Musk, Ramaswamy will lean on Supreme Court rulings to cut US agencies

(Reuters) -Elon Musk and Vivek Ramaswamy said the government efficiency panel that President-elect Donald Trump has named them to lead will follow recent U.S. Supreme Court rulings that they say can be used to take power away from federal agencies and reduce regulations the two call unnecessary, costly and inefficient.

Musk, the billionaire CEO of Tesla (NASDAQ:TSLA) and SpaceX, and Ramaswamy, a former Republican presidential candidate and the founder of biotech firm Roivant Sciences (NASDAQ:ROIV), will head a panel of outside advisers to make recommendations concerning the federal government. They want to greatly reduce the size of the federal workforce and to wipe away many existing regulations.

Given the ambitious claims made by Musk, Ramaswamy and Trump about the panel’s ability to transform the U.S. government, the effort has received widespread publicity and interest in how it will operate.

The two wrote a Wall Street Journal opinion piece about the panel on Wednesday. They said their bid to pull the plug on existing regulations will be guided by a pair of recent U.S. Supreme court rulings that limited the authority of federal regulatory agencies.

In a 2022 decision, the court decided that agencies cannot address “major questions” with broad economic or societal impact without explicit permission from Congress. In a ruling in June, the court overturned its own precedent that had called on courts to defer to an agency’s interpretation of ambiguous laws.

Both decisions have led judges to block or strike down a number of Biden administration rules, including a student debt relief plan and regulations on net neutrality and overtime pay.

Together, the Supreme Court decisions suggest that thousands of other federal rules are invalid, according to Musk and Ramaswamy. They also predicted legal challenges if Trump nullifies existing rules, but said the president has the power to correct overreach by agencies.

With an electoral mandate and the 6-3 conservative majority on the Supreme Court, Musk and Ramaswamy said, their panel has an opportunity to enact substantial structural downsizing within the federal government.

William Buzbee, a professor at Georgetown Law who specializes in administrative law, called Musk and Ramaswamy’s interpretation of the recent Supreme Court cases “very confused,” and that neither decision limits agency powers as drastically as they claim.

Trump said last week the panel will issue individual reports on its work and “a big one” at the end, slated for July 4, 2026.

The panel expects that Trump will, “by executive action, immediately pause the enforcement of those regulations and initiate the process for review and rescission.”

Musk and Ramaswamy said they can reduce federal spending by $500 billion by cutting expenditures that have not been authorized by Congress or are being used in ways that Congress did not intend, citing $535 million for the Corporation for Public Broadcasting, $1.5 billion for international organizations and nearly $300 million given to groups like Planned Parenthood.

They stated that a partnership with the Trump presidential transition team was underway to hire a team of “small-government crusaders,” which will work with the White House Office of Management and Budget. Trump is due to take office on Jan. 20.

Musk and Ramaswamy also suggested that requiring federal employees to come to the office five days a week would result in workers leaving their jobs. Some Republicans want Musk to back requiring all federal workers to work in-person.

U.S. Senator Joni Ernst said on Wednesday she was delivering a roadmap to Trump, Musk and Ramaswamy “on how to end the shenanigans and get the federal workforce back to work.”

Since it was announced last week, the panel has said it wants “high IQ” employees and plans weekly livestreams, according to social media posts by Musk and Ramaswamy.

Buzbee said that Trump had a “great deal of latitude” to order agencies to “go easy on enforcement,” but that there were significant obstacles to the sweeping deregulation described by Musk and Ramaswamy.

Many regulations allow private citizens to bring lawsuits enforcing them, he said – for example, by suing polluters that violate environmental standards. Fully rolling back the regulations is an intensive legal process that will be difficult for agencies if their staffs are suddenly slashed, he said.

The panel is not Trump’s first effort at paring back regulatory agencies.

During his first term, he tried to kill at least 19 agencies, without success. He called for eliminating the Overseas Private Investment Corporation that helps spur private investment in foreign development projects and the Corporation for Public Broadcasting. He also tried to cut funding for Amtrak, subsidies for rural airline service and the Special Olympics.