President Donald Trump Signs Executive Actions on Payment Modernization

On Tuesday, President Donald Trump signed two executive actions mandating the Treasury Department to expedite the modernization of federal money transfers.

The orders enforce the use of electronic payments “whenever possible” and assign full payment processing duties to the Treasury, aiming to reduce fraud and enhance control. While announcing the initiative at the White House, Trump remarked, “We’re doing this, and we have other modernization programs going on… these are steps that should have taken place decades ago.”

Most federal payments are currently processed through direct deposit; however, paper checks are still utilized in certain areas, which Trump aims to eliminate.

This initiative is part of a broader strategy to phase out outdated systems and minimize theft during payment processes. The administration argues that consolidating payment processes under the Treasury is essential for effective management.

DOGE Gains Access to Treasury System Amid Legal Backlash

During Trump’s second term, members of Elon Musk’s Department of Government Efficiency (DOGE) gained complete access to the Treasury’s payment database. This action faced scrutiny over potential privacy infringements and led to ongoing lawsuits. However, supporters claim the access is crucial for uncovering financial misconduct hidden in disparate systems.

The digitization push is not new; the government has long been transitioning from mailed checks to digital methods for disbursing Social Security payments, food stamps, tax refunds, and other payments. According to the IRS, in this tax season alone, nearly 99% of the $163 billion in refunds was issued through direct deposit.

The Treasury aims to increase the rate of disbursed payments for non-tax-related matters to 98.4% by 2025, a slight increase from 98.2% in 2023, focusing on eliminating remaining loopholes for physical checks.

Treasury’s Focus on Lowering Bond Yields

Treasury Secretary Scott Bessent is dedicated to decreasing 10-year bond yields, emphasizing this in speeches and interviews. His objective is to maintain lower borrowing costs for government expenditures. Recent moves, including reducing 10-year Treasury auction sizes and supporting DOGE, have influenced Wall Street’s projections for 2025 bond yields.

Analysts have revised their forecasts, attributing changes not solely to Scott’s messaging but also to Trump’s policies which have prompted investors to seek refuge in bonds. This outcome, although contrary to Scott’s expectations for growth-driven market rallies, aligns with his agenda.

Upcoming Treasury Layoffs as Part of DOGE Initiative

Concurrently, the Treasury prepares for significant layoffs as part of the DOGE restructuring, confirmed in a court document by a Treasury official. The job cuts will target various bureaus, although specific numbers and dates remain unspecified.

With over 100,000 employees in agencies like the IRS and the U.S. Mint, the layoffs plan is formalized in a sworn affidavit by HR official Trevor Norris. He indicated affected staff would predominantly include those recently reinstated under a court order due to earlier terminations, implying that these employees would be the first to face job cuts.

This move follows a Maryland court’s temporary reinstatement of thousands of federal workers who had previously been dismissed.

In summary, the Treasury has signaled that upcoming layoffs will mostly impact the newest federal workers, affecting the agencies involved in the case.