The swift and dramatic cuts to the federal workforce have rocked the DC area and the country at large. News outlets and social media platforms present a litany of testimonials from federal employees. Their stories are heartbreaking and shocking. Dedicated professionals were fired from public service jobs via emails that don’t even contain their name and job title. They were forced to walk away from work left undone, services that the public needs and deserves.
The consequences of decimating the federal workforce are only beginning to come into focus. Even conservative stalwarts like Jesse Watters are realizing that indiscriminate workforce reductions are affecting good people who do important work. The FoxNew Host used his on-air time to suggest that the White House should spare veterans, like his friend who had been fired from the VA.
The short term seismic effects of mass terminiations are unambiguous. What’s less clear are Trump and Musk’s longterm vision for the federal government and what Americans can expect.
Small Government or Big Profits?
One school of thought is that every job lost and every program defunded means the end of the road for that government service. Those functions will be erased in future budgets, and the government will simply provide fewer services. The era of so-called Big Government will end. Federal funds for food and housing assistance, education programs, Medicare, scientific research, and National Parks were all slashed to ribbons. The US will be a nation without nationalized programs. States can try to pick up the slack or…not. People will simply be left to struggle.
The other school of thought is that every program Musk cuts is a program Musk anticipates converting to a private contract for one of his companies or one of his cronies.
It will soon become evident that the cuts to federal agencies will create service gaps that are unacceptable to most Americans. Seniors want their Social Security payments. Veterans want health care. Taxpayers want their refunds processed promptly. Everyone wants airplanes to stop crashing. Congress and governors will demand solutions to the DOGE-inflicted crisis. That’s when corporations will step in.
Musk is already taking advantage of the FAA’s unsettled conditions. On February 14, hundreds of FAA employees were fired. On February 16, he posted on social media that SpaceX would step in to address concerns about the recent spate of air accidents. By February 19, Wired reported that SpaceX engineers had been installed in jobs at the FAA.
This could become a repeating pattern in the coming months. The pain points from the DOGE cuts will become obvious very quickly. To course correct, the Trump administration will seek out private entities to fill in the gaps. Imagine massive contracts with big banks to take over IRS functions and payment systems for Treasury. The VA contracting with private companies that place per diem nurses instead of having a standing workforce. Hospitality and tourism companies running National Parks.
Medicare Advantage: A Cautionary Tale
Contracting out government programs would seem like a solution, but there would be drawbacks. Services provided by third-party contractors would likely cost more and be less effective than the current system. You only have to look at the Medicare Advantage program to see what happens when for-profit companies take over public services.
Medicare Advantage (MA) is an alternative to traditional Medicare. The way it works is CMS pays a per-enrollee fee to private insurers who administer coverage for Medicare-eligible seniors who choose these plans. Medicare Advantage plans offer everything Medicare covers in an all-in-one package, without the need for supplemental plans for things like prescription coverage. Many MA plans tack on added benefits, like vision coverage, gym memberships, and an allowance for over-the-counter medications. There is usually a small annual cost to seniors, and CMS pays the rest directly to the insurers.
The downside for seniors who choose these plans is that MA plans deny claims at an astounding rate. The companies that issue MA have added administrative rules like demanding prior authorization for certain services. That means seniors (or their doctors) need to file paperwork to get care approved. If they mess up paperwork, the claim gets denied. While these denials can be reversed, filing an appeal with the insurer is required. Only about 11% of denials are appealed. Seniors have to pay for care out of pocket or skip needed treatment.
It’s important to note that the denied services are covered, and companies SHOULD pay for them. The only barrier is the administrative rules that the companies themselves have established. It appears to be a deliberate tactic to avoid paying claims. It’s so egregious that there were Senate investigations into the practice in 2023. UnitedHealth Care is facing a class action lawsuit after it was revealed that the company used a deeply flawed AI claims processing system that denied valid MA claims.
Medicare Advantage plans have become a profit leader for insurers. In 2021, research showed that CMS had overpaid Medicare Advantage plans a whopping $106 billion from 2010 through 2019. In 2023, Medicare Advantage plans, on average, turned a profit of nearly $2000 per enrollee. This is the highest profit margin of any health insurance product on the market.
Those profits are tax dollars. Instead of paying for health care for seniors, that money enriches health insurance company shareholders.
The Clock is Ticking
In the coming months, there is every possibility that we will see private takeovers of public services springing up like toadstools. Elon Musk’s cohort of Silicon Valley greed-lords is already salivating over the idea of lining up more taxpayer-funded contracts. Other major corporations appear to be setting themselves up to feed at the federal trough. It’s probably safe to suspect any company scrubbing DEI language from their website has one eye on future government contracts.
Instead of your tax dollars paying for services delivered directly by federal agencies, they’ll be paying for scaled-down versions of the same programs through the biggest businesses in the world. Will those businesses pay their employees well? Give them benefits comparable to civil service jobs. Of course not. But they’ll be hailed as “job creators,” providing “valuable services” to the American people.
It goes without saying that those “valuable services” won’t be as comprehensive and equitable as true public services. Instead of every tax dollar being allocated to program deliverables, a portion of tax-funded program budgets will be claimed as profit by people like Elon Musk.
We have a tiny window of opportunity to stand up for the system we have. A system being torn down by a quasi-governmental employee. A man who stands to gain billions in contracts to replace the programs and people he shitcanned. We have to push Congress and governors to reject the DOGE cuts. Tell them to demand protections for the federal workforce. Tell them to preserve the fully public programs that benefit their states.
The alternative is a country where public services have more corporate logos than NASCAR. The US of X.
Photo credit: DanielGoldhorn – Own work, CC BY 4.0, https://commons.wikimedia.org/w/index.php?curid=159329542
Civic Action Hub of Maryland 