While researching for my most recent column for The Nevada Independent, I found a few arguments suggesting that President Donald Trump’s aggressive federal workforce and budget cuts were an example of his administration successfully running the federal government like a business. One representative sample was written by Warren Meyer, owner of a company that manages state and federal parks, on his personal blog. Quoting from it directly:

“When I was fresh our [sic] of mba-school, I thought just whacking 20 [percent] of the staff without analysis was the dumbest thing in the world. But having tried to change and manage organizations, I have changed my mind. Necessity is the mother of invention, and sometimes just getting rid of 20 [percent] of the staff and having to make do is the ultimate in necessity. In a reverse of the McKinsey formulation, you cut the work that has to be done by cutting the staff. This approach is fast, and there is no way for the anti-bodies to organize to fight the change when the change comes fast enough. Rip off the Band-Aid, get the required savings, fix problems where you went to [sic] far later.”

Aside from the occasional spelling error (please thank our editors for making me look good), the argument seems sound at first glance. Businesses, always on the hunt for additional revenue, sometimes lose track of what built them up in the first place. When profits don’t follow, businesses have to cut costs — and often in a hurry before money runs out entirely. As one does so, the business and its employees are forced to focus on those activities that maximize revenue and minimize cost while hopefully retaining as many customers as possible. Everything outside of those activities is, by necessity, discarded.

The federal government, meanwhile, is taking on increasing amounts of debt. This debt in conjunction with rising interest rates is causing more of the money collected by the federal government to go toward interest payments. Since interest payments are growing faster than the economy, the share of the national economy dedicated toward interest payments — more than 3 percent and climbing — is reaching all-time highs.

The government, especially at the federal level, also undeniably produces an unending volume of what can be charitably described as “administrivia” — or, less charitably, as waste.

For example, Marina Nitze, a former chief technology officer of the Department of Veterans Affairs, wrote a scathing article for Reason about the regulatory hurdles she had to overcome to perform basic tasks in her former role, such as hiring qualified technologists and adding a single checkbox to a disability application form. If there were fewer government employees, perhaps they would be forced to focus their efforts on delivering the services constituents actually demand instead of generating bureaucratic busywork — and at a lower overall cost.

If only that were so.

Though noted economist Milton Friedman’s claim that “the social responsibility of business is to increase its profits” is overly broad — strictly speaking, the most profitable business, at least in the short term, is one engaged in outright fraud or theft since it will have no overhead — it does point toward an important truth. Fundamentally, the goal of a business is to earn profit, ideally by selling desirable services and products to willing customers (other models exist, of course). Additionally, each business has the power to decide for itself whether it will continue to sell a specific service or product, regardless of its popularity.

None of this is true about the government, especially in the United States.

Were the government a profit-maximizing entity, for example, Trump wouldn’t be laying off half of the Internal Revenue Service (IRS). According to a recent analysis by the Congressional Budget Office, a $1 increase in spending on the IRS’s enforcement activities is estimated to return $6.40 in additional revenue to the federal government. This of course doesn’t touch on significantly more profitable and morally dubious methods of revenue generation available to the government, such as seizing cash and other property from people without charging the owners with a crime.

Thankfully, Nevada passed some reforms a decade ago that, following a court decision in Reno last January, largely limits the worst of that particular form of profit maximization within our state.

Even if the federal government chose to focus on profit maximization, collecting revenue does not grant it authority to spend it. As the Government Accountability Office’s Red Book, a multivolume manual on federal fiscal law, informs federal agencies, “When Congress makes an appropriation, it also is establishing an authorized program level. In other words, it is telling the agency that it cannot operate beyond the level that it can finance under its appropriation.”

Consequently, even if someone with immense wealth decided to donate hundreds of millions of dollars to the Office of Information and Regulatory Affairs to give it the resources needed to work through its backlog of Paperwork Reduction Act-mandated Information Collection Reviews, it would be illegal for the agency to accept the donation if Congress did not authorize it to do so.

This limitation against augmenting appropriations through unspecified funding sources applies just as much to state agencies, too, and for similar reasons. Per NRS 353.335, state agencies are only allowed to accept gifts or grants of property or services if the Legislature has authorized it — and, even if an agency is allowed to accept gifts, there are limits to how large of a gift a state agency may accept. Statutorily, the current limit is $200,000; if AB347 passes, the limit will increase to $500,000.

To put the limit into perspective, that’s less than half the retail price of 10 Cybertrucks, which may explain why Andreessen Horowitz co-founder Ben Horowitz donated them to Las Vegas Metropolitan Police Department, which is not a state agency and thus not bound by that limit.

In short, unlike a business, the government is not a profit-maximizing entity because turning an entity with a legal monopoly on violence into one would lead to catastrophic results for our civil liberties. Additionally, unlike a business, even if the government does somehow turn a profit or receives a gift from a generous angel investor, it’s not legally permitted to spend or reinvest excess revenue into its operations or into additional products or services.

Finally, unlike a business — which can cut the work it chooses to perform in order to earn a profit — the executive branch of the government cannot voluntarily reduce the work assigned to it. Statutorily, the work remains, even if the executive branch fails to assign bodies and budget to perform it. 

Removing the regulations implementing the National Environmental Policy Act, as Trump recently ordered the Council on Environmental Quality to do, does not, for example, remove the executive branch’s legal responsibility to implement the National Environmental Policy Act (NEPA). Only an act of Congress can change that.

The same is true of the E-Government Act of 2002, which requires federal agencies to conduct a privacy impact assessment before developing a computer system that collects, maintains or disseminates information — such as, for example, a governmentwide email system used to send mass email notifications to federal employees.

Laying off the employees responsible for drafting the environmental impact statements required under NEPA or drafting the privacy impact assessments required under the E-Government Act does not remove the statutory requirements. Only Congress can remove that statutory requirement. Reducing the resources assigned toward delivering a given statutory requirement simply increases the amount of time it takes to deliver it.

How Congress and state legislatures more generally can more effectively deliver policy through law while substantially reducing bureaucratic inertia is the subject of Recoding America, a book written by Jennifer Pahlka, former deputy chief technology officer under the Obama administration. Summarizing briefly, current laws and incentives have created a cascade of rigidity that rewards process over results. To break out of this cycle, policymakers — in the legislative and executive branches — need to work together, pay close attention to the impact of the laws and regulations under their purview and make changes where necessary.

That work, however, starts by recognizing that where necessity is created in business — in profit — is not where necessity in government is created — in law.

David Colborne ran for public office twice. He is now an IT manager, the father of two sons, and a recurring opinion columnist for The Nevada Independent. You can follow him on Mastodon @[email protected], on Bluesky @davidcolborne.bsky.social, on Threads @davidcolbornenv or email him at [email protected].