Donald Trump appoints Elon Musk to lead new government efficiency department

Donald Trump has confirmed Elon Musk will head a new department aimed at creating a more efficient government.

The announcement on Tuesday hands even more influence to the world’s richest man, and fulfils a promise Trump made to the tech billionaire after he endorsed him in the race for the White House and poured nearly £100 million into his campaign.

In a statement, the president-elect said Musk and former Republican presidential candidate Vivek Ramaswamy ‘will pave the way for my Administration to dismantle Government Bureaucracy, slash excess regulations, cut wasteful expenditures, and restructure Federal Agencies’.

Trump said the new department will realize long-held Republican dreams and ‘provide advice and guidance from outside of government’, signaling the Musk and Ramaswamy roles would be informal, without requiring Senate approval and allowing Musk to remain the head of electric car company Tesla, social media platform X and rocket company SpaceX.

The new department would work with the White House and Office of Management & Budget to ‘drive large scale structural reform, and create an entrepreneurial approach’ to government never seen before, Trump said. 

The work would conclude by July 4, 2026 – the 250th anniversary of the signing of the Declaration of Independence.

What is the Department of Government Efficiency and how will it work?

Despite its name, the new department is not actually a government agency.

The acronym ‘DOGE’ is a nod to Musk’s favorite cryptocurrency, dogecoin.

Trump said in a statement that Musk and Ramaswamy will work from outside the government to offer the White House ‘advice and guidance’ and will partner with the Office of Management and Budget to ‘drive large scale structural reform, and create an entrepreneurial approach to Government never seen before’.

He added that the move would shock government systems.

It’s not clear how the organization will operate.

It could come under the Federal Advisory Committee Act, which dictates how external groups that advise the government must operate and be accountable to the public.

Federal employees are generally required to disclose their assets and entanglements to ward off any potential conflicts of interest, and to divest significant holdings relating to their work.

Because Musk and Ramaswamy would not be formal federal workers, they would not face those requirements or ethical limitations.

Musk posted on X: ‘Department of Government Efficiency. The merch will be (fire emojis).’

Later he added: ‘Threat to democracy? Nope, threat to BUREAUCRACY!!!’

‘Musk will have a massive role in the Trump White House’

Musk, ranked by Forbes as the richest person in the world, already stood to benefit from Trump’s victory, with the billionaire entrepreneur expected to wield extraordinary influence to help his companies and secure favourable government treatment.

With many links to Washington, Musk gave millions of dollars to support Trump’s presidential campaign and made public appearances with him.

Adding a government portfolio to Musk’s plate could benefit the market value of his companies and favoured businesses such as artificial intelligence and cryptocurrency. 

‘It’s clear that Musk will have a massive role in the Trump White House with his increasing reach clearly across many federal agencies,’ equities analyst Daniel Ives of Wedbush Securities said in a research note.

‘We believe the major benefits for Musk and Tesla far outweigh any negatives as this continues to be a ‘poker move for the ages’ by Musk betting on Trump.’

‘This is the ultimate corporate corruption’

The move was criticized by Public Citizen, a progressive consumer rights NGO that challenged several of Trump’s first-term policies.

‘Musk not only knows nothing about government efficiency and regulation, his own businesses have regularly run afoul of the very rules he will be in position to attack in his new “czar” position,’ Lisa Gilbert, co-president of Public Citizen, said in a statement.

‘This is the ultimate corporate corruption.’

Trump likened the efficiency effort to the Manhattan Project, the US undertaking to build the atomic bomb that helped end World War Two, while Musk promised transparency.

‘All actions of the Department of Government Efficiency will be posted online for maximum transparency,’ Musk said on X, inviting the public to provide tips.

‘We will also have a leaderboard for most insanely dumb spending of your tax dollars. This will be both extremely tragic and extremely entertaining.’

Musk said at a Trump rally at Madison Square Garden in October that the federal budget could be reduced by ‘at least’ $2 trillion.

Discretionary spending, including defense spending, is estimated to total $1.9 trillion out of $6.75 trillion in total federal outlays for fiscal 2024, according to the Congressional Budget Office. 

‘Your money is being wasted and the Department of Government Efficiency is going to fix that. We’re going to get the government off your back and out of your pocketbook,’ Musk said at the rally.

New department with a nod to Musk’s favourite cryptocurrency

In August Musk and Tesla won the dismissal of a federal lawsuit accusing them of defrauding investors by hyping dogecoin and conducting insider trading, causing billions of dollars of losses.

Dogecoin has more than doubled since Election Day, tracking a surge in cryptocurrency markets on expectations of a softer regulatory ride under a Trump administration.

Shares in Tesla fell on Wall Street ahead of the announcement but are up about 30% since the election.

Ramaswamy is the founder of a pharmaceutical company who ran for the Republican presidential nomination against Trump and then threw his support behind the former president after dropping out.

In his 2021 bestseller ‘Woke, Inc.’, Ramaswamy decried decisions by some big companies to base business strategy around social justice and climate change concerns.

Ramaswamy said the appointment means he is withdrawing from consideration for the pending U.S. Senate appointment in Ohio, where Governor Mike DeWine will appoint a replacement for JD Vance, who will become Trump’s vice president when they are inaugurated on Jan. 20.

Trump’s top team taking shape

The next president has been putting his Cabinet together, with a series of positions announced this week.

His first nomination was Susie Wiles as chief of staff, with Tom Homan as his ‘border czar’ and Elise Stefanik as his ambassador to the United Nations.

On Tuesday he named John Ratcliffe, a director of national intelligence in his first administration, to lead the CIA, while Fox News host Pete Hegseth will become defence secretary.

James Smith