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‘No Democrats will vote in favor’

To be sure, Trump has acknowledged that the Department of Government Efficiency is not a formal government agency, stating, “the Department of Government Efficiency will provide advice and guidance from outside of government.”

Schiff is skeptical that the entity’s recommendations will lead to any concrete changes, even if the Trump administration endorses them. According to him, the structure of the government makes it unlikely.

“Even if the Trump administration actually proposes some of the DOGE recommendations, they mean nothing unless Congress votes to pass them, which it won’t,” Schiff explained.

He argued that “no Democrats” are likely to support eliminating any government department or agency, with the possible exception of the Space Force. This leaves any such proposal relying heavily on Republican support in the House, requiring over 98% of GOP votes by his estimates — a scenario Schiff calls “nearly impossible” due to the number of “RINOs” (Republican in name only) and those representing swing districts.

The Senate, he noted, would also be unlikely to support drastic cuts, as all Republican votes would still fall short of the 60-vote threshold needed to pass such measures.

Schiff also highlighted practical barriers, pointing to civil service unions that make it “nearly impossible” to fire government employees. If Trump aims to reduce government size, Schiff suggests the most feasible approach is through natural attrition, allowing the workforce to gradually decrease as employees retire or leave.

Yet, even with attrition, Schiff believes any budget savings during Trump’s term would be minimal.

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‘Only one way to actually do it’

Despite these challenges, Schiff sees a definitive way for Trump to achieve his goal of trimming down federal agencies.

“If #Trump really wants to close federal agencies and departments, there is only one way to actually do it. It's really very simple. If he doesn't do it then he's all talk. All Trump has to do is refuse to sign the next increase in the debt ceiling,” Schiff wrote in another post on X.

The U.S. debt ceiling is a set limit on the total amount of debt the federal government can borrow to fund its obligations, such as Social Security, Medicare, military salaries, interest on debt, and other expenses. When the government reaches this limit, it can’t borrow more unless Congress raises or suspends the ceiling.

If Congress fails to act, the federal government would be unable to borrow further to fund its obligations, leading to immediate and widespread consequences. Essential services could face sudden funding cuts, and federal employees could be furloughed or laid off, causing a ripple effect in the economy. Missing payments on existing debt would likely trigger a downgrade in the U.S. credit rating, making future borrowing more costly and eroding confidence in the country’s financial stability.

In a 2023 letter to Congress, Treasury Secretary Janet Yellen emphasized the urgency of the situation, stating, “It is therefore critical that Congress act in a timely manner to increase or suspend the debt limit. Failure to meet the government’s obligations would cause irreparable harm to the U.S. economy, the livelihoods of all Americans, and global financial stability.”

Increasing the debt ceiling has become routine because federal spending commitments often exceed revenue. Since 1960, Congress has raised the ceiling 78 times to prevent default and ensure the government can meet its existing obligations — 49 times under Republican presidents and 29 times under Democratic presidents.

Unsurprisingly, America’s debt has surged due to persistent federal spending beyond its revenue base. For fiscal 2024, federal expenditures totaled $6.75 trillion, while revenue collected reached $4.92 trillion, resulting in a $1.83 trillion deficit. Deficits like these have fueled the growth of national debt, which now stands at $35.95 trillion, according to the latest Treasury Department data.

Musk has already set ambitious goals for reducing the federal budget. At a recent Trump campaign event at Madison Square Garden, Musk claimed he could cut “at least $2 trillion” from the federal budget, though he did not specify which areas he would target for these reductions.

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Jing Pan Investment Reporter

Jing is an investment reporter for MoneyWise. He is an avid advocate of investing for passive income. Despite the ups and downs he’s been through with the markets, Jing believes that you can generate a steadily increasing income stream by investing in high quality companies.

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