In a significant development on February 1, 2025, Elon Musk's Department of Government Efficiency (DOGE) was granted access to the U.S. Treasury payments system, which oversees approximately $5 trillion in payments to government vendors and recipients. This access follows the controversial refusal of Treasury official David Lebryk, who has since retired amid internal conflict within the department. His departure has raised concerns regarding the stability of leadership in the Treasury, with Senator Ron Wyden expressing apprehension about potential political interference in payment systems, warning that such actions could have detrimental effects on the economy.
Musk has been openly critical of USAID, labeling the organization as 'hopeless' and indicating plans to shut it down. His team is expected to propose changes to the payment system, but any adjustments will undergo a thorough internal review by Treasury officials. This scrutiny is particularly important given Musk's recent accusations against USAID, which he described as a 'criminal organization.' He claims to have access to sensitive Treasury systems, a statement that has raised significant concern among lawmakers and officials alike.
Legal experts assert that while DOGE lacks the authority to stop payments, controlling the computer system could lead to illegal interference, potentially resulting in lawsuits. Amias Gerety, a QED investor and former Treasury official, has warned that any attempt by DOGE to block payments could lead to litigation, potentially causing economic instability that might affect the U.S. dollar's status as the world's reserve currency. The implications of Musk's access to these systems are profound, particularly as he has accused Treasury payment officers of never denying payments, even to fraudulent groups, which underscores ongoing worries about the integrity of the federal payment system.
As the DOGE team halts payments to federal contractors, including organizations like Lutheran Family Services, the unfolding drama continues to raise critical questions about the intersection of Musk's business interests and his influence on government efficiency. The Treasury system is crucial for federal payments and tax collection, and any uncertainty could destabilize the U.S. dollar, which has already faced scrutiny as two major ratings agencies downgraded the U.S. credit rating, with Moody's on a negative outlook. Concerns are mounting that potential selling of U.S. Treasury bonds by countries like Japan and China could trigger a global financial crisis, especially in light of recent reactions in the bond markets to political developments, including Trump's tariffs.
Banks, acting as fiscal agents for the Treasury, are particularly concerned about the implications of political interference in payment processing, which could lead to legal and reputational risks. The situation remains fluid, with investigations into Musk's conduct ongoing and the potential for significant changes in federal financial operations looming. As Donald Trump praises Musk as a cost-cutter, the intersection of Musk's actions and broader economic stability remains a critical point of concern for lawmakers and financial experts alike.