One of the big stories of the US elections was the alliance between Donald Trump and Elon Musk. The president-elect has already announced that Tesla’s CEO will be the “savings czar”, heading the new Department of Government Effectiveness, with the aim of reducing public spending. Musk promised to cut “2,000 billion dollars” of spending from the almost 7 that the American budget reaches, to eliminate the gigantic deficit from which the country suffers. But a very careful examination of the country’s accounts reveals the difficulty of his mission: either Musk is content to reduce ridiculous sums for propaganda purposes rather than savings, or his objective of “deconstruction of the administrative state” would require a very complicated support from a Republican party. with virtually no room for maneuver in Congress.
The US budget reached $6.1 trillion in total spending in 2023 (in 2024 it will reach $6.7 trillion, although these calculations will be made for 2023, which is already closed). Of these, 3.8 billion are “mandatory”, that is to say imposed by law: Health insurance (public health for retirees), Medical help (health insurance for low-income people), Social Security Pensionsgrants unemploymenthelp for flow-income familiesfood stamps and other similar items. All of these expenses are required by law and can only be eliminated by another law.
Congress could approve changes on these points (except pensions) by a simple majority in both chambers, but the Republicans will ultimately have a tiny margin in the House of Representatives: probably 220 to 215, which will remain at 217 to 215 if Trump’s appointments of several MPs as ministers come out on top. And, knowing the historic indiscipline in their ranks, approving a law aimed at cutting welfare seems almost impossible: all Republican votes will be “the deciding vote”, and the advertisements accusing them of being “the key vote” which left thousands of American citizens without some social benefits, it would be constant until the next election, just two years away. Trump already had huge problems in 2017 eliminating Barack Obama’s health care reform due to internal rebellions, and then the Republicans had a majority of 47 deputies. With a majority of only 2 votes nowthe political cost they would have to pay for making cuts to the “working class” would be virtually unbearable for all their MPs, especially those from the most competitive constituencies.
Added to this is the payment of interest on the debt: 659 billion in 2023, which increases to 949 billion in 2024and with growth at a good pace, with the constant increase in debt recorded in recent years and the rise in interest rates on this debt.
Discretionary spending: what can be reduced
The only thing the government can unilaterally reduce what is called “discretionary spending”. That is, the items that are not required by law: $1.7 trillion in 2023. That number, for starters, is already well below what Musk has promised to cut. But practically half of this share is devoted to defense: 805 billion in 2023 and growing at 7% per year. Getting Republican Representatives and Senators to approve military spending cuts is harder than putting a camel through the eye of a needle. Even if wasteful spending were detected, it is highly likely that these savings would be passed on to other defense positions: you could always buy an additional 1,000 missiles through personnel or contract savings, for example.
That would leave only 917 billion on the table15% of the total (with the 2023 budget, this year’s will be higher even if the percentage of the total will be very similar). But some of that money is radioactive: $130 billion goes to helping veterans, a group no party wants to make an enemy of, and Trump himself brags about being the one who signed the latest law bipartisan approach to improving assistance on this issue. band. And 74 billion goes to Justice, another ministry that is very difficult to cut.
There would still be $713 billion to cut. But these games are not trivial: 125 billion goes to education, employment and social services, another 100 billion to health, 83 billion to international affairs.foreign aid, embassies, etc., another part goes to the bank deposit guarantee fund… The most “juicy” part is that of the 59 billion which goes to administrative expenses and small ministries, such as the Agriculture or Commerce. But these items do not include excessive waste: between 2003 and 2022, this group of expenses represented on average 7.3% of GDP, but in 2023 its weight had been reduced to 6.4%. That is to say, these departments are already “tightening their belts”.
Of course, there are many ways to increase efficiency: for example, digitalization of public administration can save a lot of money on offices and civil servants serving the public, and reduce delays waiting for citizens. But this process requires a campaign to expand fiber optic and mobile connections throughout the country, which is huge and mostly rural. Joe Biden launched a fund of $42.45 billion for this purpose, and that does not seem enough to reach every corner of the continent.
A document from the Commission for a Responsible Federal Budget estimates that around 70 billion can be saved each year in a “simple” way, by canceling programs such as aid for the purchase of electric cars (5 billion), by imposing customs duties on products sent from China by companies. like Temu or Aliexpress (2.5 billion) or stop the university debt cancellations approved by Biden (3 billion). Real reductions that Trump could make unilaterally, but which would not even be enough to offset 25% of the 300 billion in additional costs linked to debt interest this year alone.
What Musk Really Worries About
A review of Musk’s accounts on X, however, reveals what his real problems are. Among the list of “wastes of 2023”, which he posted on his @America account, are concepts such as “the research of Dr. Fauci”, the “Monkey Island” Institute of Health and Diseases, which total around 50 million; the Department of Defense “lobster pond,” about $8,300; aid to Egypt of 6 million; a study on “transgender monkeys,” which amounts to $477,000; or a novel about “Covid disinformation”, without quantifying it. all spending that is tiny out of total budgets, but seems ripped from a Fox News television segment to generate controversy about crazy and inexplicable government spending. The emphasis placed on the research of Doctor Anthony Fauci, who has become a sort of “bogeyman” of the American far right for his research on diseases and his role in favor of vaccines against covid, is not surprising.
But the main objective of the businessman seems to be the “dismantling of the administrative state”: for example, he opened the door to the dismissal of all those responsible for Education. Musk emphasized that they would pay them the corresponding compensation for two years, because “The goal is not to end up without paying their mortgage or to punish them,” but to force them to look for work in a sector in which they are “more productive.”. The problem is that firing thousands of civil servants without replacement can leave a huge gap in the administration, and the social and political costs could become evident very quickly. It remains to be seen whether Musk will be content to cut the famous “parrot chocolate” or whether he wants to make gigantic cuts like Javier Milei in Argentina… and whether Trump is ready to pay the political cost.
