Elon Musk’s Department of Government Efficiency (D.O.G.E) has been granted access to software capable of transferring massive amounts of data out of the US Labor Department’s systems, according to a report by NBC.
The approval has set off alarms among career government workers who fear sensitive information may already be in Elon’s hands.
The situation escalated last week when the Labor Department gave the green light for D.O.G.E to deploy PuTTY, an open-source software for remote access and file transfer.
Elon’s D.O.G.E is operating deep inside federal agencies, tearing through bureaucracies with President Donald Trump’s full backing. Labor employees reportedly said they were blindsided when D.O.G.E operatives were granted permission to use PuTTY.
According to the NBC report, five D.O.G.E personnel were given access not only to PuTTY but also to an SQL studio program used for editing and navigating government databases.
Lawsuits pile up as concerns grow
D.O.G.E’s push for federal data access is already drawing legal challenges. A federal judge issued a restraining order on Saturday, temporarily blocking D.O.G.E from accessing Treasury Department data following concerns over unauthorized information retrieval.
While the ruling did not cover the Labor Department, lawsuits from labor unions, privacy groups, and Democratic lawmakers have been filed in multiple federal offices, seeking to halt D.O.G.E’s reach.
Labor Department systems hold a wide range of critical data. Among them: Bureau of Labor Statistics files tracking economic health, Occupational Safety and Health Administration (OSHA) records on workplace violations, and Employment and Training Administration grant details, which include billions in annual funding for community colleges and apprenticeships. It remains unclear which of these, if any, D.O.G.E operatives sought access to.
D.O.G.E’s role in government layoffs
Elon’s D.O.G.E isn’t just grabbing data—it’s also slashing jobs. The Trump administration has initiated mass layoffs across at least seven federal agencies, cutting thousands of workers in an aggressive effort to shrink the government.
On Thursday, the Department of Energy announced plans to lay off most, if not all, of its 2,000 probationary employees. The Education Department, Office of Personnel Management, Department of Veterans Affairs, Small Business Administration, Consumer Financial Protection Bureau, and General Services Administration also moved forward with cuts following Trump’s executive order mandating large-scale workforce reductions.
The administration’s voluntary resignation program, which had seen 77,000 federal employees leave their positions, was shut down on Wednesday by a judge’s ruling. The program only accounted for a 3% reduction in the workforce, which is far below Trump’s 10% target, so Elon had to do something about it.
Just yesterday, the Department of Health and Human Services (HHS) was consumed by speculation that newly sworn-in Secretary Robert F. Kennedy Jr. would initiate sweeping layoffs across the National Institutes of Health (NIH), Food and Drug Administration (FDA), and Centers for Disease Control and Prevention (CDC).
Ahead of his arrival, NIH employees were warned—through unofficial channels—that mass terminations could begin within days. But as of press time, no official action had been taken.
Trump’s cost-cutting push rattles federal lease-backed bonds
The US government’s crackdown on office space spending is already hitting the bond market, with investors dumping securities tied to federal agency leases over fears that contracts won’t be renewed.
Some of these bonds—backed by properties leased to agencies like NASA, the FBI, and the Social Security Administration—are selling off at deep discounts, reflecting the uncertainty surrounding Trump’s cost-cutting agenda.
Taxable bonds issued in 2022 to refinance debt for NASA’s headquarters traded at 55 cents on the dollar on Wednesday, with yields spiking to 26%, according to Bloomberg data. That’s a massive jump from where they were trading before November’s presidential election, when yields were 11 percentage points lower.
The sell-off shows that investors are bracing for potential non-renewals of federal leases, particularly as Trump pushes to shrink the government’s office footprint.
Federal lease-backed bonds drop as investors brace for cuts
NASA’s bonds aren’t the only ones feeling the impact. Taxable bonds tied to the Social Security Administration’s office in Birmingham, Alabama, which were already junk-rated, traded at 27% yields on Feb. 11—a huge jump from 16% in October, according to Bloomberg’s data. The federal lease on that building expires in early 2028, adding to the uncertainty.
Bonds tied to an FBI field office in San Diego have also taken a hit. The General Services Administration (GSA) has a lease on the building until April 2033, but that hasn’t stopped the securities from losing value. Even debt tied to a veterans’ affairs clinic saw a price drop in February, reflecting investor concerns about federal leasing policies. While some of these trades have been small, making it harder to gauge broad investor sentiment, analysts say the change is pretty clear.
Moody’s slashes NASA bonds to deeper junk status
The sell-off has already triggered credit downgrades. On Monday, Moody’s Ratings cut NASA’s bonds to B2, which is five levels below investment grade. Analysts pointed to growing uncertainty over lease renewals in 2028, when the $275 million in principal comes due. Moody’s warned that refinancing the debt could become much harder if investors continue losing confidence in federal lease-backed securities.
“The downgrade also reflects emerging uncertainties in the GSA’s general leasing strategies more broadly,” Moody’s wrote in its report.
The uncertainty isn’t new. For years, analysts have questioned the federal government’s need for office space, especially as agencies adapt to remote work. The Government Accountability Office (GAO) reported in 2023 that many federal offices were underutilized and that agencies spend $2 billion a year to maintain office buildings, even if they sit empty.
Biden had already tried to consolidate office space before leaving office. In January, he signed legislation to reform the GSA and push for more efficient use of federal properties, according to a statement from Rep. Scott Perry, a Republican from Pennsylvania.
Despite the sell-offs, some analysts say the federal government can’t just walk away from its leases overnight. A report by law firm Arnold & Porter states that under GSA rules, most government leases have a firm term period, meaning they can’t be canceled before a certain date. NASA’s lease, tied to the 2022 bond sale, is locked in until 2028, according to Moody’s.
That’s not stopping investors from pricing in risk. Even if legal protections exist, the broader trend of federal cost-cutting, office downsizing, and expiring leases is creating a dangerous mix for bondholders.
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