President Donald Trump on Tuesday signed two executive actions forcing the Treasury Department to move fast on modernizing how the federal government moves money.
The orders require electronic payments to be used “whenever possible” and hand over full payment processing duties to the Treasury to stop fraud and tighten control. This happened at the White House, where Trump said, “We’re doing this, and we have other modernization programs going on… these are steps that should have taken place decades ago.”
According to official government information, most federal payments already go through direct deposit, but paper checks are still being used in some areas. Trump wants to shut that down.
This is part of a wider push to remove outdated systems and keep people from stealing money during the payment process. His administration believes consolidating payment processing under one agency—Treasury—is the only way to fix it.
DOGE gains access to Treasury system amid legal backlash
From the first year of Trump’s second term, members of Elon Musk’s Department of Government Efficiency (DOGE) got full access to the Treasury’s payment database. The move drew heat for potential privacy violations and triggered several lawsuits that are still active. But insiders close to the Trump team argue the access was necessary to trace financial leaks and corruption that would’ve been hidden in siloed systems.
The push for full digitization didn’t come out of nowhere. The federal government’s been working for years to ditch mailed checks in favor of digital methods to deliver things like Social Security payments, food stamps, tax refunds, and other disbursements. The IRS confirmed that in this tax season alone, out of $163 billion in refunds, $160.9 billion—nearly 99%—was sent via direct deposit.
The Treasury Department also wants to increase the disbursement rate for non-tax-related payments. They set a goal of 98.4% by 2025, up from 98.2% in 2023. These numbers might seem small, but Trump’s administration is focused on wiping out the last few loopholes that let physical checks slip through.
Meanwhile, Treasury Secretary Scott Bessent has made it his full-time job to lower 10-year bond yields. He keeps repeating the same message across speeches, TV interviews, and private talks: the administration wants yields to stay down. Some of this comes with the job—lower borrowing costs help the government spend more—but the obsession has gone so far that Wall Street has started shifting its 2025 predictions because of him.
In the last two weeks, top-rate analysts at Barclays, Royal Bank of Canada, and Societe Generale all dropped their year-end bond yield forecasts. They said the reason wasn’t just talk, but actual moves from Scott, like cutting the size of 10-year Treasury auctions, pushing for weaker bank regulations to increase bond demand, and backing Musk’s DOGE team as they scramble to lower government spending.
So far, the pressure is working. Yields on the 10-year note dropped by half a percentage point over the last two months, along with similar moves on other Treasury securities. But not all of that is because of Scott. A lot of it is tied directly to Trump’s actions. His tariffs and trade threats have investors running from stocks and into bonds, looking for safety. That’s not exactly how Scott wanted the market to move—he’s been pushing for a cleaner rally based on economic growth—but it’s helping his case anyway.
Treasury plans to make massive layoffs, as DOGE directed
All this is coming as the Treasury Department is getting ready to fire a large number of workers as part of the downsizing effort by DOGE. The plan was confirmed through language in a court filing by a Treasury official, and it ties directly back to President Trump’s executive order that launched the DOGE initiative earlier this year.
In the sworn statement, Treasury said the layoffs “will be tailored for each bureau,” and in a lot of cases, it will mean cutting a substantial number of jobs through formal reductions in force, or RIFs. The agency didn’t give exact numbers or a deadline, but made it clear that every bureau is on the table.
The Treasury has more than 100,000 employees spread out across agencies like the IRS, the Bureau of the Fiscal Service, the U.S. Mint, and the Office of the Comptroller of the Currency.
This detail came from Trevor Norris, a senior HR official at the Treasury, in a sworn affidavit filed in federal court on Tuesday. He confirmed the department is finishing up its layoff plans right now, and hinted that many of the job cuts will target newer federal workers who recently got rehired under a judge’s order.
That order came from a Maryland federal court, where a judge temporarily reinstated thousands of federal employees who were fired earlier this year. The workers had all been on probationary status, meaning they’d only been in their roles for one to two years, depending on the job. The order applies to 18 agencies and their sub-offices while the court decides whether to make that protection permanent.
Trevor told the judge the next round of layoffs will “disproportionately affect” these newly reinstated employees. That’s because under RIF rules, the government cuts the least senior workers first. He didn’t say when the layoff plans would be finalized.
