The federal government’s debt has exploded: approaching nearly 100 percent of GDP. The Department of Government Efficiency (DOGE), an independent commission set to begin in President-elect Trump’s second term, promises to cut the government down to size. But in the conversations surrounding reducing spending, people have overlooked a key point: aligning government workers’ interests with cutting costs. The government should give bonuses to departments that spend less than budgeted and employees who flag government waste.
Last year, the federal government both budgeted and spent around $1.7 trillion on discretionary spending. The way Congress currently budgets motivates government workers to spend every last penny of that amount. If a department has money left over at the end of the year, it means Congress may cut its budget next year. That risks fewer employees and less power for the higher-ups. So at the end of every year, there is a use-it-or-lose-it spending frenzy to exhaust any remaining part of the budget.
It need not be this way. The federal government should encourage its workers to find waste in the budget and spend less than Congress has budgeted. Two easy solutions: Give a percentage of any savings as a bonus to the employees in the respective department and give awards to employees that flag government waste.
Start with the employee bonus. The government should give out an annual bonus to all employees in a department that spends less than Congress budgeted for that year — say 5 percent of all savings. That way, workers have an interest in cutting useless spending.
Employees will think twice about buying a new (and not needed) copier at the end of the year just to use up the budget. And if it means smaller bonuses, maybe a department will think more carefully before funding useless workshops. By handing out bonuses to all workers, the government will create a system in which all employees have an incentive to work together to cut government spending.
What about the negative incentives that this bonus program could create? It could, for instance, encourage workers to spend money only on things in their own personal interest while cutting spending on necessary long-term projects or items that benefit the public.
An easy solution is to tie spending discretion to the significance of each budgeted item. Congress could first create a minimum required spending floor. This floor would fluctuate based on the importance of the department and the minimum spending needed to achieve the department’s goals.
Congress could also require spending thresholds for particular programs or items within each department. It could, for example, require the Department of Defense to spend a high percentage of the budgeted amount to develop a sixth-generation fighter, or it could require the IRS to use a particular percentage to upgrade its filing system. In short, Congress could give more or less spending discretion for budgeted items based on the respective importance of each item.
Consider next money awards to workers that find waste. While giving out department-wide bonuses does encourage workers to spend less, there’s still the collective action problem of finding which areas to slice. To solve that problem, the government should hand out special money awards to the workers who find areas to cut. This could include awards for both identifying ways to spend less money that year and flagging for Congress areas to decrease spending in future years.
Statutory schemes using monetary awards have worked well in other places. In the private sector, Congress has used them to disturb the norm of employee silence. Called whistleblower lawsuits, Congress has created a far-reaching regime that financially rewards employees who report poor behavior in the private sector.
And on the public side, the False Claims Act rewards whistleblowers who help the government recover losses from fraud. Congress should adopt these whistleblower principles and apply them to government spending. But instead of lawsuits, Congress should create a reporting regime in which employees flag government waste each year and draft ideas on ways to reduce spending in future years.
Cutting government spending never comes easy. But Congress should not make its job harder by incentivizing government workers to spend every dollar that they can. Create a system in which government workers prosper when the American people prosper — reward them financially when they save taxpayers money.
Eric Dement is a lawyer and graduate of the University of Virginia School of Law. He lives in Colorado.
