Donald Trump to tap Elon Musk to head proposed government efficiency commission

Elon Musk’s businesses including Tesla and SpaceX are regulated by federal agencies, potentially leading to conflicts of interest if he becomes involved in a commission on government spending.

Donald Trump outlined a suite of economic proposals in a speech here Thursday, including formally introducing a government efficiency commission to be headed by Elon Musk, cutting the corporate tax rate to 15% for companies that make products in the U.S., and creating a sovereign-wealth fund.

He also said he would rescind certain unspent funds appropriated during the Biden administration and proposed barring people in the country illegally from obtaining a mortgage.

The commission would conduct “a complete financial and performance audit of the entire federal government” and make “recommendations for drastic reform,” the Republican former president said in an appearance before the Economic Club of New York. The goal would be to identify ways to eliminate fraud and improper payments, Trump said.

Trump and Musk have grown close as Musk’s political views have become more conservative. In a recent conversation on X, the entrepreneur suggested Trump form a commission tackling government spending as a way to address inflation.

Musk said last month “I’d be happy to help out on such a commission,” and on Thursday said on X “I look forward to serving America if the opportunity arises. No pay, no title, no recognition is needed.”

This is badly needed https://t.co/H9AKYbDssZ

— Elon Musk (@elonmusk) September 5, 2024

Trump said Thursday that Musk agreed to be the head of the commission. Musk’s businesses including Tesla and SpaceX are regulated by several federal agencies, potentially leading to conflicts of interest should he become actively involved in a commission on government spending.

SpaceX’s most important customers include the National Aeronautics and Space Administration, which relies on the rocket company to transport astronauts to the space station, and the Pentagon, which uses SpaceX to launch national security satellites. Tesla’s car sales and energy business are also subsidised by federal tax credits and grants issued from various agencies.

Musk’s social-media platform X is regulated by the Federal Trade Commission, and his brain implant start-up Neuralink is regulated by the U.S. Food and Drug Administration.

Thursday’s speech provided Trump with a high-profile opportunity to sharpen his focus on the economy – often cited by voters as their No. 1 issue in the election. The address came days ahead of Tuesday’s debate with Vice President Kamala Harris in Philadelphia.

The most recent Wall Street Journal poll shows Trump holds an 8-point advantage over Harris when voters are asked who would best handle the economy and a 5-point lead on handling inflation. However, Trump had a wider advantage when President Biden was in the race.

Harris, whose candidacy Trump has cast as lacking substance, has been fleshing out her own proposals, including a 10-fold expansion of the small-business start-up tax deduction. On Wednesday, she also outlined a less drastic increase in the top capital-gains tax rate than Biden had weighed, though at 33%, the all-in top capital-gains rate would be the highest since 1978. Harris has also mimicked Trump’s proposal to eliminate taxes on tips, though not his plan to eliminate taxes on Social Security for seniors.

Harris, in speeches and TV ads, has tried to portray Trump as looking out for big business and the wealthy. He wants to extend the 2017 tax cuts, parts of which lapse after 2025, and further reduce the corporate tax rate for at least some companies to a level below the current 21%. (Harris would bump it to 28%).

During the speech, Trump called for a reduction in the corporate rate “to 15% solely for companies that make their product in America.” He added: “My message is simple. Make your product here in America and only in America.” Trump has repeatedly sought to remind voters that Harris worked hand-in-hand with Biden during a period of high inflation and high interest rates. As he did during his speech, Trump has broadly cast Harris’s ideas, which include a crackdown on ” price-gouging,” as too liberal.

The former president has long taken aim at the 2022 Inflation Reduction Act, which called for spending hundreds of billions of dollars to affect a swath of climate, healthcare and tax policies. In his speech, Trump said he would rescind unspent funds under the law. His campaign didn’t provide specifics, but the threat has alarmed Democrats. The White House, for example, is racing to lend money under a clean-energy program that has faced criticism for moving too slowly.

There was more than $50 billion in unspent IRA funds at the Internal Revenue Service alone as of March 31, according to a government report. If Trump has a Republican Congress, politicians would be eager to pull that money back, shrinking the tax agency’s ability to boost enforcement. He would need congressional approval to repeal tax credits under the law.

Some Republicans have been wary of repealing all of the law’s energy credits, as many of the projects are being built in GOP-held districts. In a speech in Raleigh today, Treasury Secretary Janet Yellen is expected to say that eliminating the IRA’s tax credits would be a historic mistake because of the climate and jobs benefits the administration says they will bring.

“It could give a leg up to China and other countries that are also investing to compete in these critical industries,” Yellen was to say, according to prepared remarks.

In his 2016 campaign, Trump promised to eliminate two regulations for every new one; during his speech Thursday, he called for even deeper cuts. He is proposing extending regulation cuts to lower housing costs and opening up portions of federal land for large-scale housing construction.

Trump reaffirmed that his administration would better embrace crypto, an industry where he has sought support for his re-election bid.

He also defended his plans to impose broad tariffs on imports, which some economists say will raise consumer prices. Trump has called for tariffs of 10% to 20% – and even higher rates on China – to boost domestic manufacturing.

“Smart tariffs will not create inflation, they will combat inflation,” Trump said. “A combination of fair trade, tax cuts, regulatory cuts and energy abundance will allow us to produce more goods, better and cheaper right here in the U.S.A.” – Becky Peterson contributed to this article.

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