Fiscal Prudence and Virtue

On August 14th, Office of Personnel Management director Scott Kupor said that the federal government is on track to cut about 300,000 workers this year, the largest reduction in nearly 80 years. There is much consternation at President Trump’s efforts to reduce the federal workforce, with warnings of collapsed services and the withering of society’s fabric. Even from conservatives cheering a reduced bureaucracy, it is important to understand why they seek such cuts. There are fiscal but also virtuous downstream effects.

For starters, there is the practical consequence of lower government expenditures. Indeed, at a cabinet meeting this year, Elon Musk said DOGE was on track to cut $150 billion from the federal budget for fiscal year 2026. Less money spent unnecessarily does not just lower government borrowing, but it also gives breathing room for policymakers to make wiser decisions with future dollars. For every large government program cut or slowed (such as recently enacted reductions in Medicaid’s rate of growth), it leaves room for those marginal ‘next’ dollars to be available for an emergency or even factored in for a tax cut. In other words, legislators and a president would have options to deal with either a crisis or propose pro-growth economic laws. To sacrifice now to give future opportunity to someone else is a concept parents understand well, unlike most Washington politicians.