During a campaign rally for presidential candidate Donald Trump at Madison Square Garden, Elon Musk suggested that he could cut $2 trillion in federal spending. Trump has already endorsed creating a position for Musk in a "department of government efficiency" that would allow Musk to make cuts to government spending.
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At the rally, Musk addressed a question about "ripping out waste" from the Biden administration's budget. Musk replied with, "Well I think we can do at least $2 trillion." He added, "Your money is being wasted, and the department of government efficiency is gonna fix that. We’re gonna get the government off your back and out of your pocketbook."
Musk's proposal reflects his long-standing advocacy of streamlined government operations. Throughout Trump's campaign, Musk has stood as a symbol for cuts to government spending.
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However, Musk's involvement in this initiative does have its controversies. His companies, Tesla and SpaceX, have received billions of dollars in federal contracts, including electric vehicle tax credits and government infrastructure support. Critics argue that this could present a conflict of interest if Musk leads a commission tasked with reducing government spending.
Brian Riedl, a senior fellow at the Manhattan Institute, told the Washington Post, "The idea that one can cut $2 trillion in wasteful and unnecessary programs is absolutely absurd. There's a long history of the fantasy that one smart businessman will just identify trillions in waste, but that's just not how it works."
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Federal spending in fiscal year 2024 reach $6.75 trillion, according to the U.S. Treasury. Musk's proposed $2 trillion cut is almost one-third of this spending, but many are concerned that in order to achieve a severe slash in budget like this, much-need government services will be impacted.
Key budget expenditures include $1.46 trillion on Social Security, $874 billion on Medicare, and $874 billion on national defense. Musk's announcement has sparked questions about which services could be reduced and what the impacts of a cut that large would realistically look like.
Throughout his campaign, former President Trump has focused on economic policies that can help reduce government spending, though he has not specified which government programs would face cuts. He has proposed tax cuts for Social Security and other areas, leaving economists to voice their concerns about how such cuts could potentially raise the federal deficit.
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In contrast, Vice President Kamala Harris has outlined economic proposals that prioritize expansions in tax credits and reductions in prescription drug prices. She has also proposed increased taxes on high-income earners and corporations as a solution to fund these initiatives.
Harris's approach also faces widespread scrutiny. However, the Committee for a Responsible Federal Budget estimates that Harris's plans would increase the national debt by $3.95 trillion by 2035 and that Trump's policies would increase the national debt by $7.75 trillion in that same timeframe.
Musk's ambitious target of cutting $2 trillion from federal spending has brought about broader questions about how to balance government efficiency while also continuing to provide essential public services.
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