“At the suggestion of Elon Musk, who has given me his complete and total endorsement … I will create a government efficiency commission tasked with conducting a complete financial and performance audit of the entire federal government and making recommendations for drastic reforms,” Trump said in remarks at the Economic Club of New York. “We need to do it. Can’t go on the way we are now.”
Trump in his speech also outlined proposals aimed at further reducing the corporate tax rate and tackling government regulations, including those aimed at energy production. He also vowed to rescind all unspent funds from one of the key laws passed under the Biden administration, embraced cryptocurrency and reaffirmed his plan to place sweeping tariffs on imports.
Trump’s government efficiency commission proposal follows a recent conversation he had with Musk on X, during which the Tesla CEO suggested that the former president should create such a group in an effort to tackle inflation and appoint him to it.
“I’d love it,” Trump responded at the time.
The Wall Street Journal first reported on Trump’s economic proposals, which come just days before he and Vice President Kamala Harris face off Tuesday in Pennsylvania for their presidential debate. Harris has recently released a slew of economic proposals, including measures aimed at aiding small businesses and at making housing, groceries, child-rearing and health care more affordable for the middle class and working Americans.
Trump said Thursday he would reduce the corporate tax rate to 15%, from 21% – but only for companies that make their products in the US.
“If you outsource, offshore, or replace American workers, you are not eligible for any of these benefits. In fact, you will pay a very substantial tariff when a product comes in from another country,” the former president said in his speech.
Trump has said repeatedly that he’s interested in lowering the corporate levy further than the 21% rate put in place by his 2017 tax law, one of the signature achievements of his administration. Prior to the law, the corporate tax rate was 35%.
The former president has argued that reducing the rate, along with making other provisions of the tax law permanent and enacting additional tax cuts, would grow the economy, raise revenue and cut the deficit. However, the economic effects of the 2017 law remain a matter of debate among experts. And slashing the rate that low could prove a hard sell in Congress, which would have to approve the measure amid concerns about the rising federal debt.
But Trump also pointed to his proposed government efficiency commission as a way to reduce government spending.
“As the first order of business, this commission will develop an action plan to totally eliminate fraud and improper payments within six months,” he told the audience. “This will save trillions of dollars.”
Trump and congressional Republicans have long pointed to combating waste, fraud and abuse as ways to save the federal government money. But that refrain is “often an excuse to do nothing,” said Marc Goldwein, senior policy director for the Committee for a Responsible Federal Budget.
The commission would also have to be given a broad mandate to review the largest federal spending programs – Social Security, Medicare and defense – to be most effective, Goldwein said.
Other proposals
Trump on Thursday proposed a ban on mortgages for undocumented immigrants in an effort to address housing affordability. The impact of what he described as a “flood” of “illegal aliens” on pushing up housing costs can’t be ignored, the former president said.
Undocumented immigrants, however, make up a tiny portion of the mortgage market. In 2023, only 5,000 to 6,000 mortgages were made to holders of Individual Tax Identification numbers, according to a recent Urban Institute report. (Those who are not legally authorized to work in the US obtain ITINs to file taxes since they are not eligible for Social Security numbers.)
Other ways Trump said he would make housing more affordable included getting rid of regulations that increase costs – with the goal of cutting the cost of a new home in half – and opening up some federal land available for large-scale housing construction in low-tax, low-regulation zones. He said falling interest rates would send mortgage rates down to 3% or even lower, which would make financing less expensive for homebuyers.
Trump also promised Thursday to make gasoline cheap again by slashing red tape and drilling for more oil.
“We’re going to get gasoline below $2 a gallon,” he said in his speech.
However, some experts warn it would take an economic calamity to make that happen.
“Think about Covid. That’s the type of situation you would need to get gasoline under $2,” Andy Lipow, president of consulting firm Lipow Oil Associates, told CNN in a phone interview. “You would need a significant economic downturn across the world – including in the US – that substantially and negatively impacts demand. You’d need oil at $40.”
Drawing a contrast with Harris
The Trump campaign, which views the economy as its top issue ahead of the November election, planned the former president’s Thursday address in an effort to contrast his economic plans with those of Harris, Trump advisers said.
“While Kamala Harris wants to hide from her four years of failure and misrepresent her record of skyrocketing inflation, driving up interest rates, recklessly spending and proposing tax hikes on middle-class families, voters know that she owns the economic disasters of the past four years. Not only does Harris co-own the failed Biden agenda as vice president, but her actions have led directly to higher costs for America’s families,” Trump campaign senior adviser Brian Hughes said on a press call Thursday ahead of the speech.
Many of the economic proposals Harris has introduced in recent weeks hew closely to President Joe Biden’s platform, but the vice president has also put her own stamp on them in an effort to be more populist but not dampen economic growth and innovation. While she supports hiking the corporate tax rate to 28%, from the 21% rate set by Trump’s 2017 tax law, Harris did not follow Biden’s lead in calling for an increase in the long-term capital gains rate to 39.6% for the highest earners. Instead, she wants to lift the levy to 28% for those making more than $1 million a year.
Economic issues, which posed a notable weak point in polling for Biden before he exited the White House race and endorsed Harris, remain the topic most often cited by voters when asked what matters to their choice for president. An average of 39% of likely voters across the six top battleground states chose the economy as their top issue, recent CNN polling found.
In the days leading up to Trump’s speech, members of the former president’s policy team, including adviser Vince Haley, began reaching out to a series of business leaders and CEOs inquiring about what Trump should focus on during his Thursday address, sources familiar with the calls told CNN. One such conversation focused specifically on taxes and recommendations for being more aggressive toward countering China, one of the sources said.
In a memo obtained by CNN, Brian Nelson, a top economic adviser to Harris, contended that Trump’s economic policies would “serve billionaires and big corporations” and his proposals would lead to “massive tax windfalls” for the wealthy.
As CNN and others have reported, many economic experts warn that a broad and unprecedented hike in tariffs could cause considerable harm and lead to a sharp spike in prices on goods for Americans and kill jobs.
“But Donald Trump is denying this broad, bipartisan consensus, ‘hoping that most economic analyses of his ideas are dead wrong’ and blatantly lying to the American people about the severe costs and consequences of his economic plans,” Nelson, who until recently served as the Treasury Department’s undersecretary for terrorism and financial intelligence, wrote in the memo released Thursday.
Reversing Biden’s measures
Trump also said Thursday that he would rescind all unspent funds from the 2022 Inflation Reduction Act, which funneled about $80 billion over 10 years to the Internal Revenue Service and put in place a wide array of climate measures. The law provided the IRS with a major funding boost to ramp up enforcement efforts and improve customer service.
Many Republicans have repeatedly criticized the IRS funding, claiming that it will provide the agency with an “army of 87,000 new IRS agents” – a misleading number based on a report about how many total employees could be hired with the money, rather than actual auditors focused on enforcement.
Republican lawmakers have made several attempts to claw back the funding. In a deal to address the debt ceiling and avoid a US default last year, Democrats agreed to allow for $20 billion of the Inflation Reduction Act funds to be rescinded. And in January, Democrats conceded an acceleration of the $20 billion cut in an effort to get a full-year federal spending law passed in time to avoid a partial government shutdown.
The Biden administration has said that increased enforcement actions will target wealthy taxpayers who earn more than $400,000 a year and corporations. So far, the ramped-up efforts have resulted in the collection of $1 billion in past-due taxes from millionaires. The federal investment has also been used to improve the IRS’ phone service, digitize paper files and create a free, direct tax filing system.
Some Republicans argue that taking back some of the IRS funding would save the government money. But the independent Congressional Budget Office and other budget experts have said that the reverse is true. Cutting IRS funding would hamper the agency’s enforcement efforts and could lead to fewer audits of tax cheats. As a result, the IRS would not be able to collect as much tax revenue.
The CBO found that a Republican effort to rescind $14.3 billion of IRS funding would have increased the deficit by almost $12.5 billion over the next 10 years.
The Inflation Reduction Act also contained the largest climate investment in US history. The Biden administration has been trying to get as much federal climate grant money as possible out the door this year, but there are funds that could be clawed back.
“There’s a bunch of money included in the bill that is unavailable until fiscal year 2025, but with all the money that’s available in fiscal year 2024, we’ll have the lion’s share, about 90% of that awarded, and most of that 90% obligated by the end of the year,” John Podesta, senior adviser to the president for international climate policy, told CNN in a recent interview.
CNN’s Matt Egan, Ella Nilsen and Ebony Davis contributed to this report.