Musk’s DOGE plans rely on White House budget office. Conflicts await.

President-elect Donald Trump has asked Musk, chief executive officer of Tesla and SpaceX, and Vivek Ramaswamy, the biotech entrepreneur who ran for president, to open a Department of Government Efficiency that will suggest ways to cut spending. Musk and Ramaswamy have said the organization will work closely with the White House Office of Management and Budget, which analyzes federal spending and guides implementation of regulations.

“We will focus particularly on driving change through executive action based on existing legislation rather than by passing new laws," Musk and Ramaswamy wrote in an opinion piece for The Wall Street Journal on Nov. 20.

Musk said Wednesday that the Consumer Financial Protection Bureau should be eliminated. “Delete CFPB. There are too many duplicative regulatory agencies," Musk wrote on X, the social-media platform he owns.

Some regulations the budget office oversees affect companies that Musk controls. Helping steer its agenda would present myriad conflicts of interest, ethics experts said.

“I’ve never seen anything like this," said Richard Painter, who served as a chief ethics counsel for President George W. Bush. Painter said he believes the advisory group, which has an acronym, DOGE, that mirrors the name of a Musk-backed cryptocurrency, would have to make some meetings public under federal law.

A spokeswoman for Ramaswamy said he and Musk are consulting legal advisers about their plans. “The team is committed to making sure all DOGE activities are conducted properly and in full compliance with ethical and legal requirements," the spokeswoman said.

Musk and representatives for Tesla and SpaceX didn’t respond to requests for comment.

Musk and Ramaswamy encouraged Trump to reappoint as OMB director Russell Vought, who led the office during Trump’s first term, a person with knowledge of their discussions said. Trump picked Vought for the role on Nov. 22.

Vought contributed to the conservative Heritage Foundation’s Project 2025, a more-than- 800-page blueprint for the incoming Republican administration. Vought wrote a chapter titled “Executive Office of the President of the United States," explaining how he believes the director and political appointees of the OMB, and not career officials, should guide it.

Vought met over the summer with Robert F. Kennedy Jr., Trump’s pick to lead the Department of Health and Human Services, people familiar with the meeting said. The OMB oversees regulations affecting the Food and Drug Administration, the HHS division overseeing the safety of the clinical trials for Musk’s brain-computer interface company, Neuralink.

The OMB influences regulations and budgetary matters across federal departments that oversee Tesla and SpaceX, including the Transportation and Defense departments and the National Aeronautics and Space Administration. Tesla and SpaceX have lobbied OMB for years, according to lobbying disclosures. SpaceX recently won government contracts of more than $700 million.

“They are the central portal through which all regulatory efforts must go," said Danielle Brian, president of Project On Government Oversight, an independent watchdog group.

Musk’s influence over the budget agency could give his companies an easier path to federal approvals and contracts in part because it is responsible for developing policies and regulations for federal contractors, Brian said. “It is literally giving him the keys to the kingdom to help his business interests get a leg up compared to their competitors," she said.

SpaceX Chief Operating Officer Gwynne Shotwell said at a conference organized by Baron Capital in New York on Nov. 15 that regulators have slowed innovation.

“All we ask is: regulate industries. Make them safe, make them right, make them fair. But we’ve got to go faster. Much faster," Shotwell said.

Palmer Luckey, a founder of Anduril Industries, a military-technology company, addressed a Trump-allied donor network known as the Rockbridge Network in Las Vegas at the Four Seasons hotel on Nov. 11 about easing restrictions on government contracting with companies, according to a person at the meeting.

An Anduril spokeswoman didn’t respond to requests for comment.

Anduril has business with the federal government. The company announced in October that it won a more than $240 million government contract to help enhance U.S. air defense.

Musk wrote to Luckey on X the day after the election that Anduril should have more opportunities to work for defense and intelligence agencies.

“Very important to open DoD/Intel to entrepreneurial companies like yours. Pay for outcomes, not requirements documents," Musk wrote.

Liz Essley Whyte and Andrew Restuccia contributed to this article.

Write to Brian Schwartz at brian.schwartz@wsj.com