
US court refuses to lift block on Trump's government overhaul
Donald Trump directed government agencies to identify targets for mass layoffs in February. (AP pic)
WASHINGTON : A US appeals court today refused to allow president Donald Trump's administration to carry out mass layoffs of federal workers and a restructuring of agencies, leaving a lower court order in place that blocked the sweeping government overhaul.
The decision by the San Francisco-based ninth US circuit court of appeals means that, for now, the Trump administration cannot proceed with plans to shed tens of thousands of federal jobs and shutter many government offices and programs.
US district judge Susan Illston in San Francisco on May 22 blocked large-scale layoffs at about 20 federal agencies, agreeing with a group of unions, non-profits and municipalities that the president may only restructure agencies when authorised by Congress.
A ninth circuit three-judge panel today, in a 2-1 ruling, denied the Trump administration's bid to stay Illston's decision pending an appeal, which could take months to resolve.
The administration will likely now ask the US Supreme Court to pause the ruling.
'The Trump administration will immediately fight back against this absurd order,' the White House said in a statement.
'A single judge is attempting to unconstitutionally seize the power of hiring and firing from the executive branch.'
A coalition of plaintiffs praised the ruling: 'The ninth circuit's decision today rightfully maintains the block on the Trump-Vance administration's unlawful, disruptive, and destructive reorganisation of the federal government.'
The appeals court said the administration had not provided any evidence it would suffer an irreparable injury if the lower court order remained in place and said plaintiffs were likely to prevail.
'The executive order at issue here far exceeds the president's supervisory powers under the constitution,' said the majority opinion from judge William Fletcher, who was appointed by Democratic president Bill Clinton.
He was joined by judge Lucy Koh, who was appointed by Democratic president Joe Biden.
Judge Consuelo Callahan, who was appointed by Republican president George W Bush, dissented, saying the administration was likely to succeed on appeal and had suffered irreparable harm from having its policy blocked.
Government overhaul
Illston's ruling was the broadest of its kind against the government overhaul that was spearheaded by Trump ally Elon Musk, the world's richest person and CEO of electric vehicle maker Tesla.
Along with blocking layoffs, Illston barred the department of government efficiency (DOGE) from ordering job cuts or reorganisation at federal agencies.
Dozens of lawsuits have challenged DOGE's work on various grounds, including claims that it violated labour and privacy laws and exceeded its authority, with mixed results.
Two judges had separately ordered the Trump administration to reinstate thousands of probationary employees, who are typically newer hires and were fired en masse in February, but appeals courts paused those rulings.
Musk joined a farewell event in the Oval Office with Trump yesterday, marking the end of his active involvement with the administration.
Trump in February also directed government agencies to work with DOGE to identify targets for mass layoffs as part of the administration's restructuring plans.
The Republican president urged agencies to eliminate duplicative roles, unnecessary management layers and non-critical jobs, while automating routine tasks, closing regional offices and reducing the use of outside contractors.
Most federal agencies have announced plans to lay off large numbers of workers, including 10,000 staffers at health agencies.
In today's case, the unions and groups that sued said only congress has the authority to create agencies, shape their missions and decide their funding levels, and that large-scale layoffs undermine that power.
Illston, also an appointee of Clinton, had said in her ruling that the plaintiffs were likely to suffer a range of irreparable harms if the layoffs were implemented.
She said, for example, that a US department of labour office in Pittsburgh that researches health hazards facing mineworkers would lose all but one of its 222 employees.
Illston gave similar examples at local offices of Head Start, which supports early learning, the farm service agency and the social security administration.
Hashtags

Try Our AI Features
Explore what Daily8 AI can do for you:
Comments
No comments yet...
Related Articles


The Star
2 hours ago
- The Star
Asean News Headlines at 10pm on Sunday (June 1, 2025)
Malaysia: * Health Ministry aims for a smoke-free Malaysia by 2040, says Dzulkefly * Books are a source of true knowledge, not social media, says Anwar * Anwar announces book voucher initiative for 400,000 teachers * Takiyuddin: Perikatan not poaching Rafizi, Nik Nazmi or Zafrul * Penang's new char koay teow champion crowned * Restaurant operator charged with abusing niece * Police hunt for suspects after Dataran Merdeka brawl * Rafizi not keen on any appointed PKR post * Rafizi warns of consequences from Tengku Zafrul's party switch * Kelantan Customs seize 1.72 million sticks of smuggled cigarettes * Zafrul's application to PKR has not yet been discussed by unity government, says Anwar * Malaysia shares 5G direction, gives focus on online security at Tokyo event, says Fahmi * BN at 51: Zahid hails spirit of democracy, unity across generations * Umno legal bureau examining anti-party hopping laws in Zafrul's case, says Azalina * Mara to enhance collaboration with Cambridge University / Mara to stop sending students to US varsities Kunlavut Vitidsarn of Thailand poses after his victory against Lu Guangzu of China in the men's singles final at the Singapore Open badminton tournament in Singapore on Sunday, June 1, 2025. -- Photo by Roslan RAHMAN / AFP Singapore: * Implants could help treat eye condition that causes vision loss, according to new innovation * Hegseth wins praise but Asia still has strong doubts about Trump * Badminton -- Smashing Aaron-Wooi Yik beat South Korean juggernauts to win Singapore Open * Did China take a back seat by not having its defence minister attend this year's Shangri-La Dialogue? * U-turns, bans await motorists who jump the queue at Singapore land checkpoints * 41 suspected money mules in Singapore to be charged over alleged involvement in various scams * Europe's top diplomat rejects Pentagon chief's call that it limits role in Asia * Pentagon chief's Lee-Trump comparison draws flak Indonesia: * Malaysian diver dies off Aceh, body repatriated; remains flown to KL on Sunday (June 1) evening * Climate-sceptic policies 'imperil' aviation decarbonisation by 2050: IATA * Saudi Arabia on high alert to safeguard 1.8 million during Haj season * Search continues for Indonesia quarry collapse victims, death toll at 17 * Digital threats a top concern for Indonesian national security * Jakarta battles open defecation with communal toilets * No land, no future - The dilemma facing rural youth in Indonesia Kim Hye-jeong and Kong Hee-yong of South Korea react after winning the women's doubles final against Rin Iwanaga and Kie Nakanishi of Japan at the Singapore Open badminton tournament in Singapore on Sunday, June 1, 2025. -- Photo by Roslan RAHMAN / AFP Thailand: * Gay Chinese couple fulfil wedding dream in 'freer' Thailand * Thai-phoon! Kunlavut lifts Singapore Open and is set to become world No. 1 * Thai beauty queen Suchata 'Opal' Chuangsri crowned Miss World 2025 * Indian tourist attacked by tiger while taking a selfie with the feline in Thailand * Thai PM Paetongtarn dismisses claims of Thaksin's influence on government * China and Thailand boost strategic ties with new military cooperation plans Philippines: * Philippine Defence chief rips China officials in testy exchange * Marcos postpones rehab of Manila's major circle road for a month * Asean urged to embrace digital tech * Philippines Vice President Sara Duterte agrees with poll: She should be tried * Philippine President Marcos promotes police officer who led Rodrigo Duterte arrest * South Korean police looking into death of newborn baby on flight from Philippines to Incheon A Vietnamese specialist checks the quality of grains during the mechanized harvesting at a Vietnamese rice field in Los Palacios, Pinar del Rio province, Cuba. -- Photo by Adalberto ROQUE / AFP Vietnam: * Vietnam celebrates groundbreaking of US$300mil tech hub in Hanoi * Danang International fireworks fest starts off with a bang * Vietnam proposes US$2bil north-eastern casino resort: VnExpress * Japan's largest annual Vietnam festival kicks off * Exploring Trang An, also known as the 'dry Halong Bay' in Vietnam * It's tough to be an amphibian – sometimes a human touch is needed Myanmar: * Myanmar junta asks for time as govt extends temporary to June 30 as it needs time for reconstruction due to upcoming elections * Myanmar, Thai firm sign exploration deal for Mottama offshore block Min Ye Thu project * Myanmar junta extends ceasefire again after quake * Ousted PM Hasina charged with crimes against humanity in Bangladesh tribunal In this handout photo released by the Indonesian National Search and Rescue Agency (BASARNAS), rescuers search for victims at the site of a collapsed natural stones quarry in Cirebon district , West Java province, Indonesia. -- BASARNAS via AP Cambodia: * Immunotherapy drugs show major progress in early-stage cancer * Cambodia's two largest state-owned ports disclose net profits in Q1 * Hun Sen reiterates Emerald Triangle is Cambodian territory * Cambodia's total public debt reaches US$12.18bil as of Q1 Laos: * Laos inflation eases to 8.3% in May, but key prices remain high * Laos aims to boost innovation growth through IP promotion * China appreciates Laos' participation in establishing IOMed: Chinese Foreign Minister Brunei: * Brunei to leverage digital technology in transportation * Brunei's Ministry of Health commits to stronger primary healthcare as decentralisation marks 25 years Women commute in cycle rickshaws through a flooded street after heavy rains in Guwahati, in India's Assam state. Torrential monsoon rains in India's northeast triggered landslides and floods that swept away and killed at least five people in Assam, disaster officials said on May 31. -- Photo by Biju BORO / AFP AseanPlus: * Tan Twan Eng novel sparks cultural exchange between Malaysia and Bulgaria * Sabahan artist's epic Kaamatan-inspired folio transformed into children's book * Mongolian President: I will not support constitutional amendments * 30 killed, over 150 injured as Israeli forces fire on aid seekers in Southern Gaza * Bad weather and heavy rain impacts thousands of people in China's Yunnan * Japan prisons to place more focus on rehabilitation than punishment * Japan, South Korea launch tourist fast-track lanes for ties anniversary * Seoul subway arson causes over US$217,000 in damages: authorities * Bangladesh top court restores largest Islamist party * Monsoon rains kill at least 30 in India's north-east * North Korea gets a weapons bonanza from Russia * Bad weather and heavy rain impacts thousands of people in China's Yunnan * China says US should not play with fire on Taiwan, slams Hegseth * How K-pop's first deaf group, Big Ocean, keeps the beat while performing live * China Focus: 80 years on, WWII stories still captivate Chinese youth * Australia calls US plan to double steel, aluminium tariffs "unjustified" act of "self harm" * Watchful of summer Covid-19 resurgence, Korea urges older adults to get vaccinated * Afghanistan welcomes upgraded diplomatic ties with Pakistan * Indian monsoon floods kill at least 22 people in the north-east * South Korean presidential front-runner backs nuclear power - for now * China's consumer goods trade-in programme spurs about US$153.1bil in sales * White House accuses US court blocking Trump tariffs of 'judicial overreach' * Two relatives of wanted Hong Kong activist Joseph Tay taken in for questioning * India -- Summer respite turns deadly in Assam * A quiet chorus of sighs in South Korea * G-Dragon concert ticket bots and scalpers kept at bay * As South Korea gets ready to vote, women don't like the choices * Explosion at chemical plant in North China kills five people * Japan prisons to place more focus on rehabilitation than punishment * 18 killed as heavy rain trigger landslides, flood across India's Northeast and South * Cyber, space, sea threats require new rules, more cooperation: New Zealand, France, Finland * Soccer - Humiliated Inter were never in the game with PSG, say Italian papers * Soccer - Paris erupts in euphoria before skirmishes as PSG win Champions League * Soccer - Popovic wants win over 'best team in Asia' in quest for World Cup berth * Athletics - Kennedy becomes first Australian to crack 10 second barrier in 22 years * Tennis - Djokovic eases into last 16 with 99th French Open win


New Straits Times
2 hours ago
- New Straits Times
Musk's chainsawing of government spending is more like a trim
ELON Musk once famously wielded a chainsaw on stage in a theatrical demonstration of his effort to drastically cut US federal spending under President Donald Trump. As he leaves government, official data shows he achieved something closer to a trim with scissors. In the four months since Musk's Department of Government Efficiency (DOGE) began slashing federal spending and staffing, a handful of the agencies he has targeted trimmed their combined spending by about US$19 billion compared with the same period last year, according to US Treasury Department summaries reviewed by Reuters. That is far below Musk's initial goal of US$2 trillion in savings and amounts to about a half of one per cent of total spending by the federal government. Musk said on Wednesday he is leaving the administration but that its cost-cutting work will "only strengthen over time." It remains to be seen, however, how enthusiastically Trump's cabinet secretaries will continue to downsize their departments. DOGE says it pulled the plug on more than 26,000 federal grants and contracts that are worth about US$73 billion, while more than 260,000 government workers have been bought out, taken early retirement or been fired. But the DOGE tallies have been riddled with errors, according to reviews by numerous budget experts and media outlets, including Reuters. That has made them difficult to verify, and some of the announced cuts are not saving the government any money because judges have reversed or stalled them. That leaves the Treasury Department's daily reports on how much the government is spending as the clearest window into the scope of the administration's cost-cutting. The view they offer so far is modest: The government has spent about US$250 billion more during the first months of Trump's administration than it did during the same period of time last year, a 10 per cent increase. And even some parts of the government Trump has cut the most deeply are, for now at least, spending more money than they did last year. One big factor driving costs is largely outside Trump's immediate control: interest payments on the United States' growing pile of debt, which amount to about US$1 in every US$7 the federal government spends. Debt interest payments are up about 22 per cent from a year ago. Spending on Social Security, the safety-net programme for the elderly and disabled, totalled about US$500 billion since Trump's inauguration, up 10 per cent from a year earlier. To be sure, the view offered by the Treasury Department's daily reports is incomplete. Many of the cuts DOGE has made to the federal workforce, grants and contracting will reduce what the government will spend in the future but do not show up in its cheque book today. For example, while thousands of workers have taken buyouts, the government will continue to pay their wages until October. So far, the Labour Department has estimated there were only about 26,000 fewer people on federal payrolls in April than were on the books in January, after adjusting the figures for typical seasonal swings. Tallying savings from future cuts, however, is seldom straightforward. "It could be that in the future we never replace these workers and we save billions of dollars, or it could be that they come back and it's even more expensive than before," said Martha Gimbel, executive director of the Budget Lab at Yale, a nonpartisan budget analysis organisation at Yale University. The White House declined to offer an explanation for DOGE's figures. Spokesman Harrison Fields said in a statement that "DOGE is working at record speed to cut waste, fraud, and abuse, producing historic savings for the American people." Reuters estimated the administration's impact by tallying outlays at agencies that had been targeted for cuts and whose spending had dropped from the same time last year. Among the agencies hardest hit are the Department of Education, State Department, US Agency for International Development, National Institutes of Health, the Centres for Disease Control and Prevention and other independent agencies. Rachel Snyderman, an expert on fiscal policy at the Bipartisan Policy Centre, said the spending declines at agencies could be reversed if the Trump administration doesn't get congressional approval to cancel outlays from this year's federal budget, as required by law. The most obvious sign that the Trump administration is making a dent in federal spending is in the Education Department, which Trump has ordered shut down. The administration cut the department's staff by about half in March. DOGE's website lists 311 Education Department grants and contracts it says it has eliminated for a savings of about US$1.6 billion, though it is not clear how it arrived at those figures. Some cuts have not stuck. A federal judge in March ordered the administration to restore some of the grants it had cut, and another judge this month ordered it to rehire 1,400 workers. Still, the Education Department under Trump has spent close to US$11 billion less than it did over the same period last year, the Treasury reports show, far more than what DOGE says it has cut. One reason could be that layoffs have made it harder for the government to process payments for special education and low-income schools. School districts that have sued over the cuts alleged that states were already experiencing slowdowns in receiving money. Another factor for the reduced outlays: The department has stopped handing out the US$4.4 billion that remains to be distributed from the hundreds of billions of dollars approved in previous years to help schools weather the Covid-19 crisis. Other agencies targeted in Trump's overhaul are also starting to show declines in their spending compared with the same time last year. Spending is down about US$350 million at the CDC and about US$1 billion at the National Institutes of Health. The Trump administration has moved to slash spending across those agencies, cancelling grants and ending leases for office space. The Department of Health and Human Services has reported terminating close to 2,000 grants that planned to disperse more than US$20 billion. Many of the grants were to boost labs that fight new infectious diseases, or to fund state mental health programs. Some US$14 billion of the grant money had already been spent prior to the termination, with roughly US$7 billion effectively frozen, according to a Reuters analysis of the government's tallies. The administration has effectively dismantled USAID, which handled most US foreign assistance, firing nearly all of the agency's employees and cancelling most of its humanitarian aid and health programmes, though federal courts have forced the government to continue making some payments. USAID spending is down about 40 per cent, to about US$4.6 billion, from last year. Spending at the State Department – where DOGE says it has cut nearly US$1 billion in grants and contracts – is also down about 20 per cent from 2024. Measuring the impact of the administration's actions is difficult because many cuts will not yield savings for months or years even as spending elsewhere increases. Spending on federal employee salaries, for example, is up by more than US$3 billion under Trump. Some of the grants and contracts DOGE cut were due to be paid out over several years, and many remain the subject of lawsuits that will determine whether they can be cut at all. DOGE says it has saved taxpayers US$175 billion, but the details it has posted on its website, where it gives the only public accounting of those changes, add up to less than half of that figure. It says the figure includes workforce cuts, interest savings and other measures it has not itemised. It is also hard to know exactly how much the government would have spent if the administration had not started cutting.


New Straits Times
2 hours ago
- New Straits Times
Global economy withstands Trump's tariff storm for now
For all the drama surrounding US President Donald Trump's trade tariffs, the world economy is holding up better than many had expected. The latest data from the United States, China and, to a lesser extent, Europe are showing resilience and the global economy as a whole is still expected to grow modestly this year. This is in part due to US buyers and foreign sellers bringing forward business, while many of the import duties unveiled by Trump remain suspended. While that effect may prove short-lived, Trump's decision to pause tariffs and some glimpses of progress in trade talks, particularly between the United States and the European Union, have fuelled cautious optimism. "We are seeing a bit of a sugar rush in industry, with manufacturers bringing forward production and trade," said Holger Schmieding, an economist at investment bank Berenberg. "The other thing is that we have evidence that Trump pedalled back on tariffs. The bet in markets and, to some extent, in the economy is that he barks but doesn't bite." Investment banks and institutions generally expect the US to avoid a recession this year and the global economy to keep growing. The International Monetary Fund downgraded its global GDP growth forecast by just 0.5 percentage points last month to 2.8 per cent. This is roughly in line with the trend over the past decade and a far cry from the downturns experienced during the Covid-19 pandemic, the 2008 financial crisis or even the turmoil that followed the Sept 11 terror attacks in 2001. No one is venturing a prediction on where the trade negotiations will eventually settle, particularly with a US president who sees himself as unstoppable. Last week alone, separate US courts first blocked and then reinstated Trump's tariffs — creating a degree of legal uncertainty that will do little to facilitate trade deals between the US and those threatened with the levies. While the EU celebrated "new impetus" in its trade talks with the US, negotiations with China were "a bit stalled" according to US Treasury Secretary Scott Bessent. Companies are counting the cost of the ongoing impasse. A Reuters analysis of corporate disclosures shows Trump's trade war had cost companies more than US$34 billion in lost sales and higher costs, a toll that is expected to rise as ongoing uncertainty over tariffs paralyses decision-making at some of the world's largest companies. Carmakers from Japan's Toyota to Germany's Porsche and Mercedes-Benz are bracing for lower, or lower-than-previously-expected profits if they have not given up making predictions altogether, like Volvo Cars and Dutch-based Stellantis. This is likely to result in a hit, especially for Japan. The US is Japan's biggest export destination, accounting for 21 trillion yen worth of goods, with automobiles representing roughly 28 per cent of the total. "While the worst shocks may be over, there's still a lot up in the air," Xingchen Yu, a strategist at UBS's Chief Investment Office, said. "We don't really know what a new normal for tariffs would look like, unfortunately." But so far the global economy has held up pretty well. China's output and exports are resilient as its companies re-route trade to the US via third countries. Even in Europe, manufacturing activity was at a 33-month high in May, rebounding from a slump induced by more expensive fuel following Russia's invasion of Ukraine. Confidence was also buttressed by the prospect of greater fiscal spending in Germany, a missing ingredient for European growth for the past couple of decades. The robustness of the world economy has surprised even professional forecasters. A measure produced by US bank Citi that tracks the degree to which global economic data has surprised to the upside is now at its highest in more than a year. Economists though still fear a triple whammy in which the front-loaded boost to the goods sector is unwound, while US household purchasing power is squeezed by higher prices and companies put off investment and hiring. At the margin, however, this scenario is starting to appear a little less likely after Trump's pause on tariffs. "The balance has slightly shifted towards more optimism, albeit with uncertainty and volatility," ING's global head of macro Carsten Brzeski said.