By David Enna, Tipswatch.com
Court documents filed by a U.S. Treasury official indicate the department is planning a “substantial number” of layoffs, according to reporting from Bloomberg.
The revelation came in court documents filed by Treasury to a federal judge in Maryland. The judge has placed a 14-day restraining order reinstating probationary employees who were fired in a mass action by the Department of Government Efficiency, or DOGE.
The affidavit was one of a collection meant to update the status of the probationary employees. It was submitted by Trevor Norris, the Treasury’s assistant secretary for human resources. It stated:
As of Monday, March 17, 2025, Treasury had 7,611 Affected Probationary
Employees, as defined in paragraph I0(c) of the Temporary Restraining Order. As of that date, Treasury had reinstated 7,560 Affected Probationary Employees.… All Affected Probationary Employees have had their Removal Personnel Action Requests cancelled and have been placed in a paid Administrative Leave status. … Employees in an Administrative Leave status continue to have their access to Treasury duty locations, computer networks, and email suspended pending their return to regular duty status.
(In other words, these 7,560 employees are being paid but are not allowed to enter Treasury offices or view emails.)
… In addition, the Department is finalizing plans in response to President Trump’s February 11, 2025 Executive Order Implementing the President’s “Department of Government Efficiency” Workforce Optimization Initiative. These plans will be tailored for each bureau, and in many cases will require separations of substantial numbers of employees through reductions in force (RIFs).
The Treasury has more than 100,000 employees across several bureaus, including the IRS, Bureau of the Fiscal Service (which controls TreasuryDirect), US Mint and Office of the Comptroller of the Currency.
Clearly, the Treasury intends to remove most or all of the 7,560 probationary employees, who are not currently allowed to work or even view email. The document said:
In some case, bureaus may determine that the likelihood of ce11ain reinstated probationary employees being separated is sufficiently high that restoring them to full duties in advance of the planned RIF would be unduly disruptive to both the employees and the bureau.
Plus, additional “reductions in force” seem likely. A Treasury spokesman told Bloomberg that no final decisions have been made.
Thoughts
In following the news of firings of probationary U.S. government employees, I keep asking myself one question: What is the most likely job for a very new Treasury employee? My thought: “Answering the phone and giving customers support.”
I have been hearing anecdotally that it has been nearly impossible to get information or help from TreasuryDirect by phone or even email in recent weeks, and this turmoil is most likely the cause. You have 7,560 Treasury employees being paid but not allowed work.
In its response to Bloomberg a Treasury spokesman said the staffing cuts are meant to “increase efficiency” by consolidating support functions to improve quality of service. TreasuryDirect had been improving its customer service in recent years, but now its customers face another setback.
A bigger issue would be the potential elimination of the savings bond program, which does involve a lot of customer service because it focuses on small-scale investors. I don’t think that will happen, but let’s stay alert.
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David Enna is a financial journalist, not a financial adviser. He is not selling or profiting from any investment discussed. I Bonds and TIPS are not “get rich” investments; they are best used for capital preservation and inflation protection. They can be purchased through the Treasury or other providers without fees, commissions or carrying charges. Please do your own research before investing.
Treasury Inflation-Protected Securities 
Why have I been buying 4 or 8-week Bills: i) higher interest, unless you want to go 5, 7, or longer maturity; ii) I reinvest the interest I make to get compounding effect; iii) no transaction costs or state taxes; iv) liquidity (not like cash but better than a longer maturity bond) if, say, 20 year hits my wishful 5% :))))…yes, a side of me is overly optimistic…:)))
Is anyone else having trouble logging on to Treasury Direct today? I’ve tried Firefox and Chrome.
I logged on earlier and things worked, but just now it wasn’t working.
Treasury direct has been down for maintenance since 7pm Friday until 6pm on Sunday, March 30th.
I logged in, saw my account, but nothing was clickable. I’ve not been able to get back on yet this morning.
David, off topic, but something I am curious about now. Is the tax-deferred interest paid by I-bonds twice a year supposed to be included in Medicare MAGI? My research suggests the answer is NO. If not included, that would be another good reason to buy I-bonds if your income is approaching the threshold, and might help to explain why the government puts a $10,000 annual cap on I-bond purchases.
The answer is “no” that the tax-deferred interest is included in Medicare MAGI … UNTIL the I Bond is redeemed. Then you will be reporting all the interest to the IRS for that tax year, and that amount is included in the MAGI amount because it is simply traditional interest. (Some investors in rare cases report the interest every year, so that means the interest would be in MAGI every year.) Keep in mind that this is no “freebie.” No I Bond has yet matured, meaning anyone holding I Bonds from the 1999 to 2001 era with high fixed rates will be reporting a huge amount of interest in the year of redemption, potentially pushing them into a higher tax bracket and higher Medicare surcharge level. See: https://tipswatch.com/2024/02/04/long-time-i-bond-investors-face-a-tax-time-bomb/
David, thanks very much. That Medicare premium adjustment schedule is not finely graduated like the IRS tax schedule is, but moves in giant thresholds (chunks) for some reason, no doubt designed by a government imbecile. For example, you would pay the same amount of Medicare premium adjustment if you are single and your MAGI is $106,000 or $133,000. That would be $74 more a month on top of the current Part B of $185, and $13.70 more a month on top of your current Part D. Medicare calls it a premium “adjustment”. I call it just another tax on prudent savers and investors.
But please don’t remind me about my I-bonds maturing in 2031-2033 (kind of scary). I am thinking of redeeming some years before maturity date so I don’t get such big IRS tax and Medicare tax hits. ZIRP would be a good time for me to do this, but I doubt we will see that again. However, maybe starting around 2028, if the economy is in recession/depression and T-bill rates are relatively low, I might think about redeeming some early.
Patrick, I have been trying to warn people about IRMAA for many years, but it really isn’t widely known. It is a “cliff” tax that triggers with just $1 of additional income over each limit. I personally am fine with going into Level 1 because of Roth conversions. That will cost a couple filing jointly $1,776 a year. OK, I can live with that. But its is worth being very careful in your income planning for each year. I will start to redeem my 2001 I Bonds five or six years before 2031 to balance out the effect.
See: https://tipswatch.com/2024/11/15/medicare-costs-for-2025-once-again-are-rising-faster-than-inflation/
If you are going to go past a threshold, you should blow past it as much as possible. Fortunately the limits will only go up, unless there is deflation which is unlikely to happen, so using the current year’s threshold is a good guideline.
Agree with Henry. It is helpful to keep a spreadsheet estimating your taxes, and with these threshholds (Medicare IRMAA, Social Security taxability, tax brackets, QDCG brackets for 0%, 15%, 20%, phaseout of ACA subsidy). That way you can plan your year’s controllable income (realized capital gains, selling of bonds, etc.) to fill up low brackets and maximize threshholds without crossing new boundaries. It can also be worth paying one of those services (like MaxiFi) to do a lifetime income analysis, to make decisions like when and how much to convert IRAs, take capital gains, etc. The combinations can be quite computationally complex (e.g. an IRA conversion now can have implications for tax brackets for decades), and hard to model on your own in just a spreadsheet. Spreadsheets are more useful, I think, for planning just one or two years ahead. I also find this 1040 spreadsheet quite useful: https://sites.google.com/view/incometaxspreadsheet/home You can enter some rough numbers (skipping most of the forms) to get some estimates of this year’s income tax, and tweak them in various ways to see how changes (e.g. adding 10K more in realized cap gains) affects your tax bill. There are some weird interactions between, say capital gains brackets, ACA subsidies, and such, that are hard to see without playing with the numbers a bit in a spreadsheet like this.
Calling people government imbeciles, as you do below, is uncalled for. Most government employees I have dealt with want to help and are knowledgeable.
Such a statement reflects more upon you, and it remaining on this site reflects upon David, as much as he would not like it to.
A lot of comments come in each day, and some of them get zapped or at least edited. In this case, Patrick was being specific with his criticism of the way IRMAA is structured as a cliff tax. It was a specific criticism, so I allowed it.
A simple solution is to never use TreasuryDirect for anything except savings bonds (where you have no other choice). Move everything to a brokerage account. Brokerages can do everything TD does and more, except savings bonds. Okay, you do have to buy Treasuries in 1000 dollar increments at a brokerage, but you can buy and sell for no commission (at Schwab, Fidelity and Vanguard). It would not bother me at all if TD were to simply shut down, except for its savings bond division, which would be named Savings Bonds Direct Because You Have No Other Choice Ha Ha Ha.
I could see this administration getting rid of new purchases of savings bonds. They might come up with something new, like an F-bond (Freedom Bond?) which can be bought and redeemed only at brokerages, but with no secondary market and less arcane rules and regulations, and no cap on how much you can buy in a year.
I still use TreasuryDirect to buy and roll over T-bills, since its system for that is easy, efficient, and reinvests on the day of maturity. Because these investments are staggered, I could unwind that investment fairly quickly.
And TD allows you to withhold taxes which a brokerage probably would not. Makes tax planning a little easier. Although the IRS has recently complicated the calculation of withholding on W-4s and pension withholdings.
On the IRS front, I’ve already received my refund and I filed a paper return in February. So the IRS apparently still has some human employees around. A big refund due to the IRS making it hard now to project necessary withholdings.
I buy a new T-bill funded by an old maturing T-bill. The settlement date is the exact date of maturity of the old T-bill. This is with Schwab. This is a kind of manual rollover. I do not use Schwab’s auto rollover. I seem to always add a few thousand dollars to the new T-bill, so my cash account stays as low as possible.
I also have a ladder in case I need money for other stuff. I always buy at auction and hold to maturity, usually three month T-bills. You do have to buy in thousand dollar increments.
David, you write “and reinvests on the day of maturity.” I wonder how TD does that. For example a 3 month T-Bill auction is always on Mondays and maturity is always on Thursdays. Always once a week. Settlement is always three days, on a Thursday. Forget about holidays for now. Does TD automatically put in an order for you on the auction day (Monday) immediately BEFORE the maturity day (the next Thursday) of your old T-Bill? That would be clever. I suppose TD could buy your new T-Bill on the secondary market on the exact maturity day of your old T-Bill, but messing around in the secondary market does not sound like something TD would do.
I’ll admit I didn’t really think through how TD does it, because of course it sends the discounted interest to my back account very close to the date of the next auction purchase. I’ve had this on autopilot so long I rarely look at it, except to extend out the number of reinvestments. TD is definitely not messing with the secondary market.
My last reinvestment of a 13-week was on March 17 (a Monday) and the interest was deposited in my back account on March 19. The next T-bill was issued March 20. However it works, it works.
Just to add to the points Patrick made. I manually monitor, instead of using Autoroll, to synch up my newly bought T-Bills settlement date with the day of maturing previously bought T-Bills. If, for example, I were to use Schwab’s autoroll for my 4 or 8 week Treasury bills, then my cash will be in Schwab’s cash sweep account for 11 weeks in a year making virtually zero interest. This is because Schwab will wait for the Thursday auction date for T-Bills post settlement of the maturing bills. It’s worth the effort to go through the hassle of keeping track and using Schwab’smoney market funds to maximize interest rates. It helps to have a margin account though Schwab helps me put a trade, if my account is non-margin, for example my IRA account, to buy T-Bills or any other US Treasuries with no transaction cost. I only keep our I Bonds with TD.
Channderkhannel, that is exactly how I buy T-bills at Schwab for exactly the same reasons you give. If you do “auto rollover” at Schwab you lose a week of interest, which can add up especially if you are buying 1, 2, or 3 month T-bills with reasonable sums of money. I buy 3 and sometimes 6 month T-bills which always mature on Thursday. I looked into buying 1 or 2 month T-bills, but they always mature on Tuesdays, so I would lose on the switch no matter how I played it. So I stick with 3 months. The rates are nearly the same as 1 and 2 months now. Too bad all T-bills don’t mature on the same day of the week. The trick with Schwab, as you probably know, is to keep little or no money in your cash account.
David, I understand your March 17 (auction date) for the new issue on March 20 (the settlement date). I don’t understand where the interest on March 19 (Wednesday) comes from. It seems like it cannot come from the March 17 purchase because that issue date is March 20. So it has to come from the T-bill which got auto rolled-over which matured March 20. If so, I wonder why TD picked the Wednesday one day before maturity to pay your interest.
Hi Patrick,
I try to keep less than a dollar of cash in my brokerage accounts. I At a minimum, I try to get the yield from their money market funds. Also, so far, I have been buying mostly 4-week T Bills, though recently 8-week T bills seem to be connsistently doing a tad better than the 4-week. I am in no rush to go longer on the maturity. I use http://www.cnbc.com/bonds to get more complete picture of real-time nominal rates. I hope CNBC will soon add the 6-week Bills reporting.
With Schwab, for example, when you trade their money market fund, it is settled the next business day. So, when 4-week bill matures on a Tuesday, I will place a Mututal fund, SWVXX or SNAXX, order to sell for the amount of cash, before 4pm on Mondays, needed for the Tuesday settlement. As you know, maturity and settlement is the same day (Tuesday). I know it can be a hassleto buy and sell mutual funds constantly, but once you do it a few times, it works fine. Some one told me that it takes a lot of bread crumbs to make a bread when it comes to creating income, Over a one year period it all can add up to a decent bread :)))….best chander
And no one is indicating a decrease in their exit survey on TD? Same or better service reflects, in part, that fewer employees may be all that is needed NOW and more layoffs down the road!
For people who are experienced users, the TreasuryDirect website doesn’t cause a lot of problems, except in times of investor overload, like in October 2022. Complaints usually involve people calling or emailing with questions or problems and getting no response. Also, fixing things like a bank routing number can be a time-consuming hassle. And of course, transferring holdings in and out of TreasuryDirect can take months.
Today’s Core inflation reading is not good news – stagflation is starting to materialize as a likely outcome of the policy mess forced upon us.
…and given the news (and declining real yields) we’re feeling comfortable about our decisions over the past year or so to build TIPS ladders at >2% real yields. Thanks to David for teaching us how.
Firing 7,500 staff to “improve” public service/support? Sounds Orwellian to me.
My Tips transfer to a broker was completed this month in 25 days….. very satisfied
First…..Thank you,David…..for this website…..and the wonderful info you share on a very important personal finance issue.
My experience with Federal Reserve andTreasury Direct has been positive…….for over 30 years now.
Just transferred some Tips from TD to a broker…….the medallion seal was an annoyance, but my bank did it for free………the TD website warned me that it could take up to year!!!…….
Thanks for posting. Paying people to not come to work does not sound very “efficient.”
I have never had a problem working on the site itself. Similar to the person above, I submitted a paper request last October to transfer a note to a brokerage. The replying email said it could take “6 months to a year or more”. The web site at the same time said to allow 6 months. I am still waiting. The same request to a brokerage would take a fraction of that. TD needs more customer service–not less.
I don’t remember ever needing a medallion stamp. What do you think they need a medallion stamp for? If it was to open the online account, it is so long ago I forgot. But certainly not to convert bonds in an existing account. It is getting harder and harder to find a bank that will cash the paper bonds, so it really seems better to convert them. The long waiting times someone mentioned are a concern. I don’t remember that being an issue with mine, but with all the firings, it may become more of a problem. My last conversion was in March, 2024, and it took from April 15th when I mailed them to May 28th when they showed up in my account.
In the past, TreasuryDirect did require a medallion stamp for some account changes. But beginning a few years ago it has been almost impossible to get a medallion stamp from any financial institution, apparently because of liability issues. So today most changes just need a notarized signature guarantee.
Has anyone heard anything more regarding the gift box issue for savings bonds? I am wondering if I should move all of the gift bonds to the one recipient now and get it over with before these layoffs occur.
I keep checking and so far nothing from the Treasury, which might be predictable because of the changing administration. I’m sure the gift-box issue is not a priority. So we continue in limbo. Last year, after making traditional purchases, my wife and I delivered two full sets of gift I Bonds, all we owned and all with the 1.3% fixed rate. Then, in January 2025 I bought another set, the usual way, for my wife and the purchase went through: https://tipswatch.com/2025/01/05/great-mystery-an-i-bond-buying-guide-for-2025/ .. I plan to buy the other set (for me) at the end of March. I don’t expect issues, but who knows?
Hi David, why buy I-Bonds by the end of March insstead of buying them before May 1st in April?…thanks!!!
No particular reason except I have available cash to do the purchase. My thinking is that the next fixed rate will be either 1.2% (same as today) or 1.1%, and right now that is 55/45 toward the 1.2%. If the fixed rate isn’t rising, I might as well purchase this month. We won’t know a whole lot more in late April.
Got it..thanks!!!
Basically, anybody who has a competing savings product that is worse. So, every bank, and every corporation selling bonds. And all the marketing and selling infrastructure for said inferior products. Big business hates the government providing better cheaper products that make them focus on consumers’ needs over pure profit. The health insurance industry is exhibit 1.
(This was meant to be a reply to Mark’s question of “Which financial services companies stand to benefit if the administrations ends Treasury Direct for I-Bonds?”) Apologies for not placing it there.
Who has a competing product for an IBond, with the tax deferral? Please enlighten me!
Well, nobody. But that’s the point. Nobody can compete with Medicare either, for the price. But if you use your influence over the gatekeepers to destroy the better product, then consumers are forced to go to the next best option, which is some sort of CD or bond which is worse for the consumer, and lines some banker’s pocketbook. Right now they can’t compete with TIPS or I-Bonds. Goodness knows they try with annuities to sell on the tax deferral front. But with the fees and required profit margins for the issuers, those are mostly terrible products.
Yes I bought two annuities. I did know I could buy an insurance product to almost replace features of Ibonds, course with state insurance. I just got back from the USPS, sending a simple package, of course not so simple, everything needs to be hand written and they have no pens. My eyes glaze over there. USPS is truly Doge low hanging fruit.
@gg80108 It’s good to know that the plan is working!
1. Cut funding and staffing levels at a public-facing agency.
2. Wait for members of the public to complain about poor service (and for some to even cite poor service as justification for further cuts!).
3. Cut funding and staffing further (with bonus points awarded for cutting haphazardly, to ensure disproportionately large hits to public experience with the service).
4. Rinse and repeat.
This is good news. There has to be changes in automation in the Treasury and our deficit must be streamlined. When you tighten the belt, it causes discomfort.
In theory, you are correct. In practice though, it’s a mess. I deal with the FDA (biotech). “Probationary” does not always mean “young and new” employee. Quite often it can mean “new to role” but of a very experienced employee. The disruptions at the FDA have been a disaster. Very experienced people cut, and other very experienced people seeing the mess and deciding to leave because these are PhD’s who are super knowledgeable, and can get a job in 10 seconds but only work at FDA to provide an essential service.
TL;DR…there is a bad way to do efficiency, and you’re seeing it. Watching this same “ready, shoot, aim” approach take place at Twitter a couple of years ago was the first clue.
Can’t argue the discomfort from belt tightening.
However, one must consider the skinny body where the belt tightening is occurring. The morbidly obese rich continue to loosen their belt at the expense of those who can least afford it.
I’ll never understand how this issue continues to be overlooked. Trying to argue for this as a solution is ludicrous.
If IRS is any indication, I am not optimistic anything will be modernized. If anything, the lobbyists would have stymied any attempts at modernization like what Intuit does on the taxes side.
Which financial services companies stand to benefit if the administrations ends Treasury Direct for I-Bonds? What could the costs be?
If it results in Treasury Direct brought into the modern age, instead of the cryptic web page they now have, and allow for contingent beneficiaries(more than two names on account), its worth it. Also the other gov “ID” pages are just junk too. This could be a good thing. I still have ibonds I got from a tax refund sitting in my desk that I just cannot bring myself to take the abuse it takes to send them in.
It’s really not that hard. I used to do it every year, and it probably took 10 minutes to fill out the form and stuff the bonds in the envelope. Less time than reading this post. I did it for my Mom’s 80 EE bonds, which was more of a pain, but the whole thing probably took an hour, especially as some of the bonds were sequential and I could copy/paste the numbers and change a digit or two.
I did that too when younger and more patience. I got lots of other financial accounts where they work like the should, and no ridiculous medallion stamp nobodys got! Minus 10 stars.
The real issue, especially in view of the news David is reporting in this new website entry, is not the amount of time it takes to fill out a TreasuryDirect form and stuff paper bonds into a mailing envelope, but rather, the amount of time which passes before perpetually understaffed TreasuryDirect completes the requested action.
In March 2024 my wife and I received a single $5,000 paper I Bond in lieu of cash as part of our 2023 federal tax refund. In August 2024 we filed the TreasuryDirect form to have the paper bond converted to electronic and transferred into our TreasuryDirect joint trust account.
It’s now March 2025, and we’re still waiting. At the end of January, I called TreasuryDirect, said we were aware of their understaffing, but asked if there was any specific problem. Answer: No, our paper bond conversion request was still just waiting its turn to be processed.
The current administration’s take-a-scythe-to-the-federal-workforce approach, which has largely been targeted to federal agencies and programs which help ordinary people, doesn’t give encouragement that any type of public service is likely to improve. But then, it’s always been clear to me that the destruction of the public trust that government can be helpful is a feature of this approach, not a bug. Can’t find public support to outright abolish a program? Then just weaken it and make it look incompetent and difficult to deal with.
Easy to start the process. The issue is HOW LONG WILL IT TAKE? 6 months? 12 months? Lost in the shuffle of staff?
I know when I converted it made me nervous to put 100k worth of bonds in an envelope. That was 15 yrs ago.
I got paper I-Bonds for tax refunds in 2022 and 2024. I converted them to my TreasuryDirect account in less than an hour of my time in each case (including looking up instructions for submitting them and later to move them into my main account). I would have preferred to get electronic bonds directly, but it wasn’t too hard to deal with.
For processing time, each request was completed within the 13 week timeframe they advised. I mailed paper bonds in November 2024 that were converted already. I know they say trust accounts take longer to deal with, but not sure what else could explain why it took so long for others.