Musk slams Trump's ‘disgusting abomination' spending bill, warns of ballooning US debt
WASHINGTON: Tensions between Elon Musk and President Donald Trump escalated Tuesday (Jun 3) as the billionaire tech mogul derided the administration's marquee economic legislation, just days after stepping down from a key White House advisory role.
"This massive, outrageous, pork-filled Congressional spending bill is a disgusting abomination," Musk posted on X, adding, "Shame on those who voted for it: you know you did wrong."
The Tesla and SpaceX chief had previously offered only mild critiques of the so-called "One Big Beautiful Bill," which includes deep cuts to welfare programs but is projected to add between US$2.5 trillion and US$3.8 trillion to the federal debt. His latest comments suggest a sharp break with the White House, where Musk recently led the Department of Government Efficiency (DOGE).
Musk's frustration boils over
Musk's criticism was not limited to the bill's budgetary implications. He said it would leave citizens burdened with "crushingly unsustainable debt" and called out those who backed it for prioritising political gains over fiscal discipline.
He also expressed frustration with the removal of electric vehicle tax credits, a direct blow to Tesla, and with other unfulfilled promises, such as the exclusion of his Starlink system from US air traffic control plans and the withdrawal of his ally Jared Isaacman's nomination to lead NASA.
Though Trump previously praised Musk's role in cutting government waste, sources say the billionaire has become disillusioned after failing to secure policy wins that would benefit his companies. His stepping down from DOGE followed months of controversial cuts, including the closure of multiple agencies and tens of thousands of job losses.
White House and GOP leaders push back
White House Press Secretary Karoline Leavitt downplayed the remarks, saying: "The president already knows where Elon Musk stood on this bill. It does not change his opinion. This is one big, beautiful bill, and he is sticking to it."
House Speaker Mike Johnson was more forceful, calling Musk 'terribly wrong,' despite having walked him through the bill just a day earlier.
Still, not all Republicans were united. Some fiscal conservatives have raised alarm over the ballooning national debt, echoing Musk's warnings.
Bill under fire as negotiations continue
The House narrowly passed the bill last month by a single vote. It now heads to the Senate, where revisions are expected during a month of tense negotiations. The Congressional Budget Office estimates the measure could add up to US$3.8 trillion to the federal debt, which already exceeds US$36 trillion.
DOGE had initially promised to save US$2 trillion in discretionary spending, but the agency's own claims have fallen far short. The White House says it has saved just US$180 billion, a figure independent analysts have disputed.
Senate Democrats on Tuesday released a report listing 130 instances of what they describe as unethical or corrupt decisions that enriched Musk, adding over US$100 billion to his wealth.
Musk recalibrates political ties
The rift with Trump marks a significant shift for Musk, who donated nearly US$300 million to the president's 2024 campaign and previously wielded significant influence over technology and fiscal policy.
His recent moves suggest a deliberate pivot. Insiders say Musk is keen to reduce the political blowback facing Tesla, where customers in some markets have reportedly been turned off by his perceived proximity to Trump.
In response to mounting criticism, Musk has pledged to refocus on his companies, stepping back from Washington and allowing DOGE to continue under new leadership.
As the Senate prepares for a contentious round of negotiations, Musk's high-profile rebuke adds to the growing pressure on lawmakers to revise the bill, and signals a potential fracture in the president's business support base.
Hashtags
Try Our AI Features
Explore what Daily8 AI can do for you:
Comments
No comments yet...
Related Articles
CNA
23 minutes ago
- CNA
Analysis:Stablecoins' step toward mainstream could shake up parts of US Treasury market
As stablecoins take a step toward becoming mainstream, some segments of the U.S. Treasury market, notably securities with short-term maturities, could be vulnerable to volatility as they become more closely tied to the world of cryptocurrency. Congress is poised to pass legislation establishing a regulatory framework for stablecoins, expected to help legitimize the dollar-pegged cryptocurrencies which are commonly used by crypto traders to move funds between tokens. Proponents of the bill argue that clear rules will spur further stablecoin activity, and support a growing sector of buyers of short-term U.S. government debt, or T-bills, that are typically considered cash-equivalent securities. But others worry a larger footprint for a relatively new and more volatile industry could in turn spur volatility in the bills market. "In the event of a sudden loss of confidence, regulatory pressure, or market rumors, this could trigger large-scale liquidations, potentially depressing Treasury prices and disrupting fixed-income markets," said Cristiano Ventricelli, vice president and senior analyst of digital assets at Moody's Ratings. "A problem in the stablecoin sector could spill over into broader financial markets, affecting institutions holding similar assets or (that) rely on stablecoin liquidity," he added. If signed into law, the stablecoin bill would require tokens to be backed by liquid assets - like U.S. dollars and short-term Treasury bills - and monthly disclosures from issuers on the composition of their reserves. That means if stablecoins are expected to grow, issuers will have to purchase more T-bills to back their assets. The bill could be passed by the Senate as early as next week and could eventually increase the amount of U.S. Treasuries held by stablecoin issuers such as Tether and Circle, the latter of which debuted on the NYSE on Thursday. They together hold $166 billion in U.S. Treasuries, according to a report by Bain & Company's financial services practice. The stablecoin market, currently about $247 billion according to crypto data provider CoinGecko, could grow to $2 trillion by 2028 if legislation were to pass, Standard Chartered estimated. U.S. Treasury Secretary Scott Bessent encouraged lawmakers to pass legislation to codify federal rules for stablecoins, arguing that it could lead to a surge in demand for U.S. government debt. Currently, there are about $29 trillion in Treasury securities outstanding, of which $6 trillion are bills. RED FLAGS In an April research note, JP Morgan analysts estimated that stablecoin issuers could become the third-largest buyer of Treasury bills in the coming years. That raises red flags for some, who worry that would lead to closer ties between the crypto ecosystem and the traditional financial world. The Treasury Borrowing Advisory Committee, a group of banks and investors that advise the government on its funding, said in a study in April that growth of the stablecoin market at the expense of bank deposits could reduce banks' demand for U.S. Treasuries, as well as have an impact on credit growth. "If (stablecoin issuers) have to move those Treasuries quickly, or the market demands that, it could create some credit crunches there," said Mark Hays, associate director for cryptocurrency and financial technology at Americans for Financial Reform. Hays said this assumes that stablecoins become more widely used after legislation passes. Money market funds, which invest in short-term debt, could be impacted. Money market expert Pete Crane, president of Crane Data, said money funds are watching stablecoin closely but the size of the market would have to become significantly bigger to create concerns over financial stability. "Treasury bills are normally so short (in maturity) that people don't concern themselves with price movements, but of course in case of a rapid liquidation the price is going to go down," he said. Issues with stablecoins have not so far been large enough to cause systemic problems but the calculus could shift if federal legislation were to spur widespread adoption. In 2022, a meltdown in the crypto markets sent Tether's stablecoin below its dollar peg, which caused no impact on the Treasury market. At the time, then-U.S. Treasury Secretary Janet Yellen said stablecoins like Tether didn't pose a systemic risk to the financial system because they were too small in scale. In 2023, Circle's USD Coin also lost its dollar peg after the company revealed it held a portion of its reserves at failed Silicon Valley Bank. Circle and Tether declined comment. POTENTIAL UPLIFT TO MARKET Still, some argue that there could be benefits from increasing demand for government debt. "If we pass stablecoin legislation, dollars will be exported around the world, which will extend the strength of the dollar as the world's reserve currency," said Matt Hougan, chief investment officer at Bitwise Asset Management, a crypto asset manager. Roger Hallam, global head of rates at Vanguard, said higher demand for short-term government debt instruments could incentivize the Treasury Department to increase T-bill issuance, rather than long-dated debt, to cover its deficit funding need. Yields of long-dated U.S. debt have been rising recently, partly due to concerns over the country's fiscal health. "You could choose to issue more bills to meet that demand, which would relieve some of the tensions we currently see in the market ... around the scale of future issues and who's going to buy all these bonds," Hallam said.
Business Times
39 minutes ago
- Business Times
Singapore stocks rise post Trump-Xi talks; STI up 0.4%
[SINGAPORE] The local bourse ended Friday (Jun 6) in a positive territory after a call between US President Donald Trump and Chinese President Xi Jinping boosted investors' confidence. The benchmark Straits Times Index (STI) rose 0.4 per cent or 16.60 points to end at 3,934.29. Across the broader market, gainers beat losers 266 to 205 as 849.5 million securities worth S$1.1 billion changed hands. Xi and Trump agreed to further dialogue on trade after their call on Thursday evening. Trump said that disputes over rare-earth exports were resolved, and he had accepted China's invitation to visit. Beijing said it had complied with the terms of last month's trade truce. Trump also reversed his stance on Chinese students, welcoming them to study in the US. Maybank's research team noted in a report on Friday: 'While this may be a positive development for risk, we are also wary that Trump may simply shift his attention to another country instead of China.' The team expects Trump's trade and tax policy to continue swinging the markets, and highlighted that Trump and Musk's feud on social media offset some equity gains from positive US-China trade developments. 'We hold on to selling US dollar on rally alongside fading US exceptionalism, and a weaker NFP (non-farm payrolls) print would reinforce the narrative that US exceptionalism is indeed fading,' wrote the team. On the STI, Sembcorp Industries led the gains, up 3 per cent or S$0.20 at S$6.85. SIA was at the bottom of the list, down 1.3 per cent or S$0.09 at S$7.09 on a cum-dividend basis. The trio of local banks ended the day mixed. OCBC was up 0.3 per cent or S$0.05 at S$16.28. DBS rose 0.2 per cent or S$0.10 at S$45.12. UOB was down 0.1 per cent or S$0.04 at S$35.25 on a cum-dividend basis. Regional markets closed mixed on Friday. Japan's Nikkei 225 rose 0.5 per cent, while the Bursa Malaysia Kuala Lumpur Composite Index dropped 0.1 per cent. Hong Kong's Hang Seng Index was down 0.5 per cent.
CNA
an hour ago
- CNA
Musk's Starlink gets key India licence from telecoms ministry, sources say
NEW DELHI :Elon Musk's Starlink has received a key licence from India's telecoms ministry, sources with knowledge of the matter told Reuters on Friday, clearing a major hurdle for the satellite provider and taking it closer to launching commercial operations in India. Starlink is the third company to get a licence from India's Department of Telecommunications, which has approved similar applications by Eutelsat's OneWeb and Reliance Jio to provide services in the country.
