From LeverNews.com — Lever Time is the flagship podcast from the investigative news outlet The Lever. Hosted by award-winning journalist, Oscar-nominated writer, and Bernie Sanders' 2020 speechwriter David Sirota, Lever Time features exclusive reporting from The Lever’s newsroom, high-profile guest interviews, and expert analysis from the sharpest minds in media and politics.
Arjun Singh 0:03
Arjun from the levers. Reader supported newsroom, this is lever time. I'm Arjun Singh Donald Trump has been president for less than two weeks, and he's already thrust the nation into chaos after ordering a freeze on trillions of dollars in federal spending. Government services from Medicaid to school funding were upended, all while federal workers were urged to resign en masse by the White House for millions this week has been a nightmare. It was a demonstration of Trump's blunt force approach to governing, one that leaves many to pay the price, and while, on one hand, it looked like an example of Trump's inability to govern, maybe there's a method to the madness. Maybe the chaos is the point today on lever time, we'll look at the origins of Trump's order and how pushing it into a court battle to get it in front of the Supreme Court might be the entire strategy, and if so, what does that mean for our country moving forward? You Yeah, so was the technical term for what happened this week, a shit show.
Dan Schuman 1:08
No, I think it's a clusterfuck. If we really want to be technical about it, I would say that although you know, if you were more of a meteorologist, like a shit store might also be appropriate.
Arjun Singh 1:18
This is Dan Schumann, the executive director of the American governance Institute and one of the smartest people around when it comes to the way the government works. I had called Dan up because on Monday, Donald Trump issued an executive order to suspend trillions of dollars in federal loans and grants, a move that completely threw the country into chaos. Less than 24 hours later, people all over the nation began reporting disruptions. Healthcare providers sounded the alarm, unsure vital services like Medicaid would stop, and people who rely on things like food stamps or housing assistance, they began to worry that they may not be able to cover rent next week, much less even buy a meal. Students took to social media asking if their financial aid would be threatened, while federal contractors reported chaos within their workplaces as their bosses were unsure if multi million and in some cases multi billion dollar projects that had been planned for years would even continue. The Order threatened so much a federal judge paused it on Tuesday, and by Wednesday, the White House had rescinded it. In the same week, the administration sent federal workers a memo titled fork in the road, essentially asking them to resign now, and in exchange they'd get paid until September, a promise workers were quickly advised to be skeptical of. And if that wasn't enough, on Thursday morning, we woke up to the tragic news of a mid air collision in Washington, DC. For a lot of people, this whirlwind week was terrifying. Millions of jobs were threatened, lives were put at risk, and some federal workers worried about the storm of hatred that Trump and his allies were stoking against career civil servants. And I think for a lot of us, it was a striking reminder of how much the federal government actually does. It
David Dayen 3:04
turns out, we kind of need government. When the entire Medicaid portal for all the states shut off people who were going to emergency rooms wouldn't have been able to get care because the Portal would not have been able to display whether or not they rightfully and duly have Medicaid. All of a sudden there was this chaos. When the Meals on Wheels program went down and seniors weren't getting something to eat that day, when that crash happened, we realized, yeah, we actually need air traffic controllers who are keeping us safe in the skies.
Arjun Singh 3:42
David Danes, the executive editor of The American Prospect, David's the kind of person I turn to when nothing in America is making sense to me, which means, lately, I've wanted to talk to
David Dayen 3:51
David a lot. None of it, I think, is very surprising. A lot of this was telegraphed both during the campaign and in the 900 page briefing book that was given to everybody a year before the campaign completed, called Project 2025, but you know, I think what's been going on in these two weeks is Donald Trump and his allies, kind of poking At where the weak boundaries are in the system and just to see if they give way well.
Arjun Singh 4:25
And you had done some interesting reporting in the prospect this week about the long view of the federal freeze, that this was something that Trump's staff had been planning back in the first term, right?
David Dayen 4:36
Yeah, so everything that's happening now was attempted again, that pushing of the boundary, that test, it was all happening in Trump's first term. So the OMB Office of Management and Budget Director in the first term was a guy named Russell Vaught, and his general counsel was a guy named Mark Paletta and do. During that tenure, they attempted to rescind spending, to defer spending, to delay spending. In fact, Trump's first impeachment was because of impoundment and on the last day of the first Trump term, January, 19, 2021, palletta and Russell Vought write this letter to the House Budget Committee, which is then, at that time, in Democratic hands. And the House Budget Committee had been writing up this whole list of all the times when, in their view, OMB had broken the law by trying to cancel spending that was duly appropriated by Congress. And this letter, this response letter, they write on the last day of the first Trump term, literally four years ago, basically says we did everything right. We completely operated under the law. And by the way, the law is stupid, and we should get rid of it. The law that I'm referring to is this law called the impoundment Control Act.
Arjun Singh 6:05
Hold on, folks, let's pause right there. The term David's been using impoundment. What is that?
Speaker 1 6:12
Impoundment is the idea that even after Congress has indicated what money it wants to be spent, and it's that that legislation has been signed into law, but the President can say, No, I'm not going to spend those funds. Thank you.
Arjun Singh 6:25
Dan Schuman, it's good to have friends who understand how the government works. So impoundment is basically when the President refuses to follow the law and allocate funding to where it should go. You may remember, this actually came up in Trump's first term. No, you
Zelenskyy 6:38
sure that we had, I think good phone call. It was normal. We spoke about many things, and I so, I think, and you read it, that nobody push it, pushed me, yes, no pressure.
Donald Trump 6:58
You know what? There was no pressure. And you know there was, and by the way, you know there was no pressure, and you have to do is
Arjun Singh 7:04
that was Trump and the leader of Ukraine, Volodymyr Zelensky, back in 2019 six years ago, Trump withheld aid to Ukraine despite it being mandated by law. But Trump and people like Rudy Giuliani were pressuring Zelensky to open an investigation into Joe Biden or his son Hunter, that's illegal.
Speaker 1 7:22
There are certain limited circumstances where you can pause spending money. So if Congress gives you the authority, they say, here's a bunch of money to spend on hurricane relief, and there's no hurricane then they don't have to necessarily spend it. But otherwise they can't do it for policy reasons. And the President, in the memo that said we don't like it because we don't like Dei, and we don't like this, and we don't like that. And the thing is, those determinations are for Congress to make, not for the President to make. That's the job of the legislative branch, which has the power of the purse,
Arjun Singh 7:55
and that's been the case since 1974 when the impoundment Control Act was passed. That's the law. David Day in mentioned up until then, presidents did impound funds. Actually, the first being Thomas Jefferson in 1801, but then this guy showed up, because
Richard Nixon 8:09
people have got to know whether or not their president's a crook. Well, I'm not a crook. I've earned everything. I've got.
Arjun Singh 8:16
Richard Nixon, known to some as Tricky Dick, impounded billions of funds, so Congress took away that power, and they overruled a veto from Nixon, forcing him to be the one that signed the law. Then, in the 1990s the Supreme Court affirmed that the president cannot just sit on funds when they want to. You
Speaker 1 8:34
know, in the 1990s Congress finally passed the law saying that the President can go through appropriations bills, which are the spending bills, and sort of x out particular provisions in the spending bill and saying, we're not going to do that. And the Supreme Court said you can't do that, because then the President is going back and opening up a law that has already been enacted and is making changes to it, and that is unconstitutional. It violates the way lawmaking works, which is that the House and the Senate passed the same bill and then the President signed into law, or they passed over the President's veto. So like the court looked at a different version of this in the 90s and said, You can't do it.
Arjun Singh 9:07
But if you ask two Trump staffers, Russ Vought, the head of the Office of Management and Budget and Mark Paletta OMB, chief legal counsel, they'll tell you they do. These two are the legal masterminds behind the push, and the strategy may very well be to get this sent back to the Supreme Court, one stacked with Trump's justices, and also one where this guy, Mark poletta, has a crucial ally. Here's David dayen again.
David Dayen 9:32
Here's what you need to know about Mark poletta. Do you remember that oil painting that came out that is takes place at Harlan crows resort. And there's a painting with Clarence Thomas justice. Clarence Thomas holding court with a bunch of people. You know, the pontificating in his brilliance. Yes, I have seen it. Yeah, Mark Paletta is in that oil painting, really. Mark Paletta has known Clarence Thomas for at least 30 years. He worked on the nomination of Clarence Thomas to the Supreme Court in the George H W Bush administration. He co edited a Autobiography of Clarence Thomas, and he represented Ginny Thomas Clarence Thomas's wife when she was questioned in the January 6 investigation. So poletta is sort of a long time friend and confidant of Clarence Thomas, and what he's doing at OMB is trying to trigger a Supreme Court ruling on impoundment that his best friend Clarence Thomas would then be ruling on
Arjun Singh 10:45
I started this episode by asking if this week was a shit show, and let's be real, it was, but maybe there was a method to the madness. In this case, it was to get it to the Supreme Court and in front of Justice Clarence Thomas. But this chaos bears an eerie resemblance to when Elon Musk, one of Trump's top advisors now bought Twitter and eliminated 80% of the workforce. So after the break, I'll get back to my conversation with David Dan and ask him if tech bro management is now our national dysfunction. We'll be right back. You.
Arjun Singh 11:30
So let's talk about Elon Musk. You know, one thing about the manner in which Trump is trying to eliminate the workers is, yes, it's part of Project 2025, Schedule F the gutting of the civil service, but this whole idea of workers resigning and getting some big severance package like that, that's something straight out of the corporate playbook. You know, it's straight out of Musk's playbook when he bought Twitter. And what I'm getting at is basically, do you think that this is like a tech bro management within a federal bureaucracy that just doesn't react the way a corporation would, you know, if a CEO made an outlandish demand, like, let's just fire 1000s of people on mask to, you know, trim the fat.
David Dayen 12:18
Well, it's a few different things. And first of all, it goes even further than just sort of being a tech bro mentality. The title of the email that was sent to every federal worker over 2 million people was called a fork in the road, and this is the one where it says, either you commit to all of the things we want you to commit to, or you resign effective september 30. The email that Elon Musk sent in his first day at Twitter was titled A fork in the road, and it shares many similarities to the actual email that was sent to federal workers. So this is an Elon Musk special and it appears that the Office of Personnel Management, which is the sort of HR office for the federal government, has been essentially taken over by Elon Musk functionaries, hang arounds and acolytes, including like an 18 year old kid who was just out of high school and had worked at one of Elon Musk's organizations. So this is very much Elon's gig, that if we get rid of the federal workforce, we will achieve my Doge vision of trillions of dollars in budget cuts. Now the reality is that the federal budget is very much not predicated on labor costs, unlike maybe how it is in the private sector. If you tally up every single salary and benefit of every single individual in the federal government, you will get about 4% of the US budget. It's about $271 billion that's for everybody, every single person the budget for contractors. Because, in fact, what we have done in the last 3040, 50 years is shrink the size of the workforce. Federal workforce used to be 4.3% of the total workforce, now it's 1.9% so we have shrunk the federal workforce as a percentage of the overall population. And when we did that, because there are more duties that the federal workforce needs to accomplish, we outsourced a lot of that work to private contractors who cost more than the individuals in the federal government, because their businesses need to make a profit on top of paying the workers. So there, if you fire large segments of the federal workforce, two things are going to happen. One, there's still going to be work. To get done, you're probably going to have to buy a bunch of more expensive contractors to do that, or two you neglect the kind of work that leads to increases in the federal deficit, things like you fire the people who do the procurement at the Department of Defense, and therefore defense contractors can just rip off the government more easily, or you fire the people who are doing oversight on the outlay of federal benefits and Social Security, and so there's more fraud in the system. So it's completely counterproductive to think about the federal budget as a function of well, if we just get rid of all of these workers, then we can cut the federal budget. That's not that. That sort of shows us complete misunderstanding about how the government works. Yeah,
Arjun Singh 15:50
and my analysis of this to get back to the idea that the chaos is the point. I mean, I wonder if there's an intentionality right here like to dismantle and gut the government, then turn around, point out to the public how broken it is, hoping they don't connect those dots. You know, say you hollow out government. And when people go to it, which we've seen they really need then you say, Oh, look, government can't even manage your health insurance properly. Wouldn't it be more efficient if a private company did this? And really it's not working properly because people didn't want it to and they wanted this dysfunction. But what do you think of
David Dayen 16:27
that? I think there are two additional goals. One of them is the one you talk about, which is the ideological goal that, you know, we're going to starve the the beast here. We're going to we're going to drown the government in the bathtub. And if we make government worse, then we'll have more of an motivation to say, Well, then let's just privatize it. Let's get rid of it. The other motivation, which you hit on a little bit is pure self enrichment. You know, Elon Musk is one of the biggest federal contractors in the country, and so if he fires a bunch of federal workers and contractors are needed, he's there as someone who can benefit from that. Elon Musk and his companies are serial violators of federal laws and regulations. So if there are fewer people, fewer cops on the beat, if he defunds the governmental police, then he is more free and available to continue to operate in defiance of the law. So I think there is an ideological component, but there's also very much a self enrichment component. Well,
Arjun Singh 17:36
David Dane, it's always a pleasure to talk to you. Thanks for chatting this week. I look forward to the next time we get to talk. Great. Thanks a lot. Thanks for listening to another episode of lever time. This episode was produced by me, Arjun Singh, with editing support from Joel Warner and Lucy Dean Stockton. Our theme music is composed by Nick Campbell.