Hey everybody. Welcome back to the Elon Musk
Podcast. This is a show where we discuss
the critical crossroads that shape SpaceX, Tesla X, The
Boring Company, and Neurolink. I'm your host, Will Walden.
So how does Elon Musk plan to cut $2 trillion from the federal
budget? Is it realistic or will it lead
to a collapse of our vital services in the United States of
America? And can his involvement with the
Trump administration really make it happen, or will conflicts of
interest get in the way? Now Elon Musk has flow to the
idea of trimming $2 trillion from the US federal government
spending during a speech at a Trump rally in New York City
last month. Now he has been appointed to Co
lead the newly established Department of Government
Efficiency, or DOGE, by president-elect Donald Trump.
This appointment gives Musk an opportunity to test his
ambitious claims, but it's unclear how feasible his
proposals are or what impact they might have on the
functioning of the US government now.
In the fiscal year of 2023, the US federal government spent
approximately $6.25 trillion, according to the US Treasury.
In Musk's goal of slashing, $2 trillion would amount to a
reduction of nearly 30% in federal spending now.
For context, mandatory expenditures such as Social
Security, Medicare and interest payments on national debt
constitute a significant portion of that budget, making them
difficult to cut without legal changes or risking severe
political backlash. Now, interest payments alone
accounted for about $880 billion at 13% of the total, while
Social Security made-up 1.46 trillion, or 22% of that.
Now, discretionary spending, which is subject to annual
congressional approval, comprised roughly 25% of the
budget in 2023. This category includes defense
874 billion, transportation, 137 billion and education 305
billion. More than half of discretionary
spending is allocated to defense and area.
Trump has pledged to expand, not cut through, initiatives like a
new missile defense system. Now, given the makeup of the
budget, targeting only spending for Musk's proposed cuts would
require dismantling entire agencies or eliminating major
programs, a strategy unlikely to gain widespread political
support. Now, Trump announced that Musk
would be working alongside entrepreneur Vivek Ramaswamy as
Co leaders of DOGE. Their primary objective is to
identify and eliminate waste in federal spending by reducing
bureaucratic inefficiencies, cutting reduction regulations
and streamlining government operations.
However, experts warned that the new departments advisory role
without direct executive power could limit its effectiveness.
They said there's the executive branch that might be in the way,
the Congress might be in the way.
The Constitution is a bit of an obstacle coming at Douglas Holtz
Eakin, president of the American Action Forum.
Now, Musk's track record is reducing operational cost, of
course. It's notable, particularly an X,
where he slashed the workforce from 8000 people to 1500 people
after acquiring the company. However, applying similar
methods to government agencies could prove more challenging,
given the complexities of federal regulations and legal
constraints of the US. Federal government operates
under a labyrinth of rules, and sweeping reforms would require
approval from Congress, where previous attempts at smaller
budget cuts have faced significant hurdles.
In 2022, Republican lawmaker struggled to pass legislation
cutting just $130 billion from discretionary spending.
Even with the GOP controlled Congress, any substantial
reductions to the budget would face resistance, especially from
lawmakers concerned about the potential impacts on essential
services. Additionally, Donald Trump
campaigned on promises to enhance Social Security benefits
by removing income tax on them, which would likely increase, not
decrease federal expenditures in that area.
Now the DOGE department, the new department will reportedly
partner with the Office of Management and budget, the OMB
to pursue structural reform. But the goal of completing their
work by July 4th of 2026. Now Trump described the
initiative as potentially the Manhattan Project of our time,
signaling its ambitious scope. The department's official
account on X has already begun messaging its goals to the
public, stating working overtime to ensure your tax dollars will
be spent wisely. Now, despite this enthusiasm,
many analysts remain skeptical. Sounds to me like an outside
Commission that will give OMB recommendations on what they
should do to improve government efficiency, and as such its
powers are entirely advisory now without formal authority, the
commission's recommendations may be easy for other parts of the
government to just ignore. Musk's close relationship with
the Trump could provide the Commission some influences.
The billionaire spent election night at Trump's Mar A Lago
estate and has been involved in several meetings with the
president-elect and Republican lawmakers.
However, this connection also raises concerns about potential
conflicts of interest. Tesla, SpaceX and other Musk
owned companies hold substantial contracts with federal agencies
including NASA, the Department of Defense, and critics argue
that Musk's dual roles as a tech CEO and government advisor could
lead to bias recommendations that favor his own business
interests. Ethics experts have pointed out
that for Musk to comply with federal conflict of interest
laws, he would need to either divest from his companies or
recuse himself from discussions involving agencies where his
businesses have dealings. However, since DOGE is
technically just an Advisory Board created by the president
rather than Congress, it might skirt standard ethics rules,
leaving questions about oversight and accountability.
If it's Commission, it's outside the government, then the
president takes the advice or he doesn't.
Now, Tesla's frequent disputes with regulatory agencies like
the National Hwy. Safety Patrol exemplify the
potential conflicts. The NHTSA has mandated recalls
and open investigations into Tesla vehicles or safety
concerns, actions that Musk has publicly criticized as
overreach. Now, a Government Efficiency
Commission Co led by Musk could propose cuts to regulatory
bodies like NHTSA, potentially limiting their ability to
enforce safety standards and directly benefit Tesla.
Now SpaceX, Muska's rocket company, also faces regulatory
scrutiny, particularly from the FAA.
Delays to Spacex's Starship program have been attributed to
FAA reviews, which Musk has argued are excessive.
And Spacex's contracts with NASA and the Department of Defense
total billions of dollars. And any budgetary or regulatory
changes recommended by DOGE could impact these projects.
No X has faces own challenges, including ongoing investigations
by the Federal Trade Commission of the FTC and the Securities
and Exchange Commission of the SEC.
Since taking control of the platform, Musk has overhauled
its operations and content policies, drawing criticism for
potentially prioritizing his political views over consumer
protection and transparency. His public endorsements of Trump
and active promotion of pro Trump content on X have fueled
concerns about the platform's neutrality during the election
season. And while Musk has described his
involvement with DOGE as an effort to delete the mountain of
choking regulations, legal experts warn that if he directly
participates in decisions affecting his own businesses, he
could violate federal ethics laws unless he receives a waiver
from the president. Now, such waivers have been very
rare and controversial in the past.
Now, environmental issues may also pose a challenge to Musk's
plans. His AI venture XAI is building a
supercomputer facility in Memphis, TN, which has drawn
criticism from environmental groups due to its reliance on
gas turbines and its location near predominantly Black
neighborhoods. The Environmental Protection
Even Agency, or the EPA, has been urged to investigate the
potential health impacts of this project, which could complicate
any attempts by DOGE to propose cuts to environmental
regulations. Now, despite these concerns,
Musk and Ramaswami seem determined to push forward with
their vision for reducing government waste.
Musk's social media presence suggests he plans to keep the
public engaged, even promising a leaderboard for the most
insanely dumb spending of your tax dollars.
Whether his approach will resonate with viewers and voters
or translate into meaningful policy changes remains to be
seen. And while the DOGE initiative
has garnered significant attention, its ultimate success
will hinge on the willingness of Congress and the White House to
adopt its recommendations. Without a clear legal mandate or
bipartisan support, the department may struggle to
implement its goals. For now, the debate over Musk's
appointment in the feasibility of its proposed cuts is likely
to dominate discussions in Washington, highlighting the
challenges of balancing efficiency, transparency and
ethical governance. Hey, thank you so much for
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