DOGE deputy to oversee powerful Treasury system as Musk demands cuts

The Treasury Department is appointing an ally of billionaire Elon Musk’s U.S. DOGE Service to a senior position in the department overseeing the nation’s powerful payment systems, according to two people with knowledge of the matter, who spoke on the condition of anonymity to reflect private deliberations.

Tom Krause, a Silicon Valley executive with ties to DOGE, will become the financial assistant secretary of the Treasury Department, the people said. He replaces David A. Lebryk, who resigned after objecting to Krause’s demands to stop payments on foreign aid – a measure Lebryk resisted as illegal.

Krause’s position will give him control over the Treasury Department system responsible for disbursing more than $5 trillion in annual payments, including for Social Security, Medicare, tax refunds and thousands of other measures. Musk has demanded on social media that Treasury unilaterally stop sending these payments, accusing the department’s career staff of breaking the law.

The decision puts Musk’s DOGE in a potential position to make sweeping changes to the federal budget, with implications for tens of millions of Americans. The payment system, run by the Bureau of the Fiscal Service, contains sensitive taxpayer information, and some former Treasury officials have expressed concerns about granting access to individuals with private business interests. The move has also touched off broad alarm within the Treasury Department, the people said.

“This is the bureau designed to be run by a career, nonpolitical person, but being taken over by a member of DOGE,” said Aaron Klein, a former Treasury Department official now at the Brookings Institution, a D.C. think tank. “It’s pretty scary – the Fiscal Service is the bureau of the people who cut the checks. They don’t determine who gets the checks. And the data that goes through this is of massive national security consequences.”

Treasury Secretary Scott Bessent previously said that DOGE affiliates at Treasury would have no more than “read-only” access to the payment network and would not be able to make changes themselves. A federal judge on Thursday ordered that Krause’s access to records be “read-only,” but it’s unclear whether he will have broader authority to change payments after becoming the head of the Fiscal Service.

On Thursday, the White House also said the second DOGE staffer assigned to Treasury – 25-year-old Marko Elez – would be stepping down after the Wall Street Journal surfaced his racist social media posts.

In his past writings, Elez embraced eugenics and once posted: “Just for the record, I was racist before it was cool,” according to the Wall Street Journal.

Musk and Vice President JD Vance called on social media Friday for Elez’s reinstatement. “I obviously disagree with some of Elez’s posts, but I don’t think stupid social media activity should ruin a kid’s life,” Vance said.

Bessent has thus far sought to downplay DOGE staffers’ work at the Treasury Department. Treasury also has said that Krause will be in touch with veteran career officials and comply with security, safety and privacy standards.

“When you say the DOGE team, these are Treasury employees, two Treasury employees, one of whom I personally interviewed in his final round,” Bessent told Bloomberg.

Krause comes to Treasury after a 25-year career in the finance, technology and software industries. In 2022, he was named chief executive of Cloud Software Group, a holding company which resulted from a private equity transaction that combined Citrix and TIBCO, two software companies.

On Wednesday, Krause told employees that he would keep his job at Cloud Software Group even as he works at Treasury as a “special government employee,” according to an internal email provided by a company spokeswoman, Caitlin Russell.

“Let me be clear – as CEO of Cloud Software Group, I am committed to our company and you, our employees,” Krause said in the email, which was first reported by the news outlet CRN.

Shortly after Krause took over at Cloud Software Group, the company laid off 15% of its workforce, followed by another 12% cut a year later. The company announced a third round of cuts last month.

Krause did not immediately respond to an email and voicemail requesting comment.