‘normal human weakness.’ On the other hand, it is assumed that regulation, which must necessarily be implemented by human beings with equal or greater ‘weaknesses,’ will somehow solve the problem.

Akerlof and Shiller simultaneously demonize human beings who operate in the private sector while idealizing human beings who operate in the public sector.“

Glenn Reynolds has been a prominent critic of the administrative state. As a consequence of the vast and growing body of regulatory rules, it’s become increasingly difficult for individuals, acting on their own or as businesspeople, to know whether they are in acting in violation of administrative law. Reynolds discusses regulatory crime and over-criminalization in “You May Be Breaking The Law Right Now“, and in his great paper “Ham Sandwich Nation: Due Process When Everything is a Crime” (free download).

Hamburger’s main position is that law should be made by elected representatives, not by bureaucrats who lack direct accountability to voters. Ilya Somin believes that with time, Hamburger will have great influence on legal theorists in this regard. He compares Hamburger’s insights on administrative law to Richard Epstein’s work on takings. Epstein insisted that “almost all regulations that restrict property rights should be considered ‘takings’ that require compensation under the Fifth Amendment.” Somin notes that Epstein’s position, despite harsh criticism from certain quarters, has influenced legal thinking in a dramatic way over the years.

What’s to be done? Can a line reasonably be drawn between constitutional legislative power and delegated rule-making authority? Somin is skeptical that absolute restrictions on lawmaking by the administrative state are practical, in the sense that there will always be details that cannot be addressed in enabling legislation. Others have suggested practical paths forward: Joseph Postell attempts to give a roadmap in “From Administrative State to Constitutional Government“. A recent Glenn Reynolds op-ed, “Blow Up The Administrative State“, gives a qualified defense of Texas Governor Greg Abbot’s proposed amendments to the Constitution. Among other things, Abbot proposes to:

“–Prohibit administrative agencies … from creating federal law.
  –Prohibit administrative agencies … from preempting state law.
  –Give state officials the power to sue in federal court when … officials overstep their bounds.
  –Allow a two-thirds majority of the states to override a federal law or regulation.”

I would add that administrative review and adjudication should be independent of the agencies themselves. Also, Representative Mia Love (R-UT) has proposed legislation that would restrict Congress to bills focused on points directly related to a single issue (i.e., no omnibus bills), which would help to check the growth of the administrative state.

All of these measures seem consistent with Hamburger’s views. Reynolds is fully cognizant of the dangers of a constitutional convention. Nevertheless, he recognizes that Abbot’s proposals would impose harder limits on the size of government, and defends them in colorful fashion:

“A smaller government would mean fewer phony-baloney jobs for college graduates with few marketable skills but demonstrated political loyalty. It would mean fewer opportunities for tax dollars to be directed to people and entities with close ties to people in power. It would mean less ability to engage in social engineering and ‘nudges’ aimed at what are all-too-often seen as those dumb rubes in flyover country. The smaller the government, the fewer the opportunities for graft and self-aggrandizement — and graft and self-aggrandizement are what our political class is all about.“

For further reading, Michael Ramsey at The Originalism Blog posts links to several other essays by Hamburger at The Volokh Conspiracy, where he acted as a guest-blogger.