Russell Vought: How to Control the Administrative State | The American Mind Podcast

Russ Vought, welcome to the special edition of The American Mind. You are, of course, the director of the Office of Management and Budget. You were in the first Trump administration as well, had a long career here in DC, ran Heritage Action for seven years or so, executive director of the Republican Study Committee, worked on the Hill. You know this town well, but we want to talk about OMB, especially from a Claremont perspective. It's close to our hearts, especially as it intersects with the administrative state. So my, I guess my opening question is, what did you, what were your main lessons of OMB from the first administration? Well, I know you spent it, and then you left and founded, I should mention, founded the Center for Renewing America, where you guys studied the problems in the off years, the Biden years, and it helped you be very effective in this administration, but I'm curious about the first. Well, I think people think of OMB as just budgets. It's every decision that is all government execution, every regulation, management where you have multiple agencies that are part of it, and really the the aha moment is that OMB has the statutory tools of a president to control the bureaucracy. So whereas you may have just needed a Bureau of the Budget in the 1920s with the rise of the administrative state, presidents that understood how to get their arms around that bureaucracy pioneered mainly by FDR, Nixon, and Trump has certainly used it through the time that we've been there, it's your tools to really manage it. You have the ability to turn off an agency's discretionary budget to get them going in your direction, and that is kind of a phenomenon of the last hundred years versus what you might call cabinet-level government, which still exists, and President Trump practices that tremendously as well with his direct relationship with cabinet members, of which he is, you know, daily and repeatedly, but without those statutory tools, the president, the White House wouldn't be as effective as other presidents previously. Yeah, let's talk about the history a little bit. You mentioned the Bureau of the Budget, which was founded in 1921. It's really a creature of the progressive movement in many ways. It reflects how we've changed the way we do modern government. To put a sort of Claremont twist on it, our senior fellow John Marini has talked for a long time, starting in his book, The Politics of Budget Control, way back in the late 70s, about that progressive history of it, and then Nixon transforms it into OMB to try to get a handle on the bureaucracy. The kids right now are having fun Nixon-maxing, as they say. John's argument was that Nixon sort of built up a lot of political capital in his first administration, of course won a landslide re-election, and then was ready to go to war with the administrative state. Is that really how we should understand OMB post-Nixon, at least for some Republicans? I definitely think that that is an accurate reading of history. You know, I think what it's certainly that, you know, in the second term aims to really use OMB to go after the administrative state, and of course what we have brought back is this conversation about the executive tools to constrain spending, which Nixon was certainly not the first president to use. He was the last president to use out of 200 years of presidents championing the notion that they could spend less. The constitutional principle is you can't spend more than an appropriation, but it had always been common for presidents to spend less. Nixon did that as part of a macro strategy, and of course Congress bit back at the lowest moment of the presidency, and so one of the reasons we have had spending become out of control is because Congress put the Congressional Budget Act in place that included the main title being the Impoundment Control Act. All of that really became ensconced in during the Nixon years, and then now we talk about post-Watergate institutional phenomena. All of those things are the types of things that we've spent a lot of time thinking about in the years of exile, and that I don't think we can truly get back on serve until we've tackled, and I think this administration is doing that. Yeah. Yeah, I mean in many ways you would think that the old progressives would have been in favor of something like impoundment, because one of their emphases was on government efficiency. So if you're, if you can do the job for less money than is appropriated. Yeah. I mean that leaves aside the question whether or not you think it's constitutional or not. What, I want to zero in on this, the first question I asked a little. What did you learn in the interim, do you think, from your experience in Trump 1 versus now in Trump 47? I think the extent to which, my experience in Trump 1 was really just what was happening at OMB and our various issues of the day, and there was so much obviously going on across the government, and the president's political battles with regard to efforts to take him out from the Justice Department and others, and I think the realization that these were, these were bureaucracies that were very hardened, very unaccountable, viewed themselves as very independent of the president, and that needed a macro approach, unified, comprehensive, to be able to ensure that the president was going to truly be in charge on the basis of Democratic representation, and not have career bureaucrats running these agencies. And I think developing that, that viewpoint out, and that realization was something that was different from first to second. Yeah, and you had four years to really plan it. I mean, the blessing that it is, the president's had it, I had it, to think about the job that you would do for four years of thinking about it, and then to try to do it better has, you know, who gets a chance to do that? Right, yeah. Only one other president in American history. Right. Sort of pre-modern government. Correct. Yeah, yeah. What's been your, or maybe there's probably more than one, but what have been, in your view, your major wins in this administration? You guys came out of the gate charging, especially at OMB. What are you most proud of? Well, I think we have significantly restored the constitutional understanding of what, they're not being independent agencies. I think the notion that we've been able to end fiscal futility. Most people think of the one big beautiful bill as a tax cut, of which it was. It was also a major spending reform bill. We had two trillion dollars in spending cuts and savings and reforms to major, major programs. And then we had the first rescissions bill, the first pocket rescissions. So these were all executive tools that were designed to get after spending, and my message to people has been, we certainly haven't fixed our problem, but we have, we've ended the futility that existed fiscally. On DREG, 129 deregulatory initiatives for every one regulatory. Our goal he gave us was 10 to 1. So there's a ton of, a ton of successes everywhere we're looking. And I think the difference, in the first term, you kind of knew what conserved, awesome conserved things were going to happen, because you were a part of them. Now, there's things that are happening across the board that you, you know, you may not be involved in a day-in, day-out basis that you learn about, you see about, and you're just excited. Yeah, so now you're in the blue sky, white board phase, right? That's right. That's more exciting. What has surprised you the most in your now two, two times, two turns at this job? The extent to which everything can be aligned, you've got the decision made by the president, you've got an ability, political winds at your, at your back, and yet how much, particularly with the court system the way it is, you can be tic-tac-toe tacking this direction in many different ways daily to deal with litigation or the Hill. And I think, I don't think people have an appreciation for that. You also, the extent to which someone else's priority or issue of the day can all of a sudden collide into yours, and people may be on the outside and be thinking why, why are they not going faster? Because there's a host of things that happen that collide into each other. We have courts that are out of control, huge problem, and a little bit of a victory two days ago with the Supreme Court really starting to speak into their own, their own lower courts. But that, that is something that is surprising. You know, most of the time you think if there's any kind of delay, the person must not be committed to the strategic objective, and that's just not true. I'm sure you, like your boss, do not want to reveal good plans, but what still needs to be done at OMB? Well, I think, you know, the extent to which getting a hand on these bureaucracies, it's one part we're reducing them. I am NOT one of these people that says we, you know, we can just put a Republican control and have good outcomes. I believe you have to have smaller government to be able to have the, the freedom and the lack of a threat from, from the American people from one administration to the next. So we've got a lot of work to do on that front. There's still, there's a ton of regulatory reforms that we're trying to get done. You know, we're in the proposed stages on many of them. They have to be finalized, and any number of these things are litigated on a daily basis. Yeah, one of the executive orders that was, I mean, there were so many that were good, but the OIRA executive order. Can you talk a little bit about that? Yeah, I mean, that's what, that was the first thing I let off with, Ryan, is the sense of day one. I mean, this had been desired, fought for, huge priority to try to get it done in the first term. It was probably going to be the first thing the president signed if, if he had gotten another January. And what he did was he brought in all regulatory review of the independent agencies into the White House. So think of FCC, SEC, all CFPB, which I also ran for a time. All of those had previously thought of themselves as independent, which you can't find that in the Constitution. And on day one, he brought those in for policy review, cost-benefit analysis. So it was a major, major stroke for kind of constitutional government overnight. And with, with agency heads that he would then select that would lean into those. Right. And you mentioned a win in the lower courts, or really a win from the Supreme Court trying to begin the process of disciplining rogue lower courts. But there was a big win recently in the spring, or really June, with Trump v. Slaughter. This case, for those that don't know, one of Claremont's, and I know Russ Boat's, goals for a long time and research interests was this problem of presidential removal power. There was this 1935 case called Humphrey's Executor that basically said it's, the president cannot remove certain principles at FTC, FCC, whatever it may be. And this, this has really been the decision that launched the modern administrative state as we know it. And the Supreme Court finally, after chipping away at it for maybe 20 years or so, especially acutely in the last 10, they finally said it's overruled. Principal executive officers, including independent regulatory heads, can now be removed by the president. What does that mean for OMB's work? What's the, what's the plan now that you're sort of freed up in that, that area? I mean we had already basically assumed that it was not in effect by virtue of the fact that we knew where they were headed. They had had a version of it for CFP, CFPB, and we just knew that this makeup of the court, this is where they were headed. And so we, it will kind of advance the work that we're already doing and confirmed the president's approach with regard to the administrative state. So it was obviously an enormous win and I think it just preserves the wins and will allow us to also win the argument. And you see the argument in the newspapers when you see, you know, will, will Todd Blanche be independent of the president? And you're like, it's the Department of Justice. Even the Department of Justice, nowhere, I mean there are pockets of it obviously, but even like DOJ, based on Humphrey's executor, should never have thought of themselves as independent, right? That is literally just, they made it up in the newspaper and convinced people for 30, 40 years and now we're still dealing with it. So the notion that there is no independent agencies I think is a very, very important one on statute and precedent and politically to win over so that as people come in they realize, I work for a president and that president got elected on behalf of an agenda by the American people and this is not career bureaucrats that are just gonna wait us out. Yeah, you saw I think that the most revealing quote in the oral argument was from Sotomayor where she basically said, well look we've been doing it this way. Surely you can't, it can't be your position that we've got to do government differently after the last seven years. That surely can't be your position. I want to talk about the national debt. You've mentioned it, you've alluded to some of the steps that have been taken. DOJ in many ways is a way to deal with this, but there are a lot of especially older generations of Republicans and practitioners and policy professionals who've been frustrated with the lack of seriousness on both sides of the political aisle about this problem. And Chris DeMuth has written in the Claremont Review books about this for us and he points out the fact that I like to point out to them which is look there's still not a political constituency, a major political national constituency to do really serious things about this which would mean reforming entitlements and all the rest. Chris's argument is that we can fix it when the crisis comes and it's really incumbent on policy professionals working out of government and responsible citizens and statesmen to think through those arguments and then be ready to make them when the crisis comes and then maybe we can take a real chunk out of it. Do you agree with that? Are you part of it? Well there's a lot to unpack there and I certainly agree in the notion of we have to approach these as statesmen, as with politics in mind, with coalitions that will actually vote for these things and live to tell about it and I think honestly those are skill sets that I learned with Claremont but we we have approached spending matters as a side, as a movement, as accountants. I kind of jokingly call our tribe you know the propeller heads and whoever suggested that people who are good with spreadsheets should be strategists or the political coalition builders and I believe that it is possible to deal with our debt and our deficits from the standpoint of what is good policy, good politics, and the promises that the President has made to the American people and I mentioned one big beautiful bill because you know people again viewed it as a deficit buster. It wasn't. It was the first time in history we ever had anywhere near that amount of entitlement reforms. Medicaid, student loans, food stamps, work requirements on all of them. You think back to 1997 the biggest reform was a small TANF program, wildly successful, and then we put a work requirement on on these two bigger programs and you're able to say notwithstanding whatever you know budget reform or came with a paper plan, no chance of ever getting it passed, we were actually able to get it accomplished and then we were also doing things on discretionary which is what funds the bureaucracy and I think politically the notion that the country's ever going to be able to think through what is necessary to get us on a better fiscal path when you're funding all of this woke and weaponized bureaucracy, critical race theory, Department of Education, ridiculous enforcement, EPA, the notion that that's going to be possible when the the federal government that people interact with is so terrible it's just that's never been it's never occurred to people before. The final thing I would say is that there's just this notion that you do things on a bipartisan basis. The left is not voting for any of these things. I have news for people. So anyone that is in the fiscal space that is concerned about debt and deficits, a bipartisan package is not coming soon to a theater near you. So many of these were political statesmen like type questions that needed to be unraveled and have a new way of doing things. Last thing I would just say we did there was a expectation in Congress that you would vote for a dollar of non-defense for every dollar of defense. We broke that. We broke that paradigm by putting all of our increases in a reconciliation package that could alleviate the filibuster. So over and over we changed the way this town worked. We're right now in a place where the town kind of wants to go back, snap back. And you know my hope is that we're able to to keep going, that we have opportunity to make this the permanent way to do business. And then I think you build on it and you'll get more progress than you think. Yeah you have a lot of experience on the Hill. Of course I think part of the truth in Sotomayor's quote was she is right to be a little worried about the executive branch and its size these days, especially if you include the administrative state. And so Congress getting back in this game has to be a part of this reform and it's very closely linked to the spending question. So why is Congress so dysfunctional? How can we get it back to real deliberation and appropriating and none of these last-minute giant bills that nobody reads and that are it's either shut down or passed the whole thing? I think that Congress needs to be more of what Congress should do and let the executive branch do more of what it's supposed to do. So I am I think that the complexity of where we are is the branches have just kind of scrambled the decks in assume things that work for one and doesn't work for the other. All three of them. All three branches. So for instance the the congressional doesn't want really doesn't at the end of the day last 70 years does not want the responsibility of writing detailed laws and they would prefer that the trade-offs be made at the executive branch. So we do lawmaking without a vote of Congress on very complicated questions. Most of what we do regulatorily is actually law writing and trying to think through what's the what is the trade-off between these different industries and sectors and all of that should be done in Congress. Congress should write that and vote on it and get the balance much more carefully and I think if they were doing that you'd have people much more interested in staying in Congress and if you had more than two votes that were actually going to get to the president's desk. I mean I think the filibuster is a part of this. We are obviously as an administration very opposed to it. I think it's one of the biggest strategic what-time-is-it questions for the movement. Many on the right have believed and and I was a part of many of these efforts that it was used to to stop liberalism. I do not believe that is the case. I believe that it is standing in the way of building on incremental or transitory success into permanent success. An EO needs to become a statute. That statute cannot occur if we have the filibuster. All of our biggest wins are either based on anti-filibuster principles like reconciliation or getting into office with that in a nomination process that no longer has the filibuster. I would never be in OMB director for two different terms if we had a filibuster and so that is still something that we're challenging as a paradigm that I don't believe Congress will be what it should be and can be if the filibuster is in place. I think the generational turnover is helping us get closer to fixing this problem. In the Congress? Just in terms of partisan, well the turning changing of the guard generationally. New congressmen especially now it's been 10 years since Trump first won office and the whole movement has shifted in many ways with him. I definitely I think it's not necessarily an age thing but I believe that there is a there is a worldview that comes along with the president's viewpoints that when he first came on the scene people are like this isn't conservatism. I believe this is conservatism. This is an older version of conservatism than the one that was largely unchallenged. I don't believe is necessarily durable to save the country but as people kind of grapple with that and figure it out and come out the other side and say you know this makes sense that that those generational swings in people getting it and coming into office certainly is is is one of the reasons we're able to go faster and farther. I mean just just to give you one small example first term your average lawyer go to the DOJ thought they wouldn't depend on the president including your AGs. So you know even just there you have an example of what a changing the guard under this administration is accomplishing. Yeah no in many ways the first post-war president to try to really go after the administrative state Nixon. The circumstances of his resignation and and all that is really when we started to get this very modern myth that DOJ is somehow this roving independent law enforcement agency when really the head law enforcement officer in the United States is the president. Yes I mean many of these things occurred post Watergate. Yeah yeah if I may just indulge myself and my institution for our last question. You were a 2011 Lincoln fellow you have some colleagues who've done our programs. What did that fellowship mean to you at that point in your career? It's now a long time ago. Yeah I mean it was an enormous learning time for me. You know I loved the week that I spent with your professors. It honestly became a multi-year process where you'd finally start to take this book, get down with it, get finished Cote d'Ivoire, finish Jaffa. But it for me it took the the budget the policy reading that I had been doing you know your typical American history and I transitioned it into what a statesman should look like. Challenge the notions about ideologies in the sense of this is our conservative policy framework and we will put it into motion as opposed to like how much can you actually get done in that moment within those politics of the time. Right. And I think that those are the fun questions to think through and have those types of histories unpacked for us and I've loved it. I think it's been one of those educational feasts and intellectual journeys that I wouldn't be where I am without it. Yeah some of our supporters asked well you're really gonna change everyone's lives in eight days. I think you've you've proved my point to them often which is well it's our introduction to them and we plant a lot of seeds. That's right. The trees grow and bear a lot of fruit and you're a wonderful example of that. Thanks Ryan. Thanks Russ. Absolutely. Appreciate it.