The Federal Government Is Being Run Like a Portfolio Company

Watch the federal government's balance sheet over the past year and a half, and two things are happening at once. On one side, the administration is liquidating capacity the public sector has carried for decades — the grants, the enforcement arms, the disaster agency, the social-service funding. On the other, it is issuing new federal permissions that did not exist before, charters and privileges handed to private firms. The two columns are not separate stories. They are one restructuring, and the place they meet is a single institution: the Office of the Comptroller of the Currency, which this month gave preliminary approval for a national trust bank charter to World Liberty Trust Company, the crypto venture co-founded by the president and his sons, to issue and safeguard a stablecoin ^[1]. The same federal government that is dismantling its own capacity is minting a federal bank charter for the president's own company. Start with the liquidation column, because it is the one most readers have watched piece by piece. The Substance Abuse and Mental Health Services Administration lost more than half its staff and roughly $2.05 billion in state block grants and overdose-prevention funding, even as a July executive order barred grants for harm reduction ^[2]. The Justice Department purged about 4,000 officials, hired 1,400 replacements, and shut down 23,000 investigations, steering the civil rights division away from police probes toward voter-fraud and university cases ^[3]. Federal funding freezes and grant terminations eliminated 29,000 nonprofit jobs, with 73 percent of organizations reporting rising demand even as they cut staff ^[4]. A Trump-appointed council has proposed handing disaster response to the states and privatizing the National Flood Insurance Program, with one member recommending "a takeout program where we transfer those federal policies to the private sector" ^[5]. SEC enforcement fell to a decade-low 313 actions in fiscal 2025, while the agency proposed moving public companies to semiannual reporting and the Labor Department opened 401(k) funds to high-risk private equity ^[6]. And in July the president pardoned eleven people, nine of them convicted of Clean Air Act violations for selling emissions defeat devices, while directing the EPA to ease enforcement of the same rules ^[7]. Now the issuance column. The OCC has granted conditional national trust charters to at least six crypto firms — Circle, Ripple, BitGo, Paxos, Fidelity Digital Assets, and Bridge, a Stripe subsidiary — under a framework that lets them operate as banks without full-service banking charters ^[8]. The Federal Reserve has proposed creating limited "master accounts" for crypto firms, opening payment rails once reserved for traditional banks to companies like Coinbase and Kraken ^[9]. The Justice Department's Office of Legal Counsel issued an opinion letting the president extend executive privilege to private advisers who are not federal employees ^[10]. Palantir won a $385.4 million Veterans Affairs contract to support a national patient database, even as the public health agencies that once did that work were being downsized ^[11]. And the January clemency wave included pardons and commutations for donors and convicted fraudsters, including a Venezuelan banker whose daughter gave $3.5 million to a Trump super PAC ^[12]. The connective tissue between the two columns is documented. A New York Times investigation found that of 346 donors who each gave at least $250,000 to Trump and his allies, more than half "benefited, or are involved in an industry that has benefited, from the actions or statements of Mr. Trump, the White House or federal agencies" — pardons, dismissed cases, favorable rulings, contracts ^[13]. Palantir itself donated $10 million to a Trump ballroom project before securing hundreds of millions in contracts. The president's family has accumulated roughly $3.4 billion from the presidency, and World Liberty Financial is projected to earn nearly $150 million from the stablecoin now backstopped by the very charter the administration's OCC granted ^[14][15]. None of this requires assuming a single coordinated design, and the record does not establish one. The charter policy is genuinely broad — Coinbase, Circle, and Fidelity are not Trump allies, and Comptroller Jonathan Gould has framed the approvals as reversing eighteen years of stalled bank formation, not dispensing favors ^[16]. But the guardrail that would have constrained the president's own conflict stalled. The Senate's digital-asset bill collapsed over bipartisan ethics demands, with Republican Thom Tillis saying "there has to be ethics language in the bill before it leaves the Senate, or I'll go from one of the people working on negotiating it to voting against it" ^[17]. The executive branch is issuing new federal charters faster than the legislative branch can build rules around them. That is what makes this different from the outsourcing this beat has covered before. Delegation is the state paying private firms to do old government work. This is the opposite motion: shedding old obligations and creating new federal permissions that did not exist before, with the president's own company sitting in the portfolio. The Senate's ethics fight is the one mechanism that engaged — and it could not keep pace.