Business
Inside Elon Musk’s Plan for DOGE to Slash Government Costs
An unpaid group of billionaires, tech executives and some disciples of Peter Thiel, a powerful Republican donor, are preparing to take up unofficial positions in the U.S. government in the name of cost-cutting.
As President-elect Donald J. Trump’s so-called Department of Government Efficiency girds for battle against “wasteful” spending, it is preparing to dispatch individuals with ties to its co-leaders, Elon Musk and Vivek Ramaswamy, to agencies across the federal government.
After Inauguration Day, the group of Silicon Valley-inflected, wide-eyed recruits will be deployed to Washington’s alphabet soup of agencies. The goal is for most major agencies to eventually have two DOGE representatives as they seek to cut costs like Mr. Musk did at X, his social media platform.
This story is based on interviews with roughly a dozen people who have insight into DOGE’s operations. They spoke to The Times on the condition of anonymity because they were not authorized to speak publicly.
On the eve of Mr. Trump’s presidency, the structure of DOGE is still amorphous and closely held. People involved in the operation say that secrecy and avoiding leaks is paramount, and much of its communication is conducted on Signal, the encrypted messaging app.
Mr. Trump has said the effort would drive “drastic change,” and that the entity would provide outside advice on how to cut wasteful spending. DOGE itself will have no power to cut spending — that authority rests with Congress. Instead, it is expected to provide recommendations for programs and other areas to cut.
But parts of the operation are becoming clear: Many of the executives involved are expecting to do six-month voluntary stints inside the federal government before returning to their high-paying jobs. Mr. Musk has said they will not be paid — a nonstarter for some originally interested tech executives — and have been asked by him to work 80-hour weeks. Some, including possibly Mr. Musk, will be so-called special government employees, a specific category of temporary workers who can only work for the federal government for 130 days or less in a 365-day period.
The representatives will largely be stationed inside federal agencies. After some consideration by top officials, DOGE itself is now unlikely to incorporate as an organized outside entity or nonprofit. Instead, it is likely to exist as more of a brand for an interlinked group of aspirational leaders who are on joint group chats and share a loyalty to Mr. Musk or Mr. Ramaswamy.
“The cynics among us will say, ‘Oh, it’s naïve billionaires stepping into the fray.’ But the other side will say this is a service to the nation that we saw more typically around the founding of the nation,” said Trevor Traina, an entrepreneur who worked in the first Trump administration with associates who have considered joining DOGE.
“The friends I know have huge lives,” Mr. Traina said, “and they’re agreeing to work for free for six months, and leave their families and roll up their sleeves in an attempt to really turn things around. You can view it either way.”
DOGE leaders have told others that the minority of people not detailed to agencies would be housed within the Executive Office of the President at the U.S. Digital Service, which was created in 2014 by former President Barack Obama to “change our government’s approach to technology.”
DOGE is also expected to have an office in the Office of Management and Budget, and officials have also considered forming a think tank outside the government in the future.
Mr. Musk’s friends have been intimately involved in choosing people who are set to be deployed to various agencies. Those who have conducted interviews for DOGE include the Silicon Valley investors Marc Andreessen, Shaun Maguire, Baris Akis and others who have a personal connection to Mr. Musk. Some who have received the Thiel Fellowship, a prestigious grant funded by Mr. Thiel given to those who promise to skip or drop out of college to become entrepreneurs, are involved with programming and operations for DOGE. Brokering an introduction to Mr. Musk or Mr. Ramaswamy, or their inner circles, has been a key way for leaders to be picked for deployment.
That is how the co-founder of Loom, Vinay Hiremath, said he became involved in DOGE in a rare public statement from someone who worked with the entity. In a post this month on his personal blog, Mr. Hiremath described the work that DOGE employees have been doing before he decided against moving to Washington to join the entity.
“After 8 calls with people who all talked fast and sounded very smart, I was added to a number of Signal groups and immediately put to work,” he wrote. “The next 4 weeks of my life consisted of 100s of calls recruiting the smartest people I’ve ever talked to, working on various projects I’m definitely not able to talk about, and learning how completely dysfunctional the government was. It was a blast.”
These recruits are assigned to specific agencies where they are thought to have expertise. Some other DOGE enrollees have come to the attention of Mr. Musk and Mr. Ramaswamy through X. In recent weeks, DOGE’s account on X has posted requests to recruit a “very small number” of full-time salaried positions for engineers and back-office functions like human resources.
The DOGE team, including those paid engineers, is largely working out of a glass building in SpaceX’s downtown office located a few blocks from the White House. Some people close to Mr. Ramaswamy and Mr. Musk hope that these DOGE engineers can use artificial intelligence to find cost-cutting opportunities.
The broader effort is being run by two people with starkly different backgrounds: One is Brad Smith, a health care entrepreneur and former top health official in Mr. Trump’s first White House who is close with Jared Kushner, Mr. Trump’s son-in-law. Mr. Smith has effectively been running DOGE during the transition period, with a particular focus on recruiting, especially for the workers who will be embedded at the agencies.
Mr. Smith has been working closely with Steve Davis, a collaborator of Mr. Musk’s for two decades who is widely seen as working as Mr. Musk’s proxy on all things. Mr. Davis has joined Mr. Musk as he calls experts with questions about the federal budget, for instance.
Other people involved include Matt Luby, Mr. Ramaswamy’s chief of staff and childhood friend; Joanna Wischer, a Trump campaign official; and Rachel Riley, a McKinsey partner who works closely with Mr. Smith.
Mr. Musk’s personal counsel — Chris Gober — and Mr. Ramaswamy’s personal lawyer — Steve Roberts — have been exploring various legal issues regarding the structure of DOGE. James Burnham, a former Justice Department official, is also helping DOGE with legal matters. Bill McGinley, Mr. Trump’s initial pick for White House counsel who was instead named as legal counsel for DOGE, has played a more minimal role.
“DOGE will be a cornerstone of the new administration, helping President Trump deliver his vision of a new golden era,” said James Fishback, the founder of Azoria, an investment firm, and confidant of Mr. Ramaswamy who will be providing outside advice for DOGE.
Despite all this firepower, many budget experts have been deeply skeptical about the effort and its cost-cutting ambitions. Mr. Musk initially said the effort could result in “at least $2 trillion” in cuts from the $6.75 trillion federal budget. But budget experts say that goal would be difficult to achieve without slashing popular programs like Social Security and Medicare, which Mr. Trump has promised not to cut.
Both Mr. Musk and Mr. Ramaswamy have also recast what success might mean. Mr. Ramaswamy emphasized DOGE-led deregulation on X last month, saying that removing regulations could stimulate the economy and that “the success of DOGE can’t be measured through deficit reduction alone.”
And in an interview last week with Mark Penn, the chairman and chief executive of Stagwell, a marketing company, Mr. Musk downplayed the total potential savings.
“We’ll try for $2 trillion — I think that’s like the best-case outcome,” Mr. Musk said. “You kind of have to have some overage. I think if we try for two trillion, we’ve got a good shot at getting one.”
The highest gas prices in the country are making it tougher for some gig drivers to make a living.
Gas prices have shot up amid the war in the Middle East. On average, California gas prices are the most expensive in the United States, according to data from the American Automobile Assn. The average price of regular gas in California is almost $6. The national average is a little above $4.
While Uber and Lyft drivers have concocted clever ways to cut gas consumption, they say that without some relief they will be forced to leave the ride-hailing business.
John Mejia was already struggling to make money as a part-time Lyft driver when soaring gas prices made his side hustle even harder.
“Unfortunately, it’s the economics of paying less to drivers and gas prices,” he said. “It actually is pulling people out of the business.”
Guests at The Westin St. Francis hotel get into an Uber.
(Jess Lynn Goss / For The Times)
Gig work offers drivers the freedom to work for themselves and more flexibility, but being independent contractors also means they must shoulder unexpected costs.
Ride-sharing companies say they’re trying to help, but drivers say the gas relief comes with caveats. For now, drivers say they’re being pickier about what rides they accept, cutting hours and are looking at other ways to make money.
Mejia, who started driving for Lyft more than a decade ago, said in his early days, he would sometimes make $400 in three hours. Now it takes 12 hours to rake in $200.
The San Francisco Bay Area consultant is an active member of the California Gig Workers Union, so he knows he isn’t alone. California has more than 800,000 gig rideshare drivers, according to the group, which is affiliated with the Service Employees International Union.
On social media sites such as Reddit and Facebook, gig workers have posted about how the higher gas prices are eating into their earnings. Among the tricks they are suggesting: reducing the number of times the ignition is turned on or off, avoiding traffic, working in specific neighborhoods and at times with high demand and switching to electric vehicles.
Gig drivers usually have only seconds to decide whether to accept a ride on the app, but they have become more strategic about which rides and deliveries they accept.
That means they are more likely to sit back in their cars and wait for higher fares for quick pick-up and drop-off.
“I highly recommend the ‘decline and recline’ strategy, rejecting unprofitable rides until a better one appears,” wrote Sergio Avedian, a driver, in the popular blog the Rideshare Guy.
Pedestrians cross the street in front of a Lyft and Uber driver on Wednesday. High gas prices have made it hard for gig drivers to make a living, cutting into their profits.
(Jess Lynn Goss / For The Times)
Uber, Lyft and other companies have unveiled several ways to help drivers save on gas.
Uber said drivers can get up to 15% cash back through May 26 with the Uber Pro card, a business debit Mastercard for drivers and couriers. Based on a worker’s tier, they can get up to $1 off per gallon of gas through Upside — an app that offers cash rewards — and up to 21 cents off per gallon of gas with Shell Fuel Rewards. The company also offers incentives for drivers who want to switch to electric vehicles.
“We know the price of gas is top of mind for many rideshare and delivery drivers across the country right now,” Uber said in a blog post about its gas savings efforts.
Lyft also said it’s expanding gas relief through May 26 because the company knows that the extra cost “hits hardest for drivers who depend on driving for their income.”
The company is offering more cash back, depending on the driver’s tier, for drivers who use a Lyft Direct business debit card to pay for gas at eligible gas stations. They can get an additional 14 cents per gallon off through Upside.
Drivers say the fine print on the offers dictates which card they use and where they fill up gas, making it difficult for them to save money.
“If I do the math, it’s ridiculous,” Mejia said. “They’re offering us nothing.”
Uber declined to comment, but pointed to its blog post about the gas relief efforts. Lyft also referenced the blog post and said “the gas savings were structured through rewards to maximize stackable opportunities.”
Guests at The Westin St. Francis hotel get into an Uber.
(Jess Lynn Goss / For The Times)
Gig workers have struggled with rising gas prices in the past.
In 2022, Lyft and Uber temporarily added a surcharge to their fares amid record-high gas prices following Russia’s invasion of Ukraine. This year, Uber is adding a fuel charge to its fares in Australia for roughly two months to offset the high cost of gas for drivers. Lyft said it hasn’t added a fuel charge in the U.S. or elsewhere.
Margarita Penalosa, who drives full time for Uber and Lyft in Los Angeles, started as a rideshare driver in 2017. Back then, gas was cheaper. She would easily hit her goal of making $300 in eight hours. Now she’s making just $250 after working as much as 14 hours.
Gas prices, she said, used to be less than $3 per gallon. Now some gas stations are charging more than $8 per gallon.
“Take out the gas. Take out the mileage from my car and maintenance. How much [do] I really make? Probably I get $11 for an hour,” she said.
Jonathan Tipton Meyers wants to spend fewer hours as a rideshare driver.
He already juggles multiple gigs even while driving for Uber and Lyft in Los Angeles. He’s a mobile notary and loan signing agent, a writer and performer.
Driving is “a very challenging, full-time job,” he said. “It’s very taxing and, of course, wages were just continually decreasing.”
John Mejia, a longtime Lyft and Uber driver, poses for a portrait before attending a meeting about unionizing gig drivers.
(Jess Lynn Goss / For The Times)
Even if oil continues to flow through the Strait of Hormuz, which Iran reopened Friday, it could take a while for gas prices to come down to earth, said Mark Zandi, the chief economist at Moody’s Analytics.
“There’s an old adage that prices rise like a rocket and fall like a feather,” he said. “I think that’ll apply.”
In the meantime, it will be survival of the fittest drivers. If enough of them decide to leave the apps, the ride-hailing companies could be forced to raise fares further to attract some back.
“Those who approach rideshare driving strategically, tracking expenses, choosing trips carefully, and optimizing efficiency are far more likely to weather periods of high gas prices,” wrote Avedian in the Rideshare Guy blog. “For everyone else, a spike at the pump can quickly turn rideshare driving from a side hustle into a money-losing venture.”
The proprietor of Los Angeles’ legendary Clifton’s has given up on reopening the shuttered venue.
It’s just too difficult to do business in downtown’s historic core, he says.
Andrew Meieran bought Clifton’s on Broadway in 2010 and poured more than $14 million into repairs, renovations and upgrades, adding additional bar and restaurant spaces in the four-story building. In 2018, he found that demand for cafeteria food was too low to be profitable, and he pivoted to a nightclub and lounge concept called Clifton’s Republic, featuring multiple dining and drinking venues. Meieran has tried elaborate themed environments, such as a tiki bar and forest playgrounds, and renting out the location for big events to spark more interest.
It was never easy, but during and since the pandemic, the neighborhood has grown increasingly unsafe as downtown has emptied of office workers and visitors.
Storefronts are gated up due to vandalism in the historic district in downtown Los Angeles on Tuesday.
(Eric Thayer / Los Angeles Times)
The alley behind Clifton’s Cafeteria in the downtown historic district Tuesday.
(Eric Thayer / Los Angeles Times)
Vandalism has been rampant, with graffiti appearing on the historic structure almost daily. Vandals would use acid or diamond glass cutters to deface the windows, often cracking the glass. It would cost Meieran more than $30,000 each time to replace the windows. Insurance companies either stopped offering policies that covered vandalism or raised premiums by as much as 600%, he said.
There has been continuous crime in the area, he said, including multiple assaults on people in front of his building. He last shut the venue last year, hoping things would improve and he could come back with a business that could work. Now he has given up. Someone else may take over the space or even the name of the historic spot, but he is done trying.
“We’ve lost our way,” Meieran said. “I want to get up on the tops of the skyscrapers and yell that people need to pay attention to this.”
The disenchantment of a business leader who used to be one of downtown L.A.’s biggest backers shines a spotlight on the stubborn safety concerns, rising costs and thinner foot traffic that have made it increasingly difficult for even iconic businesses to survive.
The once-popular institution dates back to 1935, when it was a Depression-era cafeteria and kitschy oasis that sold as many as 15,000 meals a day when Broadway was the city’s entertainment hub.
It served traditional cafeteria food such as pot roast, mashed potatoes and Jell-O in a woodsy grotto among fake redwood trees and a stone-wrapped waterfall reminiscent of Brookdale Lodge in Northern California.
It’s not the only once-prominent destination that has failed to find a way to flourish in today’s market. Cole’s, one of L.A.’s most famous restaurants and often credited with inventing the French dip sandwich, closed last month after a 118-year run.
“The bigger problem for us and the rest of the industry is the high cost of doing business,” said Cedd Moses, who used to operate Cole’s and has backed many other bars and restaurants in historic buildings downtown for decades. “That’s what is killing independent restaurants in this city.”
Outside of Clifton’s Cafeteria.
(Eric Thayer / Los Angeles Times)
Clifton’s Republic owner Andrew Meieran stands next to a boat on the top floor of the historic restaurant in 2024.
(Wally Skalij / Los Angeles Times)
Clifton’s opened and closed repeatedly during the pandemic and, more recently, after a burst pipe caused extensive damage. Meieran opened it for special events such as last Halloween, but it has otherwise been closed.
Police are woefully understaffed and hampered by public policy, said Blair Besten, president of downtown’s Historic Core Business Improvement District, a nonprofit that arranges graffiti removal, trash pickup and safety patrols in the area.
Businesses and residents in the area would like to see a bigger police presence, but there have been protests against that by people who are not from downtown, she said.
“People are starting to see the fruits of the defunding movement,” she said. “It has not led us to a better place as a city.”
The Los Angeles Police Department is making progress downtown, Captain Kelly Muniz said, with violent crime down more than 10% from last year.
“While we’re working very hard to solve crime, to prevent crime, there are still elements such as trash, open-air drug use, homelessness and graffiti,” she said. “We’re swinging in the right direction.”
Retailers have been opting out of downtown L.A., said real estate broker Derrick Moore of CBRE, who helps arrange commercial property leases. Brands have headed to more vibrant nearby neighborhoods such as Echo Park and Silver Lake.
“A lot of operators are just electing to skip over downtown,” he said. “They’re leasing spaces elsewhere, where they feel they have a greater chance at higher sales.”
A man walks past a pile of trash left on the street in the historic district.
(Eric Thayer / Los Angeles Times)
While some businesses are struggling, many downtown residents say their perceptions of safety are improving and that the area is regaining some vibrancy.
“A lot of people live here. I think people forget that,” Besten said. “We’re all surviving. It’s just hard for all the businesses to survive.”
A green shoot for the Historic Core is Art Night on the first Thursday of every month, when 50 or 60 locations, including permanent art galleries and pop-up galleries in unused storefronts, display art to map-toting visitors who come for the occasion.
They often end up in Spring Street bars, which more typically thrive on weekend nights but are still a draw to downtown.
“I think nightlife will thrive downtown, since bars attract people that don’t mind a little grittier atmosphere,” said Moses. “Our sales are hitting new records at our bars downtown, fortunately, but our costs have risen dramatically.”
A closed sign for Clifton’s Cafeteria.
(Eric Thayer / Los Angeles Times)
Clifton’s former backer, Meieran, says he doesn’t think things are going to bounce back enough to warrant more massive investment. He has sold the building, and the owner is looking for a new tenant to occupy Clifton’s space. He still controls the Clifton’s name.
While there is still a chance he could let someone else use the name Clifton’s, Meieran is done for now — too many bad memories.
“There was a guy who was terrorizing the front of Clifton’s because he decided he wanted to live in the vestibule in front, and he didn’t want us to operate there,” Meieran said. “He would threaten to kill anybody who came through.”
He doesn’t believe official statistics that show crime and homelessness are way down in the area, and he doesn’t want to restart a business when criminals can so easily erase his hard work.
“What business that’s already on thin margins can survive that?” he said.
Trader Joe’s customers might soon get a payout from the popular grocery chain.
The Monrovia-based company agreed to a $7.4-million settlement in a class action lawsuit that claimed customers were left vulnerable to identity theft.
Customers who purchased items with a credit or debit card from March to July in 2019 might be eligible for a payment as part of the settlement.
The plaintiff alleged that some receipts printed in 2019 included 10-digit credit or debit card numbers —double what’s allowed under the Fair and Accurate Credit Transactions Act.
Trader Joe’s “vigorously denies any and all liability or wrongdoing whatsoever,” the grocery chain said in the settlement website. The grocery chain decided to settle to avoid a long and costly litigation process.
The payout will go toward paying impacted customers as well as attorney fees and other expenses.
About $2.6 million will go toward attorney fees, and the plaintiff will receive a $10,000 incentive payment, according to the settlement. The remaining funds will be distributed evenly among customers who submit valid claims.
It’s unclear how much money each customer would get, but the payout could be about $102, according to the settlement notice.
To receive the payout, customers must have received a receipt displaying the first six and last four digits of the card number.
Some customers identified as part of the settlement class have been notified and received a class ID number to file a claim.
Customers have from now until June 6 to file a claim online or by phone.
A customer not identified in the settlement can still submit a claim by entering the first six and last four digits of the card used, along with the date it was used at Trader Joe’s.
Brian Keim, the plaintiff who brought the case, used his debit card at stores in Florida in 2019. He said some stores printed transaction receipts that included the first six and last four digits of customers’ card numbers.
The receipts did not include other personal information, such as the middle digits of the users’ cards, the cards’ expiration dates, or the users’ addresses. No customer has reported identity theft as a result of the receipts since the lawsuit was filed, the grocer said.
However, identity theft doesn’t require submitting a claim for payment.
The settlement was agreed upon by both the grocer and the plaintiff, but still has to be approved by a court. A hearing is set in August.
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