Trump layoff plan gets reprieve

Business & Economy

The Big Story

Judge gives Trump go-ahead on mass layoffs

A federal judge refused a request from a group of government employee unions to block President Trump from moving ahead with dramatic reductions to the federal workforce.

U.S. District Judge Christopher Cooper ruled that federal law mandates the unions bring their challenge before the Federal Labor Relations Authority, which adjudicates labor relations within the federal bureaucracy, rather than a federal district court.

The decision notches another victory for Trump’s Justice Department, which is defending against dozens of lawsuits challenging a broad range of the president’s executive actions, including the administration’s efforts to slash spending and reshape government agencies.

The case at hand was brought by the National Treasury Employees Union, the National Federation of Federal Employees, the International Association of Machinists and Aerospace Workers, the International Federation of Professional & Technical Engineers and United Auto Workers.

The unions’ lawsuit challenged mass terminations of probationary employees — the administration’s plans for additional mass layoffs, known as a reduction in force (RIF) — and its offer for most federal employees to accept a buyout.

The unions argued that the administration’s plans violates the separation of powers and regulations for how the federal government can carry out RIFs.

The Hill's Zach Schonfeld has more here.

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IRS fires newly hired compliance staff

The IRS canned 5,000 compliance staff this week, effectively clearing out the new enforcement hires the agency had made with a funding boost from Democrats’ Inflation Reduction Act (IRA).

In fact, the terminations likely result in a net reduction of compliance and enforcement workers at the IRS relative to the IRA boost, since the agency had hired an estimated 4,583 enforcers since the IRA money was deployed, according to a 2024 supplement to the IRA’s strategic operating plan.

“I think our objective is to make sure that the employees that we pay are being productive and effective. And there are many more than 100,000 people working to collect taxes. And not all of them are fully occupied.”

The IRS fails to collect around $700 billion every year in taxes, an amount known as the tax gap that former IRS commissioner Charles Rettig estimated in 2022 could be as large as $1 trillion annually. As a share of 2022 gross domestic product at $26 trillion, that’s 3.8 percent. For comparison, the federal budget deficit in that year was $1.4 trillion.

In total, the IRS on Thursday fired 6,700 employees who were in a probationary trial period with the agency.

— Tobias Burns

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