Economics
Donald Trump goes to war with his employees
TO GET a sense of what Donald Trump’s first week did to the federal government, talk to people who work in it. “I’ve been with the government for over 10 years, I lived through the first Trump administration, and nothing compares to this,” says one Treasury employee. Some workers are busy scrubbing their personal social media for items that could be interpreted as disloyal. Others are scrubbing up their resumes, anticipating that they will soon be looking for new work. Those who plan to stay expect their jobs to get worse, as colleagues flee or are not replaced. Everyone is “in absolute panic mode”, says another senior civil servant.
As a candidate, Mr Trump promised that he would “shatter the deep state”. Since taking office, it has become more clear what he meant. In a barrage of executive orders, Mr Trump has asserted that he can do just about whatever he likes to the federal government. He has, he claims, “sole and exclusive authority” over the executive branch, to include hiring, firing and all spending decisions. In effect, Mr Trump is claiming he is not merely a president, putting into action laws enacted by the legislature. He is claiming to be something closer to a king, able to withhold or redirect expenditure as he sees fit.
On January 27th Mr Trump revealed quite how far he intends to push. He decreed that all grants and loans that the federal government makes—excepting disbursements for Social Security, Medicare, and some other vaguely defined categories—would be suspended the following day, even though Congress had approved them. This apparent usurpation of Congress’s role under Article I of the constitution was “sweeping and vast” and “really, really illegal”, says Eloise Pasachoff of Georgetown University law school. The memo laid out no legal justification for the freeze and on the evening of January 28th, a federal judge stopped it temporarily. The next day, the administration rescinded its memo; what happens next is unclear. A parallel freeze of all foreign aid created similar chaos.
In the meantime Mr Trump has launched an extralegal power grab almost as ambitious against the federal bureaucracy—the over 2m civil servants who actually implement federal policy. He has directly fired dozens of senior staff, including senior immigration officials, Department of Justice prosecutors and others he and his appointees have identified as being hostile to his goals. These included more than a dozen inspectors general (watchdogs who investigate departmental efficiency and wrongdoing). In the case of the inspectors general, the president is required by law to give 30 days notice and an explicit reason to justify firing. He did neither.
These decisions came on top of a complete hiring freeze across most departments (the military, immigration authorities, as well as jobs related to social security and veterans healthcare are exempt). He also reinstated an unimplemented order from his last term allowing his administration to redesignate any career civil service job as a political job, and thereby remove the usual job protections and sack whomever he wants. He has also pledged to shut down all “diversity, equity and inclusion” jobs, known as “deiA”, in government. To top it off, he banned all work from home.
The aim is transparently to get federal workers who do not like Mr Trump to leave. On January 28th, an email went out from the Office of Personnel Management (opm) offering every single federal employee “deferred resignation”. Essentially, the terms were: agree to leave this financial year and you can work from home until then. The touches—including instructions to reply with the word “RESIGN” by February 6th—implied the influence of Elon Musk, the billionaire head of Mr Trump’s “Department of Government Efficiency”, or “doge”. Since the opm is not actually a corporate hr department, the offer is unlikely to withstand scrutiny. Federal tech employees report that outsiders, many seemingly junior employees of Mr Musk’s companies, have come into offices to take over government it systems and do “code reviews”.
Were Mr Trump to make these changes stick—a questionable prospect—it would amount to “probably the most fundamental alteration of the civil service system since 1883” says Don Moynihan, of the Ford School of Public Policy at the University of Michigan (a verdict many in the White House would love). The president appears to have little interest in the idea that most government officials should be non-partisan specialists whose expertise is deployed to keep the public safe, among other benefits. Under Mr Trump’s plan, decisions about hiring and firing would be made by his political appointees.
According to Max Stier, of the Partnership for Public Service, a charity which works to improve government, Mr Trump is “tearing apart the civil service” so as to recreate “the spoils system” of government that persisted until the end of the 19th century. That was a model whereby new presidents came in and immediately distributed jobs to their pals as a reward for supporting their election campaigns.
Will he succeed? This seems unlikely, says Larry Jacobs, of the University of Minnesota. “Mr Trump’s orders, he says, are “impressively sweeping and breathtaking in their institutional arrogance” but he argues that much of what Mr Trump is trying to do will probably be undone by the courts or Congress. He points out that even after Mr Trump appointed sympathetic new members in his last term, the Supreme Court often overruled him. Congress has ceded much power to the presidency, but controlling the federal purse is a prerogative it is unlikely to yield readily.
Yet it could take years for challenges to work their way through the courts. The damage done in the meantime could be considerable. Employees who find other jobs after being pushed out will not necessarily return just because a court says their dismissal was wrong. Talented new hires will not join. And with government lawyers cowed by fears of firing, all manner of illegality could reign. Mr Stier worries about things like the Internal Revenue Service and the Department of Justice being used to punish Mr Trump’s enemies, without civil service lawyers able to say no.
Even the best-case outcome is not good. In the last Trump administration, hiring freezes caused parts of government to shrink and jam up (see chart). Some of this may have been intended: the issuing of green cards and citizenship applications ground to a halt thanks in part to cuts at the State Department. But queues also lengthened for basic government services like getting passports, or tax refunds.
The “swamp”, as Mr Trump might call it, may feel like a lot of busybodies in Washington dc pushing around bits of paper. It is certainly true that it can often be slow, rule-bound and unaccountable. But a system based more on political loyalty than on merit is one primed for failure. Bureaucrats make sure that foods are not poisonous; that cars do not explode when they crash; and that toxic waste is not dumped into the wilderness. “The federal government is very vulnerable,” says Paul Light, a political scientist at New York University. Mr Trump, he says, risks becoming “the president of ‘I didn’t give a shit and a lot of people got killed.’” Uneasy lies the head that wears a crown. ■
UK Has a New Prime Minister Without a General Election
Adaptive Governance in Volatile Markets
Navigating Sovereign Data Residency Mandates in the Age of AI
Armanino adds Strategic Accounting Outsourced Solutions
New 2023 K-1 instructions stir the CAMT pot for partnerships and corporations
Tax Strategy: Employee Retention Credit update
-
Economics4 days agoGlobal Trade Realignment and Supply Chains in 2026
-
Economics5 days agoThe Warsh Shift: How the New Fed Chair Is Balancing War Drags and Tech Winds
-
Economics4 days agoLabor Market Calibration: Analyzing the Shift Toward Skill-Based Allocation in 2026
-
Finance6 days agoSouth Korea Raises Interest Rates to 2.75% for the First Time in More Than Three Years
-
Leaders6 days agoBerkshire Hathaway Chairman Reshapes His Long-Term Philanthropic Strategy
-
Finance4 days agoTokenized Real-World Assets: Institutional Ledger Adoption Achieves Scale in July 2026
-
Economics6 days agoGlobal Stock Market Weekly Recap: Tech Sell-Off Sparks International Rout
-
Accounting4 days agoStandardizing Global ESG Reporting: Key Compliance Imperatives for Mid-Year 2026