The following is Chapter One of David Stockman's latest book, How To Cut $2 Trillion: A Blueprint From Ronald Reagan's Budget Cutter To Musk, Ramaswamy And The DOGE Team. We encourage you to buy copies for your Senators and members of Congress and to share the Amazon link with as many influential voices as you can. The book provides detailed insights on the operations of Federal Agencies and how to streamline them.
Under our three savings bucket scheme, "Slashing the Fat" from the Federal payroll and bureaucracy would account for just $400 billion or 20% of DOGE's $2 trillion per year savings target. Needless to say, however, even that small portion would be far easier said than done.
That's because, unlike the case of typical US businesses, where payroll costs can range from 15% to 40% of total costs, such expenses comprise only a tiny fraction of total Federal spending. Setting aside DOD payrolls for the "Downsize the Muscle" bucket, we estimate fully-loaded nondefense employee compensation costs at $215 billion in the target year of FY 2029. That's just 3.1% of the $7 trillion of nondefense outlays projected under current policy by CBO for what would be the final Trump budget.
So there is a lot of wood to chop in other areas of nondefense spending, but we start with the assumption that $85 billion or 40% of nondefense payroll costs would be a fair component of a broader plan to generate the $400 billion of "Slash the Fat" savings. At the projected FY 2029 cost of $160,000 per Federal employee for payroll, benefits, and fringes, this would require termination of 535,000 positions from the current total of 1,343,000 nondefense employees.
