(Bloomberg) — Billionaire presidential adviser Elon Musk called entitlement spending — including Social Security and Medicare — a key target for cuts, arguing the federal programs are plagued by fraud.
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Musk, who is guiding President Donald Trump’s government downsizing effort, said Monday that entitlements with annual budgets of hundreds of billions of dollars were ripe for steep reductions. He made unproven claims about benefits, including that Democrats use them to “attract and retain illegal immigrants by essentially paying them to come here and then turning them into voters.” He also said there are widespread payments to dead people.
“Most of the federal spending is entitlements,” Musk said in an interview with Fox Business’ Larry Kudlow. “So that’s like the big one to eliminate.”
Musk’s remarks about popular safety net programs could run into opposition on Capitol Hill from lawmakers who have already faced backlash about the Tesla Inc. chief executive officer’s rapid approach to slashing agencies and cutting the federal workforce.
Broad cuts to entitlements could also run up against Trump’s 2024 campaign promise not to reduce Social Security and Medicare benefits. Trump repeated that pledge on Fox News’ Sunday Morning Futures, saying that he wouldn’t reduce legitimate entitlement benefits but would go after improper payments.
Musk’s estimate of the amount of fraud is far more than is believed to exist. Social Security’s internal watchdog found last year that $71.8 billion in improper payments occurred between 2015 and 2022, less than 1% of all benefits.
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Trump and Musk have claimed that millions of people listed over age 100 in the Social Security database, and presumed dead, are receiving benefits, but the Social Security Administration’s leader has said that is not the case.
Many Republicans have been adamant that entitlement benefits will not be part of Musk’s cuts through his Department of Government Efficiency.
Democrats, for their part, have raised concerns that DOGE’s targets for spending reductions will mean that retirement and health care programs will be in the cross-hairs. Those worries have sparked a wave of angry constituents at town hall meetings, prompting some Republicans to cancel in-person events with voters.
“Co-President Musk announces his desire to cut entitlements. To be very clear, the only things he could be talking about are Social Security and Medicare,” Rhode Island Democratic Representative Gabe Amo posted on X.
The billionaire’s comments come at a critical moment for DOGE, the cost-cutting initiative that Trump asked him to run.
Musk’s high-profile role as the public face of DOGE is taking a toll on businesses owned and run by the world’s richest man.
Musk told Kudlow that he has been running his six businesses with “great difficulty,” but said he would remain in his role for the foreseeable future.
“I can’t believe I’m here doing this. It’s kind of bizarre,” Musk said, adding that the $2 trillion deficit was “the real wake up call for me.”
Shares in Tesla took their biggest hit since 2020 on Monday, as analysts cut their projections for vehicle deliveries for the year. The electric vehicle brand is facing blowback from its base of climate-conscious consumers who associate it with Musk’s more conservative politics. Musk personal fortune is down $148 billion since the last trading day before the inauguration, according to the Bloomberg Billionaires Index.
And an apparent cyberattack Monday against X, temporarily took down the Musk-owned social media site for many users. Musk attributed the outage to a “large, coordinated group and or a country.”
For weeks, DOGE has shaken up the federal government by canceling contracts, backing out of leases and pushing for federal employees to quit or be fired en masse.
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Musk told Fox Business he has about 100 people working for DOGE, a figure he plans to expand to 200 people. He mentioned he was hiring mainly people with experience in finance, software and information technology.
Musk has received criticism for deputizing people with little knowledge of government to make cuts at agencies, which then had to be reversed after critical personnel — such as the employees managing the nuclear weapons stockpile — were terminated.
His powers were tested after a Musk-inspired government-wide email asked 2.4 million civilian employees to recount their top five accomplishments of the previous weeks. Agencies that deal with sensitive and classified information — like the Justice, Defense and Homeland Security departments — pushed back.
And after Musk squared off with cabinet members in a meeting last week, Trump directed his cabinet secretaries to use a “scalpel” rather than a “hatchet” — suggesting that control over downsizing efforts was shifting from Musk’s DOGE back to the Senate-confirmed officials leading departments and agencies.
–With assistance from Stephanie Lai and Akayla Gardner.
(Adds lawmaker’s statement in ninth paragraph, additional context throughout)
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