Spacex and Elon Musk are developing the Interplanetary Transport System, the Raptor engine and the Falcon Heavy on spec. Spacex is mostly self-funding the initial development of those systems.
Elon Musk is spending tens of millions per year on developing his Mars colonization plans and the hardware for it.
This will scale up to $200-300 million per year by 2018 or so.
Raptor-engined Spacex Heavy will crush the Space Launch System
The SLS has gotten US$9.8 billion (2011-16) and will get over $40 billion until 2025)
The Block 1 SLS which hopes to have a first mission in 2018 can lift 70 tons to low earth orbit. A Block 1B SLS plans to be able to launch about 100 tons to low earth orbit around 2022.
A Falcon Heavy has 27 Merlin 1D engines and lift 54.4 tons into low earth orbit.
A Raptor Heavy that used 12 Raptor engines would have three times the lifting capacity of a Falcon Heavy.
Spacex Raptor Engine is already test firing
Spacex Falcon Heavy
So before the 560 ton lifting capacity of the 42 Raptor engine Interplanetary Transport System is built, Spacex will be able to have a Raptor modified Falcon Heavy that would lift over 150 tons into low earth orbit. This will crush the capabilities of Block 2 SLS, 130 ton lifting capacity which is planned for about 2030.
Space Launch System was a pork project for the companies that built the Space Shuttle. It was always a ridiculous over payment for the capabilities that were being delivered.
Spacex will also grab a large chunk of the $1.5 billion per year deep space exploration funding. Spacex will be able to launch for larger and lower cost missions to Mars, Saturn, Asteroids etc…
Starting as soon as 2018, Musk’s SpaceX plans to fly an unmanned spacecraft to Mars. The unmanned flights would continue about every two years, timed for when Earth and Mars are closest in orbit, and, if everything goes according to plan, build toward the first human mission to Mars with the goal of landing in 2025, Musk has said.
Although there is political and pork economics going towards the Space Launch System, once Spacex has flown the unmanned Mars mission with a Falcon Heavy and then built a vastly superior Raptor engined version of a Falcon Heavy class rocket, then it will become obvious that Space Launch System will need to be cancelled. This is similar to Spacex gaining entry to military launch market for the Falcon 9.
Once Space Launch System is killed and the projects claimed by a superior Raptor Heavy then there will be extra funds available to complete the Interplanetary launch system.
SOURCES- Spacex, author speculation, Wikipedia, Planetary.org