The Inter-American Foundation has rarely found itself in the headlines, so maybe it was no surprise when Trump administration efforts to effectively close the agency didn’t get much attention either.
The administration, after all, was taking similar actions throughout much of the federal government.
President Donald Trump reentered the White House promising to make government smaller and more efficient. He launched the U.S. Department of Government Efficiency (DOGE) to lead this endeavor, fronted by the tech billionaire Elon Musk. DOGE staffers swept through Washington, accessing computer systems, firing thousands of employees, and dismantling entire agencies. Now, the aftershocks of these actions are becoming clearer.
Why We Wrote This
As Elon Musk pulls back from the Department of Government Efficiency, the initiative’s cost-cutting efforts are running up against public opinion and the courts.
These efforts have provoked legal challenges, public backlash – including in some Republican districts – and conflict among administration leaders. Mr. Musk has downwardly revised DOGE’s potential savings over the months, and some lower federal courts have ruled that some of the agency’s actions are probably unlawful.
Now, Mr. Musk has said he will be paring back his government work. But he does so as DOGE staffers now appear to be in almost every federal department. Trump officials and allies, meanwhile, are pressing Congress to implement cuts that DOGE only has the power to recommend.
Overall, the Silicon Valley-inspired “move fast and break things” approach that has defined the agency’s early work is now running up against the political and institutional constraints of Washington. The Inter-American Foundation (IAF), which was at one point reduced on paper to one employee, highlights how the DOGE approach to remaking government can be easier said than done.
A small target
DOGE’s concrete achievements are still unclear – and fall far short of the $2 trillion in savings that Mr. Musk had previously suggested would be possible – but its work has been welcomed by advocates of smaller government.
The department claims to have found $165 billion in estimated savings – though many of its records have been found by outside analysts to be exaggerated or erroneous. Nearly a quarter-million federal workers have or are expected to leave their jobs, and 11 federal agencies have been hollowed out or closed, according to a Politico analysis. Over 8,500 contracts and 10,000 grants have been terminated, Politico reported.
“It’s unprecedented work,” says Richard Stern, director of the Grover M. Hermann Center for the Federal Budget at the conservative Heritage Foundation.
“We’ve had more than a century of expansion of the federal government,” he adds. “DOGE is the first time anyone has tried to go through it and account for everything.”
Foreign aid spending has received much of the scrutiny. So officials at the IAF – created by Congress to support grassroots development in Latin America and the Caribbean – knew they needed to be prepared to defend their effectiveness. Given that the agency had 37 full-time employees in February, and a budget around $50 million, they hoped inefficiencies would be hard to find.
“We thought there would be a serious examination of foreign policy priorities, U.S. interests, and efficiency, and we were prepared for that,” says a senior official, speaking anonymously for fear of retribution.
Instead, there was an executive order. On Feb. 19, Mr. Trump called for the IAF to be reduced to its “minimum presence and function required by law.” Two DOGE staffers, Nate Cavanaugh and Ethan Shaotran, arrived the next day and met with agency leadership, according to court records.
“We would have gladly welcomed collaboration from DOGE to find more efficiencies,” says the senior official, who noted recent efforts to reduce staff and cut spending.
“DOGE did not substantively engage in any part of our programming or operations. Instead, they ordered us to dismantle the agency,” the official adds.
By the end of the following week, the agency’s entire leadership had changed. Mr. Trump fired the agency’s four board members and IAF President Sara Aviel in one-sentence emails, then appointed Pete Marocco – a leader of Trump administration efforts to slash foreign aid programs – as IAF’s sole board member. In an emergency board meeting called by Mr. Marocco the afternoon of his appointment, he refired Ms. Aviel and named himself the agency’s acting president.
Three people attended the meeting, according to court records: Mr. Marocco, Mr. Cavanaugh, and Mr. Shaotran. Four days later, DOGE posted on X that the IAF “has been reduced to its statutory minimum (1 active employee).”
Why the agency needs to be made as small as legally possible remains unclear. Requests for comment from the White House, DOGE, Mr. Cavanaugh, and Mr. Shaotran were not answered.
“Five men and a phone”
A similar story unfolded a mile away, at the headquarters of the Consumer Financial Protection Bureau (CFPB).
Republicans have criticized the agency, a consumer financial watchdog created in response to the 2008 financial crisis, for almost its entire history. But the first weeks of the Trump administration were quiet at CFPB.
In early February, however, employees learned that DOGE staffers had been given sweeping access to the agency’s data systems. The next day, Mr. Musk posted on X. “CFPB RIP,” he wrote, adding a tombstone emoji.
Within days, all CFPB employees had been told to stop their work. Probationary and term-limited employees were fired, and contracts terminated, according to court records. One terminated contract shut down the agency’s consumer complaint hotline, freezing over 16,000 unresolved complaints. After widespread media attention, the contract was reinstated.
DOGE and Trump administration officials have twice come within a day of laying off – through reduction-in-force (RIF) notices – thousands of CFPB employees, only to be stopped by a federal judge. At one point in February, a DOGE staffer was, in an effort to get RIFs sent out, “screaming at people [and] calling them incompetent,” according to court testimony from an anonymous CFPB employee.
Senior CFPB executives have said the agency will soon exist in name only. One said the agency will become, according to court testimony from another anonymous employee, a “room at Treasury, White House, or Federal Reserve with five men and a phone in it.”
External anger, internal frustration
Americans like the idea of making government more efficient, but they have increasingly soured on both how DOGE has been going about it and on Mr. Musk’s performance specifically, polling shows.
Republican lawmakers have felt this skepticism in person. In testy town halls across the country, voters have grilled them over the more unpopular DOGE actions, including downsizing the Department of Veterans Affairs and accessing Social Security data.
DOGE has also been at the center of clashes in Mr. Trump’s inner circle. The world’s richest man – a close adviser to the president but, on paper, a “temporary government employee” – has reportedly butted heads with Transportation Secretary Sean Duffy, Secretary of State Marco Rubio, and Treasury Secretary Scott Bessent.
Legal trouble
The most persistent obstacle in DOGE’s efforts to transform the federal government has been the judiciary. Much like public opinion, courts have been more concerned with how the agency has been acting than why they have been acting that way.
In a cascade of lawsuits, federal courts have pumped the brakes on Mr. Musk’s efforts. Judges have said these kinds of sweeping displays of executive power cannot be exercised so quickly, and maybe not at all.
This is not to say that courts have ruled unilaterally against the Trump administration. But with many cases still ongoing, it’s unclear how much of DOGE’s work will withstand legal scrutiny.
A lawsuit has, for now, kept the IAF intact. Filed by Ms. Aviel, the case turns not on DOGE itself, but on the legality of her termination. A federal judge in Washington, D.C., granted a preliminary injunction and temporarily reinstated her as the agency’s president in early April.
“While pursuing government efficiency is a valid goal, it must be carried out lawfully,” wrote U.S. District Court Judge Loren AliKhan in her order. The Trump administration, she added, has “not done so here.”
A case involving the CFPB raises similar questions. A lawsuit brought by the National Treasury Employees Union argues that the executive branch doesn’t have the authority to dismantle an agency created by Congress. But while the administration has been litigating the case since February, it has also been trying to drastically cut the agency.
If the government’s actions are not paused, U.S. District Court Judge Amy Berman Jackson wrote in a March 28 order, it “will eliminate [CFPB] before the Court has the opportunity to decide whether the law permits them to do it.”
The Trump administration has countered that courts do not have the power to unilaterally prevent the executive branch from making changes – including downsizing – to executive branch agencies.
“A long road to go”
DOGE supporters claim that this urgency was necessary.
“Time was of critical essence,” says Mr. Stern at the Heritage Foundation. The longer federal agencies were left alone, he added, “the longer [they had] to send fraudulent checks out the door.”
Now, Mr. Musk has said he will be stepping back from his work at DOGE to focus on his businesses. Trump administration officials have begun pressing Congress to take up the agency’s cause.
With the constitutional power of the purse, Congress was always going to have the final say on the more significant spending cuts.
Republicans have small majorities in both chambers of Congress, and there is an appetite for cuts in the GOP. Measures have passed that would formalize the work of Mr. Musk’s agency. For example, the House Financial Services Committee voted on party lines last week to approve a bill that would slash CFPB’s funding by 60%.
Even with narrow majorities, Republicans in Congress are likely to struggle to pass major budget cuts. Some GOP lawmakers have reportedly balked at early proposed budget reductions.
While Mr. Musk expressed pleasure with the roughly $160 billion in savings the agency claims it has found, he said it’s still “possible” to reach $1 trillion in cuts, The Washington Post reported.
“It’s a long road to go,” he added. “It’s sort of, how much pain is the Cabinet and this Congress willing to take? It can be done, but it requires dealing with a lot of complaints.”
