Musk Wants $2 Trillion Cut From US Budget. It’d Be Difficult
(Bloomberg) -- Elon Musk predicted he could cut at least $2 trillion from the US federal budget, a lofty goal that would require a level of austerity unprecedented since the winding down of World War II.
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His target, mentioned at Donald Trump’s Sunday rally in Madison Square Garden, exceeds the amount Congress spends annually on government agency operations, including defense. It would likely require making significant cuts to popular entitlement programs such as Social Security, Medicare, Medicaid and veterans’ benefits.
In short, it’s easier said than done — even for the world’s richest man, who Trump has said he’d appoint to lead a government efficiency commission should he win a second term in the White House.
Last fiscal year, the government spent more than $6.75 trillion, with more than $5.3 trillion of that coming from Social Security, health care, defense and veterans’ benefits — all of which are politically fraught and notoriously difficult to convince Congress to cut — as well as interest on the debt.
Musk’s own companies — including Tesla Inc. and SpaceX — have billions of dollars worth of federal contracts and have benefited from government spending, including electric vehicle tax credits and infrastructure investments, further underscoring the difficulty of implementing a $2 trillion cut.
Trump’s first term showed just how elusive spending cuts can be. His efforts to slash spending on Affordable Care Act insurance subsidies failed in the Senate, and Congress rejected many of his other proposed spending cuts to domestic agencies.
Trump eventually agreed to major increases in discretionary spending followed by trillions in pandemic-era relief in a series of bipartisan deals that ballooned the deficit. Trump has since said, however, that he would seek to shrink spending by impounding funding approved by Congress, challenging a 1974 law limiting the president’s authority to withhold appropriated funds.
The closest to Musk’s austerity push would be a budget proposed by Republican Senator Rand Paul, which would cut spending by 6% a year every year for five years, until the US budget is balanced.
That blueprint, which doesn’t specify which programs would be cut, was blocked on a 56-39 procedural vote in the Senate last month, opposed by Republican defense hawks like Roger Wicker, the top Republican on the Armed Services Committee, and Susan Collins, the top Republican on the powerful Appropriations Committee.
If Trump’s impoundment gambit failed, he’d need Congress to back his cuts, and lawmakers are generally loathe to pass on pain to programs sending billions to their states and to voters.
In the Senate, it takes just a simple majority to cut mandatory federal spending programs other than Social Security. But it would typically take 60 votes to overcome the chamber’s filibuster rule on annual spending bills, giving Democrats leverage to prevent major cuts.
Republican infighting over spending levels and policies have also forced GOP leaders to repeatedly seek Democratic votes to keep the government open and extend the federal debt limit, which will need to be raised again next year.
--With assistance from Josh Wingrove.
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