The Daily - Elon Musk Takes on Washington

Episode Date: February 5, 2025

Elon Musk and his team have taken a hacksaw to the federal bureaucracy one agency at a time, and the question has become whether he’s on a crusade that will leave the government paralyzed or deliver a shake-up it has needed for years.Jonathan Swan, a White House reporter for The New York Times, takes us inside this hostile takeover of Washington.Guests: Jonathan Swan, a White House reporter for The New York Times.Background reading: Inside Mr. Musk’s aggressive incursion into the federal government.For more information on today’s episode, visit nytimes.com/thedaily. Transcripts of each episode will be made available by the next workday. Photo: Mike Segar/Reuters Unlock full access to New York Times podcasts and explore everything from politics to pop culture. Subscribe today at nytimes.com/podcasts or on Apple Podcasts and Spotify.

From the New York Times, this is The Daily. I'm Rachel Abrams. Today, Elon Musk and his team have taken a hacksaw to the federal bureaucracy one agency at a time. And the question has become whether he's on a crusade that will leave the government paralyzed or deliver exactly the kind of shakeup it's needed for years. My colleague, Jonathan Swan, takes us inside this hostile takeover of Washington.

It's Wednesday, February 5th. So Jonathan, we always understood that Elon Musk was going to be important in this administration in the second Trump presidency. Trump had given the group that Musk was put in charge of, the Department of Government Efficiency, or DOGE as it's commonly known, the job of shrinking the entire federal government. But the question was always just how much power Musk would actually have as a private citizen

operating outside the president's cabinet. And over the past few days, we've actually started to get an answer, which is a whole lot of power. Yes, his power is extraordinary. He effectively is unaccountable. Donald Trump has fully empowered him to roam across the federal government,

get inside the pipes of the federal government, look at the payment systems and the databases to embed inside these agencies. So this is not some chin stroking professor doing an analysis of government from the outside and let me sit down at my table and write you some recommendations. Walter Isaacson wrote a biography about Elon Musk where people who know him talk about quote unquote demon mode, which he goes into, which is this sort of manic energy, staying up all night, sleeping on the floor of the factory.

He's done this at Tesla, SpaceX, Twitter, setting unrealistic deadlines, doing mass layoffs because he thinks stuff aren't hardcore enough. He's effectively trying to do that to the federal government. His team have moved beds into agency offices. He has an office space in the West Wing. And he also has been working out of this opulent Secretary of War suite in the Eisenhower executive office building. And he's brought with him this cohort from Silicon Valley, people who've worked for him at Tesla and SpaceX and he's installed them in some of the most important parts of

government. So this is Elon Musk getting his hands into government, doing what he's done at these companies and remember, we should say he's been in the private sector, probably the singular entrepreneur of our lifetime, but if you understand what he's done with his business, he is marked by incredible risk taking, extreme risk taking and a willingness to, if he or his employees consider regulations or laws to be quote unquote dumb, he pushes them and particularly at SpaceX to defy those regulations, just do it anyway. And if people want to sue, so be it.

If it gets to the mission of what he's trying to accomplish, we're seeing that kind of approach inside government right now. Okay, so what is that demon mode risk taking ethos actually look like that he's applying to the government? What has he been up to this past week? Well, the first sign of Musk and his team moving into government, the first actually look like that he's applying to the government? What has he been up to this past week? Well, the first sign of Musk and his team moving into government, the first physical sign was literally right after Trump's inauguration, the day after, workers in the Eisenhower Executive Office Building,

which is the big building next to the West Wing, they show up to work. And this building houses some operations for the United States digital service. This is an operation that was set up in 2014 to fix the federal government's online services. And they find a sticky note saying DOGE, D-O-G-E on a door to a suite that was once used as a workspace. A literal post-it note. Yeah, literally a sticky note on the door saying Doge. And this used to be a workspace for senior technologists at the agency. And inside there were these black backpacks that were strewn about.

You had these young engineers, many of them in their 20s. Some of them were wearing t-shirts with blazers over them, roaming the halls, unfamiliar faces, didn't have security badges on that federal employees typically take when they go into offices. And it turned out that this was the Musk army, the cohort of young men who work for Musk or who are in his network. And they have come to Washington to help Musk on his mission of slashing the federal government. And the message is really clear. They have arrived. Yeah, and they're not wasting any time.

My colleagues and I have talked to federal employees at different agencies, and it's really quite extraordinary. I mean, these Musk allies are interviewing people across agencies, asking them, what have you done lately? Give me examples of work you've done. Justify your job. Exactly. And when the federal employees ask them, well, who are you? In some cases, they're refusing to give their names because they don't want to be doxed

or they'll just give their first name. So there's this sort of atmosphere of we're putting the fear of God into all of you. And there is a real hostility that they're showing to the federal workforce. Right. They're really trying to send the message that we've arrived. This conversation goes one way. We ask the questions. What's the next big thing that happens last week? Well, there's been so much, but one of the big signs of Musk's imprint was an email that went out to roughly two

million federal workers, which is really kind of in itself extraordinary. You know, this is not something that normally happens. And they sent out this email offering them the option to resign but be paid through the end of September. And the email subject line, fork in the road, was the same one that Musk used in the email he sent to Twitter employees when he offered them severance packages in late 2022.

And it says, basically, we'd love you to resign, quit your lower productivity public sector job and take a higher productivity private sector job. So it literally devalued their jobs. So he's basically encouraging people to leave the government entirely and do something quote unquote more productive in the private sector, which I can imagine if you're a civil servant, that feels like you're being treated with contempt.

Right. And then Musk goes further and starts targeting other departments. So where does he start? Musk began as a matter of priority with the Treasury Department. His team, and this goes back to December during the transition, but they became fixated on the payment system for the entire federal government that literally distributes more than $5 trillion a year in federal spending. Wow.

So just imagine millions of Americans' social security details and personal details, a very, very closely guarded system, usually monitored by career civil servants who are very experienced. This came to a head last week when a top career official at Treasury resisted giving Musk's representatives access to the federal payment system. He just said no. He just said no, this is not going to happen. No, I don't agree with this.

And he was threatened with administrative leave and then retired. So all this happens on Friday. And then the treasury secretary, Scott Besant approved access for the Musk team to the payment system. Okay. So let me see if I understand this. Musk sends his guys in there. They demand access to this very sensitive system.

It runs all the payments for the federal government, somebody tries to resist, and that guy basically quote unquote retires, meaning maybe gets fired, and then they get in the pipes anyway. That's right. And when we talk to former senior Treasury officials, they can't remember of an instance ever when this has happened. There are understandable concerns that an intrusion into the system by outsiders, such as Musk's team, could lead to critical government obligations going unpaid, from missed benefit payments to even more dramatic consequences. Now, very important to note,

the White House has said on the record now, it took a while for us to get clarity on this, that the access they were granted was quote unquote, read only. At least that's what it is now, meaning the Musk allies who are now now treasury officials, can read and monitor these payments, but can't alter them. Why do we think Musk wants access to the actual system? Why does he even want his people in their reading? There's two parts to this. We've talked to a lot of people who Musk has talked to privately within the administration.

His theory of government is the way to control government is to control the computers. So he wants to get access to the computers that house the critical data within the government, including all the personnel that are on the federal payroll, and also to get access to the pipes that distribute the money. And Musk has told administration officials that he thinks they could actually balance the federal budget if they eliminate all the fraudulent payments that are going out to fake people. There's no evidence to support that statement that I'm aware of. But to be fair to Musk, there are billions upon billions of dollars

in improper payments that go out. There was a government accountability office estimate that the government made something like $236 billion in improper payments during the 2023 fiscal year. Most of those were overpayments. This is to different people around the country, social security, what have you. That's a lot of money, to be clear. It's a lot of money. And there is potential

for cost savings here, but I mean, the federal deficit for 2024 was almost $2 trillion. So Musk is of the view that the government is spending vast amounts of money that is wasteful, that is fraudulent. And in his sort of platonic ideal, his engineers would just be able to cut off these payments that are going out unilaterally. And the question then is, okay, well what then? Because this is money appropriated by Congress, and it's not actually up to Elon Musk to unilaterally, with his team, direct what payments go out and what payments stay in. It seems, Jonathan, that the fundamental sort of animus and feeling underneath all of these

actions that you've described, the email getting inside the pipes of treasury, is this basic distrust or even disdain of government operations? Yeah, and I don't need to editorialize or speak in my own words on this. I mean, you just listen to the people involved in this. Russell Vogt, who served in Trump's first administration, and he's his choice

again to lead the Office of Management and Budget. He said in a 2023 speech, talking about the plans for their coming back into power, he said, we want the bureaucrats to be traumatically affected. Wow. He said, when they wake up in the morning, we want them not to go into work because they are increasingly viewed as the villains. He's a very close ally with Elon Musk. And Musk himself has the same mindset.

I mean, it's very revealing the language he's using. He said, very few in the bureaucracy actually work the weekend. So it's like the opposing team just leaves the field for two days. So you see the mindset. We are coming in and now fully empowered by the President of the United States with the attitude of this is a government full of incompetent people, full of people who don't do any work, who are lazy, don't work the weekends. And we are coming in here with the sort of bureaucratic version of a bazooka. And he's even talked about eliminating entire agencies.

We'll be right back. So, Jonathan, you mentioned earlier that Elon Musk set his sights on entire agencies. What did you mean by that? What did he do? Well, he has turned his attention very aggressively towards the US Agency for International Development, which is known as USAID. This is the agency that is charged with delivering humanitarian assistance overseas to some of the most vulnerable people around the world, you know, nutritional assistance for children designed to help promote stability and humanitarianism. And we've seen now a pretty stunning series of events. A week ago, members of Musk's team entered the headquarters of USAID.

They demanded and were granted access to the agency's financial and personnel systems. During that period, an acting administrator at the agency put about 60 senior officials on paid leave and issued stop work orders that led to the firing of hundreds of contractors with full-time employment and health benefits. By Saturday, the agency's website vanished. Like literally just disappeared, went dark. And when the top two security directors at USAID tried to stop members of the Musk team

from entering a secure area to get classified files, they were placed on administrative leave. Katie Miller, who works on the Musk initiative, said on X that no classified material was accessed without proper security clearances. But by Monday, USAID was effectively paralyzed. And Musk has said that the president agreed that we should shut it down. Is Musk just allowed to come in and shut down an entire agency just like that? I mean, is Trump fully supportive of this?

Well, remember, it's Congress, not the president, that gets to decide how to structure the executive branch of government. And Congress has enacted laws that says USAID should exist as an independent establishment. So this is running directly into very serious legal questions and questions about whether Congress is going to assert itself as Trump basically runs roughshod over the institution. And in terms of Musk's own authority, he's effectively unaccountable because Trump has given him his blessing. It's not like Trump is really interested in the minutia of the United States digital service or the Treasury payment system or all of these pretty wonky, and in some cases, quite obscure parts of government that Musk and his team are taking control of. parts of government that Musk and his team are taking control of. He keeps Trump, you know, abreast. He drops into White House meetings. He has an office in the West Wing. He'll go

into the Oval, talk to Trump on the phone. But even like senior members of the White House staff have found themselves in the dark about what he's doing and trying to figure out after the fact. One Trump official that one of my colleagues talked to who only spoke on the condition of anonymity said that Musk was widely seen as operating with a level of autonomy that almost no one can control. In other words, demon mode, as we described earlier. Exactly.

So you now have a situation where you have an entire federal agency that's responsible for delivering aid around the world, where employees there are in a state of confusion, anxiety, they don't know whether their agency will exist. Sure doesn't look like it will. And no one can say this is a surprise. Trump campaigned on this, that we shouldn't be spending money overseas, that we should cut our foreign spending, and has been very clear that he intended to do this. So while there are really serious legal and constitutional questions about this, nobody who's been reading our coverage and listening to Donald Trump for the last

four years should have any level of surprise that he's doing this. But how much of this is actually about the budget of USAID? Like, it doesn't strike me as sort of the biggest agency if you were looking for, you know, big cuts. Is this a huge amount of money? Is it about something that's beyond the money? Well, USAID makes up less than 1% of the federal budget. It's spent about $38 billion in fiscal year 23.

Elon Musk has said that their success will be measured on how many dollars per day they slash from federal spending. So they are looking for dollars everywhere, but there's definitely an ideological component here. Elon Musk has called USAID evil. That's not just saying, oh, here's $38 billion that we want to trim out. No, this is an evil institution in his mind. And if you are looking for the platonic ideal of an agency that cuts against the quote unquote America first agenda. It's probably the agency that sends money in foreign aid overseas. The White House sent out a list of things that they say that the USAID is doing that do not align with the president's agenda. They picked out examples that relate to diversity, equity and inclusion around

the world. And basically the impression that the White House has sought to create in the public mind is this is a quote unquote woke agency run by radical lunatics in Trump's words that is spreading left wing gender ideology around the world and we're going to shut it down to save taxpayer money. Where do you think Musk and Doge go from here? Because we're only two weeks into the new administration, so I'm wondering if you expect that he's going to continue to operate without much resistance. So it's really interesting.

After Trump won the election, won the popular vote, Democrats have been just a mess, you know, divided, everyone coming up with different theories about why they lost, depressed, some of them capitulating. But we've just seen in the last few days, the resistance starting to awaken. And it's actually not Trump who's awakened them, it's oddly Elon Musk. We're starting to see organised labour rally against him. You're seeing lawsuits being filed. When our constitution is under attack, what do we do? Stand up, fight back.

You saw protests in DC outside the buildings of OPM, USAID and the Treasury. Trump is a puppet of a foreign national whose name is Musk, who has taken over our data, who has taken over our buildings, has locked federal workers out of buildings. Democratic members of the Senate who've been pretty quiet since the election are starting to voice their outrage about what Musk is doing. We don't have a fourth branch of government called Elon Musk and that's going to become real clear.

You're starting to see the resistance, which had been really in hiding since the election, start to emerge again. It is embarrassing to read the headlines about free America, where one man is walking around like he is the boss of all of us, and we don't know who put him in charge. And it is time for us to put an end to that. Now, people have been predicting for weeks that Trump and Elon Musk would fall out, that this relationship would not be sustainable. It's actually been much more durable than many people thought.

Trump almost entirely speaks very warmly of Musk in private, but he did sound a little bit of a cautionary note on Monday when he was asked about Musk by reporters and he said, quote, Elon can't do and won't do anything without our approval. And he said, if there's a conflict, then we won't let him near it. That's fine to say that, but it's not really what's happening in practice. Okay. So Jonathan, is there an argument to be made that this kind of slash and burn tactic is actually the only way to carry out the promise that Musk and Trump have made about

shrinking the government? And that also, given Musk's track record in the private sector and his unique standing with Trump, Musk is uniquely positioned, some might even say he's really qualified, to make these kind of cuts in a way that nobody has before. Well, I think there's sort of two separate parts to this. One is, is Elon Musk a brilliant entrepreneur who has shown that he is very ruthless about cost cutting to the point where he's taken several of his companies to the brink of destruction before rescuing them and in the cases of Tesla and SpaceX turning them into transformational companies. Yes, yes, all of that is true. Where this becomes thorny is we're not talking about an electric car company where let's

say Elon Musk didn't manage to pull it back from the brink and it failed. Well, the only casualties of that are a slower transition to electric cars, some investors lose their money, some engineers lose their jobs, not to diminish that. But now you're talking about the federal government writ large. So is there the possibility that Elon Musk and Trump could slash huge amounts of money out of the federal government? Yes, of course there is. But the stakes feel really different here. The stakes are different, right?

You're talking about the country and the federal government, and you're talking about the public interest. And just take one example, right? Elon Musk leads this effort to send out this email to the entire federal workforce, email saying basically, we'd love if you would just resign. Just think about that for a second. Who are the federal employees that are most likely to take that offer? It's probably people who have options outside, who are sought after, who have technical expertise that is valuable, that private sector companies could benefit from.

So you're going to potentially lose actually the thin layer at the top that is most skilled, most experienced, and potentially most critical to the functionings of government. So basically what you're saying is that you're encouraging possibly the most talented, maybe some of the most important civil servants across the government who do a range of things to leave and that does raise a really interesting question of who is left. Yes. And the other thing that is challenging with this reporting on Elon Musk is that in this role,

it's actually very hard sometimes to discern where the public interest ends and where Elon Musk's private interests begin. Well, let's talk about his private interests actually, because there's a whole other dimension to this that we haven't even talked about, which is how much business Elon Musk does with the federal government. Even if you think he's the right person to cut it down, and even if you think his experience at Twitter is relevant here, and just to remind people,

when he took over Twitter and gutted it and got rid of a lot of employees, people said, Twitter will never survive this, and obviously, Twitter X is very much still operational. Even if you think all of that experience is relevant, he still has all kinds of potential conflicts of interest. So tell us a little bit about that. Well, you have the richest man in the world whose companies have billions of dollars worth of contracts with the federal government.

I mean, SpaceX, his rocket company, effectively dictates NASA's launch schedule. And you have the president of the United States giving Musk vast power over the bureaucracy that regulates his companies and awards them contracts. The intermingling is extremely tight. He's shaping not just policy, but personnel decisions. Officially Musk is serving as a special government employee, according to the White House, but this is a status typically given to part-time outside advisors to the federal government who offer their advice based on their private

sector expertise. He has not had to divest from any of his businesses. He still retains his interest in all his businesses. And he is hardly a part-time advisor offering advice. And that's before we even get to his foreign conflicts. Tesla has relied to a significant extent on the Chinese government and the Chinese market. So there are just conflicts as far as the eye can see. And while Trump has asserted that where there's a conflict of interest, they won't allow Musk to play in that area, the bare facts already disprove that.

Jonathan, you have covered Trump and those around him for years, obviously, and their biggest complaint, and you hear this almost every day from people like Stephen Miller, one of the president's top advisors, you profiled on the show last week, is that the federal government has become overrun by unelected bureaucrats who are accountable to nobody. They don't face elections. And in fact, even a few days ago, Elon Musk himself said it was time to, quote, restore power to the people from the vast unelected bureaucracy.

But given everything you've laid out here for us, it feels like Musk and Doge have become arguably the most powerful unelected bureaucracy possibly in the history of the country. So what they used to exist in this country was the spoil system, was a patronage system where when power changed hands, government was stocked with supporters, people were rewarded with jobs, a series of laws were passed that made the civil service permanent effectively or gave them really strong job protections with the idea being that people develop expertise over a long period of time. These are not inherently political jobs or shouldn't be and what

we're potentially seeing right now is the return to that spoil system, to eliminating this permanent bureaucracy and replacing it each time a new president comes in with their cohort. Not just for a thin layer at the top, as happens every administration, but for something for a much larger group of people. And when you have the richest man in the world leading this effort, still holding his interests in his private companies, still his companies doing billions of dollars of business with the federal government, still with his companies being regulated by the federal government, you have

a level of conflict of interest that we've just never seen in the modern era. Jonathan, thank you very much. Thanks for having me. On Tuesday, Elon Musk and his team took aim at their latest federal agency, the Department of Education. Officials told employees that Doge was scrutinizing their operations, and they warned that it could lead to staff reductions. We'll be right back. Here's what else you need to know today.

In a joint news conference on Tuesday night at the White House, President Trump said the United States would take over Gaza, permanently relocate its 2 million residents to Egypt and Jordan, and turn the enclave into quote, the Riviera of the Middle East. This was not a decision made lightly. Everybody I've spoken to loves the idea of the United States owning that piece of land developing and creating thousands of jobs with something that will be magnificent. Trump said that developing Gaza would supply jobs and housing for, quote, the people of

the area, a vague reference that aligns with the far-right coalition within Netanyahu's government, which wants to repopulate Gaza with Israelis. The statement was also striking because it contradicted decades of U.S. policy that has favored a two-state solution. But just like statements the president has made about taking over Greenland and the Panama Canal, Trump did not cite any legal authority that would allow him to take Gaza over,

nor did he address the fact that forcible removal of an entire population violates international law. And on Tuesday, China responded to the 10% tariff imposed by Trump with a flurry of retaliatory measures, including tariffs of its own on liquefied natural gas, coal, and farm machinery imported from the U.S. In response to that, the United States Postal Service stopped accepting packages from China. The back and forth demonstrated how quickly Trump's tariffs can escalate into a series of painful tit-for-tat economic reprisals.

Today's episode was produced by Jessica Chung, Mujzadeh, and Caitlin O'Keefe, with help from Shannon Lin. It was edited by Lizzo Balin with help from Paige Cowitt, contains original music by Will Reid, Pat McCusker, Marian Lozano, and Dan Powell, and was engineered by Alyssa Moxley. Our theme music is by Jim Brunberg and Ben Landsberg of Wonderly. That's it for The Daily.

I'm Rachel Abrams. See you tomorrow.