Trump Copies a Good Idea from Reagan

T he Wall Street Journal reports that Donald Trump plans to adopt Elon Musk’s proposal for a government-efficiency commission. This is an old idea whose time has come again. Trump would be following in Ronald Reagan’s footsteps by going forward with this commission if he returns to the White House.

Reagan created the President’s Private Sector Survey on Cost Control in a June 1982 executive order. It was more commonly known as the Grace Commission, after its chairman, J. Peter Grace. He was the CEO of a chemical company, and he assembled a team of 161 businessmen to study government inefficiency. Grace was himself a Democrat, and the commission’s recommendations were not partisan.

Commission members worked as volunteers, and the commission’s resources were funded through private donations. It split into 36 task forces, each assigned to study a different area of government and write a report. The cumulative product included 2,478 recommendations. It was so hefty that Grace joked it would make for good exercise for Reagan when he presented it to him in January 1984, and the president did a press with it upon receipt.

It wasn’t the first time Reagan had ordered such a study. When he was governor of California, Reagan convened a similar commission of businessmen. In a speech to the Grace Commission in 1982, Reagan recounted that as governor he implemented about 1,600 of the over 1,800 recommendations the California commission produced. He gave examples of streamlining state-government fleet-car purchases, printing forms on smaller pieces of paper, using office space more efficiently to avoid building new buildings, and making sure different parts of the government were cooperating to avoid redundancy.

Reagan saw the issue of government efficiency in world-historic terms. “Throughout history — Rome in ancient times, the French and Spanish empires in the 16th and 17th centuries, the Weimar Republic in this century — many great nations toppled and fell in large part because their economic policies failed to anticipate how their populace was being overburdened with taxes, spending, and debt,” he told the Grace Commission in 1984.

The Grace Commission did not change the trajectory of the federal debt or the growth in the size of government. Some of the executive-branch recommendations were followed, but a majority of the recommendations required legislative action and were never implemented. The commission’s projected savings of $424 billion over three years was probably too optimistic, as a 1984 Congressional Budget Office analysis found.

Citizens Against Government Waste, co-founded by Grace in 1984, estimates that the recommendations that were implemented from the commission have saved the federal government a total of $1.9 trillion between the publication of the report and 2020. All of that savings was undone by one law, the American Rescue Plan Act, that Democrats passed in 2021 and added $1.9 trillion to the debt. Dispiriting as that may be, Americans should still not tolerate the levels of waste present at the federal level today, and there’s plenty to do to clean it up.

Right now, there are recommendations sitting on the shelf from the Government Accountability Office (GAO) that could save up to $208 billion. That’s just from suggestions the GAO has already made that have not been acted upon. Of course, that’s only scratching the surface of the savings that could be possible with closer study and more recommendations.

The federal government made at least $236 billion of improper payments in 2023 alone, according to the GAO. That’s a conservative estimate because many federal agencies did not provide information to the GAO on improper payments. This category includes fraud and mistakes, and it is about six times greater than the annual budget of the Department of Justice.

The Department of Labor inspector general found that at least $191 billion of pandemic-era unemployment benefits were improperly paid. That is also a conservative estimate, and it represents 22 percent of the total benefits paid during the pandemic. It’s almost double the amount of annual spending on federal food-assistance programs for the poor.

An Associated Press investigation from 2023 estimated total pandemic-benefits fraud and waste at closer to half a trillion dollars. Law enforcement is drowning in a deluge of fraud cases as prosecutors try to clean up after lawmakers’ poorly designed pandemic programs that were easily gameable by criminals.

If personnel is policy, then the Biden administration doesn’t care much about this issue. Biden has ignored the will of the Senate by keeping Julie Su as acting secretary of labor, despite Su’s record as California labor secretary, where she oversaw $33 billion in pandemic-benefits fraud. Su has since used her federal position to try to erase her failures from her state position by forgiving California’s federal loans for its unemployment system.

Trump would have a chance to offer a stark contrast to Biden, and by extension Kamala Harris, by going forward with a commission to tackle government waste and fraud. He should learn from the Grace Commission’s shortcomings by pushing hard for congressional follow-through to get the reforms into law. A government-efficiency commission would not fix the debt problem, which is driven primarily by entitlement programs and interest payments. But it would at least demonstrate commitment to what Reagan called “the very principle of government that began this nation: the belief that government is here to serve the people and not the other way around.”