Lawfare Daily: DOGE’s Attack on the Treasury Department
Feb 21, 2025
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Wendy Edelberg and Jacob Leibenluft discuss a recent scandal involving the Bureau of the Fiscal Service in the Treasury Department. They delve into the alarming implications of political actors accessing sensitive financial systems, particularly under the influence of Elon Musk's DOGE initiative. The conversation highlights concerns about the integrity of federal payment processes and the potential risks to financial markets stemming from such meddling. They also underscore the importance of trust and accountability in government operations to protect vulnerable populations.
The access granted to Elon Musk's DOGE initiative raises alarms about political appointees potentially undermining the integrity of the Treasury's financial systems.
Political interference in the Bureau of Fiscal Service could lead to unlawful withholding of appropriated funds, compromising congressional authority over financial resources.
Reliability on timely federal payments for vulnerable populations could be jeopardized, causing serious hardships due to lack of transparency and potential delays.
Deep dives
Implications of Political Meddling in Treasury Systems
The access of Elon Musk's Doge team to sensitive payment systems within the Treasury Department has raised significant concerns regarding the integrity of the financial infrastructure. Specifically, the Bureau of Fiscal Service plays a crucial role in managing the nearly $6 trillion payment system, which ensures that appropriated funds get dispensed accurately. This shift in oversight, moving from career civil servants to political appointees, threatens to redefine established roles and responsibilities, undermining trust in a system designed to operate in accordance with congressional intent. The political interference could lead to decisions made based on political motivation rather than established procedures, posing risks to the financial stability expected by stakeholders.
Concerns Over Administrative Control of Funding
There are significant alarms about the potential for the executive branch to impound funds that Congress has appropriated through manipulations at the Bureau of Fiscal Service. Political appointees can interfere with payment processes, which can create a precarious situation where funds are withheld for reasons that are not legislatively endorsed. This could lead to a dangerous precedent where the executive has undue control over financial resources at the expense of congressional authority. Examples cited include threats to halt payments to charitable organizations based on executive orders, which corrupts the fundamental checks and balances within governmental spending.
Risks of Payment Disruption to Vulnerable Populations
The uncertainty surrounding the payment processes can have dire repercussions for vulnerable populations who rely on timely funds from the federal government. Individuals dependent on social security or organizations reliant on federal grants, such as non-profits, may face hardships if payments are delayed or stopped. The potential lack of transparency about why payments are held up can exacerbate these challenges, leaving recipients unaware of whom to approach for clarity or assistance. Consequently, disconnected financial systems lead to severe ramifications for the citizens who depend on them for their sustenance and operational viability.
Threats to Financial Market Stability
The significant access potentially granted to Doge could destabilize global and domestic financial markets through mismanagement or politically motivated withholding of payments. The U.S. Treasury market, valued at approximately $28 trillion, serves as a fundamental pillar for the world’s financial system, and distrust in its operations could shake investor confidence. If key players in the market were to suspect that payments might not be honored due to political motives, it could yield catastrophic financial consequences, including skyrocketing interest rates and a loss of value in treasury securities. An example of this risk includes prior discussions around selectively ceasing payments to entities based on perceived policy discrepancies, further threatening economic stability.
Data Security Concerns Amidst Political Interference
Concerns surrounding the integrity and security of sensitive data held within BFS rise as political influence intrudes upon established protocols. The personal information of millions of Americans, including banking details necessary for payment processing, becomes vulnerable to mishandling and unauthorized access. Historical attempts by hostile foreign actors to infiltrate Treasury systems intensify fears that careless handling of data could lead to catastrophic breaches. With the increasing politicization of these sensitive systems, the risk of collusion or misuse of personal data becomes an ominous possibility, jeopardizing the security of citizens' financial information.
Before January, most Americans had probably never heard of the Bureau of the Fiscal Service (BFS), a Treasury Department agency that distributes payments from the federal government. But over the last month, this corner of government has appeared again and again in the headlines, as aides working with Elon Musk’s quasi-governmental DOGE initiative successfully gained access to BFS’s payment systems. After a flurry of litigation, a temporary restraining order now bars these aides from accessing data—but the crisis is not over. It’s still not clear precisely what happened within BFS or what access political actors within the administration might gain in the future, and DOGE continues to access similarly sensitive systems in other agencies, such as the Social Security Administration and the Internal Revenue Service.
To understand what’s happening, Senior Editor Quinta Jurecic spoke with Wendy Edelberg, Director of the Hamilton Project and Senior Fellow at the Brookings Institution, and Jacob Leibenluft, who served in the Treasury Department and the Office of Management and Budget under the Biden administration. Why is it so alarming to have political appointees accessing BFS systems? What does this tell us about the administration’s political goals? And what manner of crises could result from this kind of meddling?
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