Dear Elon

We hear you! Hit play for the merits of the Elon Musk-style commission on government efficiency. TCS stalwarts Steve Ellis and Josh Sewell emphasize the need for bipartisan support, tackling both spending and revenue issues, and going beyond just eliminating waste. 

Transcript

announcer:
Welcome to Budget Watchdog All Federal, the podcast dedicated to making sense of the budget spending and tax issues facing the nation. Cut through the partisan rhetoric and talking points for the facts about what's being talked about, bandied about and pushed to Washington, brought to you by taxpayers for common sense. And now the host of Budget Watchdog AF TCS President Steve Ellis.

Steve Ellis:
Welcome to All American Taxpayers Seeking Common Sense. You've made it to the right place for almost 30 years. TCS that's taxpayers for common sense, has served as an independent nonpartisan budget watchdog group based in Washington dc We believe in fiscal policy for America that is based on facts. We believe in transparency and accountability because no matter where you are on the political spectrum, no one wants to see their tax dollars wasted. Dear Podcast listeners, we are days away from the Democratic National Convention in Chicago, and suddenly this week the all important topic of protecting American taxpayers finally made its first star turn on the presidential campaign stage. And so today we're coming on the air with an open letter to the human who made space for this conversation. Elon Musk. That's right. X marks the spot when it comes to today's episode of Budget. Watchdog AF in his two hour plus interview with Donald Trump. Elon Musk notably said this,

Elon Musk:
I think it would be great to just have a government efficiency commission that takes a look at these things and just ensures that the taxpayer money to the taxpayers hard earned money is spent in a good way. And I'd be happy to help out on such a commission. Well,

Steve Ellis:
All right. It's never too late to get on board, Elon. Sure. The team at Taxpayers for Common Sense has been at this for 30 years, and yes, we welcome the support. Joining me now to make sure that Elon Musk stays on the correct trajectory toward fiscal success is our very own stable genius, Josh Sewell.

Josh Sewell:
Hey, welcome to the Deficits Matter party. Better late than never. I guess

Steve Ellis:
Straight to the sarcasm right out of the gate.

Josh Sewell:
Not quite. It's just that the threat of excessive annual deficits and a growing national debt is an ever present part of our work and our lives.

Steve Ellis:
Right. Excessive debt is a problem. I mean, we're sitting at 35.1 trillion in total debt. That's 28 billion debt held by public and more than $7 trillion, the government owes itself. That seems quite large, isn't it?

Josh Sewell:
Yeah, it is. And debt held by the public nearly matches the overall size of the economy, and that can bring a lot of problems

Steve Ellis:
Such as,

Josh Sewell:
Well, the main thing is reduced flexibility to respond to any sort of crisis, and we've had a few of those in the last few years.

Steve Ellis:
Like a pandemic,

Josh Sewell:
Like a pandemic or maybe an economic downturn that no one expected in the 2008. And who knows what could happen with the most recent economic bubble we may be in with housing, but also every dollar you pay an interest is a dollar you don't get to spend on something needed. Now, whether it's a crisis or an investment in some other governmental service, and frankly eventually higher taxes and fewer services are going to come to be. It's just an inevitability when you have such a high level of debt. And also I think this level of debt for an economy as large as ours, which is still the first or second largest economy in the world at a time when we aren't fighting a world war, it's unprecedented. So we're in uncharted territory.

Steve Ellis:
And that interest, you're talking about, Josh, we're looking at it. One, it's exceeding what we spend on national security, which is also excessive in our opinion. But so we're approaching a trillion dollars in interest that we're paying on our debt. And as you pointed out, with the economy, we've got high interest rates and so it's even more expensive as we go forward. And so that's a trillion dollars that's just going out the door to service the debt, not actually buying any goods and services or any real benefit for the nation.

Josh Sewell:
Yes, Steve? It's a trillion. It's a trillion dollars for things we've already done is a trillion dollars for past spending decisions. I

Steve Ellis:
Agree. Alright, so all that said, focusing on deficit reduction is good is the idea of a commission, as Mr. Musk suggests the way to go

Josh Sewell:
Commissions are a mixed bag. And lemme just lay out what my personal opinion on this. There are 535 fully voting elected members in the House and Senate representing about 335 million Americans. That's a commission. I mean, do the job you audition for. Congress is a commission in a democracy,

Steve Ellis:
But at some point we have to face reality in that they may be the commission, but they don't seem to be wanting to be commissioners. And so at some point we have to realize they're not doing it.

Josh Sewell:
So as a pragmatic realist, there's a pragmatic idealist, I guess I call myself. There is a role for commission, and if we look at history, which is important, we can see that commissions can be helpful and they can be successful for delegating some of these major issues. And I just looked into this in my time at TCS and I think one of the first successful ones was the Hoover Commission, which was back in 1947 and was studying and investigating the organizations and methods of how you operate the executive branch of the government at a time when it had significantly expanded because of World War II and the Great Depression before that. And it came up with changes to promote economy efficiency and improved service.

Steve Ellis:
And it also had, one of the provisions was that the president could go ahead and enact some of these recommendations and last Congress overturned what he did. And a lot of their recommendations were enacted. So much so that there was even a second Hoover Commission in the Eisenhower administration. And yes, former president Herbert Hoover, kind of a failed president led both the second when he was in his eighties. Also, Josh, I'm old enough to remember that from 1981 to 1983, there was the National Commission on Social Security Reform, which was more commonly known as the Greenspan Commission named after Alan Greenspan, who was future head of the Federal Reserve. And he was appointed to address the funding crisis of facing social security at the time. And the reports from that committee led to Social Security Reform Act of 1983, which has been credited with keeping social security solvent for an estimated 50 years until 2033.

Josh Sewell:
So yeah, so commissions that are delegated authority by Congress and with the buy-in of the president have historic precedents and they can be successful. There's also the most recent one in 2010 when we had another commission under President Obama and it was established as part of what was my first fight over the debt ceiling and avoiding a government shutdown. And that colloquially known as the Simpson Bowles Commission because of it was chaired by former Senator Allen Simpson, a republican from Wyoming and former Clinton White House chief of Staff, Erskine Bowles. Now, they were tasked with finding deficit reduction and they did a good job. We think mostly, I mean there are some things we didn't agree with organizationally, but they did their charge. However, their suggestions were not enacted by Congress mostly because Republican Commission members did not want to include revenue raisers. So there's successful commissions and not successful commissions as far as getting reforms to government and deficit reduction. And I think it's clear that the common thread for these past commissions is that the process was depoliticized, especially when it was successful.

Steve Ellis:
This is great, Josh, because the context matters. Mr. Musk, are you listening? Are you a budget watchdog, faithful? We are the sherra. We are the people that can help you guide through this process because we know what makes a successful commission and what is ultimately a failure. These are a mechanism to force action and make uncomfortable decisions, but you have to get buy-in from the politicians in both parties, in both chambers and in executive branch to actually have success. Alright. Josh, what are some of the other important issues that need to be tackled by this Elon Musk commission?

Josh Sewell:
Yeah, I think as it was mentioned, it's not just a deficit reduction commission, it's a government deficiency commission. And so there are really two big things that I think have to be addressed. And one of those is that first it's just government efficiency. There are a lot of things that the government needs to do and that people want the government to do that we can do better.

Steve Ellis:
So there's the government efficiency. And so really it is all the above, looking across the spectrum, maybe targeting a few particular areas, but when you're looking at reducing deficits, which has to be a focus of this commission because we can have an efficient government but still spend a ton of cash. And so you have to look at everything, no stone unturned, which means even popular programs need to be evaluated.

Josh Sewell:
Yes. And that's why this is not something like past commissions as well. It's not just about cutting spending. You can't just be, we have to eliminate programs. We have to look here and do the job that politicians get part of the way there where they say, my constituents want something, and so how are we going to deliver it? You have that debate about what do we need to do as a government and then if it is a legitimate public interest and it's got the political support, we have to find a way of doing it within what we can afford. Because it's clear that people don't like deficits and they say they don't like debt, but they sure like what the deficits buy because politicians keep giving it. And focusing on deficits isn't something new, but tackling deficits is something that's not happened very well. And so when you look at past presidents, the last few presidents debt has exploded under all of them.
Yes, we have 35 trillion in debt right now. When President Biden took office from when he took office to now, the total debt has increased by about 23%. When Trump was president from the day he was inaugurated to the day he left, it increased 39%. Under Obama, it increased 88% over the eight years. So the increase in debt isn't something new, it's a common bipartisan affliction, and it's going to require bipartisan work to get it fixed. And I think that is one of the things that Elon Musk and other people who have big megaphones can be helpful here is it's saying this is not a partisan issue. It's an issue for all of us. So let's find a new way. We need new blood, we need new thoughts. Let's do it. Let's figure it out.

Steve Ellis:
Need new blood, need new thoughts. But we've been working on federal spending and revenue issues for 30 years. And there are certain things that are seem like there are quick fix or the easy way out, but we know that it's not across the board cuts or setting budget caps. It's about identifying wasted dollars legacy programs that should no longer exist, programs growing far beyond the rate of inflation and making hard decisions and making the public case for those hard decisions so that the politicians get bought in and it doesn't become pandering to this particular political constituency or that particular constituency.

Josh Sewell:
Exactly. And that's why when we've had these discussions with members and their staff, I've suggested that if you truly care about reducing deficits and tackling the debt, you actually start with the hard programs first, the ones that are popular, and even more so the ones that are important to your own constituents. So in the Farm Bill, when you're talking to Democrats, there's a lot of times there's a feeling now that you can't take a single dollar out of the SNAP program. The money that is projected by CBO O to be spent, if you change one thing that reduces $1 regardless of where it is, even if it's in the administrative side, even if it's in the money paid to some of the people for processing the SNAP benefits, that's detrimental to the program, but it's not true. We need to make sure that programs are focused on what we want, the people who are supposed to be benefiting from the programs and we're getting what we want out of them.
Same thing on the farm side. You can cut spending to farmers. It's not going to destroy the world. One of the things that we have is in the crop insurance program, you can be a millionaire and still get subsidies. There is no income or means test. We have 35 trillion in debt and we're having to make these tough decisions. It doesn't make sense to say, yeah, bill Gates can get crop insurance. Sure, Elon Musk, if he wants to buy a farm, he can get crop insurance and be subsidized at the exact same level as not just you or me, but as an actual poor farmer somewhere. It doesn't make any sense. And so you actually have to start where you know the most, where it hurts you the most, potentially politically, I would argue for politicians, because that's where you can make a difference. You can lead by example. I

Steve Ellis:
Appreciate you bringing in the farm bill, and I'll just bring in national security. I mean, we just had a podcast talking about the Sentinel, the ICBM, part of the triad that is our nuclear deterrence. But in reality here is we're recapitalizing the submarines, we're recapitalizing the bombers, and now we're recapitalizing the ICBMs, but we don't really need all three. And the more survivable, the more challenging for our adversaries are the submarines and the bombers. Whereas you look at the I CCB M, everybody knows where they are. I mean, nuns broke into where the ICBMs are, and not only that, they've had dramatic cost overruns. And so in January they alerted the Congress because they had to that it was more than 30% over budget and they were going to look more at or what they estimated the costs were going to be, and they were going to look more at it. And then in July, they came back and said it was more than 80% over what they estimated the cost. So here's a ready cut right there that can save taxpayers money and we still have an adequate nuclear deterrence. And so it's sort of looking at some of these things and these, I would call 'em low lying fruit, but by the same token, there are people who are fighting hard for it. There's the missile caucus and there are the ag groups that are fighting to keep these subsidies alive.

Josh Sewell:
Yeah, this is rocket science. Elon Musk has made an entire business about rockets removing the wasteful spending in space travel. He has a role here. We've been doing this for a long time. We have a laundry list of potential cuts or reforms. So we're not truly reinventing the wheel. What we need to have is to find the will for people to do this. And I think that is one of the benefits of Elon Musk's step into this is to say, Hey, maybe you'll get some more people who haven't noticed this as an issue to be engaged. But my big plea for anyone is to remember next year what you said this year, especially if you're in charge, because we've got a lot of folks who really care about deficits when they're in the minority, but once they have their hands on the levers of power, it tends to not become as much of an issue.

Steve Ellis:
True that. So he mentions efficiency, Mr. Musk. And one thing I'm afraid of when I hear that is that there's going to be this focus on waste, fraud and abuse. And I'm not saying that obviously there isn't waste fraud and abuse in the federal government. There is, but you can't get there on just waste fraud and abuse. There just isn't enough of it. And I am not pleading for more waste, fraud and abuse. I'm just saying that eliminating that is not going to close our deficit is going to be looking at some of these hard issues, difficult issues. And when you look at it, two thirds plus of the federal budget is on the mandatory spending. The major entitlement programs that are incredibly popular, and so much of it is on social security is on Medicare. And so these are areas where you have to look at and figure things out because the thing is right now, they're very costly, but they're not actually a drain on the federal budget yet.
But they're going to be an enormous drain on the federal budget as far as the cost. If we're going to take general revenue funds to prop up social security to make sure that everybody still gets a hundred percent of their payments instead of 75% of their payments. And so these are areas that you have to tackle. And it was why you had the Greenspan Commission, one of the ones that we talked about being successful. It actually did extend the fiscal health of social security for 50 years. But that's what you need to do. You need to tackle those things and not just hope that you can eliminate waste front abuse and then everything is better.

Josh Sewell:
And the truth is, there are two major things that you have to do to tackle those. And the first is you have to spend money to save money. If you're going to have well delivered programs, you have to invest in the bureaucracy and the process to do that. Sometimes it's technology, sometimes it is actually you can increase efficiency. But I mean, the IRS as much as most people don't necessarily like them, they're a great example. There's a lot of complaints about, I mean, I've never had to call IRS, thank God, but even when you call them and you had to wait for hours or you never got called, you never was never picked up. And the customer service was terrible. Well, they were starved of money for more than 10 years. They had this basically the exact same budget prior to the IRA and checking some cash that they had 10 years ago.
There's a lot more taxpayers now. There's more tax cuts. There's all kinds of things that makes 'em more complicated. So if you want government to serve people, you have to invest in an adequate level of government. And that gets to the tax gap. That's one of the issues, which I don't know if you remember the number right off the top of your head, but there's hundreds of billions of dollars between, at one point it was estimated a trillion, but I think it's a little better than that between what people owe legitimately and what they actually pay. And so that's part of the thing is you have to close some of those gaps. But the other big thing is, which we haven't mentioned yet because you can't mention it sometimes, and I think we just internalize that, is you're never going to pay for any of this without increasing revenue. There is not enough of an appetite to close the gap between what people want from government and a closer to a balanced budget unless you start raising some revenue. It's just not mathematically possible.

Steve Ellis:
And we know from previous experience that tax cuts don't pay for themselves, don't increase revenue. And so that is not the way to go. Although there are some people that are arguing for further tax cuts, which is just going to exacerbate the situation. We're not saying you shouldn't tackle spending, but you got to do both. You got to come at it from both ends if you're going to actually make a difference and have something happen. And I think when you're talking about the IRS, Josh, you're right. I mean they were using 60-year-old computer systems. They were using the things that were programmed in cobol. And so I think that also gets to a point that any kind of commission, if it's going to be successful, has to come from a place that isn't, we're just cutting government, that we're recognize that government is there for a reason and is trying to deliver services and goods to American taxpayers and that how do we best deliver those services if they are actually federal government related and something that needs to be done by the federal government. So Josh, we've talked about this commission and Mr. Musk has come up with this great idea. Has anybody else come up with this idea? Is there anything else brewing on this commission front?

Josh Sewell:
It turns out there is. There's an actual bill. Shocking.

Steve Ellis:
Shocking.

Josh Sewell:
Yeah. Who knew? There's actually a bill called the Fiscal Commission Act of 2023, which was introduced by the House budget committee and its chair, Mr. Arrington from Texas, and that has some bipartisan support. And so they already had hearings last year. I think we may have even had a podcast on it. We certainly had a wastebasket that we wrote about it, a couple of them. And so there's a platform. There is an appetite. It's an election year, so that's a mixed bag right now, but that is still out there. It'll be there next year with whoever's in charge. I think it's like planting a tree. The best time to have done it was 50 years ago. And then the second best time is today. I think it's the right time, it's the right conversation, and I think we're happy to do it. So this commission, it doesn't need Republicans, it needs Democrats, it needs people in Washington DC and it needs experts outside of Washington dc So if Elon Musk wants to be a part of this, I think that's a great idea.

Steve Ellis:
I've heard Mr. Arrington talk about it, the commission and it's bipartisan, bicameral. I'm sure he'd be open to Elon Musk's ideas and ways to approach this. And Elon, I'm sure you're following us at taxpayers on X. And so this marks the spot. This is the group to support TCS Director of Research. Josh Sewell, always aiming for the star. Thanks for joining me in this ode to Elon and Taxpayer Sanity.

Josh Sewell:
Always happy to do it, Steve.

Steve Ellis:
Well, there you have it. Podcast listeners and Elon Musk. It's time to light the fires and kick the tires on a fiscal commission that will protect American taxpayers. This is the frequency market on your dial, subscribe and share and know this taxpayers for common sense has your back America. We read the bills, monitor the earmarks, and highlight those wasteful programs that poorly spend our money and shift long-term to taxpayers. We'll be back with a new episode soon. I hope you'll meet us right here to learn more.