Trump says Elon Musk has agreed to lead proposed government efficiency commission as ex-president unveils new economic plans

(CNN) — Donald Trump unveiled a slate of new economic plans Thursday, including the creation of a government efficiency commission that he said Elon Musk has agreed to lead if the former president is elected in November.

“At the suggestion of Elon Musk, who has given me his complete and total endorsement … I will create a government efficiency commission tasked with conducting a complete financial and performance audit of the entire federal government and making recommendations for drastic reforms,” Trump said in remarks at the Economic Club of New York. “We need to do it. Can’t go on the way we are now.”

Trump in his speech also outlined new proposals aimed at tackling government regulations, including those aimed at energy production, and vowed to withdraw unspent funds appropriated during the Biden administration. His speech also addressed his recent embrace of cryptocurrency and reaffirmed his plan to place sweeping tariffs on imports.

The Wall Street Journal first reported on Trump’s economic proposals, which come just days before he and Vice President Kamala Harris face off Tuesday in Pennsylvania for their presidential debate.

Trump, along with Republicans, has sought to rescind funding boosts contained in recent legislation that Democrats have pushed through Congress, including the 2022 Inflation Reduction Act, which funneled about $80 billion over 10 years to the Internal Revenue Service and put in place a wide array of climate measures. Congressional Republicans have already succeeded in paring back $20 billion of the IRS funds, though experts have warned such cuts could increase the deficit.

Trump and congressional Republicans have long pointed to combating waste, fraud and abuse as ways to save the federal government money. But that refrain is “often an excuse to do nothing,” said Marc Goldwein, senior policy director for the Committee for a Responsible Federal Budget.

Trump’s proposed government efficiency commission would have to be given a broad mandate to review the largest federal spending programs – Social Security, Medicare and defense – to be most effective, Goldwein said.

The commission proposal follows a recent conversation between Trump and Musk on X, during which the Tesla CEO suggested that the former president should create such a group in an effort to tackle inflation and appoint him to it.

“I’d love it,” Trump responded at the time.

Drawing a contrast with Harris

The Trump campaign, which views the economy as its top issue ahead of the November election, planned the former president’s Thursday address in an effort to contrast his economic plans with those of Harris, Trump advisers said.

“While Kamala Harris wants to hide from her four years of failure and misrepresent her record of skyrocketing inflation, driving up interest rates, recklessly spending and proposing tax hikes on middle-class families, voters know that she owns the economic disasters of the past four years. Not only does Harris co-own the failed Biden agenda as vice president, but her actions have led directly to higher costs for America’s families,” Trump campaign senior adviser Brian Hughes said on a press call Thursday ahead of the speech.

Harris has in recent days unveiled a slew of economic proposals, including measures aimed at aiding small businesses and at making housing, groceries, child-rearing and health care more affordable for the middle class and working Americans.

Many hew closely to President Joe Biden’s platform, but Harris has also put her own stamp on them in an effort to be more populist but not dampen economic growth and innovation. While she supports hiking the corporate tax rate to 28%, from the 21% rate set by Trump’s 2017 tax law, Harris did not follow Biden’s lead in calling for an increase in the long-term capital gains rate to 39.6% for the highest earners. Instead, she wants to lift the levy to 28% for those making more than $1 million a year.

Economic issues, which posed a notable weak point in polling for Biden before he exited the White House race and endorsed Harris, remain the topic most often cited by voters when asked what matters to their choice for president. An average of 39% of likely voters across the six top battleground states chose the economy as their top issue, recent CNN polling found.

In the days leading up to Trump’s speech, members of the former president’s policy team, including adviser Vince Haley, began reaching out to a series of business leaders and CEOs inquiring about what Trump should focus on during his Thursday address, sources familiar with the calls told CNN. One such conversation focused specifically on taxes and recommendations for being more aggressive toward countering China, one of the sources said.

In a memo obtained by CNN, Brian Nelson, a top economic adviser to Harris, contends that Trump’s economic policies would “serve billionaires and big corporations” and his proposals would lead to “massive tax windfalls” for the wealthy.

Trump has promised another tax rate cut for businesses if he is elected again, as well as the elimination of taxes on tipped wages. He has also proposed sweeping tariffs across the economy in hopes it will generate revenue to pay for these new cuts and encourage more investments in the US.

As CNN and others have reported, many economic experts warn that a broad and unprecedented hike in tariffs could cause considerable harm and lead to a sharp spike in prices on goods for Americans and kill jobs.

“But Donald Trump is denying this broad, bipartisan consensus, ‘hoping that most economic analyses of his ideas are dead wrong’ and blatantly lying to the American people about the severe costs and consequences of his economic plans,” Nelson, who until recently served as the Treasury Department’s undersecretary for terrorism and financial intelligence, wrote in the memo released Thursday.

Targeted funds

The Inflation Reduction Act provided the IRS with a major funding boost to ramp up enforcement efforts and improve customer service.

Many Republicans have repeatedly criticized the IRS funding, claiming that it will provide the agency with an “army of 87,000 new IRS agents” – a misleading number based on a report about how many total employees could be hired with the money, rather than actual auditors focused on enforcement.

Republican lawmakers have made several attempts to claw back the funding. In a deal to address the debt ceiling and avoid a US default last year, Democrats agreed to allow for $20 billion of the Inflation Reduction Act funds to be rescinded. And in January, Democrats conceded an acceleration of the $20 billion cut in an effort to get a full-year federal spending law passed in time to avoid a partial government shutdown.

The Biden administration has said that increased enforcement actions will target wealthy taxpayers who earn more than $400,000 a year and corporations. So far, the ramped-up efforts have resulted in the collection of $1 billion in past-due taxes from millionaires. The federal investment has also been used to improve the IRS’ phone service, digitize paper files and create a free, direct tax filing system.

Some Republicans argue that taking back some of the IRS funding would save the government money. But the independent Congressional Budget Office and other budget experts have said that the reverse is true. Cutting IRS funding would hamper the agency’s enforcement efforts and could lead to fewer audits of tax cheats. As a result, the IRS would not be able to collect as much tax revenue.

The CBO found that a Republican effort to rescind $14.3 billion of IRS funding would have increased the deficit by almost $12.5 billion over the next 10 years.

The Inflation Reduction Act also contained the largest climate investment in US history. The Biden administration has been trying to get as much federal climate grant money as possible out the door this year, but there are funds that could be clawed back.

“There’s a bunch of money included in the bill that is unavailable until fiscal year 2025, but with all the money that’s available in fiscal year 2024, we’ll have the lion’s share, about 90% of that awarded, and most of that 90% obligated by the end of the year,” John Podesta, senior adviser to the president for international climate policy, told CNN in a recent interview.

This story and headline have been updated.

CNN’s Katie Lobosco, Ella Nilsen and Ebony Davis contributed to this report.

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