Fact Check: Elon Musk Is Not Paying to Run SpaceX – Taxpayers Are

Elon Musk and President Donald Trump.
Peter Parks/AFP/Getty, Win McNamee/Getty

At a recent campaign rally, President Trump suggested that the U.S. let “rich guys” like Elon Musk pay to develop new rockets and further space exploration using their own money — the only problem is that SpaceX uses taxpayer money for many of its launches.

Speaking at a rally in South Carolina Sunday, President Trump discussed the creation of the United States Space Force and expressed his admiration for Elon Musk and his company SpaceX. During the speech, President Trump suggested that the United States let “rich guys” like Musk spend their own money on advancing space exploration while renting NASA launchpads for their projects — the only problem is that SpaceX is massively funded by taxpayer money and is not independently funded by Elon Musk. Americans will still be paying to further the country’s space exploration abilities.

“You have all these rich guys, I don’t know what it is, they love rockets! I said this is great because you can’t send rockets down the street right? You can’t take the local Walmart, the local store and send the rocket from there, so we have these incredible big sites, they’re meant exactly for this with all of this infrastructure. Much of it hasn’t been used in a long time and we’re back in business. But I said to them, let the rich guys pay for it, we got the site, we got the real estate, let them put their rockets up,” said President Trump.

While Elon Musk’s SpaceX is a privately owned company, it’s also a company that is heavily funded by government subsidies and contracts. Discussing Elon Musk, Dan Dolev, an analyst at Jefferies Equity Research stated: “He definitely goes where there is government money. That’s a great strategy, but the government will cut you off one day.” Three of Elon Musk’s companies, Tesla Motors, SolarCity, and SpaceX, have received billions in funding, support, and incentives from the U.S. government.

In 2014, Musk pushed for the approval of the AB 777 bill which would exempt spaceflight companies from property taxes. The Wall Street Journal wrote at the time: “Upon his request, Democrats who dominate the legislature are moving to exempt SpaceX and other space-travel companies from California’s personal property tax. SpaceX could have sought an appeal of a property tax bill it received last year for engines built at its headquarters, but instead “jumped the queue and petitioned the legislature for a tax reprieve.”

Shortly after this, SpaceX moved their operations from California to Brownsville, Texas. This decision was made as Texas offered the company a $100 million economic incentive package, $15 million for closing the deal and agreeing to move and a commitment from the state to invest $85 million into infrastructure investments to support the company. Texas offered these subsidies to Tesla in an effort to create 300 high-paying jobs in Brownsville which has previously been rated as the poorest city in America.

Aside from this, SpaceX has received $5.5 billion in government contracts from NASA and the U.S. Air Force. This means that government money is funding a large number of SpaceX’s operations. This is not a case of “rich guys” paying for something so that American citizens will not have to. Mark Spiegel, a hedge fund manager for Stanphyl Capital Partners told the LA Times: “Government support is a theme of all three of these companies, and without it none of them would be around.”

Despite receiving billions in government funding, SpaceX still requires a NASA operated launch pad run by NASA employees. Engadget reported in January that SpaceX was unable to perform a static fire test of their Falcon Heavy rocket due to lack of ground support from the U.S. Air Force’s s 45th Space Wing and NASA following a government shutdown. The static fire test of the Falcon Heavy rocket would have consisted of firing all 27 of the rocket’s engines as it was held down on a launch pad.

Citizens for the Republic, a PAC started by Ronald Reagan which is running an initiative called “Stop Elon from Failing Again,” provided this comment to Breitbart News at the time: “Elon Musk is a phony and a fake. He is stealing billions from taxpayers because he gets good press form his fellow Millennials and because of his Washington lobbyists. Despite billions in profits, Musk is leaning so heavily on government subsidies and support that he can’t even test an engine without the taxpayer holding their hand. This is a lose-lose situation. We can’t continue to waste large amounts of taxpayer money on Elon Musk’s failed schemes. There needs to be a congressional investigation of Elon’s Musk’s continued waste and continued failures.”

Breitbart News reached out to the White House for comment on this story but did not receive a reply at press time.

 

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