Hedge fund founder John Paulson, an ally of former President Trump, said in a new interview that he will work with tech billionaire Elon Musk to “reduce federal spending” if tapped to serve as Treasury secretary under a second Trump administration.
Paulson made the remarks in an interview Tuesday with The Wall Street Journal, just days after Musk drew attention for saying he thinks federal spending could be cut by “at least $2 trillion” – without offering specifics on how to do just that.
In the Journal interview, however, Paulson pointed to potential areas to reduce spending by targeting green energy subsidies created by Democrats’ Inflation Reduction Act.
“All of these tax subsidies for solar, for wind, inefficient, uneconomic energy sources. Eliminate that. That brings down spending,” he said, while pushing instead to extend expiring tax cuts enacted as part of Trump’s signature 2017 tax law.
His comments come as Trump has maintained a lead over Vice President Kamala Harris on the economy with voters in various polls. However, Harris has scored some competitive marks with experts.
Results from a Journal survey released earlier this month showed that economists expected higher inflation, national deficits and interest rates under former Trump’s proposed agenda than under policies proposed by Harris.
In the Journal survey, conducted Oct. 4-8, 68 percent of respondents said they think inflation would rise faster under a second Trump term than if Harris were to become president — up 12 percentage points from when the outlet asked in July.
Economists were also asked about the potential impact of some of Trump’s proposed tariffs on domestic manufacturing employment. Just under 60 percent of economists said employment would be lower compared to 16 percent who said it would rise in the coming years.
The Committee for a Responsible Federal Budget has also estimated the plans proposed by both candidates could increase the national debt by trillions of dollars through 2035. But its latest projections found that Trump’s tax and spending plans could add almost twice as much to the national debt as those brought by Harris.
One of the most expensive measures highlighted by the group is an estimated $5.3 trillion price tag attached to Trump’s proposals to extend and modify parts of his 2017 tax law.
However, Paulson promoted in the recent interview what he described as “strategic tariffs” and said he’d work to “encourage energy production so we become an energy dominant producer” under Trump. The Journal said he also suggested the former president’s tariff threats could help secure certain concessions, such as preventing Deere & Co. from outsourcing production abroad.
Other names have been floated to lead the Treasury Department, according to The Journal. This includes former U.S. trade representative Robert Lighthizer and former Securities and Exchange Commission Chair Jay Clayton.
If nominated for the role, Paulson said “wouldn’t expect a Senate fight,” despite the wealth he gained from the housing crisis, when he bet “against subprime mortgages,” as noted by the Journal.
“I have good relationships with senators on both sides of the aisle. The review process is a rigorous process,” he continued. “That’s a hurdle that would have to be crossed before we get to the Senate. I think once we cross that review process, I wouldn’t expect opposition.”
