How Trump and Musk Run Budget Efficiency in the US?

Trump gives billionaire Elon Musk authority

US President Donald Trump has appointed billionaire entrepreneur Elon Musk to head a new department in his administration. Musk, along with Vivek Ramaswamy, will lead the Department of Government Efficiency (DOGE), which is aimed at making government more efficient.

The appointments were announced by Trump on November 12, 2024. In a statement at the time, Trump said Musk and Ramaswamy “will pave the way for the administration to dismantle government red tape, cut excessive regulation, cut wasteful spending, and restructure federal agencies.”

Trump said the new department would fulfill a long-held Republican dream and provide advice and guidance “from outside government.”

At a Trump campaign rally at Madison Square Garden in October 2024, Musk said the federal budget could be cut by at least $2 trillion. Voluntary spending, including defense spending, is estimated to account for $1.9 trillion of the $6.75 trillion federal budget for fiscal 2024.

“Your money is being wasted, and the Department of Government Efficiency is going to fix that. We’re going to take the government off your shoulders and out of your wallets,” Musk said in the campaign.

Musk has donated more than $100 million to Trump's campaign to help him win the November 5, 2024 presidential election. The name DOGE has also been said to refer to Musk's cryptocurrency, dogecoin. Ramaswamy is a former Republican presidential candidate who lost to Trump in the party's primary.

In January 2025, Musk estimated that for the 2026 financial year, DOGE could save up to 1 trillion US dollars from various budget cuts.

Musk's first move: disbanding USAID

Musk's first move in efficiency measures in the US was to disband the international aid agency USAID. The agency has been operating for 64 years. It will be closed as part of government budget cuts.

Musk announced the decision at X Spaces on February 3, 2025. Most of USAID's 10,000 employees and staff had been asked to take indefinite leave a week before the announcement.

"I've had many meetings with the President. His decision is that USAID must be closed," Musk said.

Your money is being wasted, and the Department of Government Efficiency is going to fix it. We are going to take government off your shoulders and off your wallets.

According to United Nations data, the US contributes 42 percent of global aid. The amount in 2024 is equivalent to 13.9 billion US dollars. This fund is used for everything from finding HIV/AIDS treatment, clearing landmines from conflict areas, empowering farmers and plantation workers, to financing various field hospitals in various countries.

The dissolution of USAID has had an impact on various humanitarian programs in many countries, including Indonesia.

Musk's second move: mass layoffs of government workers and cuts to government agencies

Trump signed an executive order regarding the downsizing of federal employees on February 11, 2025. More than 9,500 US federal government employees have received layoff notices as of Friday (2/14/2025) local time or Saturday Indonesian time.

Most of the new employees are still on probation, but some are already civil servants. They are employees in the Departments of the Interior, Energy, Veterans Affairs, Agriculture, Health and Human Services.

That number is in addition to the approximately 75,000 employees who participated in the early retirement program that has now been closed.

The layoffs are part of a bureaucratic cut for the country's financial efficiency. Trump said the federal government is too fat and sucks up too much of the country's finances because of waste with work that he considers fraudulent.

The White House and the U.S. Office of Personnel Management (OPM) declined to say how many employees had been laid off. According to government data maintained by OPM, 220,000 workers had less than a year of service as of March 2024.

One of the mass layoffs is at the Centers for Disease Control and Prevention (CDC). Nearly 1,300 probationary employees at the CDC are being laid off. The head of the Atlanta-based CDC was informed of the decision Friday morning.

OPM has given the agencies targeted for employee cuts until Tuesday (25/2/2025) at 20:00 to issue layoff notices.

In addition to layoffs, Trump and Musk have proposed eliminating a number of government agencies, such as the US Agency for International Development and the Consumer Financial Protection Bureau (CFPB).

Lawsuits and protests in the dissolution of USAID

U.S. District Court Judge Carl Nichols on February 7, 2025, rejected Musk and the Trump administration's plan to lay off about 2,700 employees at the U.S. Agency for International Development, or USAID, and ordered the agency's furloughed staff to be rehired.

Judge Nichols also blocked an order that would have given thousands of USAID employees abroad just 30 days to relocate their families to the U.S.

The ruling is a victory for the American Foreign Service Association and the American Federation of Government Employees, two unions that represent U.S. federal workers. The ruling takes effect Feb. 14, 2025.

Nichols stated in his decision that the union had shown strong evidence of irreparable harm if the court did not intervene.

The layoffs have also been met with lawsuits, court orders and protests.

A series of lawsuits and protests have thwarted the mass layoffs of US federal government employees.

Following the wave of layoffs, the National Treasury Employees Union (NTEU) and a group of other US unions have filed a lawsuit, alleging unlawful layoffs.

“Termination of probationary employees who have undergone extensive training would have a detrimental impact on the agency’s mission and government operations,” NTEU President Doreen Greenwald wrote in a letter to union members Thursday (2/13/2025).

On Friday night, advocacy group Democracy Forward filed a complaint with the Office of Special Counsel, the federal agency dedicated to protecting whistleblowers, asking for an investigation into whether the mass firings violated federal personnel practices. They also asked that the firings be halted while the investigation continues.

Meanwhile, labor activists and government employees rallied outside the Hubert H. Humphrey Building in Washington, Friday (2/14/2025), to protest the wave of layoffs.

Several of Trump's agendas related to budget efficiency have been opposed by the judiciary. One of them is about the disbursement of grant funds.

In January 2025, the Trump administration issued a memo freezing federal grants, loans and other financial aid. Some of that trillion-dollar funding is aid to the federal government to pay for health care, education, transportation and a range of services.

The White House said the freeze would align federal spending with the president's priorities. The memo was later withdrawn.

After that, John McConnell, a district court judge in Rhode Island, temporarily blocked the freeze on grants, federal funds and financial aid. McConnell, who was appointed by former President Barack Obama, led a legal challenge by a coalition of 22 states.