Billionaire Elon Musk arrived at the US Congress on Tuesday, March 4th, and learned about a new concept – budget rescissions. This is a relatively obscure financial tool that can provide legal support for his federal budget reduction plans.
Musk’s Department of Government Efficiency (DOGE) team is working hard to eliminate waste, fraud, and abuse of funds, helping to reduce the United States’ annual fiscal deficit of up to $2 trillion.
Earlier that day, the US Supreme Court made an unfavorable ruling on a plan by the Trump administration, halting its freeze of around $2 billion in foreign aid funds, as part of the government’s shutdown of the US Agency for International Development (USAID). Subsequently, Musk attended a lunch meeting with Republican senators and urged Congress to take action.
While enjoying fried catfish, the senators explained to Musk that the White House could include the billions he saved in a rescission package, submit it to Congress for a vote, and formally cancel the allocation of these funds.
The senators noted that Musk seemed quite excited by the idea.
“He’s thrilled,” Republican Senator Lindsey Graham said. “He had no idea about this tool before.”
Graham, chairman of the Senate Budget Committee and a supporter of this plan, elaborated. Later, Musk had dinner with House Republicans in the basement of the Capitol building.
“There is still a lot of room for improvement in government spending,” Musk said after the closed-door meeting. “We are making good progress.”
Budget rescission is a federal government fiscal management tool that allows the President or an executive department to request Congress to cancel previously approved but unspent budgets to reduce government spending, prevent wastage, or reallocate resources.
The last time a President formally proposed a “budget rescission” to Congress was in 2018. At that time, President Trump proposed pulling back around $15 billion in approved but unused federal funds. However, the proposal did not garner enough support in Congress and was ultimately not passed.
The budget rescission mechanism may become a crucial action in the next phase for DOGE.
The Trump administration and Republican lawmakers hope to show voters that DOGE’s actions are not just about layoffs and shutting down agencies but genuinely saving costs.
Senate Majority Leader John Thune jokingly expressed a bit of concern about Musk providing his phone number directly to senators during the meeting, making it available for discussions on budget issues anytime.
“I thought his phone might start blowing up,” Thune said in an interview with Fox News. “He might need to change his number.”
Senators mentioned that Musk’s assistant Katie Miller would establish a dedicated line for senators to call and raise any questions regarding budget cuts.
Republican Senator Josh Hawley from Missouri indicated that many senators simply wanted “better communication channels and to know what happens next.”
However, Hawley added, “I’m not sure if anyone in the White House knows what happens next.” He described Musk’s team as somewhat “opportunistic.”
During the lunch meeting, Kentucky Republican Senator Rand Paul proposed the idea of utilizing the budget rescission mechanism for the first time.
“I like what Elon is doing now, I like trimming waste, I like finding out about the absurd things we’re throwing money at overseas,” Paul said after the meeting. “But to make these measures a reality, rather than a one-time thing, they need to be turned into rescission packages and sent back to Congress for a vote.”
As the Senate’s staunchest budget hawk, Paul has long been against excessive federal budget spending.
Senators noted the scale of these cut proposals is currently unclear. Paul suggested cutting at least $100 billion in federal spending, and it’s unknown how long the deliberation would take if the White House submits these proposals to Congress.
Even with a Republican majority, it is challenging to keep all Republicans unified during a vote. Whether a budget rescission package can pass remains unknown, especially when faced with opposition from all Democrats.
Musk had previously expressed to lawmakers that he hopes DOGE can save approximately $1 trillion for the federal government this year.
(This article references related reports from the Associated Press)