Demonstrators rally outside the U.S. Treasury Department after it was reported billionaire Elon Musk has gained access to Treasury’s federal payments system that sends out more than $6 trillion per year in payments on behalf of federal agencies and contains the personal information of millions of Americans, in Washington, U.S., Feb. 4, 2025.
Kent Nishimura | Reuters
A federal judge on Wednesday cleared the way for President Donald Trump ‘s plan to downsize the federal workforce with a deferred resignation program.
It was a significant legal victory for the Republican president after a string of courtroom setbacks.
“This goes to show that lawfare will not ultimately prevail over the will of 77 million Americans who supported President Trump and his priorities,” said White House press secretary Karoline Leavitt.
There was no immediate response from labor unions that had sued over Trump’s plan.
American Federation of Government Employees (AFGE) National President Everett Kelley said in a statement issued after the ruling that the union’s lawyers are evaluating the decision and assessing next steps.
“Today’s ruling is a setback in the fight for dignity and fairness for public servants,” Kelley said. “But it’s not the end of that fight. Importantly, this decision did not address the underlying lawfulness of the program.”
The union continues to maintain that it’s illegal to force American citizens to make a decision, in a few short days, without adequate information, about “whether to uproot their families and leave their careers for what amounts to an unfunded IOU from Elon Musk,” the statement said.
U.S. District Judge George O’Toole Jr. in Boston found that the unions didn’t have legal standing to challenge the program, commonly described as a buyout. O’Toole was nominated by former President Bill Clinton, a Democrat.
Trump wants to use financial incentives to encourage government employees to quit. According to the White House, tens of thousands of workers have taken the government up on its offer.
The deferred resignation program has been spearheaded by Elon Musk, who is serving as Trump’s top adviser for reducing federal spending. Under the plan, employees can stop working and get paid until Sept. 30.
Labor unions argued the plan is illegal and asked for O’Toole to keep it on hold and prevent the Office of Personnel Management, or OPM, from soliciting more workers to sign up.
A Justice Department lawyer has called the plan a “humane off ramp” for federal employees who may have structured their lives around working remotely and have been ordered to return to government offices.
