02-25-2025

Commencing the Reduction of the Federal Bureaucracy

Executive OrderView the Original .pdf
View the Original .pdf

The 1-Minute Brief

What: Executive Order 14217 initiates a process to eliminate or reduce the functions of several federal entities, advisory committees, and programs determined by the President to be unnecessary.

Money: The financial impact is not specified in a single score. It would involve the budgets of the targeted entities. For example, the United States Institute of Peace had a budget of $55 million in FY 2024. The Inter-American Foundation spent $36.5 million in FY 2024. The Presidio Trust had a $46 million surplus in the last fiscal year and recently received a $200 million grant for infrastructure projects.

Your Impact: The direct effect on an average American is likely minimal. However, for those involved with the targeted international development foundations, recent fellowship programs, or specific advisory councils, the impact could be significant. It also signals a broader policy shift toward reducing the size of the federal government.

Status: Issued by the President on February 19, 2025, and effective immediately. Heads of affected entities were required to report to the Office of Management and Budget (OMB) within 14 days.

What's Actually in the Bill

This Executive Order directs the elimination of non-statutory components and the reduction of statutory functions for specific federal entities. It also terminates several federal advisory committees and a government fellowship program. The stated goal is to reduce government waste, minimize inflation, and promote American freedom and innovation.

Core Provisions:

  • Entities to be Reduced: The non-statutory parts of the following entities are to be eliminated, and their statutory functions reduced to the minimum required by law:
    • The Presidio Trust
    • The Inter-American Foundation
    • The United States African Development Foundation
    • The United States Institute of Peace
  • Funding Rejection: The OMB Director is ordered to reject funding requests from these entities that are inconsistent with the order.
  • Program Terminations:
    • The Federal Executive Boards, established in 1961 to coordinate government activities outside of Washington D.C., are to be eliminated.
    • The Presidential Management Fellows (PMF) Program, a leadership development program for advanced degree holders established in 1977, is terminated.
  • Advisory Committee Terminations: The following advisory committees are terminated:
    • Advisory Committee on Voluntary Foreign Aid (USAID)
    • Academic Research Council and Credit Union Advisory Council (CFPB)
    • Community Bank Advisory Council (FDIC)
    • Secretary's Advisory Committee on Long COVID (HHS)
    • Health Equity Advisory Committee (CMS)
  • Deadline for Action: Heads of the listed entities had 14 days from the order's date to report compliance to the OMB. Key presidential aides have 30 days to identify more entities for termination.

Stated Purpose (from the Sponsors):

  1. To dramatically reduce the size of the Federal Government.
  2. To increase the government's accountability to the American people.
  3. To minimize Government waste and abuse, reduce inflation, and promote American freedom and innovation.

Key Facts:

Affected Sectors: Foreign Aid, Government Operations, Public Health, Financial Regulation, Historic Preservation.
Timeline: The order was signed on February 19, 2025. Key deadlines for agency actions are within 14 to 30 days of this date.
Scope: The order has a national scope, affecting various federal agencies, their programs, and advisory bodies.

The Backstory: How We Got Here

Timeline of Events:

Post-War & Cold War Era (1940s-1970s):

  • 1940s: The Advisory Committee on Voluntary Foreign Aid (ACVFA) was established after World War II to foster cooperation between the U.S. government and non-governmental organizations in foreign assistance.
  • 1961: President John F. Kennedy established the Federal Executive Boards (FEBs) to improve coordination among federal agencies operating in major metropolitan areas across the country.
  • 1977: President Jimmy Carter created the Presidential Management Intern Program (later the Presidential Management Fellows Program) to attract individuals with advanced degrees into federal service and develop them for leadership roles. This was a response to a perceived need for service-minded leaders in a time of national division.

Era of Bipartisan Institution Building (1970s-2000s):

  • 1969: The Inter-American Foundation (IAF) was created as an independent agency to fund community-led development in Latin America and the Caribbean.
  • 1980s: The United States African Development Foundation was established to provide similar community-based grants in Africa.
  • 1984: The United States Institute of Peace (USIP) was established by Congress as an independent, nonpartisan institution to help prevent and resolve violent international conflicts.
  • 1996: Congress created the Presidio Trust to manage the 1,500-acre Presidio of San Francisco, a former military post, in partnership with the National Park Service, with a mandate to become financially self-sufficient.

Post-2008 Financial Crisis & Recent Years (2009-Present):

  • 2009: The Federal Deposit Insurance Corporation (FDIC) established the Community Bank Advisory Council to get input from small community banks.
  • 2012: The Consumer Financial Protection Bureau (CFPB) created the Academic Research Council to get advice on research and rulemaking, as well as a Credit Union Advisory Council.
  • 2022-2023: In response to the COVID-19 pandemic, the Department of Health and Human Services (HHS) established advisory committees for Long COVID and Health Equity to address ongoing health challenges and disparities.

Why Now? The Political Calculus:

  • Fulfillment of Campaign Promises: The executive order aligns with a long-standing political promise to reduce the size and scope of the federal bureaucracy, often framed as cutting "government waste and abuse."
  • Targeting Specific Institutions: Some of the entities, like the Presidio Trust and the U.S. Institute of Peace, have been targets of criticism from conservative groups and politicians for their cost or perceived political leanings.
  • Shift in Governing Philosophy: The action reflects a governing philosophy that prioritizes a smaller federal footprint, with less emphasis on federal-level coordination, specialized fellowship programs, and external advisory input.

Your Real-World Impact

The Direct Answer: This directly affects a specific group of federal employees, fellows, grant recipients, and members of the financial and public health communities, but most Americans will not see an immediate change in their daily lives.

What Could Change for You:

Potential Benefits:

  • For taxpayers who believe these entities are wasteful, the primary benefit is the potential for long-term cost savings and a reduction in the federal government's size.

Possible Disruptions or Costs:

Short-term (First Year):

  • Loss of Fellowships: The termination of the Presidential Management Fellows Program eliminates a well-established pathway for individuals with graduate degrees to enter federal service.
  • Disruption of Grants: Community-based organizations in Latin America, the Caribbean, and Africa that rely on funding from the Inter-American and African Development Foundations may see their funding and projects disrupted.
  • End of Advisory Input: The termination of advisory councils at the CFPB, FDIC, HHS, and CMS means that expert and industry-specific advice on consumer finance, community banking, Long COVID, and health equity will no longer be formally channeled through these bodies.

Long-term:

  • Changes at the Presidio: The reduction of the Presidio Trust could impact the management and funding for the Presidio National Park in San Francisco, a popular site for recreation and home to businesses and residences.
  • Reduced U.S. "Soft Power": Scaling back the U.S. Institute of Peace and other foreign aid foundations could diminish U.S. efforts in conflict resolution and international development.

Who's Most Affected:

Primary Groups: Federal employees of the targeted entities, Presidential Management Fellows, and organizations receiving grants from the affected foundations.
Secondary Groups: Community banks, credit unions, public health advocates, and patients who were represented on the terminated advisory committees. Researchers and academics who participated in the advisory councils.
Regional Impact: The San Francisco Bay Area is uniquely affected due to the location of the Presidio. Communities in Latin America, the Caribbean, and Africa will be impacted by the changes to the development foundations.

Bottom Line: While the order is presented as a cost-saving measure for all taxpayers, its immediate and tangible effects will be concentrated on those directly connected to the eliminated programs and institutions.

Where the Parties Stand

Republican Position: "Cutting Waste and Bureaucracy"

Core Stance: Generally supportive of measures to shrink the federal government, cut spending, and eliminate programs deemed unnecessary or inefficient.

Their Arguments:

  • ✓ These entities and programs represent government overreach and wasteful spending.
  • ✓ The federal bureaucracy is too large and unaccountable, and this is a necessary step to rein it in.
  • ✓ Advisory committees are often duplicative or serve narrow interests and can be eliminated to streamline government.
  • ✗ (Potential opposition from Republicans who have supported specific institutions like the U.S. Institute of Peace in the past for its national security role).

Legislative Strategy: Support the executive order and potentially use the budget and appropriations process to further defund or eliminate other programs identified as unnecessary.

Democratic Position: "Protecting Critical Programs and Expertise"

Core Stance: Generally opposed to the unilateral elimination of programs and institutions that serve specific public interests and provide valuable expertise.

Their Arguments:

  • ✓ The targeted entities serve important functions in areas like international peace, community development, and public health.
  • ⚠️ The President is overstepping his authority by attempting to eliminate entities created or funded by Congress.
  • ✗ This action undermines bipartisan institutions, expert-driven policy, and U.S. engagement in the world.
  • ✗ Terminating advisory committees on issues like Long COVID and health equity harms vulnerable communities.

Legislative Strategy: Challenge the legality of the executive order, particularly for statutorily created entities, and work to restore funding for the affected programs through the appropriations process. Publicly condemn the cuts as politically motivated and harmful.

Constitutional Check

The Verdict: ⚠️ Questionable

Basis of Authority:

The order cites the President's authority vested by the "Constitution and the laws of the United States of America." This generally refers to the President's executive power under Article II to oversee the executive branch.

U.S. Constitution, Article II, Section 1: "The executive Power shall be vested in a President of the United States of America."
U.S. Constitution, Article II, Section 3: "...he shall take Care that the Laws be faithfully executed..."

Constitutional Implications:

Separation of Powers: The core legal question is the extent of the President's power to act alone.

  • Programs Created by Executive Order: The President generally has the authority to revoke prior executive orders. The Presidential Management Fellows Program and Federal Executive Boards were established by executive order and can likely be terminated by one.
  • Entities Created by Statute: The President cannot unilaterally eliminate an entity or a trust created by an act of Congress. The Presidio Trust, Inter-American Foundation, U.S. African Development Foundation, and the U.S. Institute of Peace were all established by statute. The President can direct them to reduce functions "to the maximum extent consistent with applicable law," but cannot abolish them outright without congressional action.
    Appropriations Power: Congress has the "power of the purse." While the President, through OMB, can refuse to request funding, Congress can still appropriate it. The order directs the OMB Director to reject funding requests, which is within the President's power over the budget proposal process, but Congress has the final say on spending.
    Federalism: This order does not raise significant federalism issues as it deals with the structure of the federal government itself, not the balance of power with the states.

Potential Legal Challenges:

Legal challenges are highly likely, especially from groups affected by the cuts to congressionally-chartered entities. Lawsuits could argue that the President is exceeding his constitutional authority by attempting to dismantle or defund organizations established by federal law, thereby infringing on the legislative powers of Congress. State officials, like the California State Senate, have indicated they would challenge the order in court.

Your Action Options

TO SUPPORT THIS BILL

5-Minute Actions:

  • Call Your Rep/Senators: Capitol Switchboard: (202) 224-3121. "I'm a constituent from [Your City/Town] and I support Executive Order 14217 to reduce the federal bureaucracy. I urge [Rep./Sen. Name] to support these efforts to cut wasteful spending."

30-Minute Deep Dive:

  • Write a Detailed Email: Contact your representatives and members of the House and Senate Appropriations Committees to express support for defunding these specific entities in upcoming spending bills.
  • Join an Organization: Look for conservative and libertarian advocacy groups that campaign for a smaller government and lower taxes.

TO OPPOSE THIS BILL

5-Minute Actions:

  • Call Your Rep/Senators: Capitol Switchboard: (202) 224-3121. "I'm a constituent from [Your City/Town] and I urge [Rep./Sen. Name] to oppose Executive Order 14217 and work to restore funding for programs like the Presidential Management Fellows and the U.S. Institute of Peace."

30-Minute Deep Dive:

  • Write a Letter to the Editor: Submit a letter to your local newspaper explaining the value of one of the affected programs or institutions and the negative impact of its termination.
  • Join an Organization: Support organizations that advocate for federal employees, international development, public health, or historic preservation, depending on your area of concern. Examples include alumni groups for the PMF program or non-profits that partner with the targeted foundations.