The first weeks of President Trump’s second term have been dominated by a storm of executive orders aimed at reversing diversity policies, commercial wars with the main US business partners and intrigued on the most important federal position of which most of the majority of the Americans have never heard at the office of the office of the Office of Fiscal Service.
Hidden within the Treasury Department, the office has career personnel operating a system that channels about 90 percent of payments for the United States government, which spent about $ 6.75 billion in the last fiscal year.
Sometimes known as the Nation’s checkbook, the office has a treasure of information on the beneficiaries of federal benefits, fiscal information and contracts associated with programs that cover the government.
That is why it has become a point of interest for the so -called Efficient Department of the Government of Elon Musk, which has said that its objective is to eliminate the waste expenditure, but that it has also begun to look for expenses that chocate the political agenda of Mr. Trump.
Mr. Musk and his team got access to the payment system last week, giving them a window to each payment made by the government. That includes personal data, such as Social Security numbers for those who receive federal benefits and bank account information. Access to the system could offer them the ability to prevent payments, giving the Trump administration more power to die of hunger that they do not like.
The revelation that Mr. Musk could interfere with the plumbing of the Nation’s expenses system created an alarm inside and outside the federal government.
During the past week, an official of the Carrera Treasury Department, David LeBryk, resigned after he was pressed to provide Mr. Musk’s team access to the system; The Secretary of the Treasury, Scott Besent, was sued by unions that represent federal workers because he granted access; And the Democrats in Congress have pressed research on the situation.
The Department of the Treasury said Tuesday night that it was not stopping or rejecting federal expenses and that it was committed to safeguarding the nation’s payment system. In a letter to Congress, an official described the actions of Mr. Musk’s team as a system review to “maximize the integrity of payments” for agencies and the public.
This is how the payment system works and why it matters.
The plumbing behind federal payments
The Federal Government makes more than one billion payments every year, sending money to the retired Americans who receive social security checks, state governments that help manage federal and investor programs in Wall Street that bought government debt. The Treasury Department collects tax money and bond sales and then uses it to comply with the obligations of the nation.
The agencies of the entire government prepare computer files detailing the payments they need and send them to the Department of the Treasury. Treasury officials ensure that the files are completed correctly and execute the data through a final series of checks, including if the recipients are on the “not pay” list. Entities that face sanctions, for example, are prohibited from receiving money from the government.
Personal information is included in the files to ensure that payments go to the right people.
“I would have a name, information on the bank account, some level of social security identifier,” said Don Hammond, former Treasury Fiscal Undersecretary. Corporate information about government contractors would also be in the system, Hammond said, as well as information on US tax reimbursements.
Given the sensitivity of information in the system, access to it has historically been limited to the small group of staff members who need it, according to former Treasury officials.
Once the department executes the payment file through its filters, it reforms the file and provides it with the Federal Reserve, which then sends the money to its destination. The role of the Fed is strictly as a service provider. It has no capacity to cancel or question directives in terms of who to pay and when.
Mr. Hammond said there are two types of access to the treasure system, and one offers user visibility on which payment files is processing the department and another that gives the ability to enter and make changes to the system.
“That files and inter entities could enter that did not want to be paid, put them in the list of ‘Do not pay’,” he said. “Even if I did not comply with the legal criteria to go there, if it were in that detection filter, it would stop that payment at that time.”
In a letter to Congress on Tuesday, the treasure said that a team led by Tom Krause, a treasure employee and software executive, currently has “only” access to data.
A debt border
The efforts to return to the management of the payment system occur when the government has increased with the amount of money that can be borrowed: the so -called debt limit. The Treasury Department depends on what it calls “extraordinary measures” to generate additional effective so that it can fulfill its obligations.
Many Republicans oppose the increase in debt limit, who see as a sign of waste spending of the Democrats, which makes the United States approach the edge of breach this summer when legislators try to reach an agreement.
Interference with the payment system adds another layer of complication. The Treasury will very carefully track your bank account in the Fed to ensure that you always have a positive balance, given your current inability to issue more government debt to cover your invoices. Payment sacrifice can mean less money that flows from government coffers and, therefore, more time before the treasure debt limit is reached, but the growing uncertainty about the payment system has generated concern.
“What is very important for the financial system is that they have enough money to make payments of principles and interests be overcome,” said Wendy Edelberg, director of the Hamilton project, an economic policy arm of the Brookings institution. This is because the breach of these payments to bond holders could result in the breach of the government in its debt, which would have catastrophic economic and financial consequences, according to political leaders and economists.
Mrs. Edelberg described the fact that the expenses for the United States Agency for International Development, known as Usaid, went to zero last week a “Canarian in the coal mine.”
The privacy problem
Privacy is among the greatest concerns expressed by Democrats in Congress.
The Fiscal Service Office disburses social security payments, Medicare’s benefits, federal wages, subsidies and tax reimbursements. This means that the office computer system has personal information about millions of Americans.
Legislators are alarmed because they do not know the intentions of Mr. Musk, who has publicly accused the officials of the Treasury Department of violating the law by allowing inappropriate payments.
“Controlling the system could allow the Trump administration to” unilaterally “, and illegally reduce payments for millions of Americans, putting at risk the financial security of families and companies based on political favoritism or the whims of Mr. Musk and Those who are in his team that made his way inside, ”said Senator Elizabeth Warren, the main democrat of the Banking Committee, Mr. Besent.” the law “.
Mrs. Warren and Senator Ron Wyden of Oregon, the main Democrat of the Senate Finance Committee, requested the Government’s responsibility office on Wednesday to investigate the decision to give access to Mr. Musk’s team to the payment system.
Concerns about conflicts of interest
The participation of Mr. Musk in the federal government has raised a series of concerns about possible conflicts of interest surrounding their efforts to stop federal expenditure.
The rocket company of Mr. Musk, Spacex, effectively dictates the NASA rocket launch calendar. The Department of Defense is based on it so that most of its satellites are in orbit. And their companies were promised $ 3 billion in almost 100 contracts in 2023 with 17 federal agencies.
Mr. Musk is also regularly entangled with federal regulators on security issues related to his car company, Tesla.
Access to the Fiscal Service Office theoretically could give Musk information about federal contracts of their corporate competitors.
Speaking at the White House on Monday, Trump dismissed concerns about Mr. Musk’s interest in the data in the Treasury Department, saying that he could not take measures without the approval of the White House.
“If there is conflict, then we won’t let it come,” Trump said.
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