Slash The Fat: 16 Agencies To Terminate

The following is Chapter One of David Stockman’s latest book, How To Cut $2 Trillion: A Blueprint From Ronald Reagan’s Budget Cutter To Musk, Ramaswamy And The DOGE Team. We encourage you to buy copies for your Senators and members of Congress and to share the Amazon link with as many influential voices as you can. The book provides detailed insights on the operations of Federal Agencies and how to streamline them.

Under our three savings bucket scheme, “Slashing the Fat” from the Federal payroll and bureaucracy would account for just $400 billion or 20% of DOGE’s $2 trillion per year savings target. Needless to say, however, even that small portion would be far easier said than done.

That’s because, unlike the case of typical US businesses, where payroll costs can range from 15% to 40% of total costs, such expenses comprise only a tiny fraction of total Federal spending. Setting aside DOD payrolls for the “Downsize the Muscle” bucket, we estimate fully-loaded nondefense employee compensation costs at $215 billion in the target year of FY 2029. That’s just 3.1% of the $7 trillion of nondefense outlays projected under current policy by CBO for what would be the final Trump budget.

So there is a lot of wood to chop in other areas of nondefense spending, but we start with the assumption that $85 billion or 40% of nondefense payroll costs would be a fair component of a broader plan to generate the $400 billion of “Slash the Fat” savings. At the projected FY 2029 cost of $160,000 per Federal employee for payroll, benefits, and fringes, this would require termination of 535,000 positions from the current total of 1,343,000 nondefense employees.

On its face, this headcount reduction target is eminently plausible given that the Washington Swamp is a vast cesspool of padded payrolls, useless projects, endemic inefficiency, and misbegotten government enterprises. But what is especially telling is that our 40% payroll cut would amount to just half of the 80% staff reduction that Elon Musk achieved at the old Twitter. And he did so in the context of a labor-intensive business without missing a beat in terms of operations and customer accommodation at the new “X.”

So we begin the payroll savings analysis by bringing the hammer down terminally on the 16 worst and most unneeded Federal agencies, including the FBI, OSHA, the FTC, and the Department of Education. Eliminating these 16 bureaucracies entirely would reduce Federal employment by 71,000 jobs and save $11.1 billion per year of direct compensation costs. That’s nothing to sneeze at, of course, but to place it in budgetary context it does represent only 13 hours’ worth of the $8.0 trillion per year of total baseline Federal spending for the target budget year of FY 2029.

We also show that cutting 50% of the staff levels at another 9 dubious departments–including the EPA, NASA, and GSA–would shrink the Federal payroll by an additional 93,000. That would save a further $15 billion annually in compensation costs.

Still, we would need an additional $59 billion in nondefense savings to achieve the $85 billion target for direct compensation reductions. Accordingly, upwards of 371,000 positions would need to be eliminated from the balance of the nondefense agencies or about 34% of the 1,084,000 current jobs at everything from the Agriculture Department to the Social Security Administration and Veterans health care system.

In addition, we estimate that $85 billion in compensation cost savings would generate an additional $45 billion of indirect savings in the related costs for agency overhead, occupancy, supplies, and outside contractor services.

In summary, therefore, we’d propose that about one-third of the “Slash the Fat” savings target of $400 billion be obtained from the following areas inside the four walls of nondefense government. Chapter 6 will also outline $270 billion of savings from outside the walls of nondefense government in the form of cuts in corporate welfare, farmer subsidies, the Green New Deal, and other wasteful private sector subventions.

Summary of Savings From Headcount and Nondefense Agency Waste Reductions (FY 2029):

• 100% Elimination of Staffing at 16 Unnecessary Federal Agencies: $11 billion.
• 50% Staffing Cut at 9 Dubious Federal Agencies: $15 billion.
• 34% Staff Reduction at All Other Nondefense Departments: $59 billion.
• Indirect Overhead savings from nondefense staff reductions and agency eliminations: $45 billion.
• Total Nondefense Staff and Overhead Savings: $130 billion.

We begin with a summary of the 16 agencies to be shut down, along with the number of staff positions to be eliminated and the resulting direct employee compensation savings. These agencies are slated for complete elimination because in the context of a roaring fiscal crisis, they are either utterly unnecessary or inappropriate functions of government or comprise activities that are already being handled by other Federal agencies, state and local governments, or the private sector.

Self-evidently, these 16 agency closures would result in only a small down payment against the $2 trillion per year savings goal. Yet it is crucial to start here because each of these agencies represent cases of egregious regulatory excess or Washington-based enterprises that are not remotely the business of the central government in any season, but most especially not during a time when the Federal government is careening toward the fiscal shoals.

Stated differently, the list below comprises a kind of Litmus Test of fiscal resolve. If these Federal bureaucrats and agencies can’t be eliminated, the prospect for reining in America’s unfolding fiscal calamity is dim indeed.

16 Agencies To Be Eliminated–Staff Cuts and Payroll Savings:

• National Endowment for the Arts: 100 staff and $16 million savings.
• National Endowment for the Humanities: 100 staff and $16 million savings.
• Legal Services Corporation: 800 staff and $128 million savings.
• National Highway Traffic Safety Administration (NHTSA): 600 staff and $96 million savings.
• Federal Trade Commission (FTC): 1,125 staff and $180 million savings.
• Corporation for Public Broadcasting: 100 staff and $16 million savings.
• OSHA: 2,200 staff and $352 million savings.
• Consumer Products Safety Commission: 600 staff and $96 million savings.
• Agency for Global Media: 1,125 staff and $180 million of savings.
• National Endowment for Democracy (NED): 162 staff and $26 million savings.
• Education Department: 4,245 staff and $680 million savings.
• Consumer Financial Protection Bureau: 1,500 staff and $240 million savings.
• Agency for International Development (AID): 10,000 staff and $1.6 billion savings.
• FBI: 34,000 staff and $5.4 billion savings.
• BATF: 5,300 staff and $848 million savings.
• DEA: 9,315 staff and $1.49 billion savings.
• Total 16 Agencies To Be Eliminated: 71,000 staff and $11.3 billion savings.

As it happens, many of the above listed agencies were on the original Reagan zero-out list of 1981. Yet they are still alive and prosperous because the Swamp is relentless in the defense of its own, and especially because on the margin even most of the GOP movers and shakers on the Congressional spending committees have been Washington lifers, RINOs, and political weaklings afraid to resist the politically correct dictates of the Washington establishment and their megaphones in the MSM.