From: allin
Howard Lutnick’s involvement in government reform efforts stems from a conversation with Donald Trump in October 2023, where he was asked to help the President [00:15:24]. Lutnick, who was initially not interested in politics and had focused on rebuilding his company after 9/11 [00:09:49], became the transition chair [00:07:07]. His mission is to improve government efficiency and regulations and reduce waste, fraud, and abuse in the U.S. government [00:29:28].
The Doge Initiative
The initiative to balance the U.S. budget and improve efficiency is named “Doge” by Howard Lutnick, a name he registered [00:27:56]. The name was inspired by the Defense Production Act in World War II, where everything was named after jazz singers or things that would make committee members laugh [00:28:08]. The core idea is to cut waste and generate new revenue to eliminate the national debt [00:20:45].
In October 2024, Lutnick discussed his “big ideas” with Donald Trump, proposing to balance the budget by cutting expenses and increasing revenues [00:20:49]. He suggested a goal of cutting a trillion dollars in annual expenses from the nearly 150,000 annually, covering about 85% of Americans [00:22:57].
Elon Musk, a key figure in this initiative, expressed a desire to cut 80% of the federal government, noting that only 450,000 out of 5.9 million government employees are considered “essential” [00:25:54]. Lutnick, familiar with how to legally cut 50% of non-productive government spending, agreed to collaborate with Musk [00:26:17]. The launch of Doge received significant attention, with a picture of Lutnick and Musk garnering 45 million views on Twitter [00:29:22].
Addressing Government Waste
Lutnick and Musk believe there is significant waste in government spending, with Lutnick estimating that at least 25% of the just under $4 trillion in entitlements has never been checked [00:21:12]. This unchecked spending, which can amount to a trillion dollars a year, is often sent to the wrong person or fraudulently obtained [00:21:22]. Lutnick argues that fraudsters make the “loudest noise” when payments are stopped, making them identifiable [01:03:12]. The goal is to stop money from going to those who don’t deserve it without affecting those who rely on programs like Social Security, Medicaid, or Medicare [00:43:34].
An example of identified waste is the 1.2 trillion in PPP money that was proven to go to Chinese fraud gangs [00:50:03]. Lutnick points out that no one has ever been fired for sending money to the wrong place, contributing to deliberate or accidental misallocation of funds [00:50:44]. The focus is on preventing “nonproductive government spending” from being counted as GDP, arguing that it represents a transfer of wealth rather than actual production [00:44:59]. Lutnick claims that 15% of government spending often jumps in the quarter before an election to artificially boost GDP figures [00:47:50].
He identifies specific areas for efficiency improvements:
- Post Office and Census: The Post Office has 625,000 employees who visit every house daily, while the Census hires and trains 625,000 new people for data collection [00:44:03]. Lutnick suggests combining these efforts for efficiency [00:44:15].
- Disability Payments: Stopping payments to individuals on disability for 50 years who also hold other jobs [00:43:36].
- Tax Scams: Addressing issues like cruise ships operating under flags of convenience (e.g., Liberia) to avoid U.S. taxes on profits made in the Caribbean [01:29:33], and companies like tech and pharma using countries like Ireland for low-tax IP registration to avoid U.S. taxation [01:30:18].
Internal Reforms
As transition chair, Lutnick focused on reforming the White House structure, particularly the role of the Chief of Staff [00:17:14]. He observed that previous Chiefs of Staff (Ryance Priebus, John Kelly, Mick Mulvaney, Meadows) acted as “gatekeepers,” restricting the President’s access to information and communication [00:17:38]. Lutnick proposed eliminating the “gatekeeper” function and instead having a Chief of Staff who truly serves the President, allowing him to communicate freely [00:18:29]. Susie Wiles is cited as a perfect fit for this new role, embracing the President’s style [00:18:42].
The selection process for cabinet members was meticulously designed to be transparent and merit-based [00:32:57]. Lutnick utilized a system in a “transition room” in Mar-a-Lago, where eight candidates for each position were displayed on large screens [00:33:00]. Each candidate’s key highlights, education, and 20-second speaking clips were presented [00:33:06]. This process ensured that all cabinet members were strong communicators, capable of presenting ideas effectively [00:33:16]. Lutnick, acting as a “recruiter-in-chief,” sourced thousands of potential candidates and ensured the President had the “greatest choices” [00:34:05].
The Trump Card and Sovereign Wealth Fund
One of the new revenue-generating initiatives is the “Trump Card,” a program to sell permanent residency (formerly green cards, now “gold cards”) for 5 trillion [01:13:25].
The “Sovereign Wealth Fund” is another initiative, envisioned to generate revenue for the U.S. government by taking warrants or equity stakes in companies that benefit significantly from government orders or contracts [01:23:21]. For example, if the government places a large order for COVID vaccines, it would take 20% warrants from the pharmaceutical companies whose stock triples due to the order [01:23:58]. Similarly, for long-term missile contracts, the government would request warrants in exchange for providing stable revenue that improves a company’s multiple and stock price [01:25:37]. This money would be directed to shore up Social Security or reduce national debt [01:25:56]. Lutnick and Scott Bessant aim to make over a trillion dollars for the U.S. through this fund during their term [01:28:40]. Frank Biznano, a payments executive, is set to lead the Social Security system, focusing on eliminating waste, fraud, and abuse [01:26:13].
Broader Economic Philosophy
Lutnick believes America is “rich enough” to provide benefits to deserving citizens without cutting programs like Social Security [00:52:09]. His broader economic philosophy, informed by Donald Trump, emphasizes “reshore” — bringing manufacturing and jobs back to the U.S. through tariffs [01:01:28]. He argues that tariffs are not inherently inflationary; inflation comes from printing more money [01:03:09]. Tariffs on imports would encourage domestic production, creating jobs and avoiding the tariffs [01:05:00]. He cites the example of TSMC building semiconductor wafer plants in the U.S. due to tariffs [01:05:37].
Lutnick advocates for “fairness” in global trade, highlighting that other countries have significantly higher tariffs against the U.S. (e.g., India at 50% average compared to U.S. at 4%) [00:57:59]. He attributes the decline of the U.S. auto industry and the “despair” among high-school educated workers to policies like NAFTA, which encouraged corporations to seek cheap labor abroad without protecting American workers [00:59:02]. This focus on industrial policy aims to protect American jobs and improve quality of life [01:00:39].
Technological reforms are also critical, with a plan to update outdated government software systems (many still on 1970s mainframe technology due to illogical accounting rules) [01:14:55]. Lutnick proposes having major tech companies like Google, Microsoft, and Amazon build advanced customs processing and vetting software for free as “gratis vendors,” leveraging their American values and gaining future business opportunities [01:15:56]. This approach is part of a “3D chess” strategy where the U.S., as the world’s largest consumer, can leverage its economic power to demand fair trade and encourage domestic production [01:06:43].
Finally, Lutnick emphasizes the need for regulatory reform, specifically in areas like post-quantum cryptography to protect national data [01:21:43] and reassessing “illogical” regulations that hinder domestic resource extraction (e.g., lithium mining in Nevada) [01:34:17]. He claims the U.S. can extract resources more cleanly than other nations and encourages policies that prioritize American interests while maintaining environmental standards [01:34:50].