President Donald Trump on Tuesday signed two govt actions forcing the Treasury Division to maneuver quick on modernizing how the federal authorities strikes cash.
The orders require digital funds for use “every time doable” and hand over full fee processing duties to the Treasury to cease fraud and tighten management. This occurred on the White Home, the place Trump mentioned, “We’re doing this, and we have now different modernization applications happening… these are steps that ought to have taken place many years in the past.”
In line with official authorities data, most federal funds already undergo direct deposit, however paper checks are nonetheless being utilized in some areas. Trump needs to close that down.
That is a part of a wider push to take away outdated techniques and preserve folks from stealing cash through the fee course of. His administration believes consolidating fee processing beneath one company—Treasury—is the one technique to repair it.
DOGE features entry to Treasury system amid authorized backlash
From the primary yr of Trump’s second time period, members of Elon Musk’s Division of Authorities Effectivity (DOGE) bought full entry to the Treasury’s fee database. The transfer drew warmth for potential privateness violations and triggered a number of lawsuits which can be nonetheless lively. However insiders near the Trump crew argue the entry was essential to hint monetary leaks and corruption that might’ve been hidden in siloed techniques.
The push for full digitization didn’t come out of nowhere. The federal authorities’s been working for years to ditch mailed checks in favor of digital strategies to ship issues like Social Safety funds, meals stamps, tax refunds, and different disbursements. The IRS confirmed that on this tax season alone, out of $163 billion in refunds, $160.9 billion—almost 99%—was despatched by way of direct deposit.
The Treasury Division additionally needs to extend the disbursement charge for non-tax-related funds. They set a aim of 98.4% by 2025, up from 98.2% in 2023. These numbers might sound small, however Trump’s administration is concentrated on wiping out the previous few loopholes that permit bodily checks slip via.
In the meantime, Treasury Secretary Scott Bessent has made it his full-time job to decrease 10-year bond yields. He retains repeating the identical message throughout speeches, TV interviews, and personal talks: the administration needs yields to remain down. A few of this comes with the job—decrease borrowing prices assist the federal government spend extra—however the obsession has gone up to now that Wall Avenue has began shifting its 2025 predictions due to him.
Within the final two weeks, top-rate analysts at Barclays, Royal Financial institution of Canada, and Societe Generale all dropped their year-end bond yield forecasts. They mentioned the explanation wasn’t simply speak, however precise strikes from Scott, like slicing the dimensions of 10-year Treasury auctions, pushing for weaker financial institution rules to extend bond demand, and backing Musk’s DOGE crew as they scramble to decrease authorities spending.
Up to now, the strain is working. Yields on the 10-year notice dropped by half a proportion level over the past two months, together with comparable strikes on different Treasury securities. However not all of that’s due to Scott. A number of it’s tied on to Trump’s actions. His tariffs and commerce threats have traders working from shares and into bonds, on the lookout for security. That’s not precisely how Scott needed the market to maneuver—he’s been pushing for a cleaner rally primarily based on financial progress—but it surely’s serving to his case anyway.
Treasury plans to make huge layoffs, as DOGE directed
All that is coming because the Treasury Division is on the brink of hearth a lot of staff as a part of the downsizing effort by DOGE. The plan was confirmed via language in a courtroom submitting by a Treasury official, and it ties straight again to President Trump’s govt order that launched the DOGE initiative earlier this yr.
Within the sworn assertion, Treasury mentioned the layoffs “will likely be tailor-made for every bureau,” and in a whole lot of circumstances, it is going to imply slicing a considerable variety of jobs via formal reductions in pressure, or RIFs. The company didn’t give precise numbers or a deadline, however made it clear that each bureau is on the desk.
The Treasury has greater than 100,000 staff unfold out throughout businesses just like the IRS, the Bureau of the Fiscal Service, the U.S. Mint, and the Workplace of the Comptroller of the Forex.
This element got here from Trevor Norris, a senior HR official on the Treasury, in a sworn affidavit filed in federal courtroom on Tuesday. He confirmed the division is ending up its layoff plans proper now, and hinted that lots of the job cuts will goal newer federal staff who not too long ago bought rehired beneath a choose’s order.
That order got here from a Maryland federal courtroom, the place a choose briefly reinstated hundreds of federal staff who had been fired earlier this yr. The employees had all been on probationary standing, which means they’d solely been of their roles for one to 2 years, relying on the job. The order applies to 18 businesses and their sub-offices whereas the courtroom decides whether or not to make that safety everlasting.
Trevor instructed the choose the following spherical of layoffs will “disproportionately have an effect on” these newly reinstated staff. That’s as a result of beneath RIF guidelines, the federal government cuts the least senior staff first. He didn’t say when the layoff plans could be finalized.
