Trump Treasury hopeful John Paulson vows to slash government spending with Elon Musk
Wall Street titan John Paulson has vowed to slash government spending with help of Tesla CEO Elon Musk if he becomes Treasury secretary under a second Donald Trump administration.
The billionaire investor — who famously made a killing in the 2008 financial crisis with a $3 billion bet against bad home loans — said he would work with the owner of the X social media platform, formerly known as Twitter, “to reduce federal spending”.
Paulson, who is close to Trump and worth an estimated $4 billion, singled out green projects that were passed by the Biden-Harris administration under the so-called Inflation Reduction Act.
“All of these tax subsidies for solar, for wind, inefficient, uneconomic energy sources,” he told the Wall Street Journal in an exclusive interview. “Eliminate that. That brings down spending.”
Junking the Biden-Harris clean-energy tax breaks could save $921 billion over a decade, according to the Tax Foundation, but it would require Congress to sign off on that plan.
There is as yet no indication as to whether the former president’s long-time ally will succeed in landing the job, but the Journal quoted sources familiar who said he is one of several being considered.
Trump’s transition team is co-chaired by Howard Lutnick, the CEO of Cantor Fitzgerald, who has vowed to stock the next White House with those loyal to the former “Apprentice” star.
Lutnick himself, reportedly in the mix to be the next US ambassador to Israel, told Fox News on Monday that the next president could shave “$1 trillion” off government spending.
“There is so much waste. The way we buy things in the government is outrageous,” he said.
The US spent $6.75 trillion in the 2024 tax year that ended Sept. 30, but only raked in $4.92 trillion in revenues. over the same period, according to the Congressional Budget Office.
It left a $1.38 trillion black hole in Uncle Sam’s accounts. Budget deficits – the gap between spending and income each year – can push up interest rates and slow economic growth.
Paulson gave no specific target for spending cuts in his Journal interview.
Whoever becomes the next Treasury secretary will be Trump’s point person between lawmakers, Wall Street and business leaders.
The appointee would be expected to oversee fresh tax cuts and a possible overhaul of financial regulations that JPMorgan CEO Jamie Dimon branded an “onslaught” under the current administration.
Other names under consideration by Trump include Scott Bessent, a founder of Key Square Group and another Trump ally on Wall Street, former trade ambassador Robert Lighthizer, and former Securities and Exchange Commission Chairman Jay Clayton.
“I wouldn’t expect a Senate fight,” Paulson said of a potential nomination. “I have good relationships with senators on both sides of the aisle.”
The 68-year-old money man also told the Journal that his role could also include focusing on energy and trade policy, promising to bring in “strategic tariffs” to take on Chinese companies.
He is also a trustee of the Manhattan Institute, a conservative-leaning think tank whose chairman is fellow Wall Street executive Paul Singer, the founder of activist investment firm Elliott Management.
Last month, Paulson threatened to yank his money out of the US if Harris won on Nov. 5, with the Trump megadonor saying her economic plans would “crash the market.”
Trump has also vowed to make Tesla CEO Elon Musk the head of a new “government efficiency commission” if he wins next week.
Musk said this week he could cut at least $2 trillion from the federal budget, but failed to spell out how he would rein in government spending.
