President-elect Donald Trump will not be the first American president to appoint billionaire Elon Musk as “our cost cutter” for the United States government. Musk will seek for methods to drastically reduce federal regulations.
In 1982, President Ronald Reagan appointed J. Peter Grace to oversee a group charged with reducing bureaucratic costs. Nonetheless, the chemical giant had fewer conflicts of interest than the world’s wealthiest man today.
Musk’s SpaceX has billions of dollars in NASA contracts. He is the CEO of Tesla, an electric automobile company that receives government subsidies and must follow auto safety regulations. His social media platform X, artificial intelligence startup xAI, brain implant manufacturer Neuralink, and tunnel-building Boring Corporation all interact with the federal government in different ways.
“There are direct conflicts between his businesses and the government’s interests,” said Ann Skeet, head of leadership ethics at Santa Clara University’s Markkula Centre. “He’s now in a position to try and curry favor for those enterprises.”
Musk is also more influential, having spent an estimated $200 million through his political action committee to help elect Trump. He has become a fixture at Mar-a-Lago since the presidential election and speaks regularly with like-minded political world leaders, including Argentina’s President Javier Milei and Italy’s Prime Minister Giorgia Meloni.
Trump has announced that Musk and former Republican presidential candidate Vivek Ramaswamy will oversee a new “Department of Government Efficiency,” or DOGE, a joke moniker that parodies the cryptocurrency Dogecoin and appeals to Musk’s sense of humor.
“We finally have a mandate to delete the mountain of choking regulations that do not serve the greater good,” Musk informed X on Wednesday.
Trump has stated that Musk and Ramaswamy will work from outside the government to provide “advice and guidance” to the White House, as well as collaborate with the Office of Management and Budget to promote fundamental reform, some of which can only be accomplished through Congress.
“If it’s a commission, it’s outside the government,” therefore Musk could not hold a White House office or official government title, according to Richard Painter, a White House ethics counsel under the George W. Bush administration. “Then, the president takes the advice or doesn’t.”
If it were a legitimate government entity, Musk would be in violation of federal conflict of interest statutes until he withdrew from his enterprises or recused himself from government matters affecting them, Painter said.
According to Painter, Trump might offer Musk a rare waiver exempting him from those restrictions, which has historically proven politically controversial.
Tesla, SpaceX, and X did not reply to demands for comment on Wednesday about Musk’s potential recusal. The Trump transition team did not immediately respond to a request for comment.
Regardless of how it is constructed, Musk’s ideas are expected to have an impact.
Regulating vehicle safety
Tesla, the electric vehicle firm that earned Musk the world’s richest person, has repeatedly clashed with the National Highway Traffic Safety Administration, which governs vehicle safety. So any reduction to NHTSA money or staffing could benefit Tesla.
The government has forced Tesla to conduct recalls it did not want, and it has launched investigations into Tesla vehicles, some of which have raised doubts about Musk’s claims that Tesla is close to deploying self-driving cars without human drivers. The organization is also working on legislation governing vehicle automation.
Auto safety experts are concerned that a Department of Government Efficiency co-chaired by Musk may propose drastic cuts to NHTSA.
“That could be extremely problematic because it would affect every rule-making from all of the agencies that currently oversee Musk’s companies,” said Michael Brooks, executive director of the nonprofit Center for Auto Safety, a watchdog organization.
Missy Cummings, head of the autonomy and robotics center at George Mason University and a former NHTSA safety adviser, believes Musk’s approach for NHTSA efficiency could be similar to what he did when he took over Twitter: harsh personnel layoffs.
While Cummings acknowledges that much of the federal government might be more efficient, she believes NHTSA is already understaffed and predicts Musk will try to stall or stop NHTSA investigations or handicap the agency so it can’t enforce regulations.
“It would just leave it as a shell of the agency that it was,” according to her. “Their whole job would be to put out commercials reminding people to just wear their seat belts.”
Space exploration
SpaceX’s gigantic rocket Starship, which is now launching test flights from South Texas, is how NASA hopes to put astronauts on the moon for the first time in more than 50 years. NASA has given SpaceX more than $4 billion for the first two human moon landings scheduled for later this decade under the Artemis program. Musk has been at conflict with the Federal Aviation Administration for stalling Starship because to what he claims is unnecessary bureaucracy.
SpaceX has also won numerous contracts with NASA over the last decade to transport supplies and astronauts to the International Space Station. Contracts for crew flights alone amount $5 billion between 2020 and 2030.
More recently, in June, NASA awarded SpaceX a $843 million contract to deliver the vehicle for deorbiting the International Space Station at the end of its life in early 2031 and directing it to a fiery re-entry over the Pacific.
SpaceX also has various contracts with the Defense Department, some of which are classified and estimated to be worth billions of dollars. In addition, the Pentagon has purchased internet services in Ukraine using SpaceX’s Starlink constellation. The militarized version of Starlink is known as Starshield.
Social media and AI
Federal officials have also questioned Musk’s social media platform X. The Federal Trade Commission investigated Musk’s handling of sensitive consumer data after he acquired control of the firm in 2022 but did not take any regulatory action. The SEC is currently investigating Musk’s purchase of the social media firm.
Musk has been outspoken about his political beliefs on the site, modifying its rules, content control systems, and algorithms to reflect his worldview. After Musk embraced Trump following an attempted assassination of the former president last summer, the platform has morphed into a megaphone for Trump’s campaign, providing an unparalleled quantity of free advertising that is nearly hard to quantify.
Musk’s keen interest in artificial intelligence is also expected to have an impact. He is now creating an AI supercomputer in Memphis, Tennessee, for his AI firm, xAI.
However, environmental groups have voiced worries about pollution from the facility’s gas turbines and the strain on the local power grid, prompting the Environmental Protection Agency to investigate.
The complex is located near mostly Black areas that have long faced pollution and health hazards from factories and other industrial facilities.