In a significant legal setback for the Trump administration’s cost-cutting agenda, a federal judge has temporarily restricted Elon Musk’s government efficiency team from accessing a critical Treasury Department payment system.
The judge cited concerns over data security and the potential for “irreparable harm” to millions of Americans who rely on government benefits.
The ruling, issued early Saturday by U.S. District Judge Paul Engelmayer, effectively blocks the Department of Government Efficiency (DOGE) from interfacing with the Treasury’s sensitive payment network, which processes tax refunds, Social Security and disability benefits, and federal employees’ salaries. In addition to revoking access, the court ordered that any information downloaded from the system since January 20 be destroyed immediately.
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Engelmayer’s decision was in response to a lawsuit filed by New York Attorney General Letitia James and 18 other state attorneys general, who argued that DOGE’s involvement posed an “unprecedented and dangerous” breach of government security protocols. The legal action comes amid broader resistance to the Trump administration’s aggressive restructuring of the federal workforce and Musk’s expanding influence over government operations.
White House Decries “Judicial Overreach”
The ruling has sparked fierce backlash from the White House, which dismissed the decision as an attempt to obstruct much-needed reforms.
“Grandstanding government efficiency speaks volumes about those who’d rather delay change with legal shenanigans than work with the Trump administration to rid the government of waste, fraud, and abuse,” said White House spokesperson Harrison Fields in a statement to CNN.
The administration has positioned DOGE as a radical attempt to streamline government functions, arguing that its efforts will cut billions in unnecessary spending. However, critics—including lawmakers, unions, and cybersecurity experts—warn that Musk’s team is overstepping legal boundaries by seeking access to critical government infrastructure.
Musk Defends DOGE, Insists Treasury Access Was “Necessary”
Musk, responding to the controversy on social media, defended DOGE’s access to the Treasury system, claiming that the initiative was an agreed-upon measure to improve financial auditing.
“DOGE and the Treasury Department jointly agreed to requirements involving government payments, including that all outgoing government payments have a payment categorization code, which is necessary in order to pass financial audits,” Musk wrote.
“The above super obvious and necessary changes are being implemented by existing, long-time career government employees, not anyone from @DOGE. It is ridiculous that these changes didn’t exist already!” he added.
Despite Musk’s assertion, the attorneys general behind the lawsuit maintain that DOGE’s activities pose significant risks to Americans’ private financial data. Their legal filing argues that Musk’s team, consisting mostly of “special government employees” with limited federal experience, was granted improper access to one of the most sensitive systems in the U.S. government.
Fears Over Potential Payment Disruptions
The battle over DOGE’s access has triggered fears that the administration could use the Treasury system to unilaterally freeze payments, a concern exacerbated by the administration’s broader efforts to restructure federal operations.
“The conduct of DOGE members presents a unique security risk to the States and State residents whose data is held,” the lawsuit alleges, warning that any disruption to the Treasury system could delay vital payments to millions of Americans.
The payment network, which processes transactions for more than 250 federal agencies, plays a central role in the lives of countless individuals, from retirees relying on Social Security to federal workers expecting their salaries. With DOGE’s ambitions extending beyond the Treasury, many fear the administration is moving toward an unprecedented consolidation of control over government financial systems.
DOGE’s activities have become a flashpoint in a larger political and legal battle over the Trump administration’s push to “shrink” the federal government. The initiative, spearheaded by Musk and a team of hand-picked analysts, has sought to disrupt multiple government operations, including workforce management, real estate holdings, and records control.
The Treasury case is just one of several legal challenges facing the administration’s restructuring drive.
On Friday, a separate court ruling temporarily blocked the administration’s attempts to dismantle the U.S. Agency for International Development (USAID). A judge ordered the reinstatement of 500 employees who had been suspended and blocked a plan to place 2,200 others on administrative leave. On Thursday, another judge paused the administration’s “buyout” offer for federal employees, pending further legal review. Earlier rulings had already halted a sweeping federal spending freeze that threatened to cripple government operations.
These legal battles have fueled tensions between the administration and Democratic lawmakers, who accuse Trump and Musk of attempting to consolidate executive power by undermining federal institutions.
“The reckless actions of this administration and its unchecked delegation of authority to unelected billionaires pose an existential threat to the rule of law,” said Senate Majority Leader Chuck Schumer in a statement. “We will not allow Musk to play kingmaker with taxpayer money.”
The next phase of the legal fight is set for February 14, when Engelmayer will preside over a hearing to determine whether the temporary restriction on DOGE’s access should be extended.
Legal analysts suggest that the case could have far-reaching implications, not only for the Trump administration’s restructuring efforts but also for the role of private sector figures like Musk in government operations.
For now, DOGE’s access to the Treasury remains frozen. However, with Musk’s growing influence in Washington and Trump’s determination to push through his agenda, the battle over DOGE’s future is far from over.