What to Know About Trump's Federal Worker Payout Plan
The plan immediately drew criticism from Democrats and unions representing federal workers, who said such a vast reduction would create chaos for Americans who rely on government services.
Here is a look at the plan and its possible implications:
What is the plan?
An email sent to employees on Tuesday by the Office of Personnel Management, which oversees the federal civilian work force, was titled 'Fork in the Road.' It laid out a program for deferred resignations, under which employees of federal agencies are given the option to resign and continue being paid until Sept. 30.
Anyone who accepts the offer will not be expected to continue working, except in rare cases, and would be paid until the end of September, it said. The last date to accept the offer is Feb. 6.
To do so, employees could simply send an email from their government account with the word 'resign.'
The O.P.M. published a question-and-answer page about the plan on its website.
Why is the Trump administration doing this?
Slashing the size of the federal government is a priority for Mr. Trump, as it has been for many Republican presidents. After winning the November election, he said that a smaller and more efficient government, with less bureaucracy, would be a 'perfect gift to America' for the 250th anniversary of the Declaration of Independence in 2026.
Elon Musk, the tech billionaire Mr. Trump tapped to lead what he called the Department of Government Efficiency, on Tuesday shared a post on X, the social media platform he owns, claiming that 5 to 10 percent of the federal work force was expected to quit, saving the government $100 billion.
Mr. Trump has also described the federal work force as part of a 'deep state' that attempted to thwart his priorities during his first term in office. Dramatic action is necessary to combat this group's power, according to Mr. Trump.
Critics say Mr. Trump's efforts risk gutting federal agencies whose nonpartisan work offers far-reaching legal, economic and social benefits for Americans.
The payout plan is part of a raft of changes that Mr. Trump envisions for the federal civil service, some of which were detailed in the email sent by the O.P.M. They include ending remote work, changes to performance standards to ensure that all employees are 'reliable, loyal, trustworthy,' and the reclassification of some workers to what is known as 'at-will status,' in effect making them easier to fire.
Who is eligible?
The O.P.M. said that all federal workers were eligible, with the exception of military personnel, postal workers and employees involved with immigration enforcement or national security. Individual agencies could also exclude specific staff members or positions from the offer, it said.
What happens to those who don't take the offer?
The letter says that the deferred resignation offer is 'completely voluntary,' and that employees who don't respond to the email will retain their jobs.
But it warns those who choose to remain in their positions that retaining their jobs is not guaranteed.
'At this time, we cannot give you full assurance regarding the certainty of your position or agency but should your position be eliminated you will be treated with dignity and will be afforded the protections in place for such positions,' the letter said.
Is the offer legal?
Much about the plan remained unclear, including whether the administration can legally offer such a sweeping buyout package without budget authorization from Congress. On the Senate floor Tuesday night, Senator Tim Kaine, Democrat of Virginia, urged federal workers not to resign, and warned that the administration was not legally bound to pay them after they stopped working.
'The president has no authority to make that offer. There's no budget line item to pay people who are not showing up for work,' Mr. Kaine said. 'If you accept that offer and resign, he'll stiff you.'
The American Federation of Government Employees, which represents 800,000 federal workers and is the largest union of federal employees, condemned the offer, which its president said would 'cause chaos for the Americans who depend on a functioning federal government.'
The White House is already facing mounting legal challenges to the flood of executive orders Mr. Trump has issued in the nine days since he was inaugurated. This week, a federal judge halted a Trump administration order to pause billions of dollars in federal grant and loan programs. Another temporarily blocked Mr. Trump's order ending birthright citizenship.
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US customs brokers and importers failed to get much notice and the changes took effect Monday, applying to goods already in transit. Bloomberg News reports: Read more here. Trump cracks down on Latin American countries with military action and tariffs In the next 36 hours President Trump will send three Aegis guided-missile destroyers to waters off Venezuela to address what Washington sees as a threat from drug cartels. The news, which was reported in Reuters, shows how the Trump administration are willing to use military force against Latin American drug cartels. Trump has placed pressure on Mexico to crack down on criminal organizations and end fentanyl trafficking. Another method that Trump is using is steep tariffs on goods. Bloomberg News reports: Read more here. In the next 36 hours President Trump will send three Aegis guided-missile destroyers to waters off Venezuela to address what Washington sees as a threat from drug cartels. 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Nissan's (NSANY) Infiniti brand just unveiled its latest creation, the QX65 midsize crossover SUV, at Monterey Car Week. The launch is part of a product renaissance at the Japanese automaker, which has been plagued with other headaches, such as tariffs. Yahoo Finance's Pras Subramanian reports from Carmel, Calif., that the QX65 will be built in the US, which Infiniti's US head, Tiago Castro, said was 'very important' to increase its US footprint. While Japan has a preliminary deal in place for 15% tariffs, cars imported from Canada and Mexico still have a 25% auto sector tariff tacked on. Signing a tariff deal with Japan is immensely helpful, as the QX80 SUV that's in demand is built in Japan. 'The customers are reacting very well, and we need to deliver the vehicle' and not stop, Castro said. Read more here. Germany says written EU-US trade deal requires lower car duties Germany said on Monday the US must first implement the agreed lower tariffs on European-made cars before a broader trade deal can be finalized. Reuters reports: Read more here. Germany said on Monday the US must first implement the agreed lower tariffs on European-made cars before a broader trade deal can be finalized. Reuters reports: Read more here. Fewer fake firs, higher prices: China tariff delay does little to save the holidays The holiday season is fast approaching and US shoppers will now face fewer choices for fake Christmas trees and decorations. The price of these items has also gone up due to tariffs on Chinese imports as retailers scale back orders. Reuters reports: Read more here. The holiday season is fast approaching and US shoppers will now face fewer choices for fake Christmas trees and decorations. The price of these items has also gone up due to tariffs on Chinese imports as retailers scale back orders. Reuters reports: Read more here. China ramps up rare earth exports after fright for global buyers Bloomberg News reports: Read more here. Bloomberg News reports: Read more here. EU push to protect digital rules holds up trade statement with US The EU is pushing back against US efforts to challenge its digital rules as both sides work to finalize a delayed trade statement, the FT reported. Disputes over "non-tariff barriers," which Washington says include the EU's Digital Services Act, have stalled the announcement. The statement was expected soon after European Commission president Ursula von der Leyen and President Trump unveiled a tariff deal in Scotland on July 27. EU officials said the US wants room for concession on the act, but Brussels has called the rules a red line. The FT reports: Read more here. The EU is pushing back against US efforts to challenge its digital rules as both sides work to finalize a delayed trade statement, the FT reported. Disputes over "non-tariff barriers," which Washington says include the EU's Digital Services Act, have stalled the announcement. The statement was expected soon after European Commission president Ursula von der Leyen and President Trump unveiled a tariff deal in Scotland on July 27. EU officials said the US wants room for concession on the act, but Brussels has called the rules a red line. The FT reports: Read more here. US adviser Navarro says India's Russian crude buying must stop Reuters reports: Read more here. Reuters reports: Read more here. US trade partners still waiting on Trump to seal their 'deals' US trade partners that worked out exemptions to President Trump's tariffs — like the UK's deal to reduce tariffs on its steel to zero — are still waiting for the agreements to be finalized months later, Bloomberg reports, and are growing frustrated. Read more here. US trade partners that worked out exemptions to President Trump's tariffs — like the UK's deal to reduce tariffs on its steel to zero — are still waiting for the agreements to be finalized months later, Bloomberg reports, and are growing frustrated. Read more here. Candidates at Iowa State Fair hear from voters about Trump tariffs (Bloomberg) — Republican Representative Zach Nunn is making an Iowa State Fair video about President Donald Trump's tax law, shot on a John Deere tractor under the blazing August sun. In it, Nunn, one of the nation's most vulnerable incumbents, talks to constituent Sarah Curry about how the expanded child tax credit will help with the cost of one child's speech therapy. Nunn is also planning to use the state fair as the backdrop for more videos selling the bill's provisions temporarily cutting taxes on tips and overtime. Economic issues — namely, Trump's tax package and his tariff war with countries that buy much of Iowa's agricultural products — will be front and center in Nunn's race, and he's eager to get a jumpstart defining the issues. So, too, are Democrats, who see Iowa's two swing districts as must-wins in their push to take back the House majority. Democrat Jennifer Konfrst, who is working to unseat Nunn, said she approaches Iowans at the fair asking them what keeps them up at night and the answer is usually 'costs.' Read more here. (Bloomberg) — Republican Representative Zach Nunn is making an Iowa State Fair video about President Donald Trump's tax law, shot on a John Deere tractor under the blazing August sun. In it, Nunn, one of the nation's most vulnerable incumbents, talks to constituent Sarah Curry about how the expanded child tax credit will help with the cost of one child's speech therapy. Nunn is also planning to use the state fair as the backdrop for more videos selling the bill's provisions temporarily cutting taxes on tips and overtime. Economic issues — namely, Trump's tax package and his tariff war with countries that buy much of Iowa's agricultural products — will be front and center in Nunn's race, and he's eager to get a jumpstart defining the issues. So, too, are Democrats, who see Iowa's two swing districts as must-wins in their push to take back the House majority. Democrat Jennifer Konfrst, who is working to unseat Nunn, said she approaches Iowans at the fair asking them what keeps them up at night and the answer is usually 'costs.' Read more here. Tariffs' impact on Walmart, other retailers' earnings about to come into focus Several major retailers will report earnings this week, which may give a first glimpse into how President Trump's tariffs have affected their bottom lines. The list includes Walmart (WMT), Target (TGT), Home Depot (HD), Lowe's Companies (LOW) TJ Maxx parent TJX Companies (TJX) and Ross Stores (ROST). The Trump administration has urged retailers not to raise prices for consumers to offset the tariffs' impact, with a particular focus on Walmart, The Street reminds us: Read more here. Several major retailers will report earnings this week, which may give a first glimpse into how President Trump's tariffs have affected their bottom lines. The list includes Walmart (WMT), Target (TGT), Home Depot (HD), Lowe's Companies (LOW) TJ Maxx parent TJX Companies (TJX) and Ross Stores (ROST). The Trump administration has urged retailers not to raise prices for consumers to offset the tariffs' impact, with a particular focus on Walmart, The Street reminds us: Read more here. Trump's trade war not likely to cause recession, Moody's economist says Economist Justin Begley of Moody's Analytics tells USA Today that President Trump's economic policies won't cause a recession or stagflation, but will likely slow growth and push up inflation. The economy isn't in stagflation yet, Begley said, "but it's edging that way," he adds: Read more here. Economist Justin Begley of Moody's Analytics tells USA Today that President Trump's economic policies won't cause a recession or stagflation, but will likely slow growth and push up inflation. The economy isn't in stagflation yet, Begley said, "but it's edging that way," he adds: Read more here. Commerce department applies 50% steel, aluminum tariffs to more products (Reuters) -The Trump administration widened the reach of its 50% tariffs on steel and aluminum imports by adding hundreds of derivative products to the list of goods subject to the levies. In a Federal Register notice late on Friday, the Commerce Department said the Bureau of Industry and Security was adding 407 product codes to the Harmonized Tariff Schedule of the United States that identify the goods to be hit with the additional duties on the steel and aluminum content of those products. The non-steel and non-aluminum content will be subject to the tariff rates President Donald Trump has imposed on the goods originating from specific countries, the notice said. The levies on the goods on the expanded list go into effect on August 18. Read more here. (Reuters) -The Trump administration widened the reach of its 50% tariffs on steel and aluminum imports by adding hundreds of derivative products to the list of goods subject to the levies. In a Federal Register notice late on Friday, the Commerce Department said the Bureau of Industry and Security was adding 407 product codes to the Harmonized Tariff Schedule of the United States that identify the goods to be hit with the additional duties on the steel and aluminum content of those products. The non-steel and non-aluminum content will be subject to the tariff rates President Donald Trump has imposed on the goods originating from specific countries, the notice said. The levies on the goods on the expanded list go into effect on August 18. Read more here. Consumers' inflation expectations rise amid Trump tariffs Inflation expectations rose from July to August, indicating that consumers remain uncertain about President Trump's trade policies. Year-ahead inflation expectations increased to 4.9% from 4.5% last month, according to the University of Michigan's survey of consumers. Long-run inflation expectations also rose to 3.9% in August from 3.4% in July. "Overall, consumers are no longer bracing for the worst-case scenario for the economy feared in April when reciprocal tariffs were announced and then paused," Joanne Hsu, the university's Surveys of Consumers director, wrote. "However, consumers continue to expect both inflation and unemployment to deteriorate in the future." Consumer sentiment also deteriorated month over month, falling for the first time in four months. The University of Michigan's Consumer Sentiment Index fell to 58.6 from 61.7 a month ago. Read more here. Inflation expectations rose from July to August, indicating that consumers remain uncertain about President Trump's trade policies. Year-ahead inflation expectations increased to 4.9% from 4.5% last month, according to the University of Michigan's survey of consumers. Long-run inflation expectations also rose to 3.9% in August from 3.4% in July. "Overall, consumers are no longer bracing for the worst-case scenario for the economy feared in April when reciprocal tariffs were announced and then paused," Joanne Hsu, the university's Surveys of Consumers director, wrote. "However, consumers continue to expect both inflation and unemployment to deteriorate in the future." Consumer sentiment also deteriorated month over month, falling for the first time in four months. The University of Michigan's Consumer Sentiment Index fell to 58.6 from 61.7 a month ago. Read more here. US import prices rebound in July on higher consumer goods costs US import prices rebounded in July in the latest sign that inflation is set to pick up because of tariffs. Reuters reports: Read more here. US import prices rebounded in July in the latest sign that inflation is set to pick up because of tariffs. Reuters reports: Read more here. Trump says semiconductor tariffs could reach 300% President Trump said Friday he is planning on unveiling tariffs on semiconductor imports over the next two weeks, hinting that those duties could reach as high as 300%. From Bloomberg: Read more here. President Trump said Friday he is planning on unveiling tariffs on semiconductor imports over the next two weeks, hinting that those duties could reach as high as 300%. From Bloomberg: Read more here. Applied Materials' shares sink on weak China demand, tariff risks Shares in Applied Materials (AMAT) sank 14% before the bell on Friday after the chip equipment maker issued weak fourth-quarter forecasts on sluggish China demand, fueling concerns over tariff-related risks. Reuters reports: Read more here. Shares in Applied Materials (AMAT) sank 14% before the bell on Friday after the chip equipment maker issued weak fourth-quarter forecasts on sluggish China demand, fueling concerns over tariff-related risks. Reuters reports: Read more here. Sign in to access your portfolio
Yahoo
26 minutes ago
- Yahoo
Can Beau Bayh and that 'incredible surname' reignite the hopes of Indiana Democrats?
Beau Bayh has reentered the chat. Bayh has been in Indiana's spotlight since he and his twin brother were born to a sitting Indiana governor: Evan Bayh. Their mom, the late former Indiana First Lady Susan Bayh, even gave a post-delivery interview from the hospital in 1995. Now, all grown up at age 29, some Indiana Democrats hope the younger Bayh is their best hope to regain a shred of the political power and relevance they had when the elder Bayh was in office. Beau Bayh isn't quite ready to share his plans, but he looks and sounds lately like he's about to run for political office here. Speaking to a room of about 175 Indiana Democrats down near French Lick over the weekend, Bayh spoke of standing up to the powers that be. Rebuilding the middle class. The broken bonds between the people and politicians. The Harvard graduate and U.S. military member told IndyStar he's currently moving back to Indianapolis from Bloomington, following his judicial clerkship for the U.S. Court of Appeals for the Seventh Circuit. But he signaled more could be coming soon. 'I'm going to take the next month or so to get settled,' he told IndyStar over text. 'But I'm sure of one thing: we need a change in our politics. More unity, less division. More progress, less partisanship. More elected officials who represent the public interest and not the special interests or themselves.' Meanwhile, speculation is high that he's considering waging a bid against Secretary of State Diego Morales, and if Bayh could make inroads for Democrats as they keep losing statewide elections. 'If you can get someone at the top of the ticket people are excited about, it's easier to ask people to write a check, knock on doors or go to this and that event,' said Greg Shufeldt, a University of Indianapolis political science professor, when asked about the prospect of Bayh running. 'Those are all good things for the Democratic party even if the on-the-ground reality makes it a tough fight for any Democrat.' Getting people excited doesn't appear to be out of reach for Bayh, if the reception at a recent Orange County Democratic Party event translates statewide. County Chairman Larry Hollan had to add two extra tables to the American Legion hall where Bayh served as keynote speaker on Aug. 15 due to an increase in ticket sales that he thinks was driven by interest in Bayh. 'They hung onto his every word,' Hollan said. 'You could hear a pin drop when he was speaking. He held the audience in the palm of his hand.' Bayh didn't make any announcements at the dinner, but did show up with two heavyweight supporters: his dad and Mayor Joe Hogsett. 'It was a mini reunion, you might say,' Hollan said. '(The elder Bayh) also felt welcome but … Beau was the star of the show.' Could Beau Bayh turn around Democrats' chances in Indiana? Even for a Bayh, running for a statewide seat in Indiana is going to be an uphill battle, according to political analysts contacted by IndyStar. The fundamentals of the state are just so heavily tilted against Democrats at this point, said Shufeldt. 'Our politics have become increasingly nationalized and candidate attributes, including last name, matter less and less,' Shufeldt said. 'The letter for the party after your name tends to matter a whole lot more. Devoid of anything specific to his candidacy, any Democrat faces an intense uphill fight.' Democrats thought state races could be close, but Republicans clobbered. What happened? Shufeldt said that, on paper, Democrats have run some good candidates recently. All got handily defeated electorally. Republicans haven't won a statewide race since U.S. Sen. Joe Donnelly squeezed out a win against Richard Mourdock in 2012. 'Evan Bayh lost quite comfortably to Todd Young, and I think people thought that would be a lot closer,' Shufeldt said, harkening back to the 2016 U.S. Senate race featuring Beau Bayh's dad. Still, Republicans have seemed eager to pounce on Bayh's candidacy. "The guy seems genuinely nice and I appreciate his military service… but this is the secret weapon we've heard about for 6+ years that's going to save the Indiana Dems?" state Rep. Kyle Pierce, R-Anderson, posted on X after Bayh's recent appearance on a liberal podcast. "Bayh barely wants to talk policy, avoids sharing his ideological beliefs and barely shares any vision of public service besides his personal desire to do it." 'Incredible surname' A win for a Democrat statewide now would require a fortuitous confluence of events for the candidate, Shufeldt said. 'It's a lightning in a bottle thing,' he said. However, University of Indianapolis political science professor Laura Merrifield Wilson said Bayh has some key advantages that other Democratic candidates would lack, including that 'incredible surname.' 'You're talking about a great legacy in terms of public service,' Wilson said. 'It's hard not to think 'Evan' and 'Birch.'' Along with that name ID comes access to fundraising, polling and public relations resources that other startup candidates would have to work harder for, Wilson said. Bayh could have access to an impressive war chest right off the bat if his dad is feeling generous: Evan Bayh's Senate campaign committee had about $2 million in the bank as of June, according to FEC records. Federal candidates are permitted to donate to statewide candidates subject to state law. 'It's all of the mechanisms you'd need to have a successful campaign,' Wilson said. 'He'd have a foot in the door to begin that first step. It would be a really good strong start.' Questions about his candidacy remain though, Wilson said. Namely around policy. The younger Bayh is largely undefined. Is he a centrist Democrat like his dad or does he lean more progressive? 'I do wonder policy-wise what he has to bring to the table,' Wilson said. 'That's really the struggle to find what their niche is to attract Hoosier voters. I don't know what he has to offer in terms of that.' Contact senior government accountability reporter Hayleigh Colombo at hcolombo@ or follow her on X @hayleighcolombo. Sign up for our free weekly politics newsletter, Checks & Balances, by IndyStar political and government reporters. This article originally appeared on Indianapolis Star: 'Incredible surname': Can Beau Bayh help Indiana Democrats finally win? Solve the daily Crossword
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Inside Trump world's reaction to the Zelenskyy reset
3. Trump offered to go straight to a trilateral meeting. The senior administration official told POLITICO that when Trump called Putin to offer his presence at a meeting between Zelenskyy and the Russian leader, Putin said, 'You don't have to come. I want to see him one on one.' Trump's team 'started working on that,' the official said. 'Steve Witkoff has the assignment to get it figured [out].' 4. Alaska paved the way for the 'security guarantees' discussion. If there was any concern within the administration about how the Putin meeting in Anchorage went down, Monday all but evaporated it. 'After Alaska, we were excited that Putin was at least talking and there were signs we could negotiate,' a second senior administration official told POLITICO. One of those signs came on the topic of security guarantees: Putin was 'engaging on a conversation about security guarantees instead of, 'Nyet, nyet, nyet,' this second official said. 'If Alaska was not successful and Putin didn't give us a little bit of an opening, we wouldn't have [had] the Europeans at the White House.' Of Putin: 'He'll drive a hard bargain, but that opening is huge.' 5. Those security guarantees could be a sticking point internationally. It remains unclear just how big a commitment the U.S. has on the line here. 'We haven't even started [that discussion] other than a commitment,' the first senior administration official told POLITICO. 'The question is, 'Who participates to what percentage?' But the president did commit that we would be a part of it. No specifics. And then he said he would also help it get organized. And he alone could sell that to Putin. I don't think Putin would pay any attention to the others, and I'm not sure the others would do it without him.' 6. And those same guarantees could be a problem for Trump domestically. Does the administration have a red line when it comes to committing U.S. troops to keep a peace in Ukraine? 'I don't think there's a red line,' the first senior official told POLITICO. 'So I think it just kind of remains to be seen. [President Trump] would like the Europeans to step up. But I think if the last piece of the puzzle was for a period of time to be a part of a peacekeeping force, I think he would do it.' Meanwhile, as European leaders arrived at the White House, MAGA coalition minder Steve Bannon took to his influential 'War Room' podcast to warn about the U.S. security guarantees in Ukraine. 'I'm just lost how the United States offering an Article 5 commitment for a security guarantee to Ukraine is a win for the United States,' Bannon said on his show Monday morning . 'President Trump has done more than enough to bring the parties together,' Bannon told POLITICO late Monday night. 'Once again, this is a European problem; we have all the leverage here. If we don't fund this, it stops happening. The only way this goes forward — the only way this continues every day — is American money and American arms. The Europeans don't have enough either military hardware and/or financial wherewithal.' Bannon said he hopes Trump 'eventually stops listening to the [Sens.] Lindsey Grahams and Tom Cottons and the Mitch McConnells, and realizes that there can't be any guarantee here from the United States, because that's going to inextricably link us to this conflict.' In a Truth Social post on Monday about the next steps, Trump said 'Vice President JD Vance, Secretary of State Marco Rubio, and Special Envoy Steve Witkoff, are coordinating with Russia and Ukraine.' That callout was striking. 'That's the first time JD and Marco have been dragged into a big foreign policy issue together,' the second senior administration official told POLITICO. 'If it's JD and Marco and Witkoff, who gets the credit and who gets the blame if it fails? This could be the first test of 2028.' Like this content? Consider signing up for POLITICO's Playbook newsletter.
