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Год выпуска: March, 2025
Автор: Bloomberg Businessweek
Жанр: Бизнес
Издательство: «Bloomberg Businessweek»
Формат: PDF (журнал на английском языке)
Качество: OCR
Количество страниц: 114
The Great DOGE Panic
In 1912 parishioners from a few churches in Columbus, Ohio, pooled their money to start a charity to provide pro bono care for the poor. Over time the organization, now called Lutheran Social Services of Central Ohio, grew to employ about 700 and include food pantries that served more than 2 million meals last year, a domestic violence shelter that cared for almost 1,000 adults and children, shelters and free health care for 1,100 people who can’t afford a place to stay, and affordable housing for another 1,000 seniors and disabled people. This work is subsidized by local churches, the United Way, local and state authorities, and the federal government, which is the organization’s single largest contributor and accounts for roughly 20% of its annual budget.
Beneficiaries pay, too, when they can. In general, though, client fees are modest and many services are free. Many of the people the Lutheran nonprofit helps have nowhere else to go. Some are victims of domestic violence. “In today’s economy, when you get sick or lose your job, things can spiral,” says Rachel Lustig, the Lutheran group’s chief executive officer. “Our services help people through that and get them to a place where they can contribute to society.”
Lustig’s organization is one node in a vast network of private not-for-profits that make up a more than $200 billion chunk of the US service sector. They’re load-bearing links in America’s safety net. While many are affiliated with religious orders, Lustig says their messages tend toward the universal. “Jesus called us to care for the poor, but these aren’t values that Christian churches have a monopoly over,” she says. She’d never thought of her work as controversial until Elon Musk found his way to Washington.
On Jan. 31, Musk’s newly formed Department of Government Efficiency, known as DOGE (as in the dog-themed cryptocurrency), acquired access to payment systems inside the Department of the Treasury. Chaos ensued. A top Treasury official tried to block Musk, then abruptly retired. A top Senate Democrat issued a panicked letter warning that Musk could cut off Social Security payments. Nineteen state attorneys general and three large labor unions filed lawsuits to stop Musk from accessing the systems.
Musk did what he usually does when he finds himself at the center of a scandal: He kept posting. “Very few in the bureaucracy actually work the weekend, so it’s like the opposing team just leaves the field for 2 days!” he wrote on X, his social media platform, on Feb. 1, a Saturday.
Later that night he came across a message from Michael Flynn, the retired general who pleaded guilty to lying to federal investigators during Donald Trump’s first administration. (Near the end of his first term, Trump pardoned Flynn, who served as national security adviser for about three weeks in 2017.) Flynn, now a right-wing influencer and activist, posted a spreadsheet listing federal grants to a dozen or so Lutheran charities. They included Lutheran Social Services of South Dakota ($1.4 million), Lutheran Services Carolinas ($600,000), Allegheny Lutheran Social Ministries ($17.1 million) and two grants to
Lustig’s group worth $8.2 million. Flynn referred to “the ‘Lutheran’ faith”—he put the Protestant denomination’s name in scare quotes—as a “money laundering operation” and called for federal funds to be cut. At 3 a.m., Musk reposted Flynn’s commentary and said he was taking action. “The DOGE team is rapidly shutting down these illegal payments.”
By the time Lustig saw the posts, there were replies accusing the Lutheran charities of facilitating illegal immigration and child sex trafficking. “It felt very shocking,” she says. The two grants that Musk had suggested would be canceled are supposed to be paid out as reimbursements for expenses.
Lutheran Social Services of Central Ohio hasn’t submitted a reimbursement request since Musk’s posts, and Lustig doesn’t know what will happen the next time it does. She doesn’t know why her group was singled out. “It’s the lack of understanding that’s frustrating,” she says. “And then your heart goes out to the people that we serve, who otherwise will not have access to care.”
The frustration, fear and uncertainty have been repeated across the country— not only at other Lutheran charities, but also among Catholic aid workers abroad whose jobs are at risk amid Musk’s attempted closure of the US Agency for International Development (USAID); cancer researchers whose National Institutes of Health (NIH) funding is suddenly in jeopardy; and civil servants who’ve spent weeks in limbo, unable to work under the conditions Musk has created but, as yet, unwilling to quit. Musk has portrayed all of this as healthy, a sort of strategic chaos that’s needed to shake up a system he and many other Republicans consider broken. As Trump put it at a press conference in early February, “We have to take some of these things apart to find the corruption.”
But to Democrats, Musk’s actions look like something else: a helter-skelter attack on the state. Officially he’s a special government employee with little formal authority, leading a modest agency tasked with modernizing federal tech. But his power is growing: On Feb. 11, Trump signed an executive order giving Musk’s team approval over new hires at most government agencies and asked agencies to prepare for “large-scale” layoffs. Moreover, his status as a megadonor and his close relationship with Trump have allowed him to pretty much say and do whatever he wants. Both the president and congressional Republicans have mostly deferred to Musk. “We have a tech billionaire with a huge media platform running the government,” says Lindsay Owens, a former policy adviser to Massachusetts Democratic Senator Elizabeth Warren who’s now executive director of Groundwork Collaborative, a liberal think tank. “We’re all guinea pigs.”
Trump retook the White House in November with a massive assist from Musk. The official tally puts Musk’s 2024 election contributions at close to $300 million. While his growing net worth over the past few months reflected market confidence that his investment would pay off, pundits were predicting his partnership with Trump wouldn’t be able to survive both men’s egos. So far, at least, the latter take has aged poorly.
In the early weeks of his second term, Trump has seemed to relish the dysfunction Musk generates. Musk has taken up fullish-time residence in the Eisenhower Executive Office Building. Trump has ignored opportunities to distance himself from Musk (such as when Musk made light of the Holocaust mere days after giving what looked to many like a Nazi salute). Trump has also shrugged off Musk’s apparent disloyalty, as when Musk responded to a White House announcement of major artificial intelligence investment by calling the whole thing a sham. “He hates one of the people in the deal,” Trump said afterward, referring to the rivalry between Musk and one of the investors, OpenAI CEO Sam Altman. “I have certain hatreds of people, too.”
The next day, Jan. 23, federal workers began receiving cryptic messages from an unfamiliar email address:
Этот e-mail адрес защищен от спам-ботов, для его просмотра у Вас должен быть включен Javascript
. The messages said the government was testing “a new distribution and response list” and asked employees to reply “yes.” These weren’t phishing attempts, as many workers assumed, but they were part of a sort of hack: Musk’s employees had sent the emails from a private server they’d brought into the Office of Personnel Management, according to a class-action lawsuit. (The government says the suit has no legal basis.) By the time another email followed a few days later, employees were catching on. “Our government is systematically being dismantled,” an anonymous post on the Fednews subreddit warned.
This turned out to be more or less correct. On Jan. 28, 2 million civil servants received a note from the mysterious HR account that mentioned a number of Musk-inspired presidential directives— remote work arrangements would be canceled, government departments would see drastic layoffs—and offered workers a choice. They could accept the risk of being terminated, or they could resign and be paid through September. All they had to do was respond with a one-word reply: “resign.” The subject line of this email (“Fork in the Road”) left no mistake as to the policy’s author. Musk had used the same words in a subject line after taking over Twitter, at the same time he was laying off about 80% of the company’s staff.
Musk had joked about prepping for his government role by rewatching Office Space, the 1999 comedy about a group of workers fired by management consultants known as “the Bobs.” Unaware, perhaps, that the Bobs aren’t the heroes of the film, Musk posted memes in which he imagined himself as one of them—and then attempted to re-create the humiliating dynamic that Office Space had satirized.
In the days that followed the ultimatum email, Musk’s team, many of them men in their late teens and early 20s who seem to share his edgelord sensibilities, fanned out into government agencies, ostensibly to identify expenses that could be cut. They demanded access to records, rifled through desks, threatened those who resisted, and refused to give their last names when questioned by workers. When media outlets have named Musk’s DOGE employees, he has responded by threatening criminal prosecution. (Officially he doesn’t have that power, but he has influence with those who do.)
Toward the end of the week, Musk turned his sights on the Bureau of the Fiscal Service. The BFS is the division of Treasury that processes the trillions of dollars in payments made each year by the government. Think of it as a giant Venmo, except that instead of payments for Girl Scout cookies or bar tabs, it’s Social Security checks, Medicare reimbursements, interest on the national debt, grants for charitable groups such as Lustig’s. The division doesn’t decide who should get paid—that’s the job of the federal agencies that oversee the payees. Or at least, that’s how things are supposed to work. Lately, though, the business of the BFS has taken on the tenor of a farce.
On Jan. 31 the New York Times reported that David Lebryk, the Treasury Department’s highest-ranking nonpolitical employee, had retired after refusing to grant Musk access to the BFS. The White House has insisted that Treasury Secretary Scott Bessent only gave Musk “read-only” access to BFS data, but then Wired and Talking Points Memo reported that a DOGE staffer indeed managed to modify code for two BFS systems. That staffer, Marko Elez, resigned following a Wall Street Journal report about a series of racist messages he’d posted on X. Soon, however, Musk announced that Elez would be back on the job, because “to err is human, to forgive divine.” Musk also contradicted the White House’s claims and said that yes, he was the one who’d stopped Treasury payments.
Soon after the post accusing the Lutheran charities of money laundering, Musk claimed to have personally defunded USAID. With a budget of roughly $40 billion a year, the agency has been a pillar of American soft power since the Kennedy administration and has been widely credited with helping to arrest the global AIDS pandemic in sub-Saharan Africa. Musk, who’s been railing against the specter of a “White genocide” in South Africa, portrayed the relief agency instead as a locus of far-left politics and fraud. “We spent the weekend feeding USAID into the wood chipper,” he wrote on X on Feb. 3.
The agency told employees that all but “essential personnel” would be placed on leave on Feb. 7. Workers based overseas would have to come home within 30 days. That day, Musk posted a meme featuring an open door labeled “USAID” with a pool of blood on the ground. Musk, dressed in a black robe and carrying a sickle, was preparing to knock on another door, this one labeled “Department of Education.”
“We spent the weekend feeding USAID into the wood chipper”
Depending on whom you ask, Musk’s chaotic tenure has amounted to either an unprecedented disruption of American state capacity or historic grandstanding that won’t add up to much. On Feb. 7 a judge issued a restraining order that blocked the shutdown of USAID. The next day a different judge temporarily banned Musk and his associates from accessing the BFS at Treasury. Even if Musk succeeds in overturning these orders, he’ll have barely made a dent in his initial promise to cut “at least $2 trillion” from the federal budget. Lately he’s revised that promise down to $1 trillion.
This has led to some complaints that Musk is unserious. In February, Steve Bannon, who ran Trump’s first campaign and has emerged as Musk’s loudest conservative critic, complained on his podcast War Room that Musk was exaggerating the number of fraudulent payments going through the BFS. Bannon suggested that he instead look at defense spending and that failure to do so would be evidence of a conflict of interest. “The Pentagon should be ripe for significant cuts,” Bannon says in an interview with Bloomberg Businessweek. “DOGE needs to deliver now so we don’t have another $2 trillion deficit, which we are on the path to have.”
Harrison Fields, a White House spokesman, says DOGE has been able to rack up some early wins by focusing on waste, fraud and abuse. “There’s some obvious things, like the USAID stuff,” he says. “That’s not to say that bigger fish to fry won’t be addressed at a later time.” Fields says Musk recently completed an ethics course and will file a financial disclosure but, as a special government employee, he wasn’t required to release it publicly.
While right-wing critics have focused on Musk’s potential conflicts of interest, Democrats have portrayed the opening weeks of the Trump administration as bordering on a coup. “In the building behind me, Elon Musk is seizing power from the American people,” Senator Warren said at a rally outside of Treasury. “No one elected Elon Musk to nothing.” Behind this rhetoric, and many of the lawsuits against Musk, is a constitutional complaint.
The Appropriations Clause gives Congress the power of the purse, meaning the president can’t spend money without the legislature’s approval. Practically, that’s been interpreted to mean presidents must spend the money Congress directs them to spend. In 1974, after President Richard Nixon began simply refusing to implement a host of domestic programs, Congress passed the Impoundment Control Act as part of an effort to rein him in. Withholding funds to USAID likely violates that law as well as the law that established USAID as an agency, says Bobby Kogan, a former adviser to the Office of Management and Budget under President Joe Biden and a senior director at the Center for American Progress.
Kogan says that the decision to withhold payments to groups Musk finds distasteful, as he appears to have done to the Lutheran charities, is also likely a breach of contract—and that the courts will ultimately force the government to pay its bills, along with penalties. “We don’t want a president who can unilaterally say what you can spend,” he says. “We don’t want an appropriations king.” Fields says Musk’s actions have been lawful and DOGE is complying with all appropriate security measures to safeguard agency data.
While the courts work through the DOGE lawsuits, aid workers like Lustig are holding their breath. For now, she’s hoping that maybe Musk was simply spouting off and that her organization will soon be paid for the work it’s been doing. If not, she’ll have to start thinking about reducing its services. “These grants are much more than expenses on a spreadsheet,” she says. “They are your domestic violence shelter, your food pantry, your homeless shelter. If these go away, it’s not like we can build them all back tomorrow.”
Remarks
- Elon Musk, DOGE and the fine art of the wrecking ball
In Context
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In View
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- This boy’s life: A review of Bill Gates’ Source Code
In Depth
- Risk is intrinsic to investing, but 2025 is its own animal
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- Scams of every color are parting a fool and his money
- The strip-and-flip fellas want a crack at your 401(k)
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Pursuits
- A first glimpse of Rome’s legendary lost marbles
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- Teeing off at two world-class courses in New Zealand
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- CEO Diet: Packing essentials from seven executives
Exit Strategy
- It’s uncharted territory in this month’s puzzle
скачать журнал: Bloomberg Businessweek (March 2025)
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