Budget Cuts, Government “Efficiency,” and Elon Musk’s Business Interests

 

 

Budget Cuts, Government “Efficiency,” and Elon Musk’s Business Interests

An Analysis of Conflicts of Interest and Benefits to Musk’s Ventures under the DOGE Agenda

Introduction

In early 2025, the U.S. government embarked on an aggressive campaign to slash federal budgets and even eliminate certain agencies under a new “Department of Government Efficiency,” humorously dubbed DOGE. This initiative, led by tech billionaire Elon Musk as a senior adviser to President Donald Trump, has aimed to radically downsize government programs in the name of cutting “waste, fraud and abuse.” The naming of this agency as "DOGE" has also created confusion in internet searches, as the term is heavily associated with the popular cryptocurrency Dogecoin, potentially making it more difficult for the public to find information about the agency's activities. Musk – the CEO or co-founder of SpaceX, Tesla, Neuralink, The Boring Company, and X (Twitter) – now finds himself in the unprecedented position of helping shape federal policy that could directly affect his own sprawling business empire.

This paper examines how proposed U.S. government budget reductions and agency eliminations under DOGE create potential conflicts of interest and tangible benefits for Musk’s ventures. Specifically, we analyze impacts on agencies and regulations most intertwined with Musk’s companies: the Securities and Exchange Commission (SEC), Department of Transportation (DOT) (including sub-agencies like the FAA and NHTSA), Department of Energy (DOE), NASA, Federal Trade Commission (FTC), Federal Communications Commission (FCC), and environmental regulators. We explore how reducing these agencies’ resources or oversight roles might advantage Musk’s firms – from easing regulatory scrutiny on Tesla’s operations to increasing reliance on SpaceX as a contractor – and discuss the ethical implications if Musk advocates for such cuts while serving in government. Reputable news, government, and expert sources are cited throughout to ground the analysis in documented developments.

Background: Elon Musk’s DOGE and the Push to Shrink Government

Upon President Trump’s inauguration for a new term in January 2025, Elon Musk was tasked with “dramatically slashing government” by heading a special White House-based cost-cutting team named the Department of Government Efficiency (DOGE). Despite the lighthearted acronym, DOGE’s mandate is serious: identify and eliminate perceived waste in federal agencies, reduce staffing, and even shutter entire offices or programs.

Musk’s tech-oriented team of engineers and executives – many from his own companies SpaceX and Tesla – fanned out across agencies to gain access to sensitive systems and data. By February 2025, DOGE operatives had been embedded in at least 15 agencies, and their work was unfolding with little transparency and considerable disruption for federal workers.

Among DOGE’s early targets were the U.S. Agency for International Development (USAID), which Musk publicly vowed to “shut down,” and the Department of Education, which Trump likewise pledged to dismantle. In one notorious example, Musk boasted on his social platform X of feeding USAID “into the wood chipper,” and indeed DOGE attempted to place USAID’s 2,200 employees on leave until blocked by a court order. DOGE agents have also demanded federal employees justify their jobs (e.g., mass emails asking “What did you do last week?” under threat of dismissal), reflecting Musk’s well-known management style from Twitter.

President Trump and his allies have lauded Musk’s “fantastic” work uncovering “tremendous fraud and waste,” but Democratic lawmakers, federal unions, and outside experts have raised alarms about the legality and wisdom of this experiment.

Crucially, Musk’s dual role – an unpaid special government employee leading DOGE while still helming his private companies – immediately poses conflict of interest questions. The White House insisted Musk would recuse himself from any DOGE work that overlaps with his business interests. Former ethics officials note that federal law indeed prohibits even special volunteers from working on matters affecting their financial holdings, which in Musk’s case span six major companies. In practice, however, DOGE’s sweeping mandate means many affected agencies directly regulate or contract with Musk’s firms, blurring the lines between public duty and private gain.

The sections below analyze several key areas where downsizing government oversight or spending can directly benefit Musk’s ventures and examine the potential conflicts if Musk or his DOGE team advance those cuts.

Eroding Financial Oversight: SEC Budget Cuts and Tesla

One agency squarely in DOGE’s crosshairs is the Securities and Exchange Commission (SEC), the Wall Street regulator responsible for policing financial markets and public companies like Tesla. DOGE staff arrived at SEC headquarters in late March 2025 to hunt for spending cuts, with Musk’s team given unusually broad access to SEC systems and data (Miller, 2025). The SEC, which is funded by industry fees rather than taxpayer dollars, pushed back on some of DOGE’s requests for sensitive internal records (Miller, 2025).

Nonetheless, Musk’s influence has already accelerated a significant downsizing of SEC personnel: the agency shed over 500 staff (more than 10% of its workforce) via buyouts and induced resignations (Miller, 2025). The SEC had previously charged Musk with securities fraud after his 2018 "funding secured" tweet about taking Tesla private, resulting in a settlement requiring Tesla to pre-approve Musk’s market-moving tweets (Miller, 2025).

By weakening the SEC’s capacity and aggressive posture, Musk and his companies stand to gain in several ways. A shorthanded SEC may be slower or more cautious in investigating Tesla’s corporate disclosures or Musk’s own stock transactions (Miller, 2025). Additionally, ongoing enforcement actions involving Musk could be deprioritized. Analysts note that reducing SEC enforcement bandwidth could relieve pressure on Tesla and Musk’s market conduct (Miller, 2025).

In effect, Musk now helps oversee an agency that is suing him, a textbook conflict of interest (Gold, Wingrove, & Erman, 2025). The downsizing of the SEC under DOGE, critics argue, won’t save taxpayers money but could hamper the agency’s ability to police markets (Miller, 2025). Experts warn that losing veteran SEC staff will weaken oversight of complex areas like the $26 trillion private funds industry and the volatile crypto sector (Miller, 2025).

Scaling Back Consumer Protection: FTC Data and Twitter

Another independent watchdog now under Musk’s sway is the Federal Trade Commission (FTC), which enforces antitrust laws and protects consumers from unfair business practices (Schladen, 2025). The FTC directly oversees aspects of Musk’s businesses – notably, it has an active consent order against Musk’s social media company X (Twitter), mandating privacy safeguards due to past data misuse (Sullivan, 2025).

In April 2025, the two Democratic FTC commissioners sounded an alarm that DOGE personnel had “arrived at the FTC” seemingly looking to fire staff and access confidential case files (Schladen, 2025). Commissioners Rebecca Slaughter and Alvaro Bedoya warned that allowing Musk’s DOGE aides to rummage through these files “threatens the basic functions of the FTC and the markets it protects” (Schladen, 2025).

From Musk’s perspective, a weakened or compromised FTC offers multiple advantages to his ventures. Regarding Twitter/X, a neutered FTC may be unable or unwilling to enforce the existing privacy consent decree, effectively letting Musk’s company off the hook for any privacy lapses (Sullivan, 2025). Advocacy groups like the Electronic Privacy Information Center (EPIC) noted that bringing Musk’s DOGE team into the FTC is “another gift to the companies that the FTC polices,” removing one of the “few federal defenses” against Big Tech privacy abuses (Sullivan, 2025).

Second, Musk could exploit FTC data stores to benefit Tesla and SpaceX. The FTC collects business intelligence on many sectors; if DOGE staff gain access to competitors’ confidential filings, that inside information could inform Musk’s business decisions (Schladen, 2025). Even if Musk’s team focuses only on budgetary items, the mere presence of his emissaries within the FTC’s IT systems is “rife with potential conflicts” (Schladen, 2025).

There is also an antitrust angle. The FTC had been taking a harder line on large mergers and monopolistic behavior, which could have eventually involved Musk’s expanding enterprises. Under the Trump administration, the White House attempted to remove the two FTC commissioners who resisted rollback of enforcement (Schladen, 2025). A more permissive FTC could ease Musk’s future merger activities and reduce antitrust risks for Tesla, SpaceX, and other ventures.

In short, diminishing the FTC’s capacity and neutralizing its leadership would shield Musk’s companies from consumer protection investigations and antitrust risks, while potentially granting him improper access to competitors’ secrets (Schladen, 2025; Sullivan, 2025).

Loosening Communications and Satellite Regulation: FCC and Starlink

Musk’s influence has also extended into the Federal Communications Commission (FCC) – the agency overseeing telecommunications, spectrum allocation, and satellite communications critical to SpaceX’s Starlink internet service (Feiner, 2025). In early April 2025, reporters discovered that DOGE personnel had been quietly “onboarded” at the FCC, even appearing in the internal staff directory (Feiner, 2025).

The FCC’s authority intersects directly with Musk’s business interests: it licenses SpaceX’s Starlink satellites and earth stations, assigns wireless spectrum, and sets rules for broadband providers (Feiner, 2025). By infiltrating the FCC, Musk’s team stands to shape decisions on communications policy in ways favorable to SpaceX and X Corp.

One immediate benefit is in the satellite broadband sector, where Starlink competes with other providers. Under DOGE’s influence, the FCC granted Starlink a waiver to deploy a new direct-to-cell phone satellite service, despite competitors’ concerns about safety and fairness (Estes, 2025). Analysts noted that such favoritism toward Starlink represents a poorer solution for most Americans, prioritizing Musk’s interests (Estes, 2025).

Moreover, federal broadband funding rules have been adjusted in ways that could significantly increase subsidies to Starlink. Changes to grant criteria could boost Starlink’s eligibility for infrastructure funding from approximately $4 billion up to $10–20 billion (Estes, 2025). Such sums would dramatically enrich SpaceX’s communications division, effectively using public funds to cement Starlink’s dominance (Estes, 2025).

Another clear instance is the Federal Aviation Administration (FAA) considering replacing a $2.4 billion aviation communications contract previously held by Verizon with Starlink (Estes, 2025). SpaceX has been piloting Starlink services for FAA communications, aligning with DOGE’s broader push to replace government contractors with Musk-affiliated firms (Estes, 2025).

Furthermore, a deregulation-friendly FCC benefits Musk’s companies by continuing the repeal of net neutrality rules, ensuring that Starlink and other ISPs have maximum pricing and network management freedom (Feiner, 2025). Additionally, with DOGE influence, the FCC may be more lenient in enforcement actions involving Musk’s ventures, including access to competitors’ spectrum filings and orbital licenses (Feiner, 2025).

In summary, shrinking or co-opting the FCC eases Starlink’s expansion and increases reliance on Musk’s satellite services for critical communications infrastructure. However, the ethical concern is significant: Musk, through DOGE, is effectively influencing an agency that regulates essential resources for his companies (Feiner, 2025; Estes, 2025).

Rolling Back Transportation Safety Oversight: DOT, FAA, and NHTSA

Perhaps nowhere are the immediate benefits to Musk more evident than within the Department of Transportation (DOT), particularly in agencies that regulate automobiles and space launches. Two key subagencies – the National Highway Traffic Safety Administration (NHTSA) and the Federal Aviation Administration (FAA) – have directly clashed with Musk’s companies (Tesla and SpaceX, respectively) in recent years.

Auto Safety (NHTSA): NHTSA is charged with setting vehicle safety standards and investigating defects. Tesla, as a leading EV manufacturer, has been subject to numerous NHTSA probes, including investigations into at least eight Autopilot-related crashes, some fatal (Yadava & Condon, 2025). Musk has frequently criticized NHTSA, accusing it of slowing progress on self-driving technology (Yadava & Condon, 2025).

In February 2025, DOGE orchestrated layoffs and buyouts at NHTSA that specifically targeted teams assessing automated driving risks (Associated Press, 2025). Reporting revealed that staff working on vehicle automation safety, including Tesla probes, were disproportionately affected (Associated Press, 2025). Despite NHTSA’s assurances that investigations would continue, safety advocates expressed concern that watchdog capacity had been significantly weakened (Associated Press, 2025).

By reducing NHTSA’s oversight, Musk’s Tesla benefits by facing fewer regulatory obstacles and reduced pressure for recalls or design changes related to Autopilot and Full Self-Driving (FSD) features (Associated Press, 2025).

Aerospace and Launches (FAA): SpaceX relies on FAA’s Office of Commercial Space Transportation for launch licenses and safety certifications. The FAA had previously grounded SpaceX’s Starship launches after explosive tests and issued fines for violations of launch license conditions (ProPublica, 2025).

Musk has long called for “radical reform” at the FAA, criticizing regulatory barriers to rapid spaceflight innovation (ProPublica, 2025). Through DOGE, Musk now holds power to enact these reforms. Reports indicate that DOGE is targeting FAA offices involved in commercial spaceflight regulation for staffing cuts or potential elimination (ProPublica, 2025).

If successful, Musk’s initiatives would likely result in faster launch approvals for SpaceX, reduced environmental review requirements for facilities like Starbase in Texas, and lower fines or penalties for safety violations (ProPublica, 2025). Critics warn that weakening FAA oversight could undermine spaceflight safety and lead to preventable disasters (ProPublica, 2025).

In summary, cutting back DOT’s watchdog roles under DOGE benefits Musk’s Tesla and SpaceX by removing regulatory friction. However, this creates serious concerns about conflicts of interest, with Musk simultaneously overseeing and benefiting from deregulatory changes (Yadava & Condon, 2025; Associated Press, 2025; ProPublica, 2025).

Reallocating Space and Defense Programs: NASA and Military Contracts

Beyond reducing regulatory oversight, Musk’s DOGE influence extends into federal spending priorities involving NASA and the Department of Defense (DoD), both major SpaceX customers. Changes to NASA’s budget and procurement processes, and adjustments to Pentagon contracts, could significantly benefit Musk’s companies.

NASA Outsourcing and Cuts:
NASA holds major contracts with SpaceX, including roughly $15 billion for missions such as astronaut transportation and the Artemis lunar lander project (Zhao, 2025). Under DOGE’s initiative, hundreds of NASA employees accepted buyouts, and DOGE operatives began reviewing agency budgets (Zhao, 2025).

Internal discussions indicated that Musk’s team was evaluating NASA’s large-scale projects like the Space Launch System (SLS) for potential cuts, favoring commercial alternatives like SpaceX’s Starship (Zhao, 2025). Musk publicly expressed concern about deep NASA science cuts, calling them “troubling,” and claimed he recused himself from related budget discussions due to SpaceX’s financial interests (Rogers, 2025).

Nevertheless, observers noted that DOGE’s broader push to downsize government missions and increase reliance on private contractors inherently advantages SpaceX (Rogers, 2025). Cuts to NASA’s Earth science missions or in-house human spaceflight initiatives could funnel more contracts toward SpaceX’s commercial programs.

Pentagon and Defense Contracts:
SpaceX has also become a major defense contractor, winning billions in military launch contracts. In February 2025, DOGE operatives began reviewing Pentagon spending with an eye toward outsourcing more operations to private firms like SpaceX (West & Albin, 2025).

Analysts predict that Musk’s influence could result in more Department of Defense reliance on SpaceX’s Starlink for battlefield communications and greater use of SpaceX rockets for national security launches (West & Albin, 2025). Such shifts would likely come at the expense of traditional defense contractors or government-owned infrastructure.

Critics note the conflict of interest: Musk, while steering government policy, stands to profit from contracts shaped by DOGE’s recommendations (West & Albin, 2025). Although Musk claims to recuse himself from NASA decisions, no similar clear separation has been established for Pentagon matters (Rogers, 2025).

Summary:
In summary, reallocating space and defense programs under DOGE tilts federal priorities toward commercial outsourcing, boosting SpaceX’s growth. However, this shift also heightens concerns about self-dealing and undermining transparent, competitive procurement practices (Zhao, 2025; Rogers, 2025; West & Albin, 2025).

Energy Policy and Environmental Regulations: Effects on Tesla and SpaceX

The DOGE agenda’s impact on energy and environmental policies presents a complex mix of opportunities and risks for Musk’s businesses. While Musk’s Tesla has historically benefited from clean energy incentives, deregulation and budget cuts under DOGE could simultaneously harm and benefit his companies depending on how they unfold.

Department of Energy (DOE) and Renewable Programs:
The Department of Energy became a major target of DOGE’s reviews in early 2025, particularly initiatives funded by the Infrastructure Investment and Jobs Act (IIJA) and Inflation Reduction Act (IRA) (Bravender, Richards, & Yachnin, 2025). DOGE operatives examined grants for EV infrastructure, battery production, and clean energy projects (West & Albin, 2025).

Projects considered for termination included several hydrogen hubs and other alternative energy investments, signaling a retreat from aggressive federal support for decarbonization (West & Albin, 2025). For Tesla, cutting EV incentives could reduce short-term demand. However, Tesla’s dominant position and profitability could allow it to weather subsidy cuts better than emerging competitors (Bravender et al., 2025).

In the longer term, eliminating DOE support for competitors' technologies (such as hydrogen vehicles or next-generation batteries) could entrench Tesla’s leadership in the EV and battery sectors (West & Albin, 2025).

Environmental Regulation Rollbacks:
DOGE’s influence also extended to environmental regulatory agencies, including the Environmental Protection Agency (EPA). By March 2025, DOGE had announced the termination of hundreds of leases for federal offices housing environmental scientists and regulators (Bravender et al., 2025).

This widespread retrenchment undermines enforcement of environmental protections, expediting infrastructure projects like SpaceX’s launch facilities and The Boring Company’s tunneling operations by reducing permitting hurdles (ProPublica, 2025). Starbase in Texas, for example, faced prolonged environmental litigation under the previous administration – scrutiny that now appears to be diminishing under DOGE (ProPublica, 2025).

For Tesla, looser environmental regulations could allow more flexible factory expansions. Simultaneously, easing emission standards for gasoline vehicles could marginally disadvantage EV adoption but might also blunt emerging EV competition from traditional automakers (Bravender et al., 2025).

Summary:
DOGE-driven cuts to energy and environmental programs present a mixed landscape for Musk: diminished clean energy incentives could slow some market growth, but reduced competition, faster project approvals, and relaxed oversight could ultimately strengthen Tesla and SpaceX’s positions (Bravender et al., 2025; West & Albin, 2025; ProPublica, 2025).

Other Musk Ventures and Oversight Cuts: Neuralink, The Boring Company, and Ethical Conflicts

While SpaceX, Tesla, and Starlink receive the most public attention, Musk’s smaller ventures such as Neuralink and The Boring Company also benefit from DOGE-driven deregulation.

Neuralink and FDA Oversight:
Neuralink’s human brain-computer interface projects are regulated by the Food and Drug Administration (FDA). Prior to 2025, the FDA had delayed Neuralink’s human trials, citing significant safety concerns regarding implant devices (Levy, Wingrove, & Erman, 2025).

In early 2025, DOGE-influenced layoffs impacted the FDA’s medical device review divisions, including teams overseeing brain implant safety (Levy et al., 2025). Reports indicated that Neuralink’s trials advanced more rapidly as a result of the reduction in regulatory scrutiny, raising alarms among bioethicists about patient safety (Levy et al., 2025).

The Boring Company and Local Environmental Reviews:
The Boring Company specializes in high-speed tunneling projects, which typically face local and federal environmental review hurdles. DOGE's broader weakening of environmental offices, especially regional EPA branches, facilitates faster approvals for Musk's tunneling ventures (Bravender, Richards, & Yachnin, 2025).

With fewer regulators overseeing groundwater, air quality, and seismic impacts, The Boring Company can advance projects with reduced oversight, cutting project timelines and costs (Bravender et al., 2025).

Broader Ethical Conflicts:
Across all ventures, Musk’s unprecedented dual role as a federal adviser while maintaining leadership over private enterprises presents deep conflict of interest concerns (Gold, Wingrove, & Erman, 2025). U.S. ethics laws prohibit federal employees from working on matters affecting their financial interests, but Musk’s pervasive corporate ties make recusals difficult to enforce comprehensively.

Although Musk claims to recuse from specific agency reviews, critics argue that DOGE’s influence — from regulatory cutbacks to contract reallocations — overwhelmingly aligns with Musk’s financial interests, creating an appearance of impropriety (Chang & Pereira, 2025; Bravender et al., 2025).

Watchdog groups such as the Project on Government Oversight (POGO) and members of Congress have called for investigations into Musk’s role, warning that public trust in impartial governance is jeopardized when regulatory dismantling benefits a single billionaire so directly (Sullivan, 2025).

Conclusion

The emergence of the Department of Government Efficiency (DOGE) under Elon Musk’s leadership represents an unprecedented blending of public governance with private interests. While the stated purpose of DOGE is to streamline government operations and eliminate waste, the practical effect has been to advance Musk’s corporate interests across multiple industries (Bond, Fowler, & Allyn, 2025; Gold, Wingrove, & Erman, 2025).

Reducing the capacity of agencies like the SEC, FTC, FCC, DOT, NASA, DOE, and EPA has benefited Musk’s businesses by lowering regulatory barriers, increasing reliance on his companies for federal contracts, and weakening oversight that could otherwise constrain corporate behavior (Miller, 2025; Schladen, 2025; Feiner, 2025; Zhao, 2025; Bravender, Richards, & Yachnin, 2025).

At the same time, these changes raise profound ethical and legal concerns. Musk’s simultaneous roles as regulator and entrepreneur create textbook conflicts of interest, undermining the credibility of federal decision-making and raising the specter of regulatory capture (Sullivan, 2025; Chang & Pereira, 2025).

The benefits Musk accrues — fewer SEC investigations into Tesla, streamlined FAA approvals for SpaceX, easier privacy compliance for Twitter/X, expanded broadband subsidies for Starlink, faster environmental clearance for The Boring Company — must be weighed against public harms such as weakened consumer protections, diminished transportation safety, reduced financial market integrity, and compromised environmental stewardship (Associated Press, 2025; ProPublica, 2025).

In conclusion, the DOGE experiment offers a cautionary case study: when private financial interests are allowed to dominate public regulatory structures, both democratic accountability and public trust are at risk. Musk’s involvement illustrates the dangers of blurred lines between corporate ambition and governmental authority. Moving forward, it underscores the urgent need for stronger conflict-of-interest safeguards and independent ethics oversight to protect the public good from the corrosive influence of concentrated wealth and power.

References

Associated Press. (2025, February 22). Musk’s cost-cutting team is laying off workers at the auto safety agency overseeing his car company. AP News. https://apnews.com

Bond, S., Fowler, S., & Allyn, B. (2025, February 7). Who is part of Elon Musk’s DOGE, and what are they doing? NPR News. https://www.npr.org

Bravender, R., Richards, H., & Yachnin, J. (2025, March 5). DOGE ditches environmental offices nationwide. E&E News (Politico). https://www.eenews.net

Chang, E., & Pereira, I. (2025, February 27). Here are all the agencies that Elon Musk and DOGE have been trying to dismantle so far. ABC News. https://abcnews.go.com

Estes, A. C. (2025, March 18). The Elon Musk company you should be worried about right now. Vox. https://www.vox.com

Feiner, L. (2025, April 5). DOGE staffers are listed in the FCC directory. The Verge. https://www.theverge.com

Gold, H., Wingrove, P., & Erman, M. (2025, February 3). Elon Musk is barreling into government with DOGE, raising unusual legal questions. NPR News. https://www.npr.org

Levy, R., Wingrove, P., & Erman, M. (2025, February 22). US FDA asks fired scientists to return, including some reviewing Musk’s Neuralink. Reuters. https://www.reuters.com

Miller, B. (2025, April 16). Musk’s DOGE hunts for SEC cuts but savings will prove elusive. Bloomberg Law. https://news.bloomberglaw.com

ProPublica. (2025, February 11). One agency tried to regulate SpaceX. Now its fate could be in Elon Musk’s hands. ProPublica. https://www.propublica.org

Rogers, K. (2025, April 11). Musk calls Trump’s looming NASA cuts ‘troubling.’ Politico. https://www.politico.com

Schladen, M. (2025, April 11). Federal trade commissioners alarmed as Elon Musk’s team seeks antitrust records. Iowa Capital Dispatch (States Newsroom). https://iowacapitaldispatch.com

Sullivan, M. (2025, April 4). Musk-led DOGE infiltrates FTC, deepening threat to consumers, kids, and competition. Electronic Privacy Information Center (EPIC). https://epic.org

West, D., & Albin, S. (2025, April 12). Leaked slides: DOGE playing star role in DOE kill list drama. E&E News (Politico). https://www.eenews.net

Yadava, S., & Condon, B. (2025, February 22). DOGE is laying off workers at auto safety agency overseeing Tesla. AP News. https://apnews.com

Zhao, C. (2025, February 13). Acting NASA chief says DOGE to review space agency spending as hundreds take buyout. Reuters. https://www.reuters.com