Elon Musk and DOGE get access to Treasury payment systems | PaymentsSource

Elon Musk’s infiltration into Donald Trump’s presidency has taken a provocative step as new Treasury Secretary Scott Bessent reportedly gave a Musk-led government cost-cutting initiative access to Department of Treasury technology that powers government payments.

The Department of Government Efficiency got this permission Friday, according to The New York Times, the latest in a series of moves that has given DOGE, and by extension Musk, close proximity to the executive branch.

The Treasury Department disburses Social Security and Medicare benefits, tax credits, grants and compensation for government contracts. In fiscal year 2024, the department made nearly $7 billion in payments. The Treasury unit that runs the payment systems is the Bureau of Fiscal Service, covering tens of thousands of different types of transactions that fund load-bearing government activities. 

“The Treasury is not just any agency. It deals with tax refunds, Social Security payments, and many other intricate issues,” said Jean Rausis, founder of the decentralized finance ecosystem SMARDEX, an open source digital trading platform. “This means that even a slight miscalculation could spell disaster for the entire economy.”

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Musk, the head of DOGE, is also the CEO of social media company X, Tesla and SpaceX. Musk’s professional past includes helping found an earlier incarnation of X.com, a 1990s-era online bank that evolved into PayPal. While leading DOGE, Musk has also continued his corporate roles, including touting his “new X,” the former Twitter, as a potential full-fledged financial and payments app.

The social media app X has developed X Money, a financial services product. X last week entered a collaboration with Visa to use the card brand’s transfer app to support the ability to move money from a bank account to X Money’s digital wallet accounts. Musk’s influence in Trump’s presidency has drawn conflict of interest claims. Musk has donated millions of dollars to Trump’s campaign, and he is not in a Senate-approved cabinet position. By comparison, Fiserv CEO Frank Bisignano, an appointee to lead the Social Security Administration, requires Senate approval and will leave Fiserv if he joins the government. As a private sector executive, It’s unclear what Musk can do with the Treasury’s payment systems via traditional government methods. 

“Having access to and the ability to analyze the billions of payments Treasury makes would be powerful for uncovering potential fraud, redundancies across different departments, and inefficiencies,” said Eric Grover, a principal at Intrepid Ventures.”But Musk doesn’t have legal authority to do anything material.

Critics of Musk will likely voice concerns that this access could mean utilizing the payment system for political gain, said Nic Puckrin, founder of CoinBureau, a digital asset analyst, research and consulting firm. “Taken to the extreme, this means DOGE could restrict payments to certain people, organizations, etc. As Treasury payments are supposed to be nonpartisan, this would certainly be an unwelcome result,” Puckrin said. 

Musk, for example, is attempting to shut down USAid, an agency that supervises foreign aid, disaster relief and other international programs.

By accessing Treasury payments, DOGE may be able to analyze where these payments are going, Puckrun said. “In the past, Musk has made accusations of fraudulent or wasteful transactions, and, if he is proven right, this could have broad political and economic reactions.”

The sweet spot for DOGE’s participation in federal payments would be ensuring that systems remain robust, but with no political interference, combined with rampant cutting of costs with new technologies, according to Rausis. “It is a bold idea, but very risky.”

There are efficiencies that can be brought to the Treasury, Puckrin said. “One could be to reduce the number of payment methods utilized by the agency. The department could also upgrade the systems to send more FedWire payments (instant) vs. ACH Payments, which take one to three days to clear,” Puckrin said.

Another potential upgrade to the payment system could be through stablecoins, according to Puckrin. “If the U.S. passes a comprehensive stablecoin bill, which seems likely, the use of stablecoins in banking settlements could proliferate exponentially. And stablecoins are a much more efficient method of settlement than current models.”

There are also limitations on how much government spending funding can be cut simply by streamlining payment processing. “Musk initially said he would cut at least $2 trillion in federal government spending. He quickly walked it back saying cutting $2 billion would be a ‘best-case’ outcome,” Grover said. “You can’t get anywhere near that without reforming and cutting entitlements which President Trump has pledged not to do.”

The Treasury Department did not return a request for comment. Musk on Saturday claimed, without offering evidence, that the “@DOGE  team discovered, among other things, that payment approval officers at Treasury were instructed always to approve payments, even to known fraudulent or terrorist groups,” Musk wrote. “They literally never denied a payment in their entire career. Not even once.”

Inside the Beltway

Musk reportedly received control over the Treasury’s payment system after David A. Lebryk, the acting secretary before Bessent was confirmed, did not provide access to Treasury payment computers for Musk’ staff. Trump placed Lebryk on administrative leave, then Lebryk resigned Friday.

In addition to the Treasury’s payment systems, DOGE has assumed the role of the U.S. Digital Service, a White House unit that is responsible for automating government systems. In addition to installing his staff in the U.S. Digital Service, Musk has placed surrogates into offices such the Office of Personnel Management, a federal human resources agency, and the General Services Administration, which manages government real estate.

Among Musk’s associates who, according to the New York Times, has access to the Treasury payment system is Tom Krause, the CEO of Cloud Software Group, the owner of Citrix and other technology companies. Its work includes a collaboration with Microsoft to develop generative AI. A recent Citrix software bug caused outages at about 60 credit unions. The Cloud Software Group did not return a request for comment. 

Musk has also deployed several young programmers, between the ages of 19 and 24, who have gained access to OPM, GSA and the Treasury’s payment system, according to Wired. And The Associated Press has reported DOGE staff have accessed classified material.

Sen. Ron Wyden, D-Ore., slammed the move to give DOGE access to Treasury payment systems in a letter to Bessent, saying “To put it bluntly, these payment systems simply cannot fail, and any politically-motivated meddling in them risks severe damage to our country and the economy. I am deeply concerned that following the federal grant and loan freeze earlier [last] week, these officials associated with Musk may have intended to access these payment systems to illegally withhold payments to any number of programs.”

Wyden also mentioned the debt ceiling, a must-pass measure to pay the country’s bills under the threat of default. It’s expected the government will reach its borrowing limit in the coming months.  “The federal government is in a financially precarious position, currently utilizing accounting maneuvers to continue paying its bills since it reached the debt limit at the beginning of the year,” he wrote. “I am concerned that mismanagement of these payment systems could threaten the full faith and credit of the United States.”