Musk, Separating from Trump... 'Trump's Budget Plan Undermines DOGE Achievements'

[Financial News]  


Elon Musk, Tesla CEO, who played a decisive role in Donald Trump's re-election as U.S. President, unusually criticized the President on the 28th (local time).

Musk sharply criticized this budget plan, which Trump claimed as a 'big and beautiful budget plan'.

He argued that Trump's budget plan, which includes tax cuts and a large-scale defense budget passed by the House, does not help U.S. fiscal consolidation and undermines the achievements of the Department of Government Efficiency (DOGE), which is leading austerity.

Musk is also the head of DOGE.

According to foreign media such as CNBC, Musk criticized in an interview with 'CBS Sunday Morning', which will be broadcast on the 1st of next month, that Trump's 'big and beautiful budget plan' will not help the U.S. national finances.

Musk, who is also the world's richest man, criticized this in a part of the broadcast video posted on his social media X on the same day.

He said, "I was honestly a bit disappointed to see a budget plan that includes large-scale fiscal spending," adding, "This will eventually increase the fiscal deficit rather than decrease it, ultimately undermining the achievements of the DOGE team."

The advisory body nature of DOGE claimed that it saved $170 billion (about 233 trillion won) in taxes since the inauguration of the Trump second administration on January 20, mobilizing unconventional methods at times to reduce wasteful spending and carry out restructuring.

According to the employment consulting firm Challenger, Gray & Christmas, DOGE effectively dismantled the United States Agency for International Development (USAID), which oversees U.S. foreign aid, and reduced about 275,000 civil servants.

However, there are also criticisms that Musk and DOGE's self-assessment is exaggerated.

According to AP, 40% of the government contracts cut by DOGE do not actually help reduce U.S. government spending. According to the New York Times (NYT), DOGE deleted its top five achievements from its website last February.

Musk's criticism of Trump came amid recent signs of a rift between the two.

Trump's core power circle shows increasing backlash against Musk in the inner circle, and Musk's declaration that he will no longer donate to Republican political funds indicates a rift between Trump and Musk.

Musk's determined criticism of Trump's 'big and beautiful budget plan' is expected to impose a massive fiscal deficit burden on Americans. According to the Congressional Budget Office (CBO), if this budget plan is implemented, the U.S. federal fiscal deficit will increase by $3.8 trillion (about 5,226 trillion won) over the next 10 years.

The size of the U.S. national debt, which currently stands at $36.2 trillion (about 4,979.3 trillion won), is said to snowball.

Musk asserted to CBS, "The budget plan may be big, and it may be beautiful, but it cannot be both big and beautiful."

As Musk effectively criticized Trump, Tesla's stock price fell slightly on the same day. It dropped to $358.64, down 1.2% from the previous day in early trading. As the afternoon progressed, the decline narrowed, recording a slight downward trend.

Musk announced the day before that he would significantly reduce DOGE's work and focus on managing companies such as Tesla, SpaceX, X, and the artificial intelligence (AI) startup xAI.

Meanwhile, Trump's budget plan, which passed the House, is expected to face considerable difficulties in passing the Senate.

dympna@fnnews.com Song Kyung-jae Reporter