White paper for America 2.0 and the Department of Government Efficiency (DOGE)
To: Elon Musk & Vivek Ramaswamy
From: Fred Eberlein
Subject: White paper for America 2.0 and the Department of Government Efficiency (DOGE)
Contents:
1. Introduction
2. Mission Statement
3. Approach
4. Low Hanging Fruit
5. Challenges
6. Intersections
1. Introduction
This white paper is the first draft of a plan to address out-of-control federal government spending and the gross inefficiencies that accompany it. In addition to citing specific areas of waste and inefficiency, this white paper takes a broader look at the federal government and where its bureaucracy intersects with the country—from individuals to small businesses, big businesses, and foreign entities. These intersections provide another perspective to consider when setting priorities for streamlining and cutting costs.
A more granular assessment of the country’s needs could be conducted using a tool like the Needs Monitor. The Needs Monitor [alpha release], helps users find solutions within the vast databases of government—local, state, and federal. Additionally, through the Needs Monitor Portal [not yet developed], government personnel have firsthand access to information about validated individual needs filtered by zip code, town, city, county, state and country. Using the Portal, civil servants can directly interact with users/citizens and assist them in finding solutions, ranging from clean drinking water to financial planning and education.
Through the Needs Monitor, a big part of discretionary spending (approximately 26% of the budget or $1.7 trillion) can be assessed, tracked, and refined to deliver ever greater value to the taxpayer.
2. Mission Statement
To drastically reduce government inefficiency, and provide greater taxpayer value while cutting spending, lowering the national debt, and reforming government.
3. Approach
While cutting departments and budgets has an immediate effect on spending, achieving true efficiency is a complex operational challenge. With federal spending making up one-quarter of our GDP, the key is to reform government without destabilizing the economy or harming individuals. Rash decisions risk significant costs; losing skilled personnel is one such risk. Government reform should aim to retain essential talent. Rather than mass termination, a program of mass transitions would be more effective. Civil servants would compete for roles where their skills are most needed—both in and outside the Federal Government. This approach is more publicly appealing and less likely to face resistance from federal unions.
4. Low Hanging Fruit
4.1 Outdated Payment Systems: Since 2013, the U.S. Treasury has reported ongoing issues with its payment systems. A 2013 Treasury strategic objective noted that “the federal government currently operates under multiple financial systems and accounting practices, leading in some cases to challenges in communication and coordination.” These issues have resulted in erroneous or improper payments, which totaled $247 billion in 2022, according to a 2023 GAO report.
The Department of Labor's Inspector General (DOL-OIG) has reported that improper payment rates for its Unemployment Insurance program exceeded 10 percent for 14 of the last 17 years. Following the surge of COVID-related spending, this rate worsened significantly. In a September 30, 2022 audit, 42.4% of payments were improperly disbursed (see Attachment 1).
The Department of Labor (DOL) is one of many agencies that should be evaluated on the topic of payment systems with the objective of fixing it or replacing it with a better one. Given all the legacy systems in the Federal Government, replacements may work better than patches. Such a project should not be managed or touched by the typical contractor but rather done in-house utilizing the government’s best talent.
Because of Washington’s broken payment systems, tens of billions of dollars have been lost, with limited knowledge of who’s receiving this money. Large amounts appear to be going to drug cartels, foreign adversaries such as Russia and North Korea, and terrorist groups. In short, federal mismanagement of spending has become a national security threat.
4.2 Bad Practices: A great deal of the Federal Government’s waste can be attributed to putting a disproportionate emphasis on motion over action. A good example of this is found on the Inspector General’s (IG) website, Oversight.gov. This website is managed by the Council of the Inspectors General on Integrity and Efficiency (CIGIE). Here, we see the IG’s odd interpretation of integrity, as performance is measured in “potential savings” and not real savings (see Attachment 2). Why is this? Because so few of the recommendations made by the IG are ever implemented.
Like the Federal Government’s overall inefficiency, over 95% of what the IG recommends is never touched. In the appendix to its 2020 Semiannual Report to Congress a table of accomplishments shows only two items. In the same appendix there are 9-pages of “Unimplemented recommendations.”[1]
4.3 Policy of Completion: To overcome the systemic waste of resources, perhaps a policy should be implemented that only funds projects that are likely to be completed. If this policy were adhered to ninety percent of what the IG does today would be unnecessary. This policy would have a similar impact on research, including at the NIH, where billions are spent on projects that are never translated into mainstream medicine. A policy of completion will force agencies and civil servants to align themselves with solutions rather than busy work.
A lot of today’s spending is also duplicated by government contractors. In rare cases, this is necessary; however, in most cases it’s just done to empty budgets faster and increase funding for the following year.
4.4 Tax Reform. Taxes intersect with everyone—from individuals to small and big businesses, and foreign entities—imposing a significant burden.
The Taxpayer Advocate Service (TAS) is an independent organization within the Internal Revenue Service (IRS). In its 2008 Annual Report to Congress, in a section labeled “Most Serious Problems,” TAS highlights the “Complexity of the Tax Code” and reports that in 2006, the cost of compliance was “$193 billion—or a staggering 14 percent of aggregate income tax receipts.”
In the TAS 2012 Annual Report to Congress, the complexity of the tax code is again featured under “Most Serious Problems.” Many of the arguments from the 2008 report are repeated in 2012, including this: “If tax compliance were an industry, it would be one of the largest in the United States.”
The fastest and most impactful way to help Americans is to return the tax code to its original simplicity, back when it was only 400 pages in total. Today, that same tax code is over 9 feet long; nobody knows its exact number of pages. Simplifying the tax code would reduce the pain of enacting change in Washington and save every American thousands in costs, and hours of wasted effort.
In Europe, taxes are prepared by the government and sent to taxpayers electronically to approve or dispute. Completing a tax return in Europe can literally take seconds. Anyone who achieves this in the U.S. would be a national hero—though not to the tax preparation and accounting industry that feeds off tax code complexity. In the process of reforming government, parasites must be eliminated. Washington is full of them.
4.5 Defense. A 2016 story leaked to The Washington Post reported on a Department of Defense (DoD) audit that showed how $125 billion could be saved over five years. The plan would not have required layoffs of civil servants or reductions in military personnel. Instead, according to the Post, “the audit recommended streamlining the bureaucracy through attrition and early retirements, curtailing high-priced contractors, and making better use of information technology.” Fearing that budgets could be cut, the Pentagon decided to bury the report.
Given the size of defense spending, this $125 billion loss is a small percentage of the DoD’s waste—waste that, in many respects, runs counter to its mission to protect the country and its people.
5. Challenges
Today, government overhead on many projects is upwards of 99.5%. The Healthcare.gov website is one example. A website that should have cost no more than $10 million to develop has, to date, cost taxpayers over $2 billion.
In the process of streamlining Washington and making it efficient again, thousands of government contractors will need to streamline as well. As Washington becomes more efficient, so too must the swarm of suppliers that support it.
The biggest challenge will be getting civil servants to think and act differently. New rules, like the above-mentioned Policy of Completion, will help guide them.
Overall, the Federal Government needs to shift from an “institutional” mindset to an “operational” one. It should change to align with the needs of the country and change as change is needed rather than remaining a calcified hairball of institutional complexity.
6. Intersections – Where the Federal Government intersects with citizens, small businesses, big businesses, and foreign entities offers another perspective on where attention should be focused in the mission to trim government and make it run efficiently.
6.1 CITIZENS: The average citizens interact with the federal government in a variety of ways, often impacting their daily lives and civic responsibilities:
Taxation: Perhaps the most direct interaction, U.S. citizens pay federal income taxes, which fund everything from defense to education programs. Through taxes, citizens indirectly influence government priorities, which is why tax policies and reforms are often central in political debates.
Social Security and Medicare: Working citizens contribute to Social Security and Medicare through payroll taxes. These federal programs provide retirement income, disability benefits, and healthcare for seniors, impacting the lives of nearly everyone in the workforce or retired.
Voting in Federal Elections: Voting for the President, U.S. Senators, and Representatives allows citizens to participate in federal decision-making. Elected officials shape laws, budgets, and policies that impact education, healthcare, infrastructure, and international relations.
Military Service: The U.S. maintains an all-volunteer military, so citizens join by choice rather than by draft. Beyond those serving, civilians may work in support roles or contractors, while family members of military personnel often interact with federal services.
Public Benefits: Federal programs like Medicaid, SNAP (food assistance), and student loans are lifelines for millions. Citizens apply, qualify, and receive support through these programs based on federal guidelines.
Federal Laws and Regulations: Everyday life is shaped by federal laws and regulations on topics like consumer protection, environmental standards, labor rights, and workplace safety. Citizens may encounter these regulations at work, in the marketplace, or in other aspects of daily life.
National Parks and Federal Land Use: Visiting national parks, monuments, and forests puts citizens in direct contact with federal management and conservation efforts. Additionally, some citizens who rely on federal land for grazing, logging, or other purposes have more frequent interactions with federal agencies.
Health and Safety Agencies: Agencies like the FDA and CDC regulate healthcare, medication, and public health. This has been especially visible during public health emergencies, where federal guidance, testing, and vaccinations have a profound effect on everyday life.
Research and Education Funding: Many universities and research institutions receive federal grants, impacting students and researchers. Citizens indirectly benefit from federal investments in research, whether in medical advances, technology, or public infrastructure improvements.
6.2 SMALL – MEDIUM BUSINESSES: Small and medium-sized businesses (SMBs) intersect with the U.S. federal government in multiple ways, often shaping how they operate, expand, and support their employees. Here are some key intersections:
Taxation and IRS Compliance: Businesses are subject to federal taxes, including corporate income tax, payroll taxes, and contributions to Social Security and Medicare. SMBs interact with the IRS regularly for tax filings, deductions, and possible audits. Tax credits, such as the Research and Development (R&D) tax credit, also support innovation in small businesses.
Employment Laws and Regulations: Federal labor laws impact hiring, wages, and workplace practices. SMBs must comply with the Fair Labor Standards Act (FLSA), Equal Employment Opportunity (EEO) guidelines, and Americans with Disabilities Act (ADA) requirements. These laws set minimum wage standards, prohibit discrimination, and protect employee rights.
Small Business Administration (SBA): The SBA offers loans, grants, and training programs to support small businesses. Through the SBA, businesses can access funding, mentorship, and disaster relief assistance. Programs like the 7(a) Loan Program or 504 Loan Program are tailored to help small businesses grow and expand.
Health and Safety Compliance: The Occupational Safety and Health Administration (OSHA) establishes regulations for workplace safety. SMBs must comply with OSHA guidelines to ensure a safe working environment, which may require training, recordkeeping, and workplace inspections.
Health Insurance Requirements: The Affordable Care Act (ACA) affects SMBs that employ 50 or more full-time workers, requiring them to offer health insurance or face penalties. Even smaller companies often seek guidance on ACA compliance or tax incentives for providing healthcare coverage.
Environmental Regulations: Businesses that produce waste, emissions, or use hazardous materials must comply with Environmental Protection Agency (EPA) guidelines. This can affect manufacturing, construction, and other industries, often requiring compliance with emissions standards or waste disposal procedures.
Federal Contracts and Procurement: Many small businesses work with the government as contractors. Federal agencies set aside contracts specifically for small and disadvantaged businesses, creating opportunities in fields like IT, construction, and consulting.
Intellectual Property Protection: The U.S. Patent and Trademark Office (USPTO) offers services for SMBs looking to protect intellectual property. Filing for patents, trademarks, or copyrights allows businesses to safeguard their innovations and brand.
Federal Reserve and Financial Regulations: SMBs in banking, finance, or those seeking federal loans or grants interact with regulations influenced by the Federal Reserve and the Treasury. Access to capital is shaped by federal interest rates, inflation policies, and broader financial regulations.
Data Privacy and Cybersecurity Standards: Federal laws like the Federal Trade Commission (FTC) guidelines on data privacy require SMBs to protect consumer information. Cybersecurity guidelines, especially for businesses working with federal agencies, also impact small businesses directly.
Through these intersections, federal policies play a major role in the daily and strategic decisions of small and medium-sized businesses, ensuring compliance, creating opportunities, and supporting growth in various industries.
6.3 BIG BUSINESSES: Large businesses in the U.S. intersect with the federal government in numerous, complex ways, reflecting their broader economic impact, operational scale, and regulatory responsibilities. Here are some of the primary intersections:
Taxation and Compliance: Large corporations are subject to federal corporate income taxes, and their interactions with the IRS are complex, often involving audits, deductions, and tax credits. Large companies have legal teams dedicated to navigating tax compliance and frequently lobby for favorable tax policies or credits, especially in R&D, energy, or other high-cost industries.
Antitrust and Competition Law: Federal agencies like the Federal Trade Commission (FTC) and Department of Justice (DOJ) closely monitor large corporations to prevent monopolistic practices, especially in highly consolidated sectors like technology, healthcare, and telecommunications. Large companies may face investigations, mergers, and acquisitions oversight to ensure they don’t violate antitrust laws.
Environmental Regulations and Climate Compliance: Large businesses, especially in energy, manufacturing, and agriculture, must comply with Environmental Protection Agency (EPA) standards on emissions, waste management, and pollution control. In recent years, federal government initiatives have increased requirements for reducing greenhouse gases, reporting emissions, and investing in sustainable practices.
Labor Laws and Workforce Regulations: Federal laws, including the Fair Labor Standards Act (FLSA) and Occupational Safety and Health Administration (OSHA) regulations, govern workplace safety, wages, overtime, and discrimination prevention. Additionally, large corporations that operate across multiple states need to adhere to varying federal and state guidelines, impacting human resources, payroll, and health benefits administration.
Trade and Tariffs: Large companies often depend on international trade for raw materials or markets, and they are directly affected by federal trade policies, tariffs, and customs regulations. Federal agencies like the Office of the U.S. Trade Representative (USTR) and the Department of Commerce play a significant role in shaping the rules governing imports and exports, impacting sectors like technology, automotive, and retail.
Federal Contracts and Procurement: Many large companies, particularly in defense, technology, and healthcare, have extensive contracts with the federal government. The General Services Administration (GSA) and the Department of Defense (DoD) award billions in contracts, often requiring contractors to meet stringent federal guidelines for pricing, security, and reporting.
Financial Regulations and SEC Compliance: Publicly traded companies must comply with regulations from the Securities and Exchange Commission (SEC) to ensure transparency in financial reporting, protect shareholders, and prevent fraud. This includes regular reporting, maintaining accurate accounting practices, and adhering to disclosure requirements.
Healthcare and Benefits Compliance: Large companies must adhere to the Affordable Care Act (ACA) and provide healthcare options to full-time employees. Additionally, they navigate federal guidelines for pensions and retirement benefits through the Department of Labor, affecting compliance for 401(k) plans, employee benefits, and family leave policies.
Intellectual Property and Patent Law: For companies in technology, pharmaceuticals, and manufacturing, protecting intellectual property is critical. The U.S. Patent and Trademark Office (USPTO) oversees patents, trademarks, and copyrights, and companies interact regularly with federal agencies to enforce IP rights, protect innovations, and combat infringement.
Data Privacy and Cybersecurity Compliance: Federal agencies like the Federal Trade Commission (FTC) and Department of Homeland Security (DHS) set guidelines for data protection and cybersecurity, especially relevant for tech firms, banks, and healthcare providers. This includes protecting consumer data, preventing cyberattacks, and complying with regulations like the Federal Information Security Management Act (FISMA) when handling sensitive information.
Lobbying and Regulatory Influence: Large businesses often engage in lobbying to influence federal legislation, policies, and regulations affecting their industries. They contribute to political campaigns, lobby for favorable regulatory changes, and participate in industry groups to shape federal policy on issues like taxation, labor, and the environment.
Through these intersections, large corporations exert influence on federal policies and are impacted by federal regulations in ways that shape their strategies, compliance requirements, and market operations. This complex relationship reflects the economic, legal, and social importance of these entities within the U.S. regulatory landscape.
6.4 FOREIGN ENTITIES: Foreign entities intersect with the U.S. federal government across numerous domains, impacting trade, national security, technology, finance, and diplomacy. Here are some of the primary areas:
1. Trade and Tariffs: Foreign businesses and governments interact with U.S. agencies like the Department of Commerce and the Office of the U.S. Trade Representative (USTR) to navigate trade policies, tariffs, and quotas. These agencies negotiate trade agreements, set import-export regulations, and enforce tariffs, impacting foreign companies that do business in the U.S. or rely on U.S. markets.
2. Investment and Mergers: The Committee on Foreign Investment in the United States (CFIUS) reviews foreign investments and acquisitions of U.S. companies to protect against national security risks. CFIUS can restrict or block transactions involving sensitive industries, like technology and defense, to prevent foreign entities from gaining access to critical assets or data.
3. Intellectual Property and Patent Laws: Foreign companies operating in the U.S. must follow U.S. intellectual property laws, enforced by the U.S. Patent and Trademark Office (USPTO) and the Federal Trade Commission (FTC). This includes protecting patents, trademarks, and copyrights, as well as complying with federal anti-counterfeiting measures and enforcement.
4. Export Controls and Technology Transfer: The U.S. places restrictions on exporting sensitive technology to foreign entities, especially in fields like cybersecurity, AI, and aerospace. The Bureau of Industry and Security (BIS) enforces export controls to prevent sensitive U.S. technology from reaching adversarial governments or being used in ways that might undermine national security.
5. Compliance with Sanctions: The U.S. Department of the Treasury’s Office of Foreign Assets Control (OFAC) enforces economic sanctions on certain foreign entities, governments, and individuals. Sanctions can restrict foreign entities from accessing U.S. financial systems, trading with U.S. businesses, or obtaining U.S.-origin products. Foreign companies doing business with sanctioned countries may face penalties or restrictions if they violate these measures.
6. Financial Markets and SEC Regulations: Foreign entities raising capital in the U.S. must comply with the U.S. Securities and Exchange Commission (SEC) regulations. This includes adhering to disclosure, reporting, and transparency standards that allow U.S. investors to make informed decisions. The SEC also oversees foreign entities issuing stocks or bonds in U.S. markets, ensuring they meet regulatory and anti-fraud standards.
7. Immigration and Visa Policies: Foreign businesses rely on U.S. visas, such as H-1B or L-1 visas, to bring skilled workers into the country. The Department of Homeland Security (DHS) and U.S. Citizenship and Immigration Services (USCIS) enforce visa regulations and policies that affect the movement of foreign talent, making immigration policies highly relevant for multinational companies.
8. Environmental Standards: Foreign entities operating in the U.S. must comply with federal environmental laws, including regulations from the Environmental Protection Agency (EPA). This affects businesses in manufacturing, agriculture, and energy sectors, especially where pollution, emissions, and environmental sustainability are involved.
9. Data Privacy and Cybersecurity Requirements: Foreign companies doing business in the U.S. or handling data on U.S. citizens must comply with U.S. data privacy and cybersecurity standards, such as those set by the Federal Trade Commission (FTC) and Department of Homeland Security (DHS). These standards affect how foreign firms handle data breaches, store consumer data, and protect against cybersecurity threats.
10. Lobbying and Influence: Foreign entities, including governments and corporations, often engage in lobbying to influence U.S. policies. Foreign lobbyists, representing foreign governments or corporations, must register with the Department of Justice under the Foreign Agents Registration Act (FARA), disclosing their activities and clients to ensure transparency in influencing U.S. policies.
11. Defense and National Security: Foreign entities in defense or technology industries intersect with U.S. agencies such as the Department of Defense (DoD) and the Department of Homeland Security (DHS) for any activities related to U.S. national security. The U.S. government also scrutinizes foreign telecommunications companies, especially when there are concerns about espionage or data security.
12. Diplomatic Channels and Bilateral Agreements: Foreign governments engage with the U.S. federal government directly through diplomatic channels, primarily the State Department. These interactions shape agreements on trade, security, and other areas where the interests of foreign governments and the U.S. converge or conflict.
Through these intersections, foreign entities and governments interact extensively with the U.S. federal government, navigating a complex regulatory landscape to operate within the U.S. and managing relationships that have broad economic, security, and political implications.
Fred Eberlein
[1] Semiannual Report to Congress Office of Inspector General for the U.S. Department of Labor Volume 84, (April 1–September 30, 2020)