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stephaniekelton.substack.com - Will the ratings agencies react to
Will the Ratings Agencies React to the Breakdown in Governance?
STEPHANIE KELTON
FEB 03, 2025

It’s been three days since The Washington Post reported that “the highest-ranking career official at the Treasury Department [David A. Lebryk] left the agency after a clash with allies of billionaire Elon Musk over access to sensitive payment systems.” Lebryk was serving as acting Treasury Secretary while Scott Bessent, Trump’s nominee for the job, was going through the confirmation process.

Lebryk did his best to protect the Treasury from a hostile takeover, refusing to give in to members of Musk’s Department of Government Efficiency (DOGE), who had been pressuring officials for access since the election. But after Bessent was confirmed as Treasury Secretary last Monday, the White House put Lebryk on administrative leave. There was nothing more he could do, so he announced his retirement.

Bessent was now in charge. And Bessent, it turns out, is a Yes Man. He handed over the keys almost immediately. As the New York Times reported on Saturday:

Treasury Secretary Scott Bessent gave representatives of the so-called Department of Government Efficiency access to the federal payment system late on Friday, according to five people familiar with the change, handing Elon Musk and the team he is leading a powerful tool to monitor and potentially limit government spending.

I thought it was a four-alarm fire when we found out what Musk’s team was trying to pull off, but it became a five-alarm fire when we learned they had succeeded.

A Five-Alarm Fire

I’m not sure most Americans appreciate the gravity of the situation. (In fact, I suspect they don’t.) Here’s a useful thread from Nathan Tankus that drives at some of what’s at stake. In addition to privacy concerns—Musk’s team now has access to some of our most sensitive data, including our Social Security numbers, bank details, etc.—there is a real risk that a rogue group of infiltrators could gain operational control over the payment systems.

What could that mean? The Washington Post explains:

Typically only a small number of career officials control Treasury’s payment systems. Run by the Bureau of the Fiscal Service, the sensitive systems control the flow of more than $6 trillion annually to households, businesses and more nationwide. Tens, if not hundreds, of millions of people across the country rely on the systems, which are responsible for distributing Social Security and Medicare benefits, salaries for federal personnel, payments to government contractors and grant recipients, and tax refunds, among tens of thousands of other functions.

more at the link

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