US Treasury eases anxiety over Elon Musk’s D.O.G.E as USAID staff get fired

The US Treasury has tried to shut down panic over Elon Musk’s new role in managing federal payments. Despite the eccentric billionaire’s claims of blocking what he called “illegal payments,” Jonathan Blum, a principal deputy assistant secretary, reassured Congress on Tuesday that no remittances had been canceled.

“The ongoing review of Treasury’s systems is not resulting in the suspension or rejection of any payment instructions submitted by other federal agencies,” Blum reportedly explained in a letter to the lawmakers.

The Treasury confirmed that Elon’s Department of Government Efficiency—better known as D.O.G.E—only had limited “read-only” access to the payment infrastructure. This system handles trillions of dollars in annual disbursements, including essential payments like Social Security.

But the announcement came after Elon, the world’s richest man and ‘First Buddy’ of President Donald Trump, declared over the weekend that his team was shutting down government grants he claimed were fraudulent. Elon’s comments on X, his social media platform, referenced a list of grants to Lutheran organizations.

Elon shakes up Washington, Senators demand answers

Things got worse yesterday after Elon publicly justified D.O.G.E’s involvement, alleging that payment officers had been instructed to approve transactions even for “known fraudulent or terrorist groups.”

This made Senator Ron Wyden, the senior Democrat on the Senate Finance Committee, demand an explanation from newly-elected Treasury Secretary Scott Bessent.

“I can think of no good reason why political operators who have demonstrated a blatant disregard for the law would need access to these sensitive, mission-critical systems,” Wyden said. In his response, Blum claimed that Tom Krause, the CEO of Cloud Software Group and one of Elon’s appointees, had been granted special government employee status.

Krause is now leading a review of federal payments in collaboration with career Treasury officials. Blum assured Congress that “all operational processes continue to be conducted only by career Treasury staff in accordance with all standard security, safety, and privacy standards.”

Despite these reassurances, Wyden dismissed the response, accusing Trump’s Treasury of trying to “downplay the risks as Elon Musk seizes power.” He went further, claiming, “Nothing they’re saying is believable or trustworthy.”

Former Treasury official Don Hammond also weighed in, expressing concern over Elon’s involvement. “A non-federal employee would have no accountability for the actions they take when in charge of the payments system,” Hammond warned. He added that improper access could jeopardize both the integrity of government payments and sensitive data.

USAID thrown into chaos as mass layoffs hit

While the Treasury scrambles to justify Elon’s presence, another crisis is brewing at the US Agency for International Development (USAID). Most of the agency’s staff will be placed on leave starting Friday, and overseas employees have been given 30 days to return to the US.

The decision, which was communicated to employees through an internal email and a notice on USAID’s website, is Elon’s aggressive plan to cut foreign aid spending.

President Trump and Elon are saying that USAID has been a major source of unnecessary federal expenditures. Marco Rubio, now serving as acting USAID administrator, confirmed to Congress that he is exploring a plan to merge parts of the agency into the State Department.

Rubio, who is also Secretary of State, described the decision as key to improving government efficiency. According to the agency’s official statement, “all USAID direct hire personnel will be placed on administrative leave globally, with the exception of designated personnel responsible for mission-critical functions, core leadership, and specially designated programs.”

Staff were told they would receive notifications by Thursday about whether they are considered important. The agency also said that exceptions may be granted on a case-by-case basis for employees dealing with family issues or safety concerns.

USAID employs around 10,000 people worldwide, with two-thirds of its workforce stationed in more than 60 countries. The agency’s projects, which include humanitarian aid and development programs, are now in jeopardy. The freeze has left staff scrambling to understand what this means for their futures.

“This is going to destroy USAID’s capacity to operate,” said a former senior official at the agency. The official explained that while the president cannot legally abolish USAID without congressional approval, the administration has effectively found a way to render it powerless. “Congress still has to act if you really want to kill USAID, but until that happens, this is the end. The nail in the coffin is being hammered in.”

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