EY TAKEAWAYS
Elon Musk said Wednesday that his goal of cutting $2 trillion in government spending may be a difficult number to reach, with half that figure more likely.
Musk said in an interview that cutting waste in the federal government is a "target rich environment," but said cutting $2 trillion would be a "best case outcome."
The Tesla CEO and Vivek Ramaswamy have been put in charge of an advisory department that will make recommendations for government budget cuts to the new Trump administration.
Tesla (TSLA) CEO Elon Musk acknowledged that his target of cutting $2 trillion in government spending would likely be difficult to complete, with half that number looking like a more realistic option.
Musk said in an interview late Wednesday that his advisory Department of Government Efficiency (DOGE) will be operating in a "target rich environment" when it comes to finding waste in the federal government, but said his initial target may be high.1
"We'lI try for $2 trillion," Musk said. "I think that's like the best case outcome, but I do think that you kind of have to have some overage. I think we try for $2 trillion, we've got a good shot at getting 1 [trillion]. And if we ... drop the budget deficit from 2 trillion to 1 trillion and kind of 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."
🔸'A Reverse Incentive to Waste Money'
Musk said he knows people in government who want to cut spending, but are told to spend their entire budget so it doesn't get cut in the next budget cycle, calling it "a reverse incentive to waste money."
Musk was a vocal and financial supporter of Donald Trump's 2024 campaign, and has been named the co-head of DOGE, which will make suggestions on budget cuts to the White House. Experts have saidthe $2 trillion number was unlikely from the start, as legislators would likely be hesitant to make the cuts to popular programs that would be necessary to hit that figure.
Musk and entrepreneur and one-time Republican presidential candidate Vivek Ramaswamy were put in charge of the advisory department, and will have until July 4, 2026 to make recommendations, Trump has said.