Trump's buyout offer for federal workers paused by judge | The Excerpt
On Friday’s episode of The Excerpt podcast: Paste BN Supreme Court Correspondent Maureen Groppe has the latest on President Donald Trump's buyout offer and what's next in court. President Trump signs an executive order targeting 'anti-Christian bias.' The U.S. Treasury temporarily agrees to limit DOGE access. Alaska rescue crews search for a missing airplane with 10 onboard. Paste BN Money Reporter Bailey Schulz takes a look at the conversation around potentially removing taxes on tips. Shohei Ohtani's ex-interpreter Ippei Mizuhara has been sentenced after defrauding the baseball star.
Hit play on the player below to hear the podcast and follow along with the transcript beneath it. This transcript was automatically generated, and then edited for clarity in its current form. There may be some differences between the audio and the text.
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Taylor Wilson:
Good morning. I'm Taylor Wilson, and today is Friday, February 7th, 2025. This is The Excerpt. Today, a judge has paused the deadline for a federal employee buyout offer, plus we have the latest on a missing plane in Alaska, and what a proposal over no taxes on tipping might look like.
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A federal judge yesterday paused The Trump administration's deadline for more than two million federal employees to decide by the end of the day whether to resign or stay in their jobs in order to allow time for labor unions to challenge the plan's legality. The move sets up a hearing for Monday. I spoke with Paste BN Supreme Court correspondent, Maureen Groppe for more. Hello, Maureen. Thanks for hopping on.
Maureen Groppe:
Hey, how are you?
Taylor Wilson:
Good, good. So let's just start with some of the basics for folks just catching up. There's so much news to get to every day. What was this buyout offer from President Trump?
Maureen Groppe:
The administration was hoping to get many federal employees to agree to resign their jobs in exchange for getting eight months of pay and benefits through September.
Taylor Wilson:
All right, and a big decision from a judge yesterday, Thursday, on this buyout offer. What did the judge decide?
Maureen Groppe:
Well, the judge didn't decide much other than to put a pause on the deadline. The Trump administration had originally given employees until midnight on Thursday to take the offer. A number of unions that represent federal employees wanted time to challenge this offer saying it wasn't legally done. And so they asked a judge to put the deadline on hold to give them a chance to challenge it. So the judge did that, and he will have both sides back in his courtroom on Monday to look at the legal arguments about this.
Taylor Wilson:
What have unions largely argued about these buyouts, Maureen?
Maureen Groppe:
Their legal argument is similar to but a little bit different from their argument to the federal employees. They've encouraged employees not to take this. They say that employees can't rely on the government, for example, continuing to pay their benefits and pay through September. And that ties into the legal argument. The federal government right now is only funded, only has authorization money from Congress through March. And so we don't know what money Congress is going to approve for the federal agencies beyond that. And so the legal argument is that the government doesn't have the authority to promise the pay and benefits to these employees who are no longer employees of the government because they don't know if the money will be there.
Taylor Wilson:
Did we get any response from the White House from this administration after the judge's hold?
Maureen Groppe:
So it's interesting because their response after was a little bit contradictory to their response before the judge acted. So in the legal filing that the administration had made to argue why the deadline shouldn't be extended, the administration had said that this would be too disruptive. The federal employees had relied on this deadline when making their decision. But then when the judge said, okay, we're going to pause this and come back on Monday, then the White House press secretary said that the administration was grateful for the extension so that more federal workers, she said, can take this very generous once-in-a-lifetime offer as she described it.
Taylor Wilson:
All right. Maureen Groppe covers the Supreme Court for Paste BN. Thank you, Maureen.
Maureen Groppe:
Thank you.
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Taylor Wilson:
President Trump yesterday signed an executive order creating a Justice Department task force to eradicate what he called anti-Christian bias within the federal government. Trump said at the National Prayer Breakfast that the mission of the task force will be to immediately halt all forms of anti-Christian targeting and discrimination in the federal government, including at the Department of Justice, the FBI, the IRS, and other agencies. The president did not cite specific examples of anti-Christian bias, but has previously claimed that the Biden administration used the federal government to target Christians.
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The Treasury Department has agreed not to give Elon Musk's government efficiency agency access to its payment systems while a judge hears arguments in a lawsuit alleging Musk illegally searched them. The deal made Wednesday night by the Treasury and a group of federal employee unions and retirees will for now prevent billions of sensitive government payment records from being turned over to Musk's Department of Government Efficiency as part of its moves to shrink the federal government and crack down on alleged waste.
In their Monday lawsuit, the employee unions and retirees said Treasury had violated privacy laws by giving Musk and DOGE full access to government payment records, documenting things from income tax payments to social security benefits and federal employee salaries. During a hearing on Wednesday, Treasury lawyers denied violating privacy laws and said only two Doge-affiliated people had been given read-only access to its payment systems.
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A small turboprop Cessna Caravan carrying nine passengers and a pilot was reported missing yesterday afternoon in Alaska. The plane was reportedly flying from the Alaskan town of Unalakleet to Nome on Alaska's west coast according to the state's Department of Public Safety. Before the plane was reported missing, the Nome Volunteer Fire Department said the pilot had told Anchorage air traffic control that he intended to enter a holding pattern while waiting for the runway to be cleared. You can stick with usatoday.com for more on this developing story.
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At a rally last month, President Donald Trump reiterated his pledge to end taxes on tips. But while many who stand to benefit support such a proposal, some experts say there are complications. I spoke with Paste BN money reporter, Bailey Schulz for more. Hello, Bailey. Thanks for hopping on today.
Bailey Schulz:
Hi. Thank you for having me.
Taylor Wilson:
So Bailey, what is this proposal that we've heard from Trump and others as it pertains to taxes and tips?
Bailey Schulz:
So that title is kind of what we know at this point where there is this idea to end taxes on tips. There are a few different ways this could roll out. So we'll have to wait and see on exactly what the idea is on how to implement this, where this could be something that just affects federal income tax or maybe this also affects payroll tax. There are questions on whether this would be an all-encompassing sort of proposal or whether this is something that would just affect certain workers in certain industries or certain workers who make a certain amount of money. So we're waiting on some of those details to see what direction President Trump wants to go with this. But yeah, it could roll out a few different ways.
Taylor Wilson:
Okay, so who's on board here, Bailey, and what's their argument?
Bailey Schulz:
So we have seen quite a bit of support for this idea. So one, politicians on both sides of the aisle have come out and said they support this. We've seen some bipartisan legislation proposed. We saw Trump first flow with this idea when he was on the campaign trail, and then we saw Kamala Harris say that she was also in support of this during her campaign. So that coming from politicians isn't exactly a surprise.
But we've also seen a lot of support from trade groups like the American Hotel and Lodging Association say that they support this. We've seen the Culinary Union, which represents the hospitality workers in Nevada, they say they support this idea. And so I think this is just coming when we're seeing support for letting a lot of Americans who have been strapped for cash since these spikes in inflation, allowing some of those workers to just keep more money in their pocket at the end of the day.
Taylor Wilson:
Well, what do experts say here, Bailey, about what this would actually look like in practice? I mean, who stands to benefit and who might this hurt?
Bailey Schulz:
So I spoke to tax policy experts. What they told me is that this is something that sounds like a great political move, but in practice it gets a little messy where for one, this is something that would actually benefit a small percentage of Americans. So we see from Yale University's Budget Lab, about 2.5% of the US workforce was tipped in 2023, and then more than a third of tipped workers didn't actually make enough money to pay federal income taxes to begin with. So small percentage of Americans would actually see the benefits of this sort of proposal.
Then there are concerns about the cost of this sort of thing. There's some estimates that say this plan could reduce revenue by more than a hundred billion over the next 10 years. I had one expert just describe this as a big policy for a small subset of the workforce. But then there's the question of just who is benefiting from this sort of thing where again, points to the Yale Budget Lab, they found that the average tax cut for families who benefit would be about $1,700, while the bottom fifth of earners would save about $200.
And so I spoke to another expert who questioned once again, whether this would be fair to those non-tip workers as well. So say if you're working at a restaurant and you have a chef and a waiter, if they make the same pay, why does it make more sense for just the waiter to have that sort of tax break, tax advantage at the end of the day?
Taylor Wilson:
So Bailey, how do Americans feel about tipping overall?
Bailey Schulz:
So that's another point of concern that was raised where we have heard that term tipping fatigue a lot in recent months and recent years. And there was a Pew report that found about nearly three-fourths of Americans say that tipping is expected in more places today than it was five years ago. This is something that experts told me would likely add to that, where if there is this no tax on tips change, we could see employers switching up how workers are paid so that more of their income comes from tips to see that advantage. And so that is something that we could see adding to that tipping fatigue for consumers.
Taylor Wilson:
Well, in terms of this proposal you and I have been talking about, we're still kind of in debate mode, but in terms of going forward, I mean, how would implementing this actually work? Is Congress needed? Who are the big players here?
Bailey Schulz:
So this is something that would likely require an act of Congress. We saw President Trump was in Nevada recently and he mentioned that he wanted to work with Congress to get a bill on his desk for this. Like I said earlier, this is something that could roll out a few different ways. So I think we're going to have to wait and see exactly what sort of approach they move forward with, with this idea.
Taylor Wilson:
All right. Bailey Schulz covers money for Paste BN. Folks can go check out her full piece with the link in today's show notes. Thanks as always, Bailey.
Bailey Schulz:
Yeah, thank you for having me.
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Taylor Wilson:
Ippei Mizuhara, baseball superstar Shohei Ohtani's former longtime interpreter and confidant, was sentenced to 57 months in federal prison yesterday after stealing nearly $17 million from Ohtani to pay off sports gambling debts. Mizuhara utilized his proximity to Ohtani's personal information and his role tending to many of his off-field affairs to take funds from accounts, and as prosecutors alleged, impersonate Ohtani in bank communications. The court also ordered Mizuhara to pay Ohtani 17 million in restitution. The applicable amount listed when Mizuhara struck a plea deal with prosecutors and a fine of more than a million dollars to the Internal Revenue Service. Revelations of Mizuhara stealing from Ohtani emerged last year during a federal investigation into a California bookmaker.
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Thanks for listening to The Excerpt. We're produced by Shannon Rae Green and Kaely Monahan, and our executive producer is Laura Beatty. You can get the podcast wherever you get your audio. And if you're on a smart speaker, just ask for The Excerpt. I'm Taylor Wilson, and I'll be back tomorrow with more of The Excerpt from Paste BN.