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Billionaire hedge fund manager John Paulson told The Wall Street Journal that he would work with Elon Musk in a potential second Trump administration as he seeks a slot in the former president’s cabinet.
Paulson told the Journal that, if nominated for Treasury Secretary, he would prioritize extending Trump’s 2017 Tax Cuts and Jobs Act and “working with Musk to reduce federal spending.” Paulson added that he hasn’t talked to Musk about a team-up.
While Musk hasn’t discussed his exact plans to slash the federal budget, Paulson said he wold aim to cut the Inflation Reduction Act’s subsidies for green energy, which Trump has attacked. The IRA provides $369 billion in tax breaks and subsidies for clean energy, and has helped push companies to invest $129 billion in related projects, according to Manufacturing Dive.
“All of these tax subsidies for solar, for wind, inefficient, uneconomic energy sources,” Paulson told the Journal. “Eliminate that. That brings down spending.”
Musk has agreed to lead a hypothetical Department of Government Efficiency, which would aim to conduct a “complete financial and performance audit of the entire federal government” and recommend reforms. Although his companies have been received lots of government dollars, and Tesla (TSLA-1.82%) benefits from the IRA’s tax credits for electric vehicles, he supports ending tax subsidies for automakers.
Earlier this week, Musk said he would cut federal spending by “at least” $2 trillion, without providing further details. The federal government has spent $6.75 trillion in fiscal year 2024, according to the Treasury Department.
More than half of that spending went to Social Security and Medicare — which Trump has said he will not “cut one penny from” — as well as interest on federal debt and defense. Trump’s smorgasbord of tax proposals are poised to hasten Social Security’s insolvency, according to a recent report by the nonpartisan Committee for a Responsible Federal Budget.
Paulson is one of several candidates Donald Trump’s campaign is considering for Treasury Secretary, alongside names like former trade ambassador Robert Lighthizer — who has been meeting with investors groups to discuss Trump’s tariff proposals — and Key Square CEO Scott Bessent. Among other things, Bessent has proposed an unprecedented plan for Trump to remove Federal Reserve Chair Jerome Powell, and has become his go-to economic advisor.
Paulson made his fortune — his net worth currently stands at $3.8 billion, per Forbes — by betting against subprime mortgages during the 2007 credit bubble. An event hosted at Paulson’s Palm Beach, Florida, home in April raised $50.5 million for Trump.