Majority Whip Emmer says ‘We’re going to put the Trump agenda in place’
ABC News
House Majority Whip Rep. Tom Emmer, R- Minn., said that he plans to work to implement President-elect Donald Trump’s agenda despite House Republicans’ very slim majority.
“We’re going to get the Trump agenda put in place,” Emmer told ABC News’ “This Week” co-anchor Jonathan Karl. “Donald Trump got a mandate on November 5. The public expects us to deal with the excessive spending, the debt, the deficit that has driven double-digit inflation at the beginning of the Biden term, they’ve asked Donald Trump to seal the southern border, and they want peace and stability around the globe.”
Trump has pushed to achieve his legislative goals in “one big beautiful bill” that would address many of his priorities, including tax cuts and securing the southern border, but a wide-ranging bill could be difficult to sell to fiscal hawks in the Senate and the House. The opposition to that approach caused Trump to backtrack and say he’d be willing to consider multiple bills. Emmer said that he is open to either approach.
“That’s not a concern to me once we make the decision. Is it going to be one? Is it going to be two? Doesn’t matter. The whip’s job is to make sure that we execute once that decision has been made, and I love people who tell us that we can’t do something,” Emmer said. “I mean, when we didn’t have the White House and we didn’t have the Senate, we did things that Republican majorities had never been able to do in the previous 10 to 15 years.”
Asked if Republicans are engaging with Democrats on trying to get their support on dealing with the debt ceiling, which Trump has pushed to raise or even eliminate, Emmer said some GOP hardliners could be brought around “under the right circumstances.”
“The issue that Republicans have had, and I think that Donald Trump has, is the debt ceiling is a false number. The bottom line is, you got to get your spending under control, and you got to have a plan to pay off the debt. So as long as we’re doing that, don’t underestimate what the House Republicans can do,” Emmer said.
President Joe Biden promised that 100% of initial emergency funding for the wildfires in the Los Angeles area would be covered by the federal government and called for Congress to provide California with whatever it needs to recover. Asked for a sense of what that might take, Emmer said that it’s too early to tell.
“Well, right now we don’t know what’s going to be needed. We know it’s significant. What we do know is that Congress, in December, before we left, the 118th Congress, passed the American Relief Act, which provided billions of dollars to FEMA to not only deal with the pre the hurricanes Milton and Helene, but also for situations such as this, although no one could predict what’s happening right now in LA,” said Emmer.
Asked about his relationship with Trump, who was critical of Emmer last year when he was considered for House speaker as being “totally out of touch” with Republican voters, Emmer said he and the president-elect are on “good terms.”
“The president has been wonderful to me, been wonderful to my wife. Has done everything that he could to campaign in Minnesota. He’s been amazing,” Emmer said. “We’re going to do some good work together, but it’s Donald J. Trump’s agenda. My job is to make sure that we execute.”
(WASHINGTON) — President Donald Trump’s rapid reshaping of the federal government continues with executive orders and action from his acting agency heads.
Federal departments face a 5 p.m. deadline Tuesday to cease spending on any financial assistance programs, according to a memo from the White House’s Office of Management and Budget. More firings of career officials at the Justice Department unfolded on Monday and Trump signed four military executive orders, one targeting transgender service members.
Meanwhile, Homeland Security Secretary Kristi Noem joined immigration enforcement operations in New York. More Trump Cabinet nominees, including Robert F. Kennedy Jr. and Tulsi Gabbard, will face highly-anticipated confirmation hearings later this week.
OMB reversal ‘not a rescission of the federal funding freeze,’ WH press secretary says
“This is NOT a rescission of the federal funding freeze,” White House press secretary Karoline Leavitt wrote on X defending the administration’s announcement to reverse the directive. “It is simply a rescission of the OMB memo.”
“Why? To end any confusion created by the court’s injunction,” she said. “The President’s EO’s on federal funding remain in full force and effect, and will be rigorously implemented.”
Reversal of OMB order contradicts White House defense of it this morning
The Trump administration’s decision to rescind its Office of Management and Budget directive pausing federal funding comes just hours after White House press secretary Karoline Leavitt touted the directive and told ABC News’ Mary Bruce that there was no confusion regarding the pause.
“It’s very clear this is a temporary pause on federal funding to ensure that tax dollars are not funding things that this president has signed out of law,” she said.
“I would like to double down on the fact that Social Security, Medicare, Medicaid, which I’d like to be clear on that today, welfare benefits, individual assistance, food stamps, etc., will not be impacted. So the American people should not be confused about this,” she added.
“It would make no sense for American taxpayers to pay for policies that this administration is no longer implementing,” Leavitt added on “Good Morning America” Wednesday morning.
State Dept. claims foreign aid fereeze prevented $1B in unnecessary spending
In a new release, the State Department said the freeze on U.S. foreign aid is “already paying dividends to our country and our people,” claiming that over a billion dollars “in spending not aligned with an America First agenda has been prevented” already.
The department defended the pause, saying it was necessary to stop programs because “the participants — both inside and outside of government — have little to no incentive to share programmatic-level details so long as the dollars continue to flow.”
Additionally, the release defends the waiver program in place — saying the process “was used successfully dozens of times in the first several days alone” and blaming rejections of “many requests” on the applicant’s failure to provide “the level of detail necessary to allow a thorough evaluation.”
The release also claims that setting aside support for Ukraine, the U.S. is “spending roughly $70 billion in foreign aid annually.”
This appears to be taken from the requested international affairs budget for FY2024, as the enacted budget was $60 billion, not including money set aside for emergency funding for Ukraine and other crises.
-ABC News’ Shannon Kingston
Trump admin to rescind funding freeze directive, according to OMB memo
Trump’s administration has rescinded its sweeping directive that Would have paused potentially trillions in loans, grants, and financial assistance, according to a memo obtained by ABC News.
“OMB memorandum M-25-13 is rescinded. If you have questions about implementing the President’s Executive Orders, please contact your agency General Counsel,” the short memo from Matthew Vaeth, acting director of OMB reads.
The policy reversal follows a tumultuous 48 hours for the White House, as states and local governments raised concerns that funding for health care, law enforcement, disaster aid and infrastructure spending could be paused or delayed during the expansive rollout of the policy.
In a lawsuit challenging the policy on Tuesday, 22 state attorneys general said, “Without this funding, Plaintiff States will be unable to provide certain essential benefits for residents, pay public employees, satisfy obligations, and carry on the important business of government.”
– ABC News’ Katherine Faulders, Peter, Charalambous, Alex Mallin, Ben Siegel
Trump admin replaces acting DNI ahead of Gabbard hearing
The Trump administration has replaced acting Director of National Intelligence Stacey Dixon with Lora Shiao, who previously served as acting director for one day, from Jan. 20 to 21, 2021, before former DNI Director Avril Haines was sworn in. The change occurred Friday, a source told ABC News.
Dixon, a longtime government official, served under the Trump administration but was appointed by former President Joe Biden. She was the highest-ranking Black woman in the intelligence community and previously served as the principal deputy director of National Intelligence. She had been chosen by the Trump transition team to serve as acting director.
Shiao will remain in the position until a new DNI director is confirmed, and is expected to stay in the role until then. Trump’s pick for DNI director, former Rep. Tulsi Gabbard, will have her confirmation hearing for the position on Thursday.
-ABC News’ Beatrice Peterson
EPA scientific advisory committee members who help monitor air quality standards ousted via email
Members of the EPA’s Clean Air Scientific Advisory Committee and Science Advisory Board were abruptly let go Tuesday night after receiving a notice from Acting EPA Administrator James Payne saying the groups would be “reset.”
In an emailed announcement obtained by ABC News, Payne said, “A decision has been made to reset the Science Advisory Board (SAB) and Clean Air Scientific Advisory Committee (CASAC) and reestablish its current membership.”
The CASAC and SAB are charged with providing independent, scientific advice to the EPA on the National Ambient Air Quality Standards, as well as other programs and regulations implemented by the agency.
In a written statement to ABC News, one of the ousted members of the Clean Air Scientific Advisory Committee, Dr. Mary B. Rice, expressed her concern over who the EPA may bring in to replace the removed members and whether they would ensure the “margin of safety” national air quality standards are meant to provide under the Clean Air Act.
– ABC News’ Kelly Livingston
Trump will be represented by new lawyers
Top white shoe law firm Sullivan and Cromwell will represent President Donald Trump when he appeals his criminal conviction in New York, according to new court filings Wednesday.
Among Trump’s new lawyers is firm co-chair Robert J. Giuffra.
“President Donald J. Trump’s appeal is important for the rule of law, New York’s reputation as a global business, financial and legal center, as well as for the presidency and all public officials. The misuse of the criminal law by the Manhattan DA to target President Trump sets a dangerous precedent, and we look forward to the case being dismissed on appeal,” Giuffra said in a statement.
The change in attorneys followed Trump’s naming of his lead attorneys, Todd Blanche, Emil Bove and John Sauer, to top roles in the Justice Department.
Blanche has been nominated for deputy attorney general, Sauer as solicitor general and Bove principal associate deputy attorney general.
– ABC News’ Katherine Faulders, Peter Charalambous, and Aaron Katersky
Trump to sign executive orders on education
President Donald Trump is expected to sign two executive orders Wednesday on education.
One of the orders seeks to cut federal funding to K-12 schools that teach “radical gender ideology and critical race theory,” according to a fact sheet obtained by ABC News.
The order also directs the attorney general to pursue actions against school officials and teachers who “sexually exploit minors or practice medicine without a license through ‘social transition’ practices,” it states.
“American education should focus on cultivating patriotic citizens ready for the workforce, not political activists,” the fact sheet states.
In the second order, Trump is seeking to expand “educational freedom” and allow for more school choice options.
The order directs the secretary of defense to submit a plan for how military families can use defense funds to send their children to the school of their choice, and requires HHS to provide guidance on “how states receiving block grants for children and families can use those funds to support educational alternatives, including private and faith-based options.”
Trump to sign executive order on combating antisemitism
President Donald Trump is expected to sign an executive order Wednesday aimed at combating “the explosion of anti-Semitism on our campuses and in our streets since October 7, 2023,” according to a fact sheet obtained by ABC News.
The order would seek to “protect law and order, quell pro-Hamas vandalism and intimidation, and investigate and punish anti-Jewish racism in leftist, anti-American colleges and universities,” it states.
Colombian official claims there were no criminals among 2 planes of migrants that left US this week
In a video posted to X, a Colombian government official claimed there were no criminals among the two planes of migrants that arrived in Colombia this week.
“They are not criminals,” Luis Gilberto Murillo, Colombia’s foreign minister, said on Tuesday. “Being a migrant is not a crime.”
The statement from Murillo comes after White House press secretary Karoline Leavitt said on Tuesday that all undocumented immigrants are “criminals.”
– ABC News’ Laura Romero
Noem says Gitmo, other assets for migrant detention are being evaluated
DHS Secretary Kristi Noem announced the cancellation of TPS for Venezuelans on Fox and Friends Wednesday morning, claiming the Biden administration’s move to extend protections for Venezuelans meant “they were going to be able to stay here and violate our laws.”
However, TPS holders are in the country legally, have work permits, have been fingerprinted and have been vetted by the federal government.
“Today, we signed an executive order within the Department of Homeland Security and a direction that we are not going to follow through on what he did to tie our hands, that we are going to follow the process evaluate all of these individuals that are in our country, including the Venezuelans that are here and members of TDA,” she said.
Noem claimed that during the New York City enforcement operation that people thanked her for getting the “dirtbags” off the street.
She also said they’re not ruling out using Gitmo for Venezuelans, Cubans, and other migrants whose countries refuse to take them back.
– ABC News’ Armando Garcia
Trump to sign the Laken Riley Act, his 1st act of legislation
President Donald Trump will sign the Laken Riley Act into law Wednesday at 2 pm in the East Room, according to the White House.
This will be the first measure Trump signs into law of his second administration.
The House of Representatives passed the Laken Riley Act earlier this month as the first bill of the new Republican-controlled Congress. Read more about the Laken Riley Act here.
– ABC News’ Hannah Demissie
Federal worker buyout not a way to purge those who disagree with Trump’s agenda: WH press secretary
When asked by ABC News’ Mary Bruce for her response to those who say the federal worker buyout is a way to purge individuals who disagree with the president’s agenda, White House press secretary Karoline Leavitt said this is “false” and asserted that this is a way to bring people back to the office.
Though the White House has described the federal worker buyout as an effort to bring people in the federal government back to the office, the union that represents federal workers doesn’t see it that way. It said this is not a voluntary buyout.
“We’re all here at work, at the office. There are law enforcement officers and teachers and nurses across the country who showed up to the office today. People in this city need to do the same. It’s an overwhelmingly popular policy with people outside of Washington, D.C. The President campaigned on this, and his administration’s keeping the promise.”
When asked how much it would cost to bring all those workers back and provide them with the office space they need, Leavitt claimed he would “save tens of millions of dollars.”
“I would also add that the order simply directs federal agencies to come up with a return to work plan. And so this isn’t a purge, and this isn’t forcing every single individual in Washington, DC to return to work only if they are able, and of course, within the law,” Leavitt said.
– ABC News’ Hannah Demissie
Dept of Education says Trump admin ‘committed to reorienting our education system’
The Department of Education said the Nation’s Report Card reveals a “heartbreaking reality” and that “students who were the most behind and needed the most support have fallen ever further behind.”
It said the Trump administration is “committed to reorienting our education system” and will emphasize the need for change.
According to the National Assessment of Educational Progress, dubbed the Nation’s Report Card, America’s fourth and eighth grade students’ sliding reading scores worsened in 2024.
“The nation’s report card is out and the news is not good,” National Center for Education Statistics Commissioner Peggy G. Carr said on a call with reporters.
– ABC News’ Elizabeth Schulze and Arthur Jones II
Trump admin cancels TPS for Venezuelans
The Trump Administration has canceled the Temporary Protected Status (TPS) extension for Venezuelans under the status, according to a document obtained by ABC News.
DHS Secretary Kristi Noem signed off on a memo Tuesday night that ends the extension signed by former Secretary Alejandro Mayorkas just days before he left the job earlier this month.
Those Venezuelans who gained TPS in 2021 will have their protections through September, and those who gained TPS in 2023 will have them through April.
Noem has until Saturday to decide on whether to extend Venezuelans who received status in 2023 can have their protections extended – if she chooses not to, those TPS statuses will automatically extend by six months.
The designation is expected to impact about 600,000 people, according to immigration advocates.
— ABC News’ Luke Barr
Retired US Gen. Mark Milley has security detail removed, clearance suspended
Defense Secretary Pete Hegseth has removed retired U.S. Gen. Mark Milley’s personal security detail, suspended his security clearance and directed the Pentagon’s acting inspector general to carry out an inquiry into Milley’s conduct to determine if his military rank should be reduced.
“The Secretary informed General Milley today that he is revoking the authorization for his security detail and suspending his security clearance as well,” Pentagon spokesman John Ullyot said in a statement provided to ABC News. “The Secretary has also directed the DoD IG to conduct an inquiry into the facts and circumstances surrounding Gen Milley’s conduct so that the Secretary may determine whether it is appropriate to reopen his military grade review determination.”
A senior defense official also said that a portrait of Milley was being removed from the Pentagon, this one from his time as Army chief of staff. On Inauguration Day, Milley’s official portrait from when he was chairman of the Joint Chiefs of Staff was taken down at the direction of the White House, according to two U.S. officials.
In a statement on Tuesday, DOD Chief of Staff Joe Kasper said: “Undermining the chain of command is corrosive to our national security, and restoring accountability is a priority for the Defense Department under President Trump’s leadership.”
Fox News first reported the steps Hegseth planned to take.
A spokesperson for the DOD inspector general earlier confirmed to ABC News that the office had received the request from the defense secretary and was reviewing it.
Milley’s security detail had been in place since his retirement in 2023 out of concerns that Iran might retaliate against him and other senior officials following the 2020 killing of Iranian military leader Qassem Soleimani.
Trump has sharply criticized Milley over the U.S. withdrawal from Afghanistan and previously accused the retired general of treason.
After the 2020 election, Milley reportedly took secret precautions to try to prevent Trump from taking military action or launching a nuclear weapon after the Jan. 6 Capitol riot.
In the run-up to the 2024 election, Milley called Trump “fascist to the core” in comments to journalist Bob Woodward.
In the final days of his term former President Joe Biden pre-emptively pardoned Milley, a move that would prevent him from facing civilian criminal prosecution and a military court martial.
-ABC News’ Luis Martinez
New DOT secretary signs deal to reduce ‘restrictive’ fuel standards
The Department of Transportation said in a release Tuesday night that its newly confirmed secretary, Sean Duffy, signed a memorandum as his first act of business that will make fuel standards less “restrictive” and in turn bring down the price of a new car.
“Secretary Duffy’s first act was signing a memorandum directing staff to start the process of resetting Corporate Average Fuel Economy (CAFE) standards, which will ultimately lower the price of a car for American consumers and eliminate the electric vehicle mandate,” the DOT release said.
“The memorandum signed today specifically reduces the burdensome and overly restrictive fuel standards that have needlessly driven up the cost of a car in order to push a radical Green New Deal agenda,” it continued. “The American people should not be forced to sacrifice choice and affordability when purchasing a new car.”
Duffy was confirmed as the secretary of the DOT earlier in the day on Tuesday.
-ABC News’ Sam Sweeney
Trump says he is sending Musk, SpaceX to get American astronauts stuck at ISS
President Donald Trump said that he has asked Elon Musk and SpaceX to “‘go get'” two astronauts whose departure from the International Space Station has been repeatedly delayed.
The two astronauts Barry “Butch” Wilmore and Sunita “Suni” Williams, flew to the ISS on Boeing’s Starliner last June. After experiencing issues, Starliner returned to Earth in September, leaving behind the two astronauts. They were expected to return back on a SpaceX Crew-9 Dragon spacecraft in February.
Trump added that “Elon will soon be on his way,” and wished the billionaire businessman good luck.
-ABC News’ Michelle Stoddart
Federal employees who accept buyout offers should be put on admin leave, OPM says
Federal employees who accept a buyout offer should “promptly” have their duties reassigned or eliminated and be placed on administrative leave until Sept. 30, according to a follow-up memo from the Office of Personnel Management (OPM).
OPM said each agency should report updates on the number of employees who have accepted buyouts to OPM every Friday, beginning this week.
The buyout offer sent to government employees earlier Tuesday offers them pay and benefits until Sept. 30 if they resign by Feb. 6. Employees who stay on are asked to commit to in-person work and updated performance standards, according to an earlier memo, that also emphasized loyalty.
-ABC News’ Ben Siegel
DOD OKs use of Colorado base for processing detained migrants
The Department of Defense approved a request to use Buckley Space Force Base in Aurora, Colorado, for processing detained migrants, according to U.S. Northern Command.
The Department of Homeland Security had put in the request.
“ICE requirements for the facility include a temporary operations center, staging area, and a temporary holding location for the receiving, holding, and processing of criminal aliens,” a U.S. Northern Command spokesperson said. “This facility will be manned by ICE senior leaders, special agents, and analysts, as well as members of DHS Components and other federal law enforcement agencies.”
The use of military bases to help out DHS was a possibility mentioned by border czar Tom Homan before the Trump administration came into office.
-ABC News’ Luis Martinez
OPM memo emphasizes loyalty
Among the four “pillars” addressed in the Office of Personnel Management memo offering buyouts to government employees, one emphasizes loyalty.
Under “Enhanced standards of conduct,” the memo states: “The federal workforce should be comprised of employees who are reliable, loyal, trustworthy, and who strive for excellence in their daily work. Employees will be subject to enhanced standards of suitability and conduct as we move forward. Employees who engage in unlawful behavior or other misconduct will be prioritized for appropriate investigation and discipline, including termination.”
The other pillars highlight a return to in-office work, updated performance standards and a “more streamlined workforce” with anticipated downsizing in a “majority of federal agencies,” per the memo.
Speaker Johnson says he ‘fully’ supports temporary funding freeze
House Speaker Mike Johnson said he “fully” supports President Donald Trump’s funding freeze, downplaying the impacts, and noted it’ll be temporary and not a “major interruption.”
“It is a temporary pause for some programs — it could be an hourslong pause. It is not a big thing. Some of the programs have already been approved. But what this is a, I believe, a common application of common sense,” the speaker said during a fireside chat at the GOP retreat on Tuesday. “We want to make sure that the executive orders of the new president are being fully complied with regard to these programs. I think these would be quick reviews.”
“I think it’s going to be harmless,” he added.
Asked by the reporter if Trump is stretching his executive authorities, Johnson said the president has been “using his executive authority, I think, in an appropriate manner.”
Within minutes of the White House freezing billions in federal grants and loans, a federal judge blocked the funding pause from taking effect until next week.
-ABC News’ Lalee Ibssa, Jay O’Brien and Lauren Peller
White House addresses buyout offer
The White House has addressed the buyout plan offered to federal workers on Tuesday, with press secretary Karoline Leavitt calling the payout “very generous.”
“American taxpayers pay for the salaries of federal government employees, and therefore deserve employees working on their behalf who actually show up to work in our wonderful federal buildings, also paid for by taxpayers,” Leavitt said in a statement. “If they don’t want to work in the office and contribute to making America great again, then they are free to choose a different line of work, and the Trump Administration will provide a very generous payout of 8 months.”
22 states and DC sue Trump administration over funding freeze
Twenty-two states and Washington, D.C., are suing the Trump administration over its plan to pause billions in federal grants and loans.
The federal lawsuit, filed in the U.S. District Court for the District of Rhode Island around the same time that a judge for the U.S. District Court for the District of Columbia temporarily delayed the freeze, argued that Trump exceeded his authority as president by denying funds appropriated by Congress.
“The OMB Directive constitutes a refusal to spend money appropriated by Congress, in violation of the executive’s constitutional authority to administer the law,” the lawsuit said.
The state attorneys general argued the funding is necessary to support health systems, Medicaid, law enforcement, disaster relief, critical infrastructure, education systems and other key services.
“Without this funding, Plaintiff States will be unable to provide certain essential benefits for residents, pay public employees, satisfy obligations, and carry on the important business of government,” the filing said.
-ABC News’ Peter Charalambous
OPM memo tells employees to respond ‘Resign’ if they want to take buyout
ABC News has obtained the Office of Personnel Management memo sent to government employees Tuesday informing them of their offer for “deferred resignation,” which begins effective immediately and offers pay and benefits until Sept. 30 for those who accept.
The memo, titled “Fork in the Road,” instructs employees simply to reply “Resign” in the message body if they plan to accept the buyout.
The memo states that any government employee can qualify “except for military personnel of the armed forces, employees of the U.S. Postal Service, those in positions related to immigration enforcement and national security, and those in any other positions specifically excluded by your employing agency.”
The last day to accept the offer is Feb. 6, per the memo.
-ABC News’ Benjamin Siegel, Luke Barr and Cheyenne Haslett
Fed workers union responds to buyout plan
The American Federation of Government Employees, which represents more than 800,000 federal and Washington, D.C., employees, responded to the reports that Trump is planning to offer federal workers buyouts.
“This offer should not be viewed as voluntary,” AFGE National President Everett Kelley said in a statement.
Kelley claimed the Trump administration’s goal “is to turn the federal government into a toxic environment where workers cannot stay even if they want to.”
“The number of civil servants hasn’t meaningfully changed since 1970, but there are more Americans than ever who rely on government services. Purging the federal government of dedicated career federal employees will have vast, unintended consequences that will cause chaos for the Americans who depend on a functioning federal government,” he said.
-ABC News’ Sarah Kolinovsky
Trump signs EO restricting transgender care access for people under 19
Trump signed an executive order that would restrict gender-affirming care for people under the age of 19.
The action would restrict medical institutions that receive federal funding from providing such care — including puberty blockers, hormone therapies, and surgeries — and calls on the secretary of the Department of Health and Human Services to “take all appropriate actions to end the chemical and surgical mutilation of children.”
Stephen Miller claims freeze won’t affect ‘any federal benefits’ programs
White House Deputy Chief of Staff for Policy Stephen Miller took questions from the press to talk about the federal funding freeze, which was temporarily blocked by a judge.
Miller claimed the freeze “doesn’t affect any federal programs that Americans rely on, full stop.”
When asked by ABC News if Americans who rely on indirect benefits might see impacts, Miller said the OMB document “is clearing up how to implement the original executive order, which doesn’t cover any entitlement or public benefit spending at all.”
-ABC News’ Mary Bruce and Michelle Stoddart
Nevada governor says his office in touch with White House over funding freeze
In a post on X, Nevada Gov. Joe Lombardo said his office is in touch with the White House and will be part of a larger meeting with the Office of Management and Budget to discuss the impact of the federal fund freeze on his state’s agencies.
“While these discussions are ongoing, it’s important to reiterate that programs that provide direct benefits to Nevadans — like Medicaid, Medicare, SNAP, and Head Start — are continuing without interruption. Despite the shameless political theater on this issue, the Office of the Governor will continue to provide state agencies and Nevadans with timely, accurate, and correct information,” he said.
-ABC News’ Brittany Shepherd
Trump expected to offer buyouts to federal employees: Sources
Trump is expected to offer buyouts to all federal workers in a memo that is expected to be sent by the White House as soon as Tuesday, sources familiar with the matter told ABC News.
The offer of a one-time severance payment to leave the federal government is the latest attempt to further shrink the federal government. It’s not clear how many federal workers would be eligible for this offer or who would pay for it.
The expected White House memo will say that workers who want to continue working from home will be paid through the end of September, but they must resign by next week, Feb. 6, sources said.
In order to be eligible for a severance payment, federal workers must have completed at least 12 months of continuous service, according to OPM’s website.
-ABC News’ Katherine Faulders
Federal judge temporarily blocks Trump’s funding pause from taking effect
Within minutes of the White House freezing billions in federal grants and loans, a federal judge temporarily blocked the funding pause from taking effect.
U.S. District Judge Loren L. AliKhan issued a brief administrative stay of the policy during a virtual hearing on Tuesday afternoon. The stay blocks the policy from taking effect until 5 p.m. on Feb. 3.
Pressed by Judge AliKhan, Justice Department lawyer Daniel Schwei struggled to articulate the full extent of the administration’s guidance.
“It seems like the federal government currently doesn’t actually know the full scope of the programs that are going to be subject to the pause. Is that correct?” she asked.
-ABC News’ Peter Charalambous
Trump invites Israel’s Netanyahu to White House
President Donald Trump has invited Israeli Prime Minister Benjamin Netanyahu to a meeting at the White House on Tuesday, Feb. 4, according to the prime minister’s office.
Netanyahu is the first foreign leader to be invited to the White House in Trump’s second term.
White House confirms outage of Medicaid portal
The White House is now confirming the Medicaid portal is experiencing outages, as states reported issues accessing the site in the wake of the federal government’s abrupt freeze
“The White House is aware of the Medicaid website portal outage,” White House press secretary Karoline Leavitt said in an X post.
“We have confirmed no payments have been affected — they are still being processed and sent. We expect the portal will be back online shortly,” she added.
Leavitt defended the freeze during her first press briefing earlier Tuesday. Leavitt said it was a temporary pause and would not impact direct individual assistance Americans rely on.
But questions remain on its impact, as the government funds thousands of loan and grant programs on everything from water and air quality to housing subsidies.
Nonprofits, health groups and more sue to block memo freezing financial aid
A group of nonprofit groups, public health organizations, small businesses and LGBTQ advocates have asked the federal district court in Washington for an emergency injunction and temporary restraining order to block implementation of the White House Office of Management and Budget memo freezing all federal grant and loan distributions.
The lawsuit invokes the Administrative Procedures Act, which says that federal agencies must undertake changes in policy by providing justification for the action, adequately consider the real-world impacts, and accept public input.
The groups allege the Office of Management and Budget has done none of these things and has exceeded its authority.
-ABC News’ Devin Dwyer and MaryAlice Parks
State officials report trouble accessing health, emergency funds
The White House memo on ceasing spending for federal financial aid programs is sparking alarm for some across the country.
Multiple state agencies are reporting they are encountering error messages as they try to access online portals that they typically use to draw down funds for emergency aid, community health centers, Head Start and even Medicaid — despite the memo’s explicit carve out for Medicare and Social Security.
“This is sowing chaos and confusion everywhere,” one state official told ABC News.
-ABC News’ Steven Portnoy
EPA temporarily pauses disbursement of federal financial aid
The Environmental Protection Agency is “temporarily pausing” its disbursement of federal financial aid in response to the order from the White House Office of Management and Budget, the agency confirmed in a statement to ABC News.
The EPA grants fund a wide array of national, state and tribal programs, including some to assist with air and water quality. A list of its grant programs can be found here.
The agency said it is “continuing to work with OMB as they review processes, policies, and programs, as required by the memorandum.”
-ABC News’ Kelly Livingston
Karoline Leavitt, youngest WH press secretary, to hold 1st briefing
Karoline Leavitt will make her first appearance behind the podium in the James S. Brady briefing room on Tuesday.
Leavitt, 27, is the youngest White House press secretary in history. She served as the spokesperson for Trump’s 2024 campaign and transition team.
On Monday, she held her first gaggle with reporters aboard Air Force One. There, she fielded questions on Trump’s upcoming moves on FEMA and his attempts to end birthright citizenship. She’ll face more questions, likely about Trump’s recent actions regarding the military and federal aid programs, at 1 p.m.
Trump weighs in on possible deal for Microsoft to buy TikTok
President Donald Trump discussed a possible deal for Microsoft to buy TikTok while speaking with reporters by phone from Air Force One on Monday evening.
Trump was asked whether Microsoft was in discussions to acquire the embattled social media app amid its looming U.S. ban deadline.
“I would say yes,” Trump said, before adding, “A lot of interest in TikTok, there’s great interest there.”
When asked whether he liked the idea of a bidding war for the app, Trump said he likes bidding wars.
“I like bidding wars because you make your best deal,” he said.
“It’s very clear, if I sign, then somebody’s going to buy it, pay a lot of money, have a lot of jobs, keep a platform open and have it be very secure. If I don’t sign, then it closes,” Trump added of TikTok’s future in America.
He was asked about what other companies were looking to buy the app, and he declined to respond but said that they are all “top of the line.”
White House budget office suspends federal financial aid programs for internal review
The White House budget office is ordering federal agencies to cease any financial assistance spending if they suspect the program might conflict with President Donald Trump’s executive orders.
In a memo obtained by ABC News, Matthew Vaeth, acting director of the Office and Management and Budget, told agency chiefs that they must report back by Feb. 10 on all programs that apply.
“The memo requires federal agencies to identify and review all federal financial assistance programs and supporting activities consistent with the President’s policies and requirements,” according to the document.
The memo says it is directed at programs providing “financial assistance for foreign aid, non-governmental organizations, DEI, woke gender ideology and the Green New Deal.”
The order does not specify which financial aid programs would have to be suspended, although it could have sweeping implications. The federal government funds thousands of programs, including research programs, housing subsidies and educational grants.
Quakers sue to keep ICE out of houses of worship
Five Quaker congregations sued the Department of Homeland Security on Monday over last week’s policy reversal that allows immigration agents to conduct searches and arrests in so-called “sensitive areas” like churches and schools.
The Quaker groups, known as the Religious Society of Friends, alleged that the policy change harms their congregations by deterring immigrants from worshipping in person, violating their First Amendment rights to freely associate and exercise religion.
“Allowing armed government agents wearing ICE-emblazoned jackets to park outside a religious service and monitor who enters or to interrupt the service and drag a congregant out during the middle of worship is anathema to Quaker religious exercise,” the federal lawsuit filed in Maryland said.
Quaker worship generally involves multiple congregants sitting together in silence to await a message from God, which can be received and shared by anyone in attendance, according to the lawsuit.
“Being able to receive those messages is fundamental to Quaker religious exercise,” the lawsuit said.
“Criminals will no longer be able to hide in America’s schools and churches to avoid arrest,” Acting Department of Homeland Security Secretary Benjamine Huffman said in a statement announcing the policy change on Jan. 24. “The Trump Administration will not tie the hands of our brave law enforcement, and instead trusts them to use common sense.”
-ABC News’ Peter Charalambous, James Hill and Laura Romero
Trump says he wants to deport ‘repeat offenders’ in US legally
Trump said Monday he wants to deport repeat criminal offenders who are in the U.S. legally, offering that they be held in foreign jails.
“I don’t want these violent repeat offenders in our country any more than I want illegal aliens from other countries who misbehave,” Trump said during his remarks at the House GOP retreat.
“This is subject to getting it approved, but if they’ve been arrested many, many times, they’re repeat offenders by many numbers, I want them out of our country,” he added. “We’ll be seeking permission to do so. We’re going to get approval hopefully to get them the hell out of our country along with others.”
Trump suggested that they could be maintained in a foreign country “for a very small fee.”
-ABC News’ Fritz Farrow
ICE arrests 1,179 undocumented immigrants on Monday
The U.S. Immigration and Customs Enforcement said it arrested 1,179 undocumented immigrants on Monday.
That marks an increase from Sunday, when the agency said it made 956 such arrests.
ICE is operating at an increased tempo since the new administration took office.
-ABC News’ Luke Barr
Trump says DeepSeek is a ‘wake-up call’ for American companies
During his remarks at the House GOP retreat, Trump discussed the emergence of Chinese AI technology DeepSeek, saying it should be a “wake-up call” for American companies.
“The release of DeepSeek AI from a Chinese company should be a wake-up call for our industries that we need to be laser-focused on competing to win, because we have the greatest scientists in the world, even Chinese leadership told me that,” Trump said.
He also cast the technology as an “asset” for how it could revolutionize technology due to its less-expensive method.
Trump said that he hoped American companies could come up with the “same solutions” without investing billions of dollars and repeated his promise to “unleash” American tech companies to “dominate the future.”
-ABC News’ Michelle Stoddart
CDC officials told to cease communications with the WHO
Public health officials at the Centers for Disease Control and Prevention have been told to cease communications with the World Health Organization, an official with the Department of Health and Human Services confirmed to ABC News.
This comes after Trump signed an executive order on his first day of office ordering the withdrawal of the U.S. from the WHO. The U.S. is the biggest financial contributor to the global public health organization and public health experts immediately denounced the move as a risk to national security and pandemic outbreak prevention.
Any country’s withdrawal from the WHO is supposed to be preceded by a one year advance notice, which experts interpreted Trump’s executive order to serve as. But the recent order for CDC public health officials to immediately stop communicating with their WHO counterparts suggests that Trump is not adhering to those governing rules.
-ABC News’ Cheyenne Haslett
Trump addresses new executive orders on the military
Trump said “in a little while” he will be signing four new executive orders addressing the military, during his remarks at a retreat of House Republicans at his Doral golf resort in Miami on Monday.
One will direct Secretary of Defense Pete Hegseth to “immediately begin” the construction of an “Iron Dome” missile defense shield, a nod to the Israeli missile defense system.
“We protect other countries, but we don’t protect ourselves,” he said.
Trump said his administration will also “get transgender ideology the hell out of military” and “stop our service members from being indoctrinated with radical left ideologies such as critical race theory.”
Trump didn’t go into detail, though the White House earlier Monday said that Trump is expected to sign an order directing the Department of Defense to update its guidance “regarding trans-identifying medical standards for military service and to rescind guidance inconsistent with military readiness.”
The order will also end the use of pronouns in the Department of Defense and will also prohibit males from “sharing sleeping, changing, or bathing in facilities designated for females.”
Another order that Trump is expected to sign takes aim at diversity, equity and inclusion programs at the Department of Defense and Department of Homeland Security. The order will ban the use of “discriminatory race- or sex-based preferences,” according to a fact sheet about the move.
Trump also addressed another order that will offer a “full reinstatement” to service members who were expelled from the armed forces due to the COVID-19 vaccine mandate.
Scott Bessent confirmed as treasury secretary
The Senate on Monday evening confirmed Scott Bessent to serve as secretary of treasury by a vote of 68-29.
Bessent becomes the fifth member of Trump’s team to be confirmed by the Senate, following Marco Rubio, John Ratcliffe, Pete Hegseth and Kristi Noem.
The Senate is now taking a test vote on Sean Duffy’s nomination to lead the Department of Transportation. He’s expected to easily clear this procedural hurdle to tee up a final vote likely on Wednesday.
-ABC News’ Allison Pecorin
Trump: ‘Am I allowed to run again?’
During his remarks at a retreat of House Republicans at his Doral golf resort in Miami on Monday, Trump raised the questiion whether he could run for a third term.
“I’ve raised a lot of money for the next race that I assume I can’t use for myself, but I’m not 100% sure, because I don’t know,” he said to some laughs in the crowd. “I think I’m not allowed to run again. I’m not sure, am I allowed to run again?”
Last week, Rep. Andy Ogles, R-Tenn. introduced a House joint resolution to allow a president to be elected for no more than three terms, instead of two.
Air Force chief of staff releases statement on Tuskegee Airmen videos
Air Force Chief of Staff Gen. David W. Allvin wrote a statement Monday regarding curricula on the Tuskegee Airmen and women pilots, saying no such material has been removed from basic military training.
“Allow me to clearly dispel a rumor — while we are currently reviewing all training courses to ensure compliance with the Executive Orders, no curriculum or content highlighting the honor and valor of the Tuskegee Airmen or Women Air Force Service Pilots has been removed from Basic Military Training,” Allvin wrote. “The historic legacy and decorated valor these Airmen embodied during World War II and beyond will continue to guide our newest recruits and all who serve in our ranks.”
The statement comes after an Air Force spokesperson confirmed to the Associated Press that training courses with such videos were removed last week after Trump’s executive order to eliminate DEI initiatives in the federal government. The Air Force later clarified to the AP that the courses were edited but that the Tuskegee Airmen and WASP content would still be shown.
Allvin also said in his own statement on Monday that the Air Force is “faithfully executing” all of Trump’s executive orders, including on DEI.
JD Vance surveys hurricane damage in Virginia
Vice President JD Vance’s first official trip since taking office was to Damascus, Virginia, to survey damage from last year’s devastating Hurricane Helene.
In remarks alongside Republican Gov. Glenn Youngkin, Vance said he was heartened by the stories he’s heard on the ground of “good people helping their neighbors rebuild.”
Without providing evidence, he also criticized the federal response to the flooding, claiming federal agencies had acted as “a barrier, as opposed to a facilitator” of getting resources into the communities who needed it.
This comes on President Donald Trump’s assessment of storm damage in North Carolina last Friday. During that visit, he floated getting rid of FEMA. He also signed two executive orders Friday that focused on emergency response, one of which creates a task force to conduct a “a full-scale review” of FEMA.
Vance was asked about what changes he would like to see made to FEMA, including possibly eliminating the agency. Vance did not mention the agency being terminated, which Trump could not do unilaterally, but once again reinforced the idea that bureaucrats were getting in the way of rebuilding.
-ABC News’ Michelle Stoddart
Trump spoke with India’s Modi
President Donald Trump spoke with India’s Prime Minister Narendra Modi on Monday, continuing his calls with foreign leaders since taking office. Trump’s first call was to Saudi Arabia’s crown prince Mohammed bin Salman.
Trump and Modi discussed “expanding and deepening cooperation” between their countries along with “a range of regional issues, including security in the Indo-Pacific, the Middle East, and Europe,” the White House said.
“The President emphasized the importance of India increasing its procurement of American-made security equipment and moving toward a fair bilateral trading relationship,” according to a readout of the call.
The two leaders also talked about plans for Modi to visit the White House. The prime minister visited the White House as well as former President Joe Biden’s home in Wilmington during the previous administration and made visits to the White House during the first Trump administration.
-ABC News’ Molly Nagle
Mexico’s received 4,094 migrants deported from US, president says
Mexico President Claudia Sheinbaum said her country has received 4,094 migrants, most of whom are Mexican nationals, deported from the U.S. since Jan. 20.
“Mexico has a very important history of repatriation with the United States. First with the Trump administration and then with the Biden administration. There are coordination mechanisms,” Sheinbaum said. “We ask for respect for human rights.”
Sheinbaum said four planes with deportees arrived this past weekend. But she noted it has happened in the past and that there has not been “a sustained increase” of deportations.
-ABC News’ William Gretsky
VA says 60 employees placed on leave after DEI order implementation
The Department of Veterans Affairs announced it has completed its initial implementation of ending its DEI program, which has included placing nearly 60 employees on paid administrative leave. The release said the employees in question had been solely focused on DEI initiatives.
According to the release, the combined annual salary of those employees totals more than $8 million, an average of more than $136,000/year per employee. One such employee is making more than $220,000 per year.”
Additionally, the VA has identified other DEI-related expenses totaling more than $6.1 million, which the department said it is working to cancel.
This comes after President Donald Trump signed an order last week to eliminate DEI initiatives in the federal government. Defense Secretary Pete Hegseth earlier Monday indicated Trump would take more executive action toward “fully removing DEI inside the Pentagon.”
-ABC News’ Nathan Luna
Trump to sign executive order reinstating service members removed for refusing COVID vaccine
President Donald Trump will sign two executive orders relating to the military, a White House official confirmed to ABC News.
The first executive order Trump is expected to sign will reinstate service members removed from the military for refusing the COVID-19 vaccine, restore their rank, and provide back pay.
The second executive order directs the Department of Defense to determine a policy regarding transgender service members based on readiness. It does not put an immediate ban on trans service members. It simply directs the DOD to come up with a policy.
Last week, Trump revoked a Biden administration order allowing transgender people to serve in the military.
– ABC News’ Hannah Demissie
Trump cabinet confirmation hearings this week
All eyes will be on the Senate this week as confirmation hearings continue for Trump’s cabinet choices.
Health and Human Services pick Robert F. Kennedy Jr. will be facing the Senate Finance Committee on Wednesday morning.
On Thursday, FBI nominee Kash Patel’s hearing before the Senate Judiciary Committee will take place, in addition to Director of National Intelligence nominee Tulsi Gabbard’s hearing before the Senate Select Committee on Intelligence.
Army Secretary nominee Daniel Driscoll’s confirmation will also be voted on Thursday before the Senate Armed Services Committee.
Texas Gov. Abbott to send 400 troops, military resources to Rio Grande Valley
Texas Gov. Abbott is sending an additional 400 soldiers from military bases in Forth Worth and Houston to assist Border Patrol and the Trump administration’s mission to “secure the border.”
The 400 soldiers join the thousands of troops Abbott has already deployed under his border mission, Operation Lone Star.
In addition to troops, he’ll also be sending C-130s and Chinook helicopters.
“Texas has a partner in the White House we can work with to secure the Texas-Mexico border,” Abbott said in a statement, thanking Trump for his “decisive leadership on the southern border.”
– ABC News’ Armando Garcia
Hegseth responds after uproar over removal of Tuskegee Airmen video
Defense Secretary Pete Hegseth on Sunday had to respond to criticism after videos of Tuskegee Airmen and Women Air Force Service Pilots were removed from basic training courses, according to a report from Reuters.
An official told Reuters the videos were removed pending a review to comply with Trump’s order to eliminate DEI efforts in the federal government. Hegseth, too, has made eliminating DEI from the military a top priority.
But uproar quickly grew over the removal of the videos, including from Alabama Republican Sen. Katie Britt. Britt called the removal of the videos “malicious compliance” that had to be corrected.
“We’re all over it Senator. This will not stand,” Hegseth said in response. Hours later, he posted, “This has been immediately reversed.”
Reuters reported on Sunday that the Air Force said the videos will be taught.
Trump signs executive orders for ‘full-scale review’ of FEMA, seeks control over California water system
President Donald Trump signed two executive orders Friday focused on emergency response, one which creates a task force to conduct a “a full-scale review” of FEMA to “recommend to the President improvements or structural changes to promote the national interest and enable national resilience.”
The task force — which is intended to be no larger than 20 people — is expected to “meet regularly” for a year. Among the directives in the order is to evaluate “whether FEMA can serve its functions as a support agency, providing supplemental Federal assistance, to the States rather than supplanting State control of disaster relief.”
They could recommend that FEMA be dismantled, but Congress would need to act in order to do away with the agency.
The second executive order, called “Emergency Measures To Provide Water Resources In California And Improve Disaster Response In Certain Areas,” calls for a plan for the federal government to assert power over California’s water system.
One section outlines actions for the government to go around state and federal law to more directly assert control of California’s water management — though it’s not clear how much of an impact this order will have.
– ABC News’ Molly Nagle
Pete Hegseth arrives for 1st full day at Pentagon as defense secretary
Arriving for his first full day at the Pentagon as defense secretary, Pete Hegseth stopped to talk to reporters to lay out some of his priorities.
“It’s an honor to be here,” Hegseth said after being greeted by Gen. CQ Brown Jr., chairman of the Joint Chiefs of Staff.
Hegseth said that would include removing DEI efforts inside the Pentagon, reinstating service members discharged because of COVID-19 vaccine mandates and building an Iron Dome — though experts have said the latter may not be realistic for the U.S.
He also said the Pentagon would provide “whatever’s needed” at the southern border as Trump carries out his immigration crackdown.
Hegseth previously suggested the firing of Brown as well as other senior officers who were involved either in the chaotic withdrawal of troops from Afghanistan or “woke” DEI initiatives.
Asked on Monday if he wants to fire Brown, Hegseth said: “I’m standing with him right now. Look forward to working with him.”
As Donald Trump seeks to reshape the federal government at breakneck speed, his administration has encountered a flood of litigation challenging the legality of its early actions in office.
With more than 100 federal lawsuits filed since the inauguration, Trump and his administration have effectively been sued three times for every business day he has occupied the Oval Office.
Approximately 30 of the 100 lawsuits relate to Trump’s immigration policies, while more than 20 of the cases directly challenge the actions of Elon Musk’s Department of Government Efficiency. Ten of the cases challenge Trump policies relating to transgender people, and more than 20 cases oppose the president’s unilateral changes to federal funding, government hiring and the structure of agencies like the U.S. Agency for International Development and the Consumer Financial Protection Bureau.
With Trump signing more than 75 executive orders since taking office, the unprecedented flood of litigation has yielded mixed results in blocking the president’s unilateral efforts to reshape the federal government. His attempts to freeze funding or rewrite longstanding laws have generally been blocked, but some federal judges have implicitly given him the green light to carry out part of his plan to reshape the federal workforce.
U.S. District Judge John Coughenour — who was nominated to the bench by Ronald Reagan — handed the Trump administration one of its first legal defeats by blocking Trump’s executive order on birthright citizenship and offered one of the fiercest criticisms of his presidency’s early actions.
“It has become ever more apparent that to our president, the rule of law is but an impediment to his policy goals,” Judge Coughenour said. “There are moments in the world’s history when people look back and ask, ‘Where were the lawyers, where were the judges? In these moments, the rule of law becomes especially vulnerable. I refuse to let that beacon go dark today.”
But other judges have stopped short of fully blocking policies they believe might be unlawful, demonstrating how a slower-moving judiciary can be outpaced by a rapidly moving administration. In a case challenging the Trump administration’s effort to fire thousands of probationary employees, U.S. District Judge William Alsup rebuked the administration’s actions but did not step in to stop the indiscriminate firing of employees, despite acknowledging its ongoing harm.
“That’s just not right in our country – that we run our agencies with lies like that and stain somebody’s record for the rest of their life? Who is going to want to work in a government that would do that to them? Probationary employees are the lifeblood of our government,” he said.
The number of lawsuits appear to have tested the limits of the court’s ability to hear emergency applications, particularly in the District Court in D.C., where 51 of the cases have been brought. During one contentious hearing, U.S. District Judge Ana Reyes threatened to sanction a lawyer who pushed the court to accept an emergency appeal while court staff had been “working around the clock on really monumental time sensitive issues,” Reyes said.
“Why on earth could you not have figured that out with the defendants before coming and burdening me and burdening the defendants and burning my staff on this issue?” Reyes told Seth Waxman, a former U.S. Solicitor General under President Bill Clinton who is now representing eight former inspectors general fired by Trump.
Lawsuits challenging the Trump administration have reached the Supreme Court twice, and the Department of Justice has begun their appeals to the Circuit Court in approximately a dozen cases.
While no judge has found that the president has openly defied a court order, the Trump administration has found itself in hot water for failing to comply with multiple court orders, including orders to stop unilaterally freezing funding to states and holding back more than $1.9 billion in foreign aid.
On Wednesday, the Supreme Court narrowly denied the Trump administration’s request to block that payment, marking the first time during this administration that the Supreme Court ruled against the president who nominated three of the court’s nine justices. In a dissenting opinion, Justice Samuel Alito remarked that he was “stunned” by the decision.
“Does a single district-court judge who likely lacks jurisdiction have the unchecked power to compel the Government of the United States to pay out (and probably lose forever) 2 billion taxpayer dollars? The answer to that question should be an emphatic ‘No,’ but a majority of this Court apparently thinks otherwise,” Alito said.
Alito’s criticism comes as Trump’s allies including Vice President JD Vance and Elon Musk have criticized the power of judiciary to slow some of the administration’s agenda. Vance publicly suggested defying a court order, and Musk is increasingly calling for the judges who block the administration to be impeached.
“The only way to restore rule of the people in America is to impeach judges. No one is above the law, including judges,” Musk said in a recent post on X.
While the first two months of the Trump administration has yielded a torrent of lawsuits, the cases themselves are expected to take months and potentially years to play out as the courts weigh the limits of Trump’s authority.
(WASHINGTON) — Economists say the uncertainty from President Donald Trump’s tariff threats and mass layoffs of government workers are starting to have a “chilling” effect on the U.S. economy.
“It’s a very difficult business environment, because they can’t plan for what their cost structure is going to be,” said Rachel Ziemba, an adjunct senior fellow at the Center for a New American Security. “It’s adding to investment uncertainty, and some people are holding back on investments.”
Trump has so far imposed 10% tariffs on Chinese imports and says he’ll impose additional 10%, plus 25% tariffs on Canada and Mexico on March 4. Trump also says he will impose “reciprocal tariffs” that match the duties other countries levy on the U.S. That comes on top of tariff plans on cars, semiconductors, steel and aluminum. Even if Trump doesn’t ultimately move forward with all his tariff threats, the mere uncertainty has a chilling effect.
“If one of the inputs of your factory goes up by 25%, you might cut your production and say maybe we’ll have to fire some people,” Ziemba added.
Meanwhile, the Department of Government Efficiency’s slashing of the federal workforce across the country “also impacts consumption, because people are losing their jobs or are afraid of losing their jobs, so that might cause them to save more money,“ Ziemba said.
This week, The Conference Board’s consumer sentiment survey found that it registered the largest monthly decline since August 2021.
“Views of current labor market conditions weakened. Consumers became pessimistic about future business conditions and less optimistic about future income. Pessimism about future employment prospects worsened and reached a 10-month high,” said Stephanie Guichard, senior economist for global indicators at The Conference Board.
“Average 12-month inflation expectations surged from 5.2% to 6% in February. This increase likely reflected a mix of factors, including sticky inflation but also the recent jump in prices of key household staples like eggs and the expected impact of tariffs,” Guichard said.
The Canada and Mexico tariffs would have a sweeping effect, since those are America’s two biggest trading partners. It could raise prices at the grocery store and the gas pump. Ziemba also noted that the cost of cars could increase by several thousand dollars.
“Every time a car part crosses the border, 25% tariffs could be very onerous,” Ziemba said. “We could see the cost of building a house go up quite substantially.”
