WASHINGTON, Nov 13 (Reuters) - Donald Trump has tasked

Elon Musk with setting up a panel to streamline the U.S.

government. Although the president-elect has said little about

how this group would operate, Musk has previously set an

ambitious goal of cutting $2 trillion of spending.

Here is how this new panel, which will be headed up by Musk,

the world's richest person, and former Republican Presidential

candidate Vivek Ramaswamy, might work.

WHAT DOES MUSK WANT TO CUT?

Musk said at a Trump rally at Madison Square Garden in

October that the federal budget could be reduced by "at least"

$2 trillion. Discretionary spending, including defense spending,

is estimated to total $1.9 trillion out of $6.75 trillion in

total federal outlays for fiscal 2024, according to the

Congressional Budget Office, suggesting Musk's target would be

very difficult to meet.

Musk, whose companies include the electric vehicle maker

Tesla and commercial space company SpaceX, has a deep knowledge

of the National Aeronautics and Space Administration and the

Pentagon, agencies he has extensive contracts with for rockets,

satellites and other space operations.

He has also tussled with regulators within the Department of

Transportation, including the Federal Aviation Administration,

which has a say in his company's rocket launches, and the

National Highway Traffic Safety Administration, which is

investigating autonomous driving functions in his cars.

Ramaswamy, who founded pharmaceutical company Roivant

Sciences ( ROIV ), has worked with the Food and Drug Administration, an

agency he has previously called "corrupt". On social media site

X in 2023 he added that "Countless FDA regulations and actions

are hypocritical, harmful & unconstitutional."

WHAT HAVE MUSK AND TRUMP SAID ABOUT THE PANEL?

Trump in a statement on Tuesday said the panel would

"provide advice and guidance from outside of government," on

slimming down the government, cutting regulations, reducing

spending and restructuring federal agencies.

Trump wants to abolish the Department of Education, and

leave states in control of schooling, and decimate what he terms

the "deep state" - career federal employees he says are

clandestinely pursuing their own agendas.

Trump and Musk have suggested the panel will be able to make

dramatic cuts, but generally speaking large budgetary actions

are the remit of Congress. They can take advice from outside

panels like the proposed efficiency panel, or disregard it.

In an effort to be transparent, Musk said the panel will

post its "actions" for public comment.

"Anytime the public thinks we are cutting something

important or not cutting something wasteful, just let us know!"

he said on X.

He also mentioned a list of "dumb" spending, which he noted

would be "extremely entertaining".

WHAT IS THE PRECEDENT FOR THE EFFICIENCY PANEL?

Former President Ronald Reagan announced in February 1982

that he would form a group of private sector experts to

recommend ways to eliminate inefficiency and waste. That June,

he issued an executive order forming the President's Private

Sector Survey on Cost Control in the Federal Government, which

became known as the Grace Commission for its chairman J. Peter

Grace, the former CEO of W.R. Grace and Co.

Grace raised money to fund the effort through a foundation.

About 150 business leaders volunteered their

time on an executive committee that oversaw 36 Grace Commission

task forces, which reviewed agencies or functions.

The Commission issued a report in January 1984 with some

2,500 recommendations, and the various task forces came out with

reports as well.

"Most of the recommendations, especially those requiring

legislation from Congress, were never implemented," the Reagan

Library said.

In March 2017, Trump signed an executive order that aimed to

improve the efficiency, effectiveness, and accountability of

federal agencies and to "eliminate or reorganize unnecessary

federal agencies." It directed each federal agency to submit a

proposed plan to reorganize. He also signed a separate executive

order to place "regulatory reform" task forces and officers

within federal agencies.

Trump also tried to kill at least 19 agencies but was

unsuccessful during his first term. 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.

WHAT EXPERIENCE DOES MUSK HAVE WITH COST CUTTING?

After Musk bought the social media app Twitter, he laid off

roughly 3,700 employees, or half its workforce, as advertisers

pulled spending. Hundreds more employees subsequently resigned.

He later renamed the social media site "X", but its valuation

has shrunk dramatically under Musk's ownership.

Musk has had much greater success in space. SpaceX's

Falcon 9 rocket slashed launch costs with its reusability,

sprouting new satellite markets and giving rise to the company's

fast-growing Starlink constellation, which has disrupted the

established satellite communications industry and helped shape

modern military strategies and turned SpaceX into a major

defense contractor.

WHAT ARE THE RULES FOR A PANEL LIKE THIS?

The committee would likely operate under the Federal

Advisory Committee Act, a 1972 law ensuring panels provide

advice that is prompt, objective and open to the public. It also

mandates cost controls and record keeping requirements that

apply to the roughly 1,000 committees with some 60,000 members

advising the President and the executive branch at any given

time.