(A)Political - June 7th

Good morning everyone,

Well, it’s certainly been an eventful week. I’m here for it though! Let’s break it down!

The Trump–Elon clash has cooled to a tentative stalemate, but markets and legislators are bracing for another flare-up when the Senate amends—or stalls—the massive budget bill at the feud’s core. A Supreme Court stay now lets the White House’s Department of Government Efficiency tap raw Social Security files, setting up rapid fraud audits even as privacy advocates ready a full-blown merits fight in the Fourth Circuit. The administration has rushed to the Supreme Court again—this time to revive its plan to shrink the Education Department—arguing that a district-court injunction blocking mass layoffs usurps executive authority and costs taxpayers millions each day.

• Trump’s Huge Feud With Elon Ends With Simmer

• Supreme Court Grants DOGE Team Access To Social Security Data

• Trump Admin Files Emergency Appeal To Erase The Dep. Of Education

Trump’s Huge Feud With Elon Ends With Simmer

_{By: Atlas}

Until late May 2025 Donald Trump and Elon Musk appeared to be strategic partners. Musk’s public endorsement, a $289 million donation to House Republicans, and six months as head of the Department of Government Efficiency (DOGE) helped the president frame his first-year agenda as both business-friendly and innovation-driven. The relationship cracked on 3 June when Musk labelled House Republicans’ 1 900-page One Big Beautiful Bill Act a “disgusting abomination.” He said the package would raise the debt ceiling by another $5 trillion and swell the ten-year deficit by as much as $2.4 trillion. Trump countered that the legislation produced $1.7 trillion in mandatory savings and accused Musk of acting only to protect Tesla’s soon-to-expire federal tax credits. The dispute migrated to social media, with Musk reposting old Trump tweets about balanced budgets and calling for a “Slim Beautiful Bill” stripped of what he called “a mountain of pork.”

Escalation in Public and Private

On 5 June the feud escalated in three rapid moves.

• White House warning: From the Oval Office Trump told reporters he was “very disappointed” in Musk and suggested he could terminate “billions and billions of dollars” in federal contracts and subsidies linked to Tesla, SpaceX and Starlink.

• SpaceX counter-threat: Musk replied on X that SpaceX would “begin decommissioning its Dragon spacecraft immediately,” a move that would jeopardize NASA crew rotations to the International Space Station. He retracted the threat hours later but noted that cancelling Dragon would save his company $450 million a year.

• Personal barbs: Musk claimed that Trump was “in the Epstein files,” asserted that Republicans would control neither the House nor the Senate without his help in 2024, and floated the idea of forming a centrist third party.

Behind the scenes Speaker Mike Johnson, Budget Director Russ Vought and several senior aides tried to arrange a conciliatory phone call; Trump publicly declined, telling ABC he had “zero interest” in speaking with “a man who has lost his mind.”

Economic and Political Fallout

Markets reacted sharply. Tesla shares slid 14 percent in two trading sessions, erasing about $90 billion in market capitalization. SpaceX is privately held, but analysts warned that losing NASA’s Commercial Crew contract (valued at $3.1 billion) or Pentagon launch work could disrupt the company’s cash flow and delay Starship deployments. The Philadelphia Semiconductor Index fell 3 percent on fears that a broader Trump–Musk rift might chill federal support for domestic battery and chip plants.

On Capitol Hill Republican leaders tried to limit collateral damage. Johnson, Sen. Ted Cruz and House Majority Whip Tom Emmer all urged the two men to “mend fences” for the sake of passing the bill and avoiding a government shutdown in September. Privately, appropriators questioned whether stripping SpaceX contracts would derail two national-security missions scheduled for the fourth quarter. Democrats mostly watched from the sidelines, hoping the spectacle would fracture GOP unity but wary of embracing Musk, who had spent months criticizing progressive clamp-downs on speech and crypto.

Why the Dispute Matters

1. Spending and debt narrative – Musk’s criticism resonates with fiscal-hawk Republicans and libertarian Democrats who are uncomfortable voting for a bill that stretches reconciliation rules to keep expiring tax cuts while delaying offsetting reductions. If the Senate trims EV credits and offsets more spending, Musk can claim victory; if not, his influence inside the party may wane.

2. Industrial-policy stakes – Tesla has received more than $7 billion in clean-energy credits since 2010, while SpaceX relies on government launch contracts for roughly 30 percent of revenue. Trump’s threat to revisit those agreements signals a tougher stance toward corporate subsidies—an issue that could resonate with blue-collar voters skeptical of Silicon Valley giants.

3. 2026 midterm finance – Musk’s donations made him one of the GOP’s top five individual contributors in 2024. Party strategists warn that losing that stream would cost House Republicans at least ten toss-up seats. Conversely, if Musk channels his wealth into a third-party organization, he could splinter the center-right coalition in swing districts.

Signs of a Slow Simmer

By 7 June the rhetoric cooled modestly. Musk reposted hedge-fund manager Bill Ackman’s plea for reconciliation and acknowledged that a revised package with “real spending cuts” could regain his support. Trump, focused on a foreign-policy press conference, said only that he “wished Elon well.” Aides confirmed that DOGE’s audit teams would remain in place and that no immediate contract actions against SpaceX were forthcoming. Congressional Republicans began sketching a two-track approach: leave core tax and tariff provisions in the reconciliation bill, then move DOGE-driven rescissions and permitting reform in a separate Impoundment Control Act measure that also needs only 51 Senate votes.

Neither side, however, has backed off public talking points: Musk still calls the current bill fiscally reckless, and Trump still suggests Musk’s motivation is “purely about EV credits.” For now the feud has settled into a simmer—sharp words, no fresh policy detonations, each man waiting to see whether the Senate amends or advances the legislation before its Fourth-of-July target.

Outlook

Short-term: If senators carve out at least $200 billion in additional spending cuts or adopt Sen. Rand Paul’s proposal to cap non-defense discretionary outlays at FY 2022 levels, Musk could claim partial victory and soften his opposition. That would give the president political cover to celebrate a compromise without appearing to bow to the tech billionaire.

Medium-term: Should Trump follow through on reviewing Tesla and SpaceX contracts, he risks disrupting NASA timelines and hurting defense-launch capacity—moves likely to draw pushback from hawkish Republicans and the Pentagon. Musk, meanwhile, would face investor scrutiny if Tesla’s subsidy pipeline dries up earlier than Wall Street models assume.

Long-term: The spat underscores two competing visions inside the Republican coalition: an older, tariff-powered populism focused on manufacturing and balanced budgets, and a techno-libertarian wing that champions deficit reduction but also wants flexible tax incentives for emerging industries. How—and whether—the White House reconciles those visions before the 2026 midterms will shape not only Musk’s political giving but also the legislative agenda for the rest of Trump’s term.

In sum, the Trump–Elon feud has paused at a low boil: neither a dramatic break nor a public reconciliation. Market swings, legislative horse-trading and potential ego bruises will determine whether the relationship cools back to collaboration or erupts again when the next big bill—or presidential tweet—hits the table.

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