Berliner Boersenzeitung - Trump offers federal workers exit package as funding freeze sows chaos

The announcement, apparently inspired by Elon Musk's uncompromising management of his companies, followed an attempted freeze on federal funding also ordered by Trump that opponents blasted as unconstitutional.

The emailed severance offer put the lives of US civil servants into disarray hours after the healthcare system for millions of low-income Americans was disrupted in the confusion of the decision to cut off federal aid.

A senior administration official told NBC News that the White House expects between five and 10 percent of federal staff to quit and around $100 billion in savings.

The email to public workers resembled a message that was sent to Twitter employees when it was taken over by Musk in late 2022 that asked for an emailed response if they wanted to stay at the company that was later renamed X.

Musk, who spent over $270 million to help Trump and other Republicans win election, has been tapped to lead a new Department of Government Efficiency aiming to make massive cuts to federal spending.

Federal workers wishing to take the deal on Tuesday were asked to reply to the email with the word "resign" written into the body of the email.

The moves were Trump's latest shock-and-awe steps since he took office a week ago, vowing to force the US government and its employees to back his right-wing political goals or face retribution.

Potentially trillions of dollars in federal grants, loans and other aid faced possible suspension by the White House halt in aid, but a federal judge suspended the order shortly before it was to take effect Tuesday afternoon.

Judge Loren AliKhan halted the order until at least Monday, after several non-profit groups filed suit claiming it was illegal.

Attorneys general of over 20 Democratic-led states later filed a separate suit seeking to block the order.

Even before the order was set to begin, online portals used to access the Medicaid health insurance program for poor families and disabled individuals became inaccessible.

"This is a blatant attempt to rip away health insurance from millions of Americans overnight and will get people killed," Oregon Senator Ron Wyden posted on X.

White House Press Secretary Karoline Leavitt said the website would be fixed soon and that "no payments have been affected."

She defended the drastic move as part of Trump's bid to make the government "good stewards of taxpayer dollars."

The freeze is not a "blanket" stop on spending, but a tool to check that "every penny that is going out the door is not conflicting with the executive orders and actions that this president has taken," Leavitt said.

She listed as examples racial equality and climate change programs that Trump has vowed to eradicate -- and did not answer a question about whether Medicaid recipients would be cut off.

Top Trump aide Stephen Miller later told CNN that Medicaid was not targeted and, in a post on X, said the confusion was a "media hoax."

- Constitutional challenge -

The order, signed by acting director of the Office of Management and Budget (OMB) Matthew Vaeth, did not make clear how such a pause on disbursements of funding will work or for how long.

Federal spending included more than $3 trillion in financial assistance like grants and loans in fiscal year 2024 -- all of which was approved by Congress.

Democrats accused Trump of usurping Congress' constitutionally mandated control over budget spending and attempting to force the government to bend to his personal will.

In the past week, his administration has fired independent government watchdogs and several career prosecutors who were involved in an official probe of his attempts to overthrow the 2020 election.

- 'Sweeping halt' -

Democratic Senator Patty Murray called the order "a brazen & illegal move."

Another Democratic senator, Richard Blumenthal, said the order will create "havoc" in medical and research facilities, which receive major government funding.

The White House memo explicitly stated that Social Security and Medicare benefits -- used by retirees -- were excluded from the pause.

Areas that might be impacted, it said, include "financial assistance for foreign aid, nongovernmental organizations, DEI, woke gender ideology, and the green new deal" -- references to racial equality and climate change programs that Trump has vowed to overturn.

(B.Hartmann--BBZ)