President-elect Donald Trump put billionaire Elon Musk, Tesla’s chief executive, in charge. While Trump has said little about how this group would operate, .
Musk, the world’s richest person, will head the new panel alongside former Republican presidential candidate Vivek Ramaswamy. See how this can work.
What does Musk want to cut?
Musk told a Trump rally at Madison Square Garden in October that the federal budget could be reduced by “at least” $2 trillion. This ambitious goal exceeds total discretionary spending, including defense spending, which is estimated at $1.9 trillion out of a total of $6.75 trillion in federal spending for fiscal year 2024, according to the Budget Office. of Congress.
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Musk, whose companies include electric vehicle maker Tesla and commercial space company SpaceX, has extensive federal contracts for rockets and other space operations with NASA and the Pentagon.
Musk has also been in trouble with several federal regulators. The Federal Aviation Administration has influence over SpaceX’s rocket launches, and the Environmental Protection Agency has fined the company for pollution near a launch site in Texas.
The National Highway Traffic Safety Administration is investigating autonomous driving functions in Tesla cars. The Securities and Exchange Commission disciplined Musk for a 2018 tweet about Tesla’s delisting.
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Ramaswamy, who founded the pharmaceutical company Roivant Sciences, worked with the Food and Drug Administration (FDA), which he called “corrupt.” On the social networking site X, he wrote in 2023: “Countless FDA regulations and actions are hypocritical, harmful and unconstitutional.”
What did Musk and Trump say about the panel?
In a statement Tuesday, Trump said the panel would “provide advice and guidance from outside the government” to shrink the government, cut regulations, decrease spending and restructure federal agencies.
Trump wants to abolish the Department of Education, giving states greater control over education. He also wants to drastically curtail the “deep state” — career federal employees who he says are clandestinely pursuing their own agendas.
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Trump and Musk have suggested the panel will make drastic cuts. However, the US Constitution gives Congress power over the federal budget. Congress can accept or disregard recommendations from outside panels, such as the proposed efficiency group.
In an attempt to be transparent, Musk said the panel will publish its “actions” for public comment.
What is the precedent for the efficiency panel?
In February 1982, former President Ronald Reagan announced that he would form a group of private sector experts to recommend ways to eliminate inefficiency and waste.
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In June of that year, his decree formed a panel that became known as the Grace Commission, named after its chairman J. Peter Grace, former chief executive of WR Grace and Co.
Grace raised money to fund the initiative through a foundation. About 150 business leaders volunteered on an executive committee that oversaw 36 Grace Commission task forces that analyzed agencies or functions.
The Commission issued a report in January 1984 with 2,500 recommendations. The task forces also produced reports.
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“Most of the recommendations, especially those that required congressional legislation, were never implemented,” the Reagan Library said.
After purchasing social media app Twitter, Musk laid off about 3,700 employees, half of his workforce. Revenue declined as advertisers cut spending, and then hundreds of other employees resigned.
He later renamed the social network “X,” but the site’s valuation plummeted under his ownership.
Musk has had much more success with SpaceX. Its Falcon 9 rocket has reduced launch costs thanks to reusability. This gave rise to new satellite markets, giving rise to the company’s fast-growing Starlink constellation, which disrupted the established satellite communications industry and helped shape modern military strategies.
SpaceX is now a major defense contractor.
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