WSJ What’s News - Federal Workers Hesitate to Take Buyout

Episode Date: February 6, 2025

A.M. Edition for Feb. 6. Uncertainty surrounding a buyout deal for U.S. federal workers is deterring many from accepting it, putting the Trump administration at risk of missing a target to trim the government via voluntary measures. Plus, the WSJ’s Lauren Thomas reports that Honeywell, one of America’s last big industrial conglomerates, is preparing a three-way split of its business. And lawmakers push to ban DeepSeek from U.S. government devices over security concerns. Luke Vargas hosts.  Sign up for the WSJ’s free What’s News newsletter. Learn more about your ad choices. Visit megaphone.fm/adchoices

Get groceries delivered across the GTA from real Canadian superstore with PC Express. Shop online for super prices and super savings. Try it today and get up to $75 in PC optimum points. Visit superstore.ca to get started. More than 40,000 federal workers take a buyout deal, but the number risks falling short of the White House's cost-saving target. Plus, U.S. lawmakers move to ban DeepSeek on government-owned devices.

And a legal battle heats up around President Trump's move to end birthright citizenship. To actually end birthright citizenship, Trump would need to either amend the Constitution. That's something that legal experts say would be very difficult. Or the other option is to go to the Supreme Court and ask the Court to endorse his interpretation of the 14th Amendment. And this second pathway is what the administration is banking on. It's Thursday, February 6th. I'm Luke Vargas for the Wall Street Journal and here is the AM edition of What's News,

the top headlines and business stories moving your world today. Today is the final day for American federal government workers to decide whether to take a buyout offer from the Office of Personnel Management, or OPM, part of a broader Trump administration effort to cut government spending. The White House had said it expected between 5 and 10 percent of the about 2 million civilian federal employees to accept the deal. However, with the deadline nearing, we report that number is closer to 40,000 workers, or roughly 2 percent. According to OPM, those who opt to resign will be paid through September and don't have to work, though unions and a dozen attorneys general say the offer isn't guaranteed.

Journal reporter Lindsay Ellis says widespread uncertainty about the buyout working as advertised has deterred employees from taking it, but that the job security of those who turn it down is far from certain either. Hanging over the buyout offer is that workers who opt to keep their jobs could be targeted for layoffs down the line. Employees have been pretty unnerved by signs of increasing pressure to push out government workers, either through the DEI executive orders or what has been unfolding with USAID in the last few days. In the meantime, it's really hard to do your jobs when all of this is unfolding, federal

workers are telling me. With all of this tumult and message after message on this deferred resignation plan, it's tough to focus on the mission of these agencies and that might be even harder with fewer staff after Thursday's deadline. Federal employees have until 11 59 p.m. tonight to respond to the resignation offer. Meanwhile, we are exclusively reporting that more than 100 environmental protection agency workers are set to be placed on leave in connection with the president's executive order targeting DEI programs. The planned cuts will unwind a Biden administration program meant to help poor communities recover from exposure to health risks from industrial activity.

House Republicans are considering extending President Trump's expiring tax credits by as little as five years, putting them at odds with Treasury Secretary Scott Besant and Senate Finance Committee Chair Mike Crapo, who want the tax cuts to be permanent. The shorter extension would limit revenue declines within a broad tax and border bill Republicans hope to push through Congress, as a core group of conservative lawmakers advocates for up to $2.5 trillion in cost savings over the next decade, including via significant changes to programs like Medicaid.

In another journal scoop, we report that lawmakers plan to introduce legislation today that would ban AI chatbot DeepSeq on government-owned devices over concerns it could provide user info to the Chinese government. The bipartisan legislation echoes a strategy Congress used to ban TikTok from government devices. After a seemingly emerging out of nowhere last month, DeepSeek's chatbot has risen to the top of Apple and Google's US App Store rankings. DeepSeek didn't respond to a request for comment. We are exclusively reporting that Honeywell, one of America's last big industrial conglomerates,

is preparing to split into three companies. According to people familiar with the matter, Honeywell is expected to announce plans today to separate its aerospace division from its automation business while moving ahead with previously reported plans to spin off its advanced materials arm. Journal reporter Lauren Thomas says activist investor Elliott Investment Management has been pushing for such a breakup after seeing how successful General Electric's recent split proved. For years now, investors have really clamored for leaner businesses with more simplified

operations and that really have more of a honed in strategic focus. One of the best examples really of what Honeywell might in part hope to achieve here is what General Electric did a number of years ago. So GE's aerospace, energy, and healthcare units are now standalone businesses that together have market values nearly four times bigger than what GE had when that trio was a single company just a couple years ago. And GE's aerospace unit now, for example, has a value of over $200 billion. So these are massive numbers. Honeywell in particular with its aerospace business had really been outshining other

parts of the company that in turn were a drag on that business. So I think by separating that business out, certainly hope to see some more value unlock there. Honeywell is due to report earnings at 6 a.m. Eastern. What we'll also do later today our earnings from Amazon. The company may be America's top online retailer, but it's been struggling to compete in the competitive arena of physical stores.

Since early 2023, it's closed about half of its U.S.-based Amazon Go convenience stores, which use so-called Just Walk Out technology that charges customers electronically, allowing them to skip waiting to pay for their purchases. The pullback is part of a broader retrenchment in Amazon's brick-and-mortar portfolio, though as journal reporter Kate King told our tech news briefing podcast, Just Walk Out tech isn't going away. Amazon licenses this technology to over 200 third-party retailers. That includes colleges and universities, hospitals,

those convenience-type stores in airports, stadiums. And someone I interviewed who was really critical of Amazon's physical location said, Amazon Go, while it didn't really work as a standalone store, it didn't really work as a standalone store, it wasn't a waste of time or money because it allowed Amazon to really research, develop and refine this technology, which it's now selling to other retailers. And on deck today, earnings are due from Eli Lilly, Hershey and ConocoPhillips before the

market opens. And the Bank of England is expected to cut interest rates for a third time in a row, with its decision expected at 7 a.m. Eastern. Coming up, President Trump's executive order to end birthright citizenship has kicked off a legal battle, and we'll look at how it could play out after the break. TD Direct Investing offers live support, so whether you're a newbie or a seasoned pro, you can make your investing steps count. And if you're like me and think a TFSA stands for Total Fund Savings Adventure, maybe reach out to TD Direct Investing.

It is shaping up to be a busy week for the legal fight over President Trump's executive order to end birthright citizenship, the automatic granting of citizenship to children born in the U.S. A federal judge in Maryland yesterday issued a nationwide pause of the order, and a Seattle judge who had previously questioned the constitutionality of Trump's move will hear arguments today over whether to issue a similar injunction. States have also waded into the debate, with Attorneys General representing 22 states challenging the order and 18 others formally expressing their support for it.

My colleague Kate Bulevent spoke to journal video journalist, Josephine Chu, about the legal battle underway. Josephine, you have just finished working on a video which gets into Trump's strategy here. Can you start by telling us what the Constitution says about birthright citizenship and what Trump makes of this? Yeah, so birthright citizenship is written into the 14th amendment of the Constitution and it was first established to guarantee citizenship to black Americans after the Civil

War and it goes something like this, that all people born in the US and subject to the jurisdiction thereof are citizens of the US. And the phrase subject to the jurisdiction thereof is included in the citizenship clause to exclude three groups of people. Children of diplomats, because they have diplomatic immunity, children of Native Americans born on tribal lands, and then children of members of an invading and occupying army. The vast majority of legal experts agree that the meaning of the 14th Amendment is very clear and the federal government has basically operated on this understanding of it for decades.

The Trump administration is offering an alternative interpretation of the 14th Amendment. The administration is focusing on the phrase subject to the jurisdiction thereof. And their argument is that children of immigrants in the US illegally are one of those groups that should be excluded from birthright citizenship. So children of immigrants in the US illegally are not subject to the jurisdiction thereof and therefore should not get the right of birthright citizenship. So let's say that Trump manages to successfully end birthright citizenship in the US, what will happen? So if Trump successfully ends birthright citizenship, children born in the US wouldn't get citizenship

unless at least one of their parents is a citizen or a legal permanent resident. And if the executive order does take effect, the federal government would stop issuing citizen-affirming documents like social security cards and passports to children of non-citizens. And local governments, so cities and states, they also stand to lose funding for certain federal benefit programs like healthcare services, educational services. These are programs where eligibility is based on social security numbers. And if the executive order goes into effect, then states like New Jersey would have to pay substantially more to cover for that.

The Trump administration has said that part of the intent of this policy is to deter what they call birth tourism. That's when pregnant women come into the US specifically to give birth so that their children would automatically become US citizens. The administration has argued that the birthright citizenship right has been abused and that it's a major incentive for illegal immigration. Let's hear now from some of the critics of this move. This is a clip from your interview with New Jersey Attorney General Matt Plotkin.

These are not children who have ties to any other country. They're born here. So what it would do is create this permanent underclass of people who are here that aren't entitled to the same health care or educational rights necessarily as American born children. Josephine, we should note that Trump's executive order isn't just getting criticism, it's being challenged in court. How likely is the president to succeed in ending birthright citizenship? The president doesn't have the right to change the constitution by executive order. To actually end birthright citizenship, Trump would need to either amend the constitution,

which would require two-thirds of both the House and Senate and three-quarters of the states to agree. That's something that legal experts say would be very difficult. Or the other option is to go to the Supreme Court and ask the court to endorse his interpretation of the 14th Amendment. And this second pathway is what the administration is banking on. But there are many challenges underway in this legal case. Most experts say the executive order is unlikely to take effect, mostly because it violates not only the Constitution, but also several federal statutes, so laws passed by Congress. But this issue is bigger than just the legal case.

This executive order is one of several that Trump has signed in his first few days in office that are essentially ways for him to test his powers as the president. And it's something that we haven't really seen before. And a lot of experts are saying that this is quite radical. So we're going to have to wait and see how this plays out. That was journal video journalist Josephine Chu. Josephine, thanks so much for your time. Thank you so much for having me.

And that's it for What's News for this Thursday morning. Today's show was produced by Kate Boulevent and Daniel Bach with supervising producer Christina Rocca. And I'm Luke Vargas for The Wall Street Journal. We will be back tonight with a new show. Until then, thanks for listening.