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Employee unions call "deferred resignation" offer illegal

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Trump and Musk pursue efforts to overhaul US government

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Lawyer for unions says buyout done in "slap dash" fashion

(Adds details on USAID and grants in paragraphs 21-23)

By Nate Raymond and Tim Reid

BOSTON/WASHINGTON, Feb 10 (Reuters) - A U.S. judge kept

his block on President Donald Trump's buyout plan for federal

employees in place on Monday while he considers whether to

impose it for a longer period of time.

The decision by U.S. District Judge George O'Toole in Boston

prevents Trump's administration from implementing the buyout

plan for now, giving a temporary victory to labor unions that

have sued to stop it entirely.

More than 2 million federal civilian employees had faced a

midnight deadline to accept the proposal. It is unclear when

O'Toole will rule on the request by the unions.

The buyout effort is part of a far-reaching plan by

Trump and his allies to reduce the size and rein in the actions

of the federal bureaucracy. Trump, who returned to the

presidency on January 20, has accused the federal workforce of

undercutting his agenda during his first term in office, from

2017-2021.

Unions have urged their members not to accept the buyout

offer - saying Trump's administration cannot be trusted to honor

it - but about 65,000 federal employees had signed up for the

buyouts as of Friday, according to a White House official.

Reuters has been unable to independently verify that number,

which does not include a breakdown of workers from each agency.

The offer promises to pay employees their regular salaries

and benefits until October without requiring them to work, but

that may not be ironclad. Current spending laws expire on March

14 and there is no guarantee that salaries would be funded

beyond that point.

At a court hearing, U.S. Justice Department attorney Eric

Hamilton called the buyout plan a "humane off-ramp" for those

frustrated by Trump's decision to reduce the size of the

workforce and end the ability of many of them to work from home.

But a lawyer for the unions said the plan had been carried

out in a "slap dash" fashion with little regard to how it might

disrupt operations at agencies such as the Department of

Veterans Affairs.

"They failed to consider the continued functioning of

government," lawyer Elena Goldstein said.

The administration had initially proposed a deadline of last

Thursday before O'Toole, an appointee of Democratic former

President Bill Clinton, extended it so he could consider the

case.

AGENCIES DISRUPTED

Trump has tasked Tesla CEO and SpaceX founder Elon

Musk, the world's richest person, with overseeing the purge of

federal employees through his "Department of Government

Efficiency," which is not an actual government agency.

Musk's actions have sown panic among federal workers and

prompted public protests. His actions also have led to a flood

of calls to U.S. lawmakers by voters worried about the access

that Musk's team has been given to sensitive information in

government computer systems that contain data on federal

payments to Americans and personal details of federal workers.

Musk aides have taken up senior positions at key government

agencies while the billionaire has pushed for the dismantling of

others, including USAID, the U.S. humanitarian and development

aid agency.

Another Trump lieutenant, White House budget director

Russell Vought, has ordered the Consumer Finance Protection

Bureau, an independent federal agency created after the 2008

global financial crisis, to cease its activities.

Opposition Democrats and federal employee unions have

decried the power Trump has bestowed on South African-born Musk,

who appears largely unaccountable except to Trump himself. Trump

has said Musk does not operate unilaterally but only with the

president's blessing.

SEVERAL LAWSUITS

The unions and Democratic attorneys general have brought

lawsuits challenging Trump's rapid remaking of government and

won some initial victories.

A union that represents CFPB workers has filed a lawsuit seeking

to block Vought's actions, one of several legal challenges that

Trump's administration now faces.

Democratic attorneys general from 22 U.S. states filed a

lawsuit on Monday in Boston challenging sharp cuts to federal

grant funding for universities, medical centers and other

research institutions by the Trump administration.

An effort to hollow out the U.S. Agency for International

Development is partially on hold after a judge's ruling.

In a court filing on Monday evening, the administration for

the first time detailed a legal argument for its authority to

gut USAID.

It said the president's power over foreign affairs is "vast

and generally unreviewable," and it was up to Congress, not the

courts, to push back if it believed the president had violated

the law. Placing employees on administrative leave was a

"personnel question" for which it did not have to give any

reason.

Trump's effort to freeze trillions of dollars in federal

loans, grants and other financial assistance has also been

paused in a separate case. A federal judge in Rhode Island on

Monday ruled that the administration must restore all domestic

funding while he considers the case.

Also on Monday a judge temporarily blocked the Trump

administration's sharp cuts to federal grant funding for

universities, medical centers and other research institutions.

On Saturday, a judge temporarily blocked Musk's entity from

accessing government systems used to process trillions of

dollars in payments at the Treasury Department.