As Musk melts down over budget bill, Trump threatens his government contracts

Jenna Benchetrit · CBC News

· Posted: Jul 01, 2025 2:34 PM EDT | Last Updated: 6 hours ago

U.S. President Donald Trump and tech titan Elon Musk are feuding again, arsenic Trump's megabill — a fund reconciliation measure projected to adhd trillions to the country's national deficit — passes a ballot successful the Senate.

Trump's arguable spending measure has been the root of Musk's ire since the opening of the summer, starring to the soap opera-like collapse of their adjacent moving narration that began during Trump's predetermination run past year.

Musk, who was brought into the Trump medication successful January to pb the then-newly formed Department of Government Efficiency — a cost-cutting task that led to monolithic occupation cuts crossed the nationalist service — said the authorities would pb to "the biggest indebtedness summation successful history."

The Congressional Budget Office, a non-partisan authorities agency, estimated that successful all, the measure including the Senate's additions would adhd $3.3 trillion US implicit 9 years. The CBO has projected the U.S. shortage volition beryllium $1.9 trillion US this year.

The bill, which promises measures similar expanded taxation cuts, wide deportations and cuts to Medicaid, is projected to trim national revenues by a larger borderline than it volition trim national spending, widening the deficit. Musk sees this as undoing the cost-saving enactment helium performed with DOGE.

Trump, meanwhile, has suggested that he'd people Musk's companies by eliminating their government contracts and subsidies, which a Washington Post investigation recovered amounted to astatine slightest $38 cardinal US implicit the years — providing the instauration for Musk's immense idiosyncratic wealth.

"DOGE is the monster that mightiness person to spell backmost and devour Elon," helium told reporters connected Tuesday morning.

WATCH | Why Trump and Musk broke up: 

How does Musk benefit?

Musk presently runs oregon owns six companies, and his backstage abstraction formation venture SpaceX holds about $22 cardinal US successful authorities contracts, according to SpaceX CEO Gwynne Shotwell — the bulk from NASA and the Department of Defence. 

SpaceX technology is truthful ingrained successful immoderate of the Pentagon's operations — similar its Starlink outer service, which provides net connectivity successful agrarian areas, and which was utilized during subject operations successful Ukraine past year — that immoderate person questioned however the agency, and the U.S.'s abstraction program, would fare without it. 

Conversely, immoderate of Musk's companies are besides susceptible to regulatory oversight, including encephalon spot company Neuralink — its technology and objective trials are overseen by the U.S. Food and Drug Administration — and Tesla, which has been scrutinized implicit its self-driving software. That company's enlargement into robo-taxis besides depends connected regulatory approval.

Tesla besides gets regulatory credits for selling EVs. And it has benefited from EV subsidies — but Senate Republicans recently added a connection to the fund measure that would rapidly termination a $7,500 US user taxation recognition for electrical vehicles, a nonstop deed to the company.

"The past happening Tesla investors privation to spot is Trump spell from [a champion friend] to an enemy, oregon astatine slightest idiosyncratic who tin beryllium a detractor for Musk. It's each politics, and that's the frustration," said Daniel Ives, planetary caput of tech probe astatine Wedbush Securities successful New York.

There was ne'er overmuch uncertainty that the Trump medication would do distant with the alleged EV mandate, according to Ives. The U.S. president, penning connected Truth Social, said electrical cars are "fine, but not everyone should beryllium forced to ain one."

"The bigger interest is what this means for autonomous and the regulatory model for Musk and Tesla," said Ives. "In presumption of SpaceX and immoderate of the concerns there, I deliberation the bark is worse than the bite."

Musk, distraught by the spending bill, has been threatening for the past fewer weeks to signifier a caller U.S. governmental party, pitching it arsenic an alternative to what helium referred to arsenic the Democratic and Republican "uniparty." Writing connected X, the societal media level that helium owns, Musk said that helium would signifier the America Party wrong a time if the spending measure is passed, which it has.

"Investors privation to spot him retired of politics, but helium keeps diving into it. And that's portion of the frustration," said Ives. 

WATCH | Will Musk and Trump destruct each other?: 

A deed to Musk's businesses

Musk's choler implicit the measure is being perceived wrong the White House arsenic interest implicit his ain companies, due to the fact that the measure "would wounded Musk's businesses successful a fig of antithetic ways," Dasha Burns, the White House main analogous for Politico, told CBC's Front Burner last month.

LISTEN | Why Trump and Musk broke up: 

"Musk is simply a astute guy," she added. "The mode that helium is messaging the measure and his problems with it bash deed connected the aforesaid issues that immoderate fiscal conservatives person with the bill, arsenic well."

In a menace to Musk connected Truth Social connected Tuesday, Trump said the U.S. would prevention a "fortune" if it ended subsidies for SpaceX's rocket launches and satellites, and Tesla's electrical conveyance production.

Responding connected X, the societal media level that helium owns, Musk said, "I americium virtually saying CUT IT ALL. Now."

Tesla's banal plummeted connected Tuesday, with immoderate shareholders unnerved by Musk's spat with Trump. The company's second-quarter net are retired this week.