Former President Donald Trump, GOP presidential candidate, speaks at the New York Economic Club in New York, September 5, 2024.
Adam Jeffery | CNBC
NEW YORK — Former President Donald Trump on Thursday unveiled a new set of economic policy proposals that include Tesla CEO Elon Musk’s idea to create a government efficiency commission to eliminate wasteful federal spending, a shot at the spending levels of the Biden-Harris administration.
“This committee will develop an action plan to completely eliminate fraud and improper payments within six months,” Trump said in a speech to a room full of business executives at the Economic Club of New York.
He added that Musk could be “good” to lead the committee “if he has the time.”
Trump embracing Musk’s idea is the latest sign of their tepid alliance, a sharp turn from just two years ago, when the two were embroiled in a public spat, openly trading insults at each other.
“When Elon started the conversation with the president, I think the president was very excited that someone like Elon Musk is so committed to the future of America that he would be willing to participate in something that will help the government run more efficiently,” the Trump campaign said. adviser Brian Hughes said on a call with reporters before the former president’s speech.
Hughes added that details on how the efficiency committee will be staffed and run are yet to come.
But Musk has repeatedly raised his hand to lead such a commission: “I look forward to serving America if the opportunity arises. No pay, no title, no recognition required,” the billionaire entrepreneur reiterated in a Thursday’s post in X.
The government efficiency committee’s plan also gives Trump a concrete proposal to attach his attacks to what he sees as frivolous spending in the Biden-Harris administration.
Former President Donald Trump and GOP presidential candidate speaks at the New York Economic Club in New York on September 5, 2024.
Adam Jeffrey | CNBC
“It’s time to send comrade Kamala Harris back home to California,” Trump said during his speech on Thursday. “He wants four more years to impose the radical leftist agenda that is a fundamental threat to the well-being of every American family and America itself. We’re talking about America itself.”
So far, Trump’s economic proposals come with their own set of high prices.
During Thursday’s speech, Trump doubled down on potentially costly proposals such as cutting the corporate tax rate to 15 percent from the current level of 21 percent, deepening the first-ever tax cut that lowered the rate from 35 percent . He also reinforced his commitment to eliminate taxes on gratuities and Social Security benefits.
A recent study by the Penn Wharton Budget Model estimated that Trump’s proposals could increase federal deficits nearly five times more than what Harris has so far revealed. It’s an open question whether the savings from the Musk-inspired government efficiency committee will be canceled out by these increases in the budget deficit.
The Trump campaign did not immediately respond to CNBC’s request for comment on this question.
The former president pledged to remove some funding from President Joe Biden’s Inflation Reduction Act. “I promise low taxes, low regulations, low energy costs,” he said.
Trump also praised some of his own first-term policy decisions, including imposing tough tariffs on China and cutting the corporate tax rate to 21 percent.
“I took care of our economy [as] I would mind my own business,” Trump said.
Thursday’s speech comes as Trump works to sharpen his policy, five days before he is scheduled to face Harris in a Sept. 10 debate hosted by ABC News.
Some of Trump’s economic proposals, such as his plan to impose blanket tariffs on all imports, have faced backlash from economists and Wall Street analysts.
Goldman Sachs, for example, said in an analyst note on Tuesday that Trump’s proposals could threaten to dampen GDP growth. They also said a hypothetical Harris administration could be better for the U.S. economy. Trump’s campaign strongly rejected that idea on Thursday.
“They’re pushing this kind of stuff into the political environment and then not being held accountable or responsible for how bad it was,” Trump campaign adviser Hughes told Goldman Sachs.
The multinational investment bank’s assessment of the competitive financial plans was part of a proprietary research paper created for Goldman Sachs clients and not for the general public.
— CNBC’s Josephine Rozzelle contributed to this report.
