Musk is about to leave his unfulfilled ambitions DOGE

Deng Tong, Golden Finance

On May 29, Musk confirmed his resignation in a post on X and thanked President Trump for "giving the opportunity to reduce wasteful spending." The White House "removed" Musk from his position as a special government employee on Wednesday evening local time.

1. Why did Musk leave DOGE?

The direct reason is Musk's identity as a special government employee. Musk once said that he would perform his duties as an external volunteer, and the White House later confirmed that he would work as an unpaid special government employee. This means that he needs to participate in 130 days of federal work in a year.

Starting from Trump's inauguration on January 20, he will reach 130 days of work at the end of May. Therefore, according to the hard regulations, Musk will leave the White House at the end of May.

But if there is no hard regulation, can Musk continue to work in the White House?

2. Is Musk happy with his 130-day trip to the White House?

1. Disappointed with Trump's bill

In a clip from the interview shared by CBS on Tuesday, Musk noted that he was "disappointed" with Trump's budget bill, a Republican-backed bill that would add trillions of dollars to the federal debt (primarily by permanently extending massive tax cuts).

"Frankly, I was disappointed to see this huge spending bill that not only did not reduce the budget deficit, but increased it, and undermined the work of the DOGE team. I think a bill can be big or it can be beautiful. I don't know if it can be both."

When White House reporters asked Trump to respond to Musk's criticism on Wednesday, he did not respond directly, saying only: "We're going to negotiate the bill, and I'm not happy with some aspects of it, but I'm excited about other aspects. That's the way they do things."

Musk's public remarks come as the Republican bill is about to be submitted to the Senate for consideration, and several senators in the Senate have also criticized the bill for increasing the deficit. The bill covers many of Trump's priorities, and he has urged Congress to send the bill to his desk for signature "as soon as possible."

Asked to respond to Musk's criticism of the Republican domestic policy bill passed by the House, Trump said: "We have to get a lot of votes," adding that "we can't cut spending" unless it's detailed. "We're going to negotiate this bill, and I'm not happy with some aspects of it, but I'm excited about other aspects. That's what they did. It's big. It's a big, beautiful bill."

House Speaker Mike Johnson, a Louisiana Republican, defended the GOP budget bill on X, saying it built on the work of the Department of Government Efficiency team overseen by Musk. Johnson said: "The House of Representatives ensured that the success of the Department of Government Efficiency (DOGE) was continued in the One Big Beautiful Bill." Trump adviser Stephen Miller pointed out that "DOGE achieved savings on discretionary spending (such as funding agencies), and our One Big Beautiful Bill achieved more than $1.6 trillion in savings on mandatory spending (such as Medicaid). Both bills are historic and have taken a huge step towards solving our debt and deficit problems." 2. Musk faces a lawsuit for "illegal exercise of federal government power" On Tuesday, a U.S. District Court judge ruled that the lawsuit accusing Musk and the Department of Government Efficiency of illegally exercising the power of the federal government can continue. U.S. District Court Judge Tanya Chutkan issued a 42-page order on the lawsuit, which was submitted by several Democratic state attorneys general. The order denied a motion to dismiss the case, but Chutkan granted a motion to dismiss President Trump as a defendant, ruling that "a court may not enjoin the President from performing his official duties."

The ruling highlights the often conflicting descriptions of the power Musk and the DOGE entities have been given to carry out Trump's agenda, and how public statements and actions have undermined efforts to dilute that power in court.

"At this point, the states appear to have grounds to allege that Musk makes decisions regarding 'Federal expenditures, contracts, government property, and the existence of Federal agencies.'" The states allege that Trump violated the Appointments Clause of the Constitution by giving Musk and the Department of Government Efficiency (DOGE) broad powers to make mass firings, terminate grants and contracts, and access sensitive government data without congressional approval.

New Mexico Attorney General Raul Torres said in a statement that Tuesday's ruling "is an important milestone in preserving the American system of checks and balances. We are proud to advance this case and help end Musk's reign of terror."

3. Tesla's performance has declined sharply

Beginning in February of this year, protests broke out outside Tesla stores in many parts of the United States. It started because Musk promoted the work of cutting US government costs in the Trump administration's Efficiency Department, which damaged the Tesla brand. In the United States and Europe, many Tesla showrooms were vandalized and consumers launched boycotts because people were dissatisfied with its political stance.

Musk once pointed out: "They do like to burn my cars, which is not good." Trump said: "You really sacrificed a lot, and they were very unfair to you."

According to the financial report released by Tesla on April 22, as of March 31, Tesla's net profit was US$420 million, a sharp drop from US$1.405 billion in the same period last year. Tesla's net profit attributable to common shareholders in the first quarter was US$409 million, a sharp drop of 71% compared with US$1.39 billion in the same period last year; diluted earnings per share attributable to common shareholders were US$0.12, a drop of 71% compared with US$0.41 in the same period last year.

According to the Wall Street Journal, as the company's profits and stock prices both declined, Tesla's board of directors began contacting several executive headhunting companies about a month ago to look for Musk's successor. Investors are concerned that Musk has spent too much time on positions related to cutting US government costs. Board members asked Musk to spend more time on the company.

However, Tesla publicly denied the report on May 1. Musk is still regarded as the soul of Tesla. Wedbush Securities analyst Dan Ives once said: "Tesla is Musk, Musk is Tesla." However, Tesla is currently facing difficulties: aging product lines, intensified competition in China, and Musk's controversial political remarks have led to a decline in both product demand and profits. Deutsche Presse-Agentur commented that Musk's actions in Washington and his right-wing political views have also caused some potential buyers to stay away from Tesla. Analyst Ives estimates that long-term demand for Tesla vehicles may fall by 15% to 20%.

In addition, Tesla has also been involved in Trump's tariff trade war to a certain extent. Although most of Tesla's cars are produced in the United States, the company needs to purchase some materials from abroad, which will face import taxes. Pressure from China will also hurt Tesla's earnings. Earlier this month, the company was forced to stop accepting orders for the Model S and Model X from mainland customers. Musk said last week that he had to be “intensely focused” on his company and was “back to working 24/7 and sleeping in conference rooms/servers/factory rooms.”

3. Does DOGE really save money?

DOGE claims to have saved an average of more than $10 billion per week since President Trump took office. But has it really saved that much money?

Last October, Musk promised to cut the federal government budget by "at least $2 trillion." He then halved that goal and said on April 10 that by the end of fiscal 2026, $150 billion would be saved by "reducing fraud and waste." The U.S. federal budget for the previous fiscal year was $6.75 trillion.

The U.S. media also exposed some calculation errors, for example, Doge mistakenly claimed to have saved $8 billion by canceling an immigration contract with a total value of $8 million.

Doge says it is working to upload all receipts in a "comprehensible and transparent way" and that as of April 20, the receipts it has posted represent "approximately 30% of the total savings." In addition, they list some receipts that are "unavailable for legal reasons."

The largest individual savings Doge lists is $2.9 billion.

The money comes from canceling a contract - which went into effect in 2023 under President Biden - to house up to 3,000 unaccompanied migrant children at a facility in Texas. Doge appears to have subtracted the total amount of the contract from the spending to date to arrive at the $2.9 billion figure. But in reality, Doge's number is "based on speculative, never-used numbers" and actual spending depends on how many children are placed at the facility and the services they need. "In fact, the government has never borne these costs and will never reach this cap. It is estimated that the actual recordable savings from the early termination of the contract is about $153 million."

The second largest savings listed by Doge came from the cancellation of a $1.9 billion contract between the Internal Revenue Service (IRS) and an IT company called Centennial Technologies. However, some government departments have poor record keeping problems, which means that the expenditure amounts of some contracts may not be updated in a timely manner. And the CEO of Centennial Technologies has pointed out that the agreement was actually canceled during the Biden administration last fall.

Some analysts believe that the budget recently passed by the House of Representatives only approved $9.3 billion in agency cuts, less than 5% of Musk's initial $2 trillion annual savings target. Jessica Riedl, a budget analyst at the Manhattan Institute, said: "DOGE thunders loudly but rains little, and the actual savings may be far less than $10 billion." Political reality exposes the essence of DOGE. This may be just a superficial cost-cutting show, and the "stubborn disease" of the federal budget has not been moved at all. Members of Congress have a firm grip on the executive branch, and even Republicans are reluctant to let vigilantes like Musk interfere with their turf. ”

Fourth, will DOGE continue to operate after Musk leaves?

On Thursday, the Wall Street Journal reported that about 100 DOGE employees will remain in various government departments after Musk leaves. The White House has also stated that members of US President Trump’s cabinet will work with government efficiency staff in various federal agencies to advance ongoing work. White House press secretary Carolyn Levitt said that cabinet ministers "have been working closely with Musk and will continue to work with government efficiency employees who join these agencies as political appointees."

Musk and Trump set a deadline for DOGE to complete the work, which coincided with the 250th anniversary of the signing of the U.S. Declaration of Independence-Trump signed an executive order to establish the Doge project on the day of his inauguration in January this year, which mentioned that Doge’s termination date was July 4, 2026.

As early as December, Musk responded to a tweet, "DOGE’s last step is self-destruction. ”

But former Department of Government Efficiency (DOGE) employees said in their first interview after leaving the job that with Musk leaving the Trump administration, the government efficiency improvement project he led is likely to stagnate. Software engineer Sahil Ravingia (Sahil Ravingia) Lavi, who worked at DOGE for nearly two months, predicted that the division would quickly "die down." "Like a death whimper," said Lavingia, who was fired earlier this month. "The charm of this project is Musk himself." He expects DOGE employees to "stop coming to work one after another, like children joining a startup that will go bankrupt after four months."

Source: Golden Finance, BBC, Reuters, Bloomberg, Washington Post, NBC, NPR, etc.