What Musk's outsized clout on Capitol means for US and Trump administration

President Musk. First Buddy. Co-president. The fourth branch of the US government. Shadow president.

These are some of the monikers that detractors of Elon Musk, the world’s richest man, have used for the South Africa-born businessman who never held a public office but is seen as the alter ego of President-elect Donald Trump and the main driver of his ambitious, and sometimes, outlandish ideas.

The ultimate demonstration of Musk’s unrivalled political clout in Washington took place this week when the unelected tech billionaire single-handedly scuttled a bipartisan spending bill meant to avoid a federal government shutdown.

On Wednesday, Musk unleashed a barrage of posts on X, the social media platform he owns, asking the Republican Party to gut a piece of legislation meant to keep the federal government open for the next three months.

He criticised the funding bill thrashed out jointly by Republicans and Democrats in Congress to avert a government shutdown – scheduled at 12:01 am on Saturday without action from Congress – as federal agencies are due to run out of cash this weekend.

The debt ceiling limits the amount that the US government can borrow to meet its existing legal obligations. Borrowing beyond that ceiling requires Congressional approval.

“This bill should not pass,” Musk said, adding that legislators should kill the “criminal” bill.

More than 12 hours after Musk’s social media blitz, Trump issued a joint statement with vice president-elect JD Vance, criticising the bipartisan bill.

“Republicans must GET SMART and TOUGH. If Democrats threaten to shut down the government unless we give them everything they want, then CALL THEIR BLUFF,” the statement said.

The sudden about-turn of the Republican Party threw the stopgap funding measure into chaos, even though leaders of both parties were hoping to pass it.

House representatives from the Republican Party rushed to scrap the bill, and came up with a rushed alternative.

In addition to being considerably shorter than the original bill, the alternative bill proposed a two-year debt-ceiling hike — a key demand by Trump, who wants the current Congress to increase the debt limit now, thus sparing him the contentious and time-consuming fight next year.

Trump has been adamant that the debt limit be either increased or suspended to give him budgetary room for the promised tax cuts and public works.

Republicans have traditionally opposed increasing the debt ceiling. But most of them quickly changed their stance on Thursday by including a provision for the suspension of the debt limit until January 30, 2027.

Yet the second funding proposal, backed by Trump and Musk, overwhelmingly failed to pass in Congress on Thursday, raising the chances of a shutdown.

In a 174-to-235 vote, both hard-right Republicans and nearly all Democrats voted against the bill.

Musk poured $270 million in the November election to become the largest political donor in US history, raising concerns about the multi-billionaire buying influence in the incoming Trump administration.

Since then, Musk has been at the centre of the US news cycle. From helping Trump make cabinet picks to joining the president-elect in official meetings with foreign dignitaries, Musk has been acting as the enforcer-in-chief of Trump’s agenda.

A Musk-created midnight social media maelstrom – which consisted of numerous false claims about the contents of the bipartisan spending bill – has caused uncertainty among hundreds of thousands of employees who will face furloughs in the case of a government shutdown starting next week.

“If this is the type of power (Musk) has, then he is going to be the unelected co-president of this country and we’ve got to be super blunt about it,” said Maxwell Frost, a Democratic Congressman from Florida.

Musk: influencer-in-chief

Musk’s outsized sway on Trump and his incoming administration showcases the interplay between corporate power and political influence.

In addition to pouring millions of dollars into Trump’s campaign, Musk fully leveraged X and his public image to sway voters. Since acquiring X, Musk has used it to amplify pro-Trump narratives, often sharing his own endorsements and engaging with Trump directly on the platform.

This digital megaphone has been instrumental in shaping public discourse in the US, especially among Musk’s 208 million X followers, who view him as a self-styled champion of free speech.

Trump has tasked Musk with a semi-formal role in a yet-to-be-created Department of Government Efficiency. This role will allow Musk to influence how government spending is managed, potentially aligning federal policies with his business interests.

Musk and Trump have vowed to reduce government bureaucracy, cut regulations and restructure federal agencies — objectives that can directly benefit Musk’s businesses like electric automaker Tesla and rocket firm SpaceX by easing regulatory burdens and securing favourable government contracts.

“The reality that Musk is capable of turning his political influence into action suggests that investors have been right to believe that his companies will benefit from a Trump administration and Republican Congress,” says Nathan Bomey of US publication Axios.

The net worth of Musk has increased by almost $200 billion to $485 billion since Trump’s election in the first week of November.

That’s because Tesla is expected to benefit from a national regulatory framework for self-driving cars, rather than the patchwork of rules that currently exists, Bomey says.

Similarly, SpaceX will benefit from a continued flow — or perhaps even an increase — in federal funding for its interstellar projects.

Another of Musk’s businesses, artificial intelligence startup xAI, is raising fresh funds at a $50 billion valuation, which is double the valuation it received in a separate funding round earlier this year. Congress is expected to enact laws to regulate AI next year.

“After Musk wielded a cudgel with the federal budget, there’s no reason to believe he won’t deploy a pencil and eraser to federal regulations,” Bomey says.