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Speaker 1: Bloomberg Audio Studios, podcasts, radio news.

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Speaker 2: For over a decade, Barbara Hoblitzel worked at the Department

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Speaker 2: of Education. Most recently she was in the Office of

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Speaker 2: Legislation and Congressional Affairs, and in that job she spent

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Speaker 2: a lot of time talking to people on Capitol Hill.

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Speaker 2: Early last year, Barbara started hearing there would be layoffs

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Speaker 2: in the department, and.

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Speaker 1: Of course it was very hard to get a straight

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Speaker 1: story in terms of who is being impacted in what way.

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Speaker 2: Almost all Education Department offices were slashed, including the Office

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Speaker 2: of Indian Education, which funds tribal schools and provides grants

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Speaker 2: to support indigenous education. When that office announced it was

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Speaker 2: laying off employees, Barbara says she got a call from

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Speaker 2: a Republican senator's.

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Speaker 1: Office and they were like what.

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Speaker 2: She says, that senator was getting a lot of angry

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Speaker 2: feedback from constituents.

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Speaker 1: We're hearing these terrible stories, and you know, do they

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Speaker 1: under stand who is served by these programs? And you know,

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Speaker 1: to hear that from a Republican office, it was like,

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Speaker 1: so nobody talked to you. Huh.

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Speaker 2: For Barbara, that exchange was the first inkling of what

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Speaker 2: was to come. At the Department of Education.

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Speaker 1: It sounds strange as in that Department of Education, we're

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Speaker 1: going to eliminate it, and everybody knows it's right.

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Speaker 2: In March, President Donald Trump signed an executive order to

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Speaker 2: begin shutting down part of the department, and in the

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Speaker 2: first year of his second term, his administration cut the

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Speaker 2: Department's workforce by forty percent, with the stated goal of

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Speaker 2: making the department obsolete, which concerns people like Barbara.

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Speaker 1: That impacts students, It impacts faculty, and impacts staff. It

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Speaker 1: impacts the nation across all education, and I don't think

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Speaker 1: there's a real appreciation for just how much these programs

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Speaker 1: touch individual lives.

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Speaker 2: I'm David Garrett, and this is the big take from

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Speaker 2: Bloomberg News Today on the show, Inside the Trump Administration's

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Speaker 2: efforts to gut the Department of Education, how it plans

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Speaker 2: to reshape an agency that serves nearly every American student

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Speaker 2: and school, and put its approach provide a blueprint for

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Speaker 2: how the administration handles other agencies whose work it opposes.

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Speaker 2: The Department of Education is housed in a sprawling building

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Speaker 2: just off the National Mall. Back in September, Liam Knox,

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Speaker 2: an Education reporter for Bloomberg paid it a visit.

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Speaker 3: Walking through the halls there, it's a very quiet place

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Speaker 3: right now. There's a lot of empty cubicles and offices

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Speaker 3: without name placards outside the door. Signs of massive reduction.

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Speaker 3: It's viscerally apparent when you step inside the building.

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Speaker 2: State and local offices have primary control over curricula, educational priorities,

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Speaker 2: and the vast majority of school funding. But the Federal

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Speaker 2: Department of Education has a few main tasks, like making

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Speaker 2: sure programs that receive its funding comply with civil rights laws,

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Speaker 2: investigating complaints, and increasing access to education.

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Speaker 3: And then, of course, its primary responsibility is basically as

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Speaker 3: being a bank for the massive student loan portfolio that

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Speaker 3: they manage.

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Speaker 2: When Congress created the Federal Department of Education in nineteen

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Speaker 2: seventy nine, there was no single department that oversaw all

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Speaker 2: of this, and the decades leading up to then were

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Speaker 2: a busy time for American education policy.

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Speaker 3: The point was to consolidate a whole raft of federal

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Speaker 3: programs that had been created during a pretty turbulent historical

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Speaker 3: period for federal involvement in education that came with the

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Speaker 3: Civil rights movement, that came with President Johnson's were on

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Speaker 3: poverty about ensuring equal access to education, equal treatment within

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Speaker 3: the American education system in a way that just the

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Speaker 3: federal government had never been involved to that extent before.

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Speaker 2: Think of the Supreme Court's ruling in Bread versus Board

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Speaker 2: of Education that declared racial segregation unconstitutional and tasked the

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Speaker 2: federal government with enforcing integration.

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Speaker 3: You had school bussing, You had all sorts of new

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Speaker 3: federal aid programs, tell and other grant programs to support

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Speaker 3: students and schools that were disproportionately underfunded.

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Speaker 2: In nineteen seventy nine, President Carter pressed Congress to establish

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Speaker 2: a Department of Education to put all those programs in

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Speaker 2: a new cabinet level home.

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Speaker 3: This was a divisive political move at the time. Ronald

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Speaker 3: Reagan campaigned in part on taking it apart right away.

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Speaker 3: It was seen as another example of federal bureaucratic overreach

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Speaker 3: into local decision making about what students go to what schools,

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Speaker 3: and there was a lot of saber rattling about the

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Speaker 3: encroachment there.

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Speaker 2: That saber rattling continued for decades. The heart of the

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Speaker 2: argument was a common Republican refrain that the federal government

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Speaker 2: size and influence should shrink to empower local districts and

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Speaker 2: state governments. But only Congress can fully dissolve a cabinet

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Speaker 2: level agency, So the executive branch can't do away with

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Speaker 2: the Department on its own, but it can make cuts,

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Speaker 2: big cuts.

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Speaker 3: At its peak, when Carter created it was over six

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Speaker 3: thousand employees. Reagan cut it down substantially, and it's just

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Speaker 3: its first couple of years to around forty five hundred employees,

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Speaker 3: which is where it maintained a relatively stable level. I

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Speaker 3: think it went down to the high three thousands under

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Speaker 3: Trump's first term. Biden staffed it up again. But regardless,

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Speaker 3: throughout its history, it's been the smallest cabinet level agency

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Speaker 3: in the federal government, and it's not even close in

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Speaker 3: terms of personnel. In terms of budget and funding, a

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Speaker 3: lot of that money is distributed in Grant's two school districts.

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Speaker 3: It's distributed through organizations that work with students on the ground. Obviously,

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Speaker 3: the biggest piece of the Education Department is the student

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Speaker 3: loan portfolio, which is about one point six one point

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Speaker 3: seven trillion dollars. But this is not money that is

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Speaker 3: put into the bureaucracy of the Education Department. It's money

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Speaker 3: to be distributed out throughout the country. When you look

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Speaker 3: at the actual Education Department's budget and personnel, it's in

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Speaker 3: fact about as small as a federal agency can get.

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Speaker 2: Critics argue that the department, small though it is relative

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Speaker 2: to other agencies, still has bureaucratic fat to trim, and

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Speaker 2: no president has taken that argument as far as President Trump.

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Speaker 2: In his second term, his administration has set out to

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Speaker 2: cut the department as much as is legally possible, using

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Speaker 2: a familiar strategy.

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Speaker 3: It's strikingly similar to how a company kind of entering

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Speaker 3: bankruptcy or entering into a period of austerity might manage

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Speaker 3: its decline.

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Speaker 2: Step one bringing a new leader, and in this case

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Speaker 2: that's Secretary of Education Linda McMahon.

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Speaker 3: President Trump has a history of appointing business people to

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Speaker 3: lead his executive agencies. Linda McMahon has some education ext

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Speaker 3: experi and she was on the Connecticut school Board for

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Speaker 3: about a year, but largely she's a businesswoman. She ran

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Speaker 3: his small business administration during the first term. Obviously, the

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Speaker 3: former CEO of World Wrestling Entertainment and oversaw two decades

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Speaker 3: of pretty tremendous growth, as well as lots of acquisitions

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Speaker 3: and mergers and consolidations in that industry as it changed rapidly,

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Speaker 3: and in my discussions with senior officials at the department,

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Speaker 3: it's clear that that business experience is what is guiding

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Speaker 3: her as she moves toward what she's called her final mission,

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Speaker 3: putting herself and her staff out of a job.

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Speaker 1: The President made it very clear when he hired me

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Speaker 1: to do this job that he wanted me to be

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Speaker 1: the last Secretary of Education.

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Speaker 3: The formal dismantling of the department came almost immediately after

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Speaker 3: Secretary McMahon was confirmed by the Senate. About a week later,

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Speaker 3: she sent out reduction of force notices to nearly half

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Speaker 3: of the department's staff over thirteen hundred people, and continued

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Speaker 3: cutting the staff in other ways early retirement buyout offers,

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Speaker 3: voluntary severance packages, deferred resignation offers, and then the obvious

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Speaker 3: kind of attrition that can come with the chaos and

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Speaker 3: the precarity of a department that you know, if your

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Speaker 3: boss says it's time to shut down, then maybe for

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Speaker 3: good reason, you're thinking, oh, maybe it's time for me

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Speaker 3: to leave.

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Speaker 2: Over six hundred employees have taken voluntary buyouts or chosen

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Speaker 2: to retire early, including Barbara Hoblitzel, who handed in her

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Speaker 2: resignation in April.

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Speaker 1: Now, as a career staffer, your job is to help

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Speaker 1: the administration, whomever it is, advance their agenda. And there

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Speaker 1: were just elements of the agenda of this administration that

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Speaker 1: I felt I couldn't in good conscience advance.

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Speaker 3: Linda McMahon, the Education Secretary. Her slogan for dismantling the

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Speaker 3: department is returning education to the States.

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Speaker 1: Education is local. It should be overseen locally by those

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Speaker 1: who best know local needs.

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Speaker 3: Some people say that that is exactly what they're doing

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Speaker 3: and should be doing. Others say it's a bit of

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Speaker 3: a euphemism. The truth is local school districts, state governments

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Speaker 3: are responsible for the vast majority of funding, decision making

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Speaker 3: and governance at schools, at universities, and so when they

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Speaker 3: say that they want to return education of the States,

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Speaker 3: there's an extent to which it's already there. But I

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Speaker 3: think the argument is that even those grant programs, even

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Speaker 3: that money that is at the federal government is you know,

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Speaker 3: when it's managed from on high, from DC, it's managed poorly.

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Speaker 3: That would be what Trump administration officials would say, I.

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Speaker 2: Think a lot of us are familiar with this product

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Speaker 2: that the Heritage Foundation, this conservative thing tank put out

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Speaker 2: now a couple of years ago, Project twenty twenty five.

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Speaker 2: President has tried to disavow himself from it. But when

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Speaker 2: you thumb through that document and look at what was

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Speaker 2: written about the future of the Department of Education, how

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Speaker 2: much of what's in there has come to pass here

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Speaker 2: in the second term of President Trump's administration.

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Speaker 3: Quite a lot of it. There's good reason for that.

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Speaker 3: Lindsay Burke, who wrote the section on education in Project

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Speaker 3: twenty twenty five, is a senior policy advisor to McMahon

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Speaker 3: at the department. The three step plan, broadly outlined in

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Speaker 3: the Heritage Foundation's Project twenty twenty five, is being followed

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Speaker 3: fairly closely by the administration. It starts with sweeping layoffs.

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Speaker 3: We saw those last year. There's a lot of indicators

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Speaker 3: to say that we will see more to come this year.

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Speaker 3: The next step is to take the pieces of the

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Speaker 3: Department that they want to preserve and moving them into

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Speaker 3: other federal agencies.

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Speaker 2: Like moving programs for students with special needs to health

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Speaker 2: in human services or career training to the Department of

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Speaker 2: Labor moving the one point seven trillion dollars student loan

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Speaker 2: portfolio to the Treasury Department.

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Speaker 3: That's a big move that they are still in planning

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Speaker 3: mode on, but that is their goal. By the end

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Speaker 3: of this they've already started to move huge chunks funding

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Speaker 3: from the offices of post secondary and elementary education into

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Speaker 3: the Department of Labor. There's a real kind of idea,

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Speaker 3: both in the Project twenty twenty five and in the

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Speaker 3: Trump administration that managing education and outcomes should be a

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Speaker 3: lot more tied to employment, to the workforce, to the economy,

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Speaker 3: and less just about education as a more abstract goal.

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Speaker 2: As more programs and staff shift to other federal agencies,

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Speaker 2: the Education Department will continue to shrink until it's small

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Speaker 2: enough to potentially disappear altogether.

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Speaker 3: The final step in Project twenty twenty five is to

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Speaker 3: take whatever's left and basically to convince Congress to act

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Speaker 3: the whole thing.

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Speaker 2: So, how smoothly has the rollout of that plan gone,

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Speaker 2: and what would it mean for the US if there

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Speaker 2: isn't a Department of Education? That's next? The Heritage Foundations

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Speaker 2: three part planned to cut the Department of Education offers

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Speaker 2: a clear blueprint to the Trump administration, but Bloomberg's Liam

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Speaker 2: Knox says actually implementing that plan has come with challenges,

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Speaker 2: Starting with those mass layoffs.

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Speaker 3: There have been a number of core cases challenging these

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Speaker 3: reductions in force. Some of them have been allowed to proceed,

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Speaker 3: others have been overturned. There were two hundred and sixty

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Speaker 3: employees at the Office for Civil Rights who were fired

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Speaker 3: last March and then placed on it paid administrative leave,

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Speaker 3: pending a court case over the legality of their dismissal

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Speaker 3: because they fulfilled sort of congressionally mandated roles. Because of

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Speaker 3: the way that it was carried out. Specifically, there's a

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Speaker 3: process and often it takes a lot longer than a

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Speaker 3: couple of weeks, and those employees were kind of sitting

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Speaker 3: in limbo for most of twenty twenty five.

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Speaker 2: Until last month when the department reinstated them.

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Speaker 3: And so they're all back and working at the department now.

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Speaker 3: That's not to say they won't be laid off again

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Speaker 3: in the near future, or that those firings are not

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Speaker 3: the goal of the department eventually, but they've had a

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Speaker 3: lot of hiccups and it's cost them a lot of money.

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Speaker 3: There was a recent Government Accountability Office report that put

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Speaker 3: the cost of having all of those employees not working

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Speaker 3: but being paid receiving benefits at anywhere from twenty eight

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Speaker 3: to thirty eight million dollars last year.

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Speaker 2: For people who rely on programs or grants that used

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Speaker 2: to fall under the Education Department, all that shuffling to

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Speaker 2: new agencies has created new challenges.

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Speaker 3: Some of these offices that manage tens of thousands of

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Speaker 3: grant programs have been slashed by you know, fifty eighty percent.

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Speaker 3: Even that makes it a lot harder to be responsive

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Speaker 3: to school districts that have questions, that have concerns, that

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Speaker 3: are advocating for themselves, maybe that are applying for new grants.

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Speaker 3: The staff that I've spoken to say, you know, it's

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Speaker 3: not that there has been, you know, a stanching off

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Speaker 3: of the flow of federal money into school districts or

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Speaker 3: into organizations that help students, but rather that the kind

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Speaker 3: of turbulence of it all has made it difficult for grantees,

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Speaker 3: for school leaders to deal with, and especially for students

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Speaker 3: and families.

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Speaker 2: One employee told Liam that grantees have been hesitant to

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Speaker 2: reach out with questions or to raise problems for fear

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Speaker 2: of attracting the administration's attention and putting their programs at risk,

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Speaker 2: and all these changes, all that makes it difficult for

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Speaker 2: the existing infrastructure and the department staff to serve the

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Speaker 2: communities that rely on them.

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Speaker 3: Nowhere is that more true than at the Office for

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Speaker 3: Civil Rights, where the education departments remit, which is to

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Speaker 3: investigate and resolve complaints about discrimination, harassment, things that really

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Speaker 3: affect student's ability to get a good quality education. The

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Speaker 3: rate at which those are being taken up and being

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Speaker 3: resolved is lower than ever.

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Speaker 2: During the first year of Trump's presidency, only two racial

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Speaker 2: harassment complaints were resolved. In twenty twenty four, that number

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Speaker 2: was twenty five. If you have Congress continuing to approve

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Speaker 2: a budget, and you have programs and sometimes staff being

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Speaker 2: moved to these other departm I guess I hear that

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Speaker 2: wonder is sort of what's changed as a result of that.

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Speaker 2: I mean, we're still kind of funding and financing, we

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Speaker 2: tax players, still funding and financing a lot of these

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Speaker 2: programs in this staff. What is the administration's response to that?

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Speaker 3: Secretary of McMahon has talked about that strategy as being

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Speaker 3: a kind of proof of concept for Congress. A lot

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Speaker 3: of Republicans in Congress are nervous about the idea of

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Speaker 3: eliminating the Education Department completely. Does not have the support

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Speaker 3: that the administration would need to get it done legislatively

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Speaker 3: as they have to, and so this is a way

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Speaker 3: for the Department to show, hey, we're still going to

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Speaker 3: fund these programs that your constituents really care about, like

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Speaker 3: pell grants, like Title I. But we're just we just

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Speaker 3: doesn't have to actually be at the Education Department. For

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Speaker 3: skeptical lawmakers, it's going to take a little while to prove.

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Speaker 2: That Congress seems committed to education funding. Its latest budget

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Speaker 2: maintained or increased funding for nearly all education programs despite

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Speaker 2: the staff cuts, and Trump's One Big Beautiful Bill actually

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Speaker 2: increase the scope of the department its responsibilities. It established

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Speaker 2: a new pel grant program for workforce training credentials and

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Speaker 2: new earnings tests for colleges to qualify for federal aid.

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Speaker 3: And so there is a disconnect there. And their plan

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Speaker 3: right now is to keep the policy shops at the

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Speaker 3: Education Department, but take the oversight and management of the

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Speaker 3: budgets as well as most of the staff that actually

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Speaker 3: do that practical day to day work and detail them

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Speaker 3: to other agencies to show that it can be done there.

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Speaker 2: So effectively, to cleave the policy side of things from

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Speaker 2: the operations side of thing.

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Speaker 3: Yes, I don't think they would use the word cleave,

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Speaker 3: but a lot of their critics certainly would and would

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Speaker 3: say that once you move a program into a different office,

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Speaker 3: into a totally different department, one of the goals of

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Speaker 3: having all of these programs consolidated under an education department

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Speaker 3: is that their success would be measured in terms of

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Speaker 3: educational outcomes educational access by people who are experts in

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Speaker 3: education policy, and not by departments where the policy goals

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Speaker 3: are different. At the Department of Labor are very different

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Speaker 3: than the Department of Education. At the Treasury Department running

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Speaker 3: the student loan portfolio, there might be a lot that

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Speaker 3: changes in terms of the perspective with which that's run.

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Speaker 3: It's run more like an actual bank. So yes, that

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Speaker 3: cleavage I think is concerning some people. The administration would

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Speaker 3: say that it shouldn't make a difference.

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Speaker 2: The Trump administration is not currently seeking to eliminate any

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Speaker 2: other cabinet level agencies, but liam says the playbook it's

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Speaker 2: used with the Department of Education could be replicated on

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Speaker 2: other parts of the federal government the administration doesn't support.

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Speaker 3: For example, like the Consumer Finance Protection Bureau, which Russ vought.

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Speaker 3: Trump's kind of cizar of Management and budget at the

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Speaker 3: executive Agencies has argued for defunding completely. Again, that is

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Speaker 3: a congressionally mandated agency that if they want to gut

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Speaker 3: it significantly, they're going to have to find creative workarounds,

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Speaker 3: just like they're doing at the Education Department. And so

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Speaker 3: if the administration wants to do things by executive decree,

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Speaker 3: they're going to need to find ways to do that

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Speaker 3: that don't contradict with the authority of Congress, with law

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Speaker 3: as it's already been passed, because they just don't have

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Speaker 3: the votes to do it otherwise, at least not right now.

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Speaker 3: And those kinds of creative workarounds getting rid of certain programs,

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Speaker 3: especially getting rid of programs that the administration has said

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Speaker 3: it views as borderlining legal programs whose goals aligned with diversity, equity,

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Speaker 3: and inclusion. It could certainly be a template for hacking

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Speaker 3: away at those pieces of the federal bureaucracy.

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Speaker 2: This is the big take from Bloomberg News I'm David

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Speaker 2: gurat To get more from The Big Take and unlimited

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Speaker 2: Thanks for listening, We'll be back tomorrow.

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Speaker 1: Hello,