Trump proposes using savings from Musk’s efficiency plan for public relief and debt reduction

Thursday 20 February 2025 - 10:06

U.S. President Donald Trump has suggested using a portion of the savings generated from Elon Musk’s cost-cutting initiative to provide financial relief to Americans and reduce the national debt. Speaking at an investment summit hosted by Saudi Arabia’s sovereign wealth fund in Miami Beach, Trump proposed allocating 20% of the savings to direct payments to U.S. citizens and another 20% to tackle the federal government’s $36 trillion debt.

Trump discussed these ideas with the Future Investment Initiative (FII) Priority Summit audience, highlighting the massive savings estimated by Musk’s Department of Government Efficiency (DOGE). “The numbers are incredible, Elon. So many billions… hundreds of billions,” Trump stated.

This proposal came one day after James Fishback, CEO of Azoria investment firm and DOGE adviser, suggested creating a “DOGE dividend.” According to Fishback, if Musk’s team manages to save $2 trillion by July 2026, every taxpaying household could receive a $5,000 check.

Musk responded positively to Fishback’s suggestion, mentioning that he would “check with the President.” However, experts like Guo Xu, an associate professor at UC Berkeley Haas, raised concerns about the long-term implications of reducing government efficiency. Xu described the proposal as a populist move, warning that it might compromise federal government capabilities. He emphasized the importance of investing in infrastructure, science, and national security instead of merely cutting budgets.

While Musk had previously predicted that $2 trillion in savings could be achieved, he later revised the estimate. DOGE has claimed to save $55 billion, but the details supporting this claim remain unclear. The department published a list of canceled contracts, citing $16 billion in savings, although some figures, like an $8 million contract with Immigration and Customs Enforcement, were mistakenly listed as $8 billion.

Academics like Canice Prendergast, a professor at the University of Chicago, are skeptical about the program’s impact. He questioned whether DOGE could effectively reduce waste in the federal bureaucracy, suggesting that most savings would likely go toward severance pay for laid-off employees. He also pointed out that cutting costs in areas such as Social Security and Medicare, which constitute a large portion of the federal budget, is politically challenging and unlikely to happen swiftly.