Trump Considers Musk for Budget Cuts Role Amid Cost-Cutting Controversies

Last week, during an appearance on Fox News, Donald Trump suggested that Elon Musk could take on the role of “Secretary of Cost Reduction,” a position that currently does not exist in the U.S. government. This statement adds to the ongoing discussions between the billionaire CEO of Tesla and the former president regarding Musk’s potential involvement in a future Trump administration if he were to be re-elected.

While specific details were not provided, Musk previously joked about leading the Department of Government Efficiency (DOGE), a name that also references a popular internet meme and a cryptocurrency he supports. Trump’s recent comments further fuel speculation about Musk’s possible role, especially in light of Musk’s known approach to cutting costs in his companies.

According to CNN, this cost-cutting strategy mirrors Musk’s practices at Tesla, SpaceX, and X (formerly Twitter). However, observers express skepticism regarding the effectiveness of such an approach for the federal government, especially given the mixed results in Musk’s ventures.

AGGRESSIVE COST CUTTING

In an August interview, Musk indicated that if given a government position, he would propose significant budget cuts to eliminate wasteful spending that does not benefit Americans. He suggested utilizing artificial intelligence (AI) to identify areas for reduction. Musk has also advocated for the removal of contentious administrative regulations and has committed to a more lenient approach to severance packages for laid-off government employees, proposing a system to assess unnecessary public servants for potential dismissal.

Trump, in his August interview, praised Musk’s decisiveness in workforce reductions, calling him an “expert in cuts.” This prompted a lawsuit from the United Auto Workers (UAW) against Trump and Musk, following Trump’s remarks encouraging Musk to lay off striking Tesla employees.

In September, Trump reiterated his intention to offer Musk a government position upon his return to the White House, noting Musk’s potential for implementing “radical reforms.”

At an event in Pittsburgh on October 20, Musk emphasized the need for substantial government spending cuts. “The first step is to drastically reduce expenditures. Let’s start from scratch,” he stated while discussing what he could contribute to the government.

However, the reality shows that Musk’s cost-cutting measures at his companies have not always been effective. At X, he laid off nearly 80% of the workforce after acquiring the platform, resulting in instability. Notably, X has faced technical issues during high-profile interviews, including those with Florida Governor Ron DeSantis and Trump.

Musk also disbanded X’s trust and safety department, leading to a rise in hostile speech and unchecked misinformation, prompting a wave of advertising withdrawals. Fidelity reports that the platform’s value has decreased by 80% since Musk’s acquisition in October 2022.

ELIMINATING ADMINISTRATIVE REGULATIONS

Over the years, Musk has frequently criticized U.S. state regulations, labeling them bureaucratic and cumbersome. While this sentiment is common among business leaders, Musk’s methods of circumventing or bending rules have sometimes led to serious consequences.

At Tesla, Musk continues to pursue fully autonomous driving technology despite numerous accidents and regulatory warnings. Adopting a “deploy first, fix later” philosophy, Tesla has issued multiple recalls related to this technology, even as they assert it has saved lives.

On October 18, the National Highway Traffic Safety Administration (NHTSA) announced a new investigation related to a fatal incident involving a Tesla self-driving car. The agency previously indicated that this technology posed “unreasonable risks” due to non-compliance with traffic safety laws.

At SpaceX, Musk’s company has faced lawsuits for allegedly circumventing regulations related to launch facilities in California, upsetting local residents and prompting numerous complaints about privacy violations and environmental damage. Musk has relocated much of SpaceX’s operations to Texas, citing excessive regulations in California, and recently filed a lawsuit against a California regulatory agency.

CONCERNS FOR LAID-OFF EMPLOYEES

According to the Wall Street Journal, Musk proposed a two-year severance package for laid-off government workers, emphasizing the importance of not being overly harsh or financially crippling those losing their jobs.

However, Musk faces legal action for failing to honor commitments to severance packages for laid-off employees at X, including the former CEO and other senior executives, amounting to hundreds of millions in unpaid compensation. The company’s severance policy states that employees who continue to work post-acquisition but are later laid off are entitled to a maximum of six months’ salary plus an additional week’s pay for each year of service. Many affected employees have filed lawsuits after not receiving promised payments.