While campaigning for Donald Trump in October, Elon Musk claimed he could slash “at least $2 trillion” in government spending. Now that Musk has started laying the groundwork for his so-called “Department of Government Efficiency,” or DOGE, he’s not as confident.
“We’ll try for $2 trillion. I think that’s like the best-case outcome,” the Tesla (TSLA+0.15%) and SpaceX CEO told former Microsoft (MSFT+0.52%) executive and political strategist Mark Penn on Wednesday night. “I think if we try for $2 trillion, then we have a good chance of getting $1 [trillion].”
After Trump’s election win, the president-elect tapped Musk and billionaire entrepreneur Vivek Ramaswamy to lead DOGE, a non-government body that will make recommendations to Trump and Congress for cutting federal spending.
The federal government spent more than $6.7 trillion last fiscal year. Social Security, Medicare, and other payments related to health were among the top lines in the federal budget, along with interest payments and defense spending.
Musk’s $2 trillion target was lauded by allies but was largely dismissed as unrealistic, especially given Republican lawmakers’ repeated opposition to slashing Social Security and Medicare. Trump has also promised “no cuts” to Social Security.
Ramaswamy has also said that DOGE won’t cut either program but will look for waste and fraud. Musk, on the other hand, has warned of “temporary hardship” as a result of cost-cutting.
When asked on Wednesday, Musk declined to name any specific targets he has in mind for DOGE, pointing to the broader federal government as being a “very target-rich environment for saving money.”
In the past, Musk and Ramaswamy have said they plan to take aim at remote work for federal employees, non-government organizations, and regulations they deem burdensome.
In a November editorial, they criticized funding for the entity supporting the Public Broadcasting Service and National Public Radio, reproductive healthcare provider Planned Parenthood, and international organizations. Federal agencies could also be on the chopping block, especially the Department of Education, which Ramawsamy has frequently criticized.
Both Republican and Democratic lawmakers have expressed interest in helping the group, although the newly formed Congressional DOGE caucus is still overwhelmingly dominated by Republicans. Each lawmaker has their own targets in mind.
California Democratic Rep. Rho Khanna plans to target defense spending, as does Independent Sen. Bernie Sanders of Vermont. Iowa Republican Sen. Joni Ernst, who is leading the DOGE Caucus in the Senate, has called for cuts to funding for electric vehicle charging stations and for the government to sell “thousands” of vacant or underutilized buildings.
Even if DOGE’s efforts don’t result in Musk’s $2 trillion goal, he said there’s still a way to help Trump achieve “an epic outcome.”
“If we can drop the budget deficit from $2 trillion to $1 trillion and free up the economy to have additional growth, such that the output of goods and services keeps pace with the increase in the money supply, then there will be no inflation,” Musk said.
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