Elon Musk and Vivek Ramaswamy are spearheading an effort to slash the federal budget, a project humorously dubbed the DOGE effort by former President Trump. Although the advisory panel has no official authority, it aims to make recommendations to the White House after Trump's anticipated second term inauguration. The primary goal is to reduce the federal budget by identifying substantial cuts, initially estimated by Musk to be around $2 trillion.
However, Musk has since revised his estimate, suggesting that achieving a $2 trillion cut might be overly ambitious. He now considers a $1 trillion reduction as a "best-case outcome." Despite this adjustment, Musk remains optimistic about the potential impact of the initiative.
"I think we'll try for $2 trillion. I think that's the best-case outcome," – Elon Musk
The DOGE effort's advisory panel, led by Musk and Ramaswamy, has been described as a "very target-rich environment for saving money." Yet, experts caution that significant savings would likely require proposals to cut mandatory programs like Medicaid. Such measures could result in "hardship" for some, Musk warned.
"But I do think that you kind of have to have some overage. I think if we try for $2 trillion, we've got a good shot at getting 1," – Elon Musk
Despite the challenges, Musk expressed confidence that reducing the budget deficit from $2 trillion to $1 trillion would free up the economy and potentially prevent inflation. This optimistic outlook highlights the potential benefits of the DOGE effort's recommendations.
"If we can drop the budget deficit from $2 trillion to $1 trillion and 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. So that, I think, would be an epic outcome," – Elon Musk
The Trump transition team has not responded to requests for comments on Musk's updated estimates. Nonetheless, this initiative underscores Musk's and Ramaswamy's commitment to exploring fiscal solutions that could reshape federal spending.