What Trump’s Elon Musk, Vivek Ramaswamy pick means to the U.S. government?

Elon Musk, pictured on the left; Donald Trump, in the middle, Vivek Ramaswamy, pictured on the right [File]
| Photo Credit: ALAIN JOCARD

Story so far: The U.S. President-elect Donald Trump on Tuesday (November 12, 2024) handpicked tech billionaire Elon Musk and biotech entrepreneur Vivek Ramaswamy to lead his incoming regime’s effort to cut down bureaucracy in the U.S. Federal government. Mr. Trump said in a statement that the duo will lead the Department of Government Efficiency (DOGE) and pave the way “to dismantle Government Bureaucracy, slash excess regulations, cut wasteful expenditures, and restructure Federal Agencies.”

Messrs Musk and Ramaswamy are tasked to advise and guide the government from the outside. They will work with the White House and the Office of Management and Budget (OMB) “to drive large scale structural reform, and create an entrepreneurial approach to Government never seen before.”

Who are Messrs Elon Musk and Vivek Ramaswamy?

Very few people in today’s world may not know Tesla co-founder and CEO Elon Musk. Mr. Musk is a visionary businessman who fundamentally transformed ground transportation with electric vehicles. His company has sold over 2.3 million EVs as of 2021, per a report by InsideEV.

Beyond EVs, Mr. Musk’s business empire extends skywards. The Musk-owned SpaceX designs and makes rockets and spaceships. Its subsidiary, Starlink, makes low-Earth orbit (LEO) satellites that provide satellite-based internet connectivity in remote locations in several parts of the world.

Mr. Musk’s brush with the U.S. bureaucracy and politics began about three years ago when the multi-billionaire came in the crosshairs of the Delaware Chancery Court for not following through on his $44 billion Twitter takeover bid. The company’s shareholders sued the world’s richest man for backing out from a deal that he initiated. The court ordered Mr. Musk to complete the deal, ending months of verbal mudslinging and a near miss trial.

Once Mr. Musk was at the helm of affairs at Twitter, he lost no time in downsizing the company, starting with the board and the CEO. He then re-inducted user accounts that were de-platformed, including president-elect Donald Trump’s. Several Republicans celebrated the acquisition as they alleged the old guard censored conservative viewpoints.

With Mr. Vivek Ramaswamy, the stars aligned a bit differently. Mr. Ramaswamy quit his hedge fund job in his late-twenties and started Roivant Sciences, an investment holding company. One of the subsidiaries went public at a $2.2 billion valuation as it owned a much-hyped Alzheimer drug candidate. While that drug failed clinical trials couple years later, Mr. Ramaswamy reported millions of dollars in income that year, primarily through capital gains. Subsequently, he rebranded this subsidiary, and then sold five other abandoned drug candidates to Japanese pharma giant Sumitomo Dianippon for $3 billion, reporting $176 million in income on his tax return that year, per a Forbes report.

After making money from business deals, Mr. Ramaswamy switched to an active role in politics. He was the youngest person to run for the Republican nomination, and rose to the third position in national polls. But a strong Trump wave drowned Mr. Ramaswamy’s popularity. He later dropped out and endorsed Mr. Trump.

Why did Mr. Trump handpick the duo?

Both Mr. Musk and Mr. Ramaswamy are ardent supporters of Mr. Trump. And the duo share the president-elect’s views on cutting bureaucracy in government civil services. Mr. Musk, in one Trump rally in October, said the US government’s budget can be cut by at least $2 trillion, from $6.5 trillion. He has also called for a leaner government with fewer civil services personnel.

Mr. Ramaswamy, during his run for the Republican nomination, put forward plans to dismantle the federal agencies and proposed a reorganisation of intelligence units, including the FBI. He has been critical of the growth of government bureaucracy and regulatory capture, emphasising the need to remove unnecessary agencies and interventions that hurt American workers and manufacturers.

Have there been any efficiency drives like this in the past?

This is not the first time the U.S. government is going on an efficiency drive. In February 1982, President Ronald Reagan formed a group of business leaders, more commonly known as the Grace Commission, to identify and reduce inefficiency and waste in the U.S. Federal government. The commission was funded through private contributions and included 36 task forces. They put out a report two years later with 2,500 recommendations.

Initially, the White House Office of Cabinet Affairs was tasked with tracking the implementation of the recommendations. A year later, the responsibility was transferred to the Office of Management and Budget (OMB). Most of the proposals required congressional approval, and so were not implemented.

How will DOGE be different from the Grace Commission?

While the announcement from the president-elect sounds grand, there isn’t much the duo can do, except submit a Grace Commission-like recommendation, which has to be followed through by the OMB, provided they get the approval from the Congress to cut down the power of Federal agencies. So, their work, which must conclude no later than July 4, 2026, will not directly result in Federal agencies being shut down or government employees losing their jobs.

But, Mr. Trump could potentially dovetail the duo’s work with his Schedule F initiative that would re-classify thousands of government workers and make it easier to dismiss any at the president’s whim. This move could represent one of the most significant shifts in the U.S. civil service in recent history, as it would give the president direct control over positions traditionally insulated from political pressure.

While Mr. Trump’s supporters argue that these changes are necessary to address what they call a “deep state” of career bureaucrats obstructing policy, critics warn that implementing Schedule F would dismantle the modern civil service, undermining its non-partisan foundation.