Recently, former President Trump floated the idea of creating “a government efficiency commission a federal commission to audit the entire federal government.” And even better, he suggested putting Elon Musk in charge of the commission, saying he is a great “cost-cutter.”
Unleashing a commission of this nature on the federal government, led by a titan of industry who famously reduced Twitter’s staff by 80% without any service interruption, could result in untold efficiency gains and service improvements—not to mention a retrenchment of the national government in a manner more consistent with the constitutional order.
What’s particularly interesting about this possible future commission (besides the name!) is that something like it happened before. And it was a great success.
In February 1967, then-California Gov. Ronald Reagan issued Executive Order R2-67 establishing the Governor’s Survey on Efficiency and Cost Control, which was “a non-profit, bipartisan, privately financed management analysis of State administration conducted by private citizens…for the purpose of achieving improvement in administrative procedure and operating economies in State government.”
In all, this citizen-led commission included 250 private sector leaders who freely donated their time and knowledge “to determine how the services of the State of California may be provided its citizens in the most efficient, expeditious, and economical manner.” In a relatively short period, the group completed a holistic review of California state agencies and came up with almost 2,000 specific recommendations to improve operations and cut costs.
Had all recommendations been adopted, Californians could have realized $22 million in one-time savings, $233 million in long-term reductions, $153 million in cost avoidance, and $118 million spared through deferrals. Too, the state’s various reforms could have also yielded annual savings of $92 million and $67 million for federal and local authorities, respectively.
The California commission’s success would serve as a template for Reagan’s later federal cost-cutting efforts. In June 1982, Reagan issued Executive Order 12369, which established the President’s Private Sector Survey on Cost Control in the Federal Government. Famously, this group would later come to be known as the Grace Commission.
Like the state-specific commission before it, Reagan formed the Grace Commission in such a way that it was comprised of “‘outstanding experts from the private sector’ that would conduct an in-depth review of the entire Executive Branch, and make recommendations for eliminating waste and inefficiency.” This group and all of its activities were, “Fully funded by the private sector at no cost to the taxpayers.”
It only took experts a few years to conduct a comprehensive review and offer up major findings. In all, the Grace Commission put forward almost 2,500 separate recommendations to improve federal operations and save taxpayers greatly. Had policymakers fully implemented their findings, through administrative action or legislation, Americans could have possibly saved as much as $424.4 billion over a three-year period. What’s more, all of the recommendations could have been achieved “without raising taxes, without weakening America’s needed defense build-up, and without in any way harming necessary social welfare programs.”
Over time, many of the Grace Commission’s key ideas became law, temporarily bending down the federal government’s cost curve and improving service delivery. Much like the California commission before it, the Grace Commission proved to be a fruitful exercise that brought to bear private sector perspective on old bureaucratic systems—and the result was smaller and better government.
Reagan’s cost-cutting experiences should inform any future president’s efforts to get the federal Leviathan under control. It will take private sector innovation, creativity, and outside the box thinking to get the federal government’s finances back on track, and to keep them there over the long-term.
The good news is that there are many, many people in the private sector that want to move things in a better, more sustainable direction. All they need is a chance to roll up their sleeves and help.