Musk, Ramaswamy to Lead Government Efficiency Drive

Summary

WSJ What’s News: Musk, Ramaswamy to Lead Government Efficiency Drive
Release Date: November 13, 2024
Host/Author: The Wall Street Journal

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Introduction

In the November 13, 2024 episode of WSJ What’s News, The Wall Street Journal delves into President-elect Donald Trump’s strategic appointments aimed at enhancing government efficiency. The episode explores the implications of selecting high-profile figures like Elon Musk and Vivek Ramaswamy to lead the newly proposed Department of Government Efficiency (Doge). Additionally, the episode covers significant Republican leadership votes, economic indicators, market movements, and anticipated changes within the Securities and Exchange Commission (SEC).

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1. Trump’s Government Efficiency Drive

Key Appointments and Objectives

President-elect Donald Trump has announced the formation of the Department of Government Efficiency (Doge), appointing Tesla CEO Elon Musk and biotech founder Vivek Ramaswamy to spearhead efforts to cut government spending, eliminate regulations, and restructure federal agencies.

• Elon Musk’s Role and Vision

  • Andrew Rastuccia highlights Musk’s ambitious goal: "[Musk] has previously said that he wants to cut federal spending by at least $2 trillion." (01:34)
  • Musk is expected to remain outside the federal payroll, allowing him to retain ownership of his business empire.

• Vivek Ramaswamy’s Proposals

  • As a presidential candidate, Ramaswamy advocated for the elimination of several key departments and agencies, including the Education Department, FBI, ATF, and Nuclear Regulatory Commission (02:07).

Additional Key Appointments

• Robert Lighthizer as Trade Czar

  • Trump's selection of former U.S. Trade Representative Robert Lighthizer aims to oversee policy at the Commerce Department and the Office of the U.S. Trade Representative. This role does not require Senate confirmation, enabling swift implementation of tariff proposals post-inauguration (02:19).

• Pete Hegseth as Secretary of Defense

  • An army veteran and Fox News host, Hegseth, if confirmed, will manage the Department of Defense’s substantial budget of $850 billion and oversee nearly 3 million personnel (03:00).

• John Ratcliffe as CIA Director

  • Former House lawmaker John Ratcliffe steps in to lead the CIA, bringing a sense of relief to intelligence officials seeking a more moderate nominee (03:15).

Notable Quotes

• Political Analyst: "Any sort of lack of unity that we see with the voting could be a sign that it will be difficult for Republicans to unify under the new Congress." (00:26)
• Trump Spokesperson: "President Trump fully understands and appreciates the math here, and it's just a numbers game." (04:26)

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2. Republican Leadership Elections

House and Senate Leadership Votes

On Capitol Hill, Republican lawmakers are poised to vote for new Senate and House leadership positions, marking significant steps in shaping the incoming administration’s legislative agenda.

• Senate Leadership:

  • Front-runners include Senators John Thune (SD) and John Cornyn (TX), with Rick Scott (FL) closely aligned with Trump’s preferences (03:43).

• House Leadership:

  • Republicans are set to nominate their Speaker, with current Speaker Mike Johnson expected to secure the position comfortably (04:10).
  • Katie Stetch Farek emphasizes the tight majority: "Republicans have so far clinched 216 seats in the House, too short of a majority, with 12 seats still to be called." (05:42)

Implications for Trump’s Agenda

The narrow majority in the House signals potential challenges in passing Trump’s key priorities, especially given the diverse fiscal perspectives among Republican lawmakers.

• Political Analyst: "Some of the things that Trump wants to do are expensive... It's one of the first moments we'll get to see how calibrated House Republicans are with Trump." (04:57)
• Katie Stetch Farek: "The tight numbers game in the House is already setting up to test Republicans' ability to deliver on Trump's key priorities." (04:47)

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3. Economic Updates

Consumer Price Index (CPI) and Inflation Trends

The U.S. Bureau of Labor Statistics is set to release the latest CPI data, indicating continued cooling of inflation, albeit at a gradual pace.

• Justin Lahart: "Economists think that overall prices were 2.6% higher than a year earlier in October... economists expect there to continue to be this cooling trend." (06:12)
• The Federal Reserve is anticipated to cut rates by a quarter percentage point in its final meeting of the year, supported by the ongoing trends in inflation (06:00).

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4. Market Movements

Spirit Airlines’ Bankruptcy Filing

Following the collapse of merger talks with Frontier Airlines, Spirit Airlines is preparing to file for bankruptcy protection, edging closer to a potential filing.

• Luke Vargas: "Spirit's shares are down more than 60% in off-hours trading." (06:53)
• Frontier Airlines declined to comment, while Spirit Airlines mentioned being in "constructive discussions to restructure debt" (06:46).

Klarna’s US IPO Plans

Swedish fintech firm Klarna has filed paperwork for a U.S. IPO, signaling a significant step despite a substantial reduction in its valuation to finance its expansion (06:53).

• Luke Vargas: "Klarna has significantly cut its valuation to fund its expansion in recent..." (07:23)
• The company had previously discussed the possibility of an IPO next summer (07:20).

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5. Changes in the SEC

Gary Gensler’s Departure and SEC’s Future

With Donald Trump’s impending inauguration, Gary Gensler is set to depart as SEC Chair, paving the way for potential policy shifts within the agency.

• Richard Vanderford: "It's certain that come January he's going to be out." (08:20)
• SEC Expert: "Gensler has been an aggressive enforcer on the topic of crypto... his legacy could be quickly unwound." (08:14)

Potential Policy Shifts

• Climate Disclosure: Initiatives like requiring public companies to disclose climate risks and emissions are expected to be rolled back.
• Crypto Regulation: Critics argue that Gensler’s application of traditional securities laws to crypto is outdated, advocating for more industry-friendly regulations.
• AI Enforcement: While some enforcement approaches may adjust, the SEC is expected to maintain its active stance on investor protection with over 1,500 active investigations (09:35).

Notable Quotes

• SEC Expert: "The SEC is a very active law enforcement agency... the basic investor protection enforcement agenda is likely to just keep on going." (09:35)
• SEC Expert on Crypto: "The SEC should maybe be a bit hands off or take more input from the industry." (10:16)

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Conclusion

The episode of WSJ What’s News provides an in-depth analysis of President-elect Trump’s strategic appointments and their potential impact on government efficiency and regulatory frameworks. From high-profile selections like Elon Musk and Vivek Ramaswamy to critical leadership votes within the Republican Party, the episode underscores the complexities and challenges ahead. Additionally, the economic indicators and market movements highlight the dynamic landscape that the new administration will navigate. Changes within the SEC signal a possible shift in regulatory approaches, particularly in areas like climate disclosure and cryptocurrency. For listeners seeking a thorough understanding of these developments, this episode offers valuable insights and expert commentary.

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Notable Contributors:

• Luke Vargas: Wall Street Journal Reporter
• Andrew Rastuccia: Journal Reporter
• Katie Stetch Farek: Journal Congressional Reporter
• Justin Lahart: Journal Economics Reporter
• Richard Vanderford: Wall Street Journal Reporter
• SEC Expert: [Anonymous]

Production Team:

• Kate Bullivant and Daniel Bach: Producers
• Christina Rocca: Supervising Producer

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For more detailed strategies and updates, tune into future episodes of WSJ What’s News.

Transcript

[NHTSA Representative]

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[News Anchor]

Trump officially taps.

[Luke Vargas]

Elon Musk to cut government spending Plus.

[News Anchor]

House Republicans prepare to vote on their.

[Political Analyst]

Pick for speaker Any sort of lack of unity that we see with the voting could be a sign that it will be difficult for Republicans to unify under the new Congress. When President Trump is in the White.

[News Anchor]

House and spirits merger talks with Frontier.

[Luke Vargas]

Fall apart, taking the airline one step closer to a bankruptcy filing.

[News Anchor]

It's Wednesday, November 13th.

[Luke Vargas]

I'm Luke Vargas for the Wall Street.

[News Anchor]

Journal, and here is the AM edition.

[Luke Vargas]

Of what's News, the top headlines and.

[News Anchor]

Business stories moving your world. President elect Donald Trump has tapped biotech founder Vivek Ramaswamy and Tesla CEO Elon Musk to lead what is being called the Department of Government Efficiency, or doge, in order to cut spending, eliminate regulation.

[Luke Vargas]

And restructure federal agencies.

[News Anchor]

Doge will sit outside of the federal.

[Luke Vargas]

Government, and Musk, the world's wealthiest person, isn't expected to become an official government employee, meaning he likely won't be required to divest from his business empire. Journal reporter Andrew Rastuccia has more on what could be in store.

[Andrew Rastuccia]

Musk has previously said that he wants to cut federal spending by at least $2 trillion. In fiscal year 2024, for example, the government spent roughly $6.8 trillion. Exactly how they would carry this out is a little bit unclear at the moment, but we do have some hints broadly at what Trump on the campaign trail promised. He promised, for example, for every one new regulation, to cut 10 existing regulations. And he has talked about making sweeping changes to civil service protections for government employees, essentially making it easier to fire them and potentially even eliminating some federal agencies.

[Luke Vargas]

As a presidential candidate, Ramaswamy called for eliminating the Education Department, the FBI, the Bureau of Alcohol, Tobacco, Firearms and Explosives and the Nuclear Regulatory Commission.

[News Anchor]

In another potential staffing move, we are exclusively reporting that Trump has told his allies he'd like former U.S. trade Representative Robert Lighthizer to serve as his administration's.

[Luke Vargas]

Trade czar, a role that would likely.

[News Anchor]

Give Lighthizer oversight of policy at the.

[Luke Vargas]

Commerce Department and the Office of the US Trade Representative. Given that the position wouldn't require Senate confirmation, he could begin implementing Trump's tariff proposal shortly after the inauguration. Lighthizer and a spokeswoman for Trump's transition, didn't respond to a request for comment. And later in the show, we'll hear about the potential changes coming to the securities and Exchange Commission ahead of the expected departure of Chair Gary Gensler.

[News Anchor]

Meanwhile, Trump's push to staff formal government roles is steaming ahead with the selection of army veteran and Fox News host Pete Hegseth as secretary of defense.

[Luke Vargas]

If confirmed by the Senate, Hegseth would.

[News Anchor]

Take over the federal government's biggest department.

[Luke Vargas]

With a budget that reached $850 billion last year and oversees nearly 3 million civilian workers and military service members. Separately, Trump has chosen former House lawmaker John Ratcliffe to lead the Central Intelligence Agency. Ratclif Trump briefly served as the director of national Intelligence toward the end of Trump's first term, and his nomination is likely to be greeted with some relief by intelligence officials who had feared a more radical nominee.

[News Anchor]

And on Capitol Hill today, Republican lawmakers are set to vote for a new.

[Luke Vargas]

Senate leader in a secret ballot for a job that's opened for the first time in nearly two decades. Senators John Thune of South Dakota and John Cornyn of Texas are considered frontrunners, while Florida's Rick Scott is closest to Trump, though all support the president president elect's plans.

[News Anchor]

And in the House, Republicans will also be voting to nominate their pick for.

[Luke Vargas]

Speaker, along with other leadership positions, with current House Speaker Mike Johnson expected to easily win today's vote. With the count first seats in the.

[News Anchor]

House still ongoing, Johnson acknowledged yesterday that while Republicans are likely to win a.

[Luke Vargas]

Majority, it will be a thin one.

[Trump Spokesperson]

President Trump fully understands and appreciates the math here, and it's just a numbers game. You know, we believe we're going to have a larger majority than we had last time. It's too early to handicap it, but we're optimistic about that. But every single vote will count because if someone gets ill or has a car accident or a late flight on their plane, that it affects the votes on the floor.

[Luke Vargas]

Journal congressional reporter Katie Stetch Farek says the tight numbers game in the House is already setting up to test Republicans ability to deliver on Trump's key priorities.

[Political Analyst]

Some of the things that Trump wants to do are expensive, and the House is full of Republican lawmakers who have a range of thoughts when it comes to spending. Some of them are big deficit hawks. It's one of the first moments we'll get to see how calibrated House Republicans are with Trump and how unified we think they'll be next Congress. The reason that this is such a curiosity is because under Speaker Johnson and under the previous speaker that was ousted Kevin McCarthy. House Republicans have been really a mess on trying to get together behind conservative priorities. So we're really curious to see whether or not House Republicans will be able to calibrate with Trump quickly to get things passed soon in Congress that he wants.

[Luke Vargas]

Republicans have so far clinched 216 seats in the House, too short of a majority, with 12 seats still to be called.

[News Anchor]

The U.S. bureau of Labor Statistics is set to release the latest reading of the Consumer Price Index this morning.

[Luke Vargas]

And Journal economics reporter Justin Lahart told us that the inflation update is expected.

[News Anchor]

To support another quarter percentage point rate.

[Luke Vargas]

Cut by the Fed when it holds its final meeting of the year next month.

[Justin Lahart]

Economists think that Overall prices were 2.6% higher than a year earlier in October. That's a tick up from September when they're up 2.4%. The overall story is still one where inflation is cooling, albeit more gradual than people would like. But as it stands, economists expect there to continue to be this cooling trend. So does the Fed. That's why the Fed has been comfortable cutting rates and expects to continue to cut rates through next year.

[News Anchor]

And in other news, moving markets today, we're exclusively reporting that Spirit Airlines is preparing to file for bankruptcy protection after.

[Luke Vargas]

Merger talks with rival Frontier Airlines broke down. Frontier declined to comment, while Florida based Spirit said late yesterday that it was in constructive discussions to restructure debt. Spirit's shares are down more than 60% in off hours trading and Klarna has filed paperwork for a US ipo. No financial details were disclosed about the listing, but the Swedish Buy now pay.

[News Anchor]

Later company has significantly cut its valuation.

[Luke Vargas]

To fund its expansion in recent. The Journal previously reported Klarna had discussed the possibility of timing an IPO next summer.

[News Anchor]

Coming up, we'll look at the potential changes coming to the SEC under Donald Trump.

[Luke Vargas]

We've got that story after the break.

[News Anchor]

Since taking over as the chair of the securities and Exchange Commission in 2021, Gary Gensler has pursued a packed agenda, including including regulating the budding crypto industry and pushing for new climate and ESG disclosure rules. But as the Journal's Richard Vanderford reports, the signature elements of Gensler's term atop the commission could be quickly unwound when.

[Luke Vargas]

Donald Trump takes office. And Richard joins me now with more.

[News Anchor]

Richard, before we get to Gary Gensler's.

[Luke Vargas]

Legacy, just very quickly, is it certain that come January he's going to be out?

[Richard Vanderford]

Yes.

[SEC Expert]

Trump has said to an audience of appreciative crypto industry people that he would fire Gensler on Day one to a round of applause. It's a unclear whether Trump has the authority to do that. There's some questions about that. But every time he's been speaking in public lately, especially close to the election, Gensler has said the president gets to choose the SEC chair. I like democracy. I think elections are a good thing. So all indications are that he's ready to depart on his own.

[News Anchor]

Assuming that happens, what then is to become of the various efforts he's spearheaded?

[Luke Vargas]

There are a number of them we've covered on the podcast throughout the last few years.

[Podcast Host]

Yeah.

[SEC Expert]

So Gensler has had a really ambitious term as chair of the sec. One big initiative has been climate disclosure, getting big public companies to disclose their climate risks and even some of their emissions. My understanding is that's just debt in the water. It's been challenged in court, but it's going to die one way or another. Gensler has also been an aggressive enforcer on the topic of crypto. Also, he was the, I would say, the first cop on the beat for the SEC when generative AI was exploding in a big way with commercial uses. And so he's had to come out there and give some guidance on what the agency's expectations are.

[Luke Vargas]

And do we expect any changes there around AI?

[SEC Expert]

Yeah, on that topic of AI, there might be some different details of the enforcement approach they might take, but a lot of things aren't going to change. The SEC is a very active law enforcement agency. Acting enforcement head Sanjay Wadhwa recently said they have more than 1500 active investigations happening right now. Most things that the commission does actually are done unanimously, with the Republican and the Democratic commissioners voting in favor. So that kind of basic investor protection enforcement agenda is likely to just keep on going. There's a lot of staff who don't turn over, who keep that work moving.

[News Anchor]

And finally, Richard, should Trump part ways with Gensler? It sounds like change is likely coming.

[Luke Vargas]

For the crypto industry. What are they expecting?

[SEC Expert]

So one criticism of Gensler has been that they're applying a very old legal framework to regulating crypto. And Gensler says that's fine. We have a legal framework that was set up to regulate securities generally, and crypto in many cases is a security. And crypto people say it just doesn't work well. The tests that are established there don't work well. The SEC should maybe be a bit hands off or take more input from the industry, or there's various solutions put forward that would, instead of treating it as something that's most often leading to fraud, try to regulate it and bring it into the norm of financial instruments.

[Luke Vargas]

All right, something else to watch as Trump's cabinet and administration take shape. I've been speaking to Wall Street Journal reporter Richard Vanderford. Richard, thanks so much.

[SEC Expert]

Thanks for having me.

[News Anchor]

And before we go, what are your money plans for 2025?

[Luke Vargas]

Are you looking to invest more, save more, or maybe pay off debt? Email us a voice note about your goals to ymbsj.com and you could be.

[News Anchor]

Featured in an upcoming episode of the.

[Luke Vargas]

Youe Money Briefing podcast that'll be focused on providing strategies to put those goals within reach. Again, that email is ymbsj.com and that's it for what's news for Wednesday morning. Today's show was produced by Kate Bullivant and Daniel Bach with supervising producer Christina Rocca. And I'm Luke Vargas for the Wall Street Journal. We will be back tonight with a new show. Until then, thanks for listening.