President-elect Donald Trump, on Tuesday, greenlit the formation of the Department of Government Efficiency or DOGE, the acronym which almost sounds like a parody of the cryptocurrency known as Dogecoin DOGE/USD. As the department promises to restructure federal agencies and reduce government spending, it is still unclear if the committee would come under the Federal Advisory Committee Act, which dictates how external groups that advise the government must operate and be accountable to the public.
Such external advisory committees have played an important role in shaping federal programs and policies in the past; former presidents Ronald Reagan and Bill Clinton established similar task forces. However, it is still ambiguous how President-elect Trump, along with unconventional businessman Elon Musk and former presidential candidate Vivek Ramaswamy, will structure and lead this committee.
What Happened: The initiative will focus on dismantling bureaucracy, reducing regulations, and cutting wasteful expenditures, as per the notice shared by Trump. The department is scheduled to complete its work by Jul. 4, 2026, coinciding with America's 250th independence anniversary.
Musk, who shared the announcement on X (formerly Twitter), stated the changes would "send shockwaves through the system." Ramaswamy, responding to the announcement on X, posted "We will not go gently," while sharing Trump's statement.
The department's primary objectives include restructuring federal agencies, reducing government regulations, cutting wasteful spending, creating accountability measures, and implementing structural reforms. The administration states that this effort will make the U.S. government more accountable to citizens while promoting economic growth through reduced bureaucracy.
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Why It Matters: The Federal Advisory Committee Act mandates specific guidelines for external groups offering advice to the government, ensuring transparency and public oversight.
Federal employees are typically obligated to disclose their roles, obligations, duties, allowable expenses, compensation limitations, and any ethics requirements with their committee's Designated Federal Officer and/or Committee Management Officer, as appropriate. However, as Musk and Ramaswamy would not hold official federal positions, they may not be bound by these disclosure and divestment requirements.
According to The New York Times, Musk’s businesses, including SpaceX and Tesla Inc. TSLA, were scheduled to receive approximately $3 billion in federal contracts from 17 agencies in 2023. Furthermore, his companies have been the subject of at least 20 federal investigations or reviews. These factors have led to concerns about potential conflicts of interest arising from a Musk-led federal commission.
According to Wedbush’s Dan Ives, “Since this is not an official Cabinet or US government position and it's essentially newly created, there will be NO changes to Musk’s CEO roles with Tesla and SpaceX importantly from the Street’s perspective.”
Congress’ Role
As per FACA, the U.S. Congress seeks to ensure that advisory committees:
- Provide advice that is relevant, objective, and open to the public.
- Act promptly to complete their work.
- Comply with reasonable cost controls and record-keeping requirements.
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Appointing Committee Members
The U.S. General Services Administration rules state that federal advisory committee members are drawn from nearly every occupational and industry group and geographical section of the United States and its territories. The FACA requires that committee memberships be "fairly balanced in terms of the points of view represented and the functions to be performed."
Selection of committee members is made based on the FACA's requirements and the potential member's background and qualifications. However, the final selection is made by the president or heads of departments or agencies.
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