Trump wants Elon Musk to overhaul the government. Here’s what could be on the chopping block

(CNN) — President-elect Donald Trump and Elon Musk have big ambitions for making the federal government leaner and more efficient by reviewing its budget and operations from top to bottom.

Musk, the world’s richest person who owns or runs several companies, has warned that his goals – including cutting at least $2 trillion in federal spending – could cause “temporary hardship” before ultimately creating “long-term prosperity.” His pronouncements are prompting budget experts to scoff, while sending chills down the spines of many federal workers and those who depend on the federal government for assistance or their livelihood.

Details about how the new Department of Government Efficiency, or DOGE, will operate – and how Musk and his co-leader Vivek Ramaswamy will avoid conflicts of interest – remain scarce. But the duo has spoken openly about areas of the government they’d like to see altered, while Trump and Republican lawmakers have a long list of programs and operations they’d like to reform.

It’s important to note that while Trump has promised that the initiative will make “drastic changes,” Musk and Ramaswamy will not have any direct power to make spending cuts, regulatory changes or other moves. The group will exist outside of the government and will likely serve to make recommendations to the White House for the president’s annual budget, which outlines the president’s vision but Congress is not required to follow.

What Musk and Ramaswamy have said they’d target

Asked at a town hall on X last month about what the initiative’s first steps would be, Musk said there is so much government waste that it would be easy to find targets.

“We, just as a country, obviously, we need to live within our means,” said Musk, who owns X and is CEO of Tesla and SpaceX. “So that means just looking at every line item, every expense and saying, ‘Is this necessary at all?’”

But he also acknowledged that “everyone’s taking a haircut here.”

“That necessarily involves some temporary hardship, but it will ensure long-term prosperity,” said Musk.

Musk also took aim at the Department of Education, a frequent target of Trump and Republicans, criticizing the agency for allegedly indoctrinating kids with left-wing propaganda and other failings. However, he did not call for its elimination during the town hall.

Meanwhile, Ramaswamy, a biotech entrepreneur and former 2024 Republican presidential candidate who shifted his support to Trump, has been more specific about how he’d change the federal government.

On the campaign trail, he said he would get rid of up to 75% of the federal workforce. About 2.3 million civilians are employed by the federal government, with nearly 60% working for the Departments of Defense, Veterans Affairs and Homeland Security.

“Hordes of unelected bureaucrats stifle innovation and ignore the voted desires of the American people,” Ramaswamy wrote in a white paper.

The plan also called for closing the Education Department and shifting its workforce training programs to the Labor Department; eliminating the FBI and relocating its 15,000 special agents who solve cases to other agencies; and getting rid of the Nuclear Regulatory Commission and shifting its duties to other departments.

Rooting out waste in the government is “a huge undertaking,” said Stephen Moore, an economic campaign adviser to Trump and a Heritage Foundation economist.

“DOGE is going to need hundreds of people to pull this off. It won’t just be Elon and Vivek,” said Moore, who is not involved in the effort.

Experts are doubtful

A host of budget experts across the political spectrum have questioned the effort’s ability to cut anywhere near $2 trillion a year in spending, which is more than the federal government spent on defense, education, veterans’ health and other discretionary items in the past fiscal year.

Larry Summers, a former Treasury secretary in the Clinton administration, and Glenn Hubbard, a former US Council of Economic Advisers chairman in the George W. Bush administration, both poured cold water on the idea at an event on Tuesday.

Slashing that much from the federal budget – which totaled roughly $6.8 trillion in fiscal 2024 – would require cutting every program by roughly one-third, said Bobby Kogan, senior director of federal budget policy at the left-leaning Center for American Progress.

And if Social Security, Medicare and veterans’ programs were protected, the rest of the budget could have to be cut by 62%, affecting defense, food stamps, home heating assistance, housing aid, food safety inspections and infrastructure, among others.

“$2 trillion per year is such an absurdly large number, it’s impossible,” Kogan said, noting that more than 70% of federal government spending (not including interest payments) consists of payments to individuals, such as Social Security, Medicare, Medicaid and other aid programs. “You could only propose $2 trillion a year if you are not interested in living within reality or if you are completely callous to the major harmful effects that doing that would entail.”

Actual savings from cutting waste, fraud and abuse would likely total between $150 billion and $200 billion, Brian Riedl, senior fellow at the right-leaning Manhattan Institute, posted on X Tuesday.

“Additional savings beyond that becomes more of an ideological project focused on killing programs you dislike rather than making them more efficient,” wrote Riedl, who also worked for Republican presidential candidates and as chief economist for former GOP Sen. Rob Portman of Ohio. “Trump’s ‘Department of Government Efficiency’ will not be an actual department. It will not likely even be a White House office. It will likely be a private effort that writes a report and sends it to the White House & Congress. Nothing more.”

Congressional Republicans have repeatedly targeted certain government programs and operations for cuts, many of which were also included in Project 2025, the conservative blueprint published by the Heritage Foundation that Trump distanced himself from.

Among the biggest targets have been Medicaid, which provides health coverage to lower-income Americans, the Children’s Health Insurance Program and the Affordable Care Act exchanges, which cover about 100 million people in total, said Sharon Parrott, president of the left-leaning Center on Budget and Policy Priorities.

“The only way to get significant savings anywhere close to the dollar levels that Republicans have put forward is to take health care away from people,” she said.

Some supporters of the Department of Government Efficiency have likened it to previous fiscal commissions, particularly the Grace Commission authorized by former President Ronald Reagan in 1982. It was charged with eliminating waste and inefficiency in the federal government.

The commission presented more than 2,500 recommendations to Reagan and Congress, but most – particularly those that required legislation – were never implemented, G. William Hoagland, a Bipartisan Policy Center senior vice president who served as a staffer for Senate Republicans for 25 years, wrote for the Peter G. Peterson Foundation last year.

Potential conflicts of interest

Musk’s and Ramaswamy’s vast business ventures pose considerable conflict of interest concerns if they lead the new initiative. For instance, in his X town hall, Musk repeatedly criticized government regulations, citing their interference with his companies. The duo and Trump have all pushed for slashing regulations.

“It’s quite arduous getting regulatory approval,” Musk said while discussing his Neuralink startup that develops implantable brain-computer interfaces. “It does slow us down, and I think we should be able to go faster in the US with advancing Neuralink technology and other technologies that are out there unrelated to my company.”

Legal experts told CNN that the government efficiency entity, based on what’s known about it so far, will likely be covered by a federal law requiring transparency and a balance of views on such advisory commissions.

Multiple commissions set up under the first Trump administration faced litigation under the law, known as the Federal Advisory Committee Act, or FACA, and one of those commissions – set up to study the alleged problem of voter fraud after Trump claimed falsely that millions voted illegally in 2016 – ultimately disbanded rather than continue to fight the cases in court.

The Trump transition team did not respond to CNN’s inquiries about whether it believes the new initiative would be subject to FACA’s requirements, but legal experts said that if the president-elect follows through with his plan to have the two outsiders lead it, the law will be hard to get around.

“FACA is typically when the president sets up a commission to look at particular issues of interest and concern and so this does seem like FACA-like,” said Jon Greenbaum, a lawyer who was involved in FACA litigation during the first Trump term and founder of the legal advisory firm Justice Legal Strategies.

The law has strict transparency mandates requiring, among other things, advance notice of meetings, that meetings are publicly accessible and that the public has a view into what records a commission is using to do its work. It also requires that a commission’s members are not all of the same viewpoint.

“The idea that you can just say, ‘I am going to give my two wealthy friends the power to reshape government and they can do it in secret,’ that’s not how it works,” said Harry Sandick, another lawyer who sued the Trump voter fraud commission on behalf of a Democratic commissioner who said he was cut out of the commission’s work.

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