U.S. President Donald Trump and Tech Titan Musk have another dispute as Trump's big giants (the budget settlement bill is expected to add trillions of dollars to the country's federal deficit).
Trump’s controversial spending bill has been the source of Musk’s anger since the beginning of the summer, leading to a soap opera-like close-up collapse that began last year during the Trump election.
Musk was brought into the Trump administration in January to lead the then-standing Department of Efficiency (a cost-cutting project that led to large-scale work across public services) that the legislation would result in “the biggest debt increase in history.”
The Congressional Budget Office, a non-partisan government agency, estimates that overall, bills, including the increase in the Senate, will increase by $33 trillion in nine years. The U.S. Congress Bureau expects the U.S. deficit to be $1.9 trillion this year.
The bill promises measures such as tax cuts, mass deportations and reductions in Medicaid are expected to reduce profit margins on federal revenues that are greater than reducing federal spending, thus widening the deficit. Musk believes this is an elimination of cost-saving work he has done in the Governor.
Meanwhile, Trump suggested he target Musk's company by eliminating government contracts and subsidies, which over the years, the Washington Post analysis found that reached at least $38 billion, providing the basis for Musk's huge personal wealth.
“Dorgi is a monster that may have to go back and eat Elon,” he told reporters Tuesday morning.
After a very public verbal war, Elon Musk and Donald Trump seem to have ended their honeymoon. CBC's Eli Glasner breaks the unexpected interest between the world's two most powerful characters and how the “Big and Beautiful Bill” eventually tear it apart.
How can Musk benefit?
SpaceX CEO Gwynne Shotwell said Musk currently operates or owns six companies, and his private space flight venture capital SpaceX holds $22 billion in U.S. government contracts, which is the majority of NASA and the Department of Defense.
SpaceX Technology is so deeply rooted in some of the Pentagon operations—such as its Starlink Satellite Service—which provided internet connectivity in military operations in Ukraine last year—that some questioned how the agency and the U.S. space plans are.
Conversely, some of the companies at Musk are also vulnerable to regulatory oversight, including brain chip company Neuralink (which has technical and clinical trials supervised by the U.S. Food and Drug Administration) and Tesla, which has reviewed its autonomous driving software. The company's expansion to the robot tax also depends on regulatory approvals.
Tesla also received regulatory credit for selling electric vehicles. It benefits from EV subsidies — but Senate Republicans recently added a proposal to their budget bill that would quickly kill the $7,500 EV excise tax credit, a direct blow to the company.
“The last thing Tesla investors want to see is Trump from [a best friend] For enemies or at least those who can become critics of Musk. This is all politics, this is frustration.
Ives said the Trump administration never had much doubts about the so-called EV mandate being removed. The U.S. president wrote that Truth Social said that electric cars are “good, but not everyone should be forced to own one.”
“The bigger concern is what it means for Musk and Tesla’s autonomous and regulatory framework,” Ives said. “In terms of SpaceX and some of the concerns there, I think the bark is worse than a bite.”
Musk has been terrified by the spending bill over the past few weeks and has been threatening to form a new American party to replace what he calls the Democratic and Republican “unilateral.” Musk wrote on the social media platform X, which he owns, that if the spending bill is passed, he will form the American Party within one day.
“Investors want to see him get out of politics, but he's been infiltrating into politics. That's part of the frustration,” Ives said.
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The blow to Musk's business
White House Chief Correspondent Dasha Burns told Canadian Companies Front burner last month.
Front burner28:34Trump and Elon's messy breakup
“Musk is a smart guy,” she added. “The way he sent messages to the bill and his problems did hit the same issue as some fiscal conservatives were striking about the bill.”
Trump said in a social threat to Musk on Tuesday that the United States would save “wealth” if SpaceX rocket launches and satellite subsidies were terminated, as well as Tesla's electric vehicle production.
Musk responded on the social media platform X, which he owned, and Musk said: “I'm actually talking about it all. Now.”
Tesla shares plummeted on Tuesday, with some shareholders upset over Musk’s quarrel with Trump. The company's second-quarter earnings have already been available this week.
