• An AI-generated video of Trump sucking Musk's toes was shown on TVs at the HUD office.
• The video was emblazoned with the text: "LONG LIVE THE REAL KING."
• "Another waste of taxpayer dollars and resources," a HUD spokesperson said about the video.

When some employees at the Department of Housing and Urban Development came into work on Monday morning, they were greeted with an unexpected sight: office TVs showing what appeared to be an AI-generated video of President Donald Trump sucking the toes of Elon Musk underneath a text that read, "LONG LIVE THE REAL KING."

It's unclear how widely the video was distributed or how long it was displayed. One HUD employee said that by the time they arrived at the building, just before 9 a.m., the video was no longer showing.

"Another waste of taxpayer dollars and resources. Appropriate action will be taken for all involved," HUD spokesperson Kasey Lovett said in a statement to Business Insider.

The White House and Musk did not immediately respond to Business Insider's request for comment.

Two recordings seen by BI seem to show different monitors in the building displaying the video. AFGE union officials also said that they had verified the video was shown at HUD.

According to one HUD worker, the video was all the buzz among staffers this morning, with coworkers passing along their own accounts of the monitors. That worker said that they hadn't received any official communications on the monitors or video. Footage also quickly made its way to reporters, with several posting the video on X and Bluesky.

Monday was the first day that bargaining unit employees at HUD were to return to the office.

One former HUD worker, who was recently terminated as part of probationary worker cuts, said the video was "funny as hell."

"I have been in shock since seeing it," they said. "And immediately shared it with anyone I could."

The video comes as workers across the federal government contend with large-scale terminations of probationary employees. The Associated Press has reported that HUD could see sweeping cuts, with half of the workforce reportedly set to be slashed.

Over the weekend, the Office of Personnel Management emailed federal workers under the subject line "What did you do last week?" The email asked workers to submit five bullet points on what they had accomplished the past week. Some federal agencies directed their workers not to respond to the email, while at least one — the Social Security Administration — told workers to reply and treat it as an opportunity to highlight their work.

For now, according to another HUD worker, the monitors have been turned off, and people have moved on.

"Everyone was talking about it this morning," the worker said, "and then it's back to business on housing policy."

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• The IRS fired probationary workers this week, claiming they weren't critical to tax filing season.
• The agency had already been struggling in recent years to keep up with tax return processing.
• One expert said there's no way to cut a large number of workers without affecting filing season.

Your tax return may languish on an empty desk at the Internal Revenue Service this season after the agency began firing workers this week.

An internal IRS email viewed by Business Insider said the agency would terminate probationary workers — typically employees who have been at the agency for less than a year — who were not "critical" to tax filing season.

Tax experts and IRS employees told BI they expected the terminations to result in delayed tax refunds, slower customer service, and a backlog in paperwork processing. Some spoke with BI under the condition of anonymity.

Natasha Sarin, a professor at Yale Law School, said there's "no way, in the middle of filing season, to cut a substantial number of IRS employees without having an impact on filing season," adding that it's an "all hands on deck" time at the agency.

Many Americans still file paper tax returns, a human resources worker at the IRS said, adding: "If there's not anyone there to process them, it's just going to be sitting."

A former Treasury official likened the situation to a business "eliminating your entire accounts receivable department," adding: "No business would say we have no interest in collecting the revenue that's due to us."

The IRS did not immediately respond to a request for comment. Kevin Hassett, the director of the White House National Economic Council, told reporters on Thursday that the estimated 3,500 firings "is a small number and probably you can get bigger, especially as we improve the IT at the IRS." He added that not all IRS employees working on taxes were "fully occupied."

In the wake of the pandemic, the IRS struggled with a backlog of millions of returns, taking months to process them, which caused economic hardship for some taxpayers.

Sarin, who served as a counselor to Janet Yellen when Yellen was the Treasury secretary, said that the terminations could throw the IRS back into the "dark ages." Taxpayers should be concerned about whether they'll be able to get in touch with the IRS, whether refunds will be processed in a timely manner, and whether the IRS website will malfunction during tax season.

A fired IRS worker said: "The long-term ramifications of this will be felt for decades."

They added: "There will continue to be processing delays due to incredibly outdated systems, and there will not be supported free filing for Americans due to budget cuts and lobbying by major tax software players."

"It's just going to slow the IRS down," one IRS worker who still has a job at the agency said, adding: "It's a shame that all the progress is going to reverse."

They were referencing increased funding from the Biden administration's Inflation Reduction Act, which was meant to mitigate staffing issues. Bolstered by the funding, hiring at the IRS in recent months focused on tax-evasion and fraud-detection staff.

Vanessa Williamson, a senior fellow in governance studies at the Brookings Institution and the Urban-Brookings Tax Policy Center, said during a press call on Thursday that the expected terminations could "disproportionately affect enforcement."

"When you underpay and understaff the IRS, the agency doesn't have the power or the resources it needs to go after wealthy tax evaders with their high-priced lawyers," Williamson said.

"It's going to be incredibly harmful to efficiency at the IRS," the former Treasury official told BI. If the agency can't keep up with existing efficiency programs — like using artificial intelligence to target audits better — compliance will be less effective, they said.

Over the past couple of weeks, various federal agencies have fired their probationary employees as part of President Donald Trump's efforts to slash government spending by reducing the federal workforce. BI previously spoke with over half a dozen fired workers at agencies, including the US Department of Agriculture and the Department of Energy, who said they're planning to fight their terminations.

"We're not going to take this lying down," Melanie Mattox Green, a fired US Forest Service worker, told BI. "We all love our work, and we're planning on fighting and getting our jobs back."

The IRS HR employee said that these terminations, coupled with the federal hiring freeze, could put the IRS behind on its functions into next year.

"If you have filed, or will file a tax return, you are going to feel an impact," they said.

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• The IRS is the latest agency to be hit with probationary worker terminations.
• The firings come as agencies across the government have seen their workforces slashed.
• IRS staff were told of the cuts Wednesday in a memo asking them to be in the office Thursday and Friday.

An IRS worker woke up Thursday morning to find a slew of emails saying they were locked out of work software. By noon, they'd been fired.

"We've been waiting for the shoe to drop since Inauguration Day," an IRS probationary worker told Business Insider before termination letters were sent out. "It's been exhausting and at this point, we are all just ready for the Band-Aid to be ripped off."

Now, the proverbial Band-Aid is off.

A termination letter viewed by BI said the agency was removing probationary staff from their positions based on "current mission needs" and because their "continued employment at the Agency is not in the public interest."

It also said that the termination is "taking into account your performance," which an employee who received the letter called a "bullshit" reason. The letter added that employees can appeal with the Merit Systems Protection Board within 30 days of the termination notice.

Some probationary workers are still waiting to receive word on their terminations. One said that they "just want it to be done." Another is waiting in the office and said the mood is somber.

These terminations could specifically hit the jobs responsible for enforcement and tax evasion. One source who was fired told BI that they were tasked with investigating tax compliance and alerting the IRS of any findings of fraud or evasion.

Vanessa Williamson, a senior fellow in Governance Studies at the Brookings Institution and the Urban-Brookings Tax Policy Center, also said on a Thursday press call that the terminations could "disproportionately affect enforcement" because the Inflation Reduction Act invested in new hires in that department. Firings are focused on probationary employees, many of whom are new hires who have been at the IRS for less than a year.

"When you underpay and understaff the IRS, the agency doesn't have the power or the resources it needs to go after wealthy tax evaders with their high-priced lawyers," Williamson said.

The firings were signaled earlier this week in a memo telling staff to come into the office Thursday and Friday and bring any "government-issued equipment."

It said coming in at short notice "may be an inconvenience, and we truly appreciate your flexibility."

"Under an executive order, IRS has been directed to terminate probationary employees who were not deemed as critical to filing season. We don't have many details that we are permitted to share, but this is all tied to compliance with the executive order," the email, sent Wednesday and seen by BI, said.

The extent of the cuts is unclear, but Office of Personnel Management data showed that 14,130 of the nearly 95,000 federal civilian workers for the IRS had less than a year of service as of May.

The Associated Press reported on February 15 that the agency was set to terminate thousands of probationary workers. On Tuesday, the president of the Kansas City National Treasury Employees Union local — the umbrella union for IRS workers, among others — said that probationary workers were set to be terminated.

A Q&A form sent to the managers of terminated IRS employees — reviewed by BI — on Thursday said that affected workers who were on leave would have their leaves canceled and are expected to report to the office to return their equipment. Employees will be paid for the full day on February 20, the form said, and they're expected to be notified of their terminations by noon that same day.

The National Treasury Employees Union, which represents IRS workers, already filed a lawsuit on February 12 asking a judge to deem widespread probationary worker firings — along with the "Fork in the Road" deferred resignation program — unlawful.

Representatives for the IRS, the White House, and DOGE did not immediately respond to requests for comment.

The cuts at the IRS follow other agencies slashing their probationary workforce, including the Office of Personnel Management.

"Right now, I'm just going from crying to just trying to figure everything out," an OPM worker, who was terminated and is considering where to apply to next, previously told BI.

Some probationary workers from various agencies who were told they were fired on performance-based grounds are already pushing back, with some turning toward their unions and potential litigation.

One attorney expects more job cuts in the federal workforce and thinks they won't just be aimed at probationary workers.

"We're in the mass termination of probationary employees," Michael Fallings, a partner at the law firm Tully Rinckey PLLC, said.

"What's likely next is the reduction in force procedures, which is really the official, correct way to reduce the size of federal workforce that you even saw past administrations utilize," he added.

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• Gen Xers are moving to retirement hot spots for better housing, lower prices, and warmer weather.
• Census data shows a rise in Gen X movers in Florida, central Texas, north Georgia, and Tennessee.
• Movers told BI they sought lower costs and taxes but faced high insurance and utility bills.

Gainfully employed Gen Xers are packing their bags for retirement hot spots.

They're not foregoing the daily grind; instead, 45- to 60-year-olds are increasingly moving their families to warmer locales to take advantage of abundant housing, sunshine, and lower taxes.

Matt Hickman wanted to live somewhere with easy ocean access, good weather, and vibes that echoed his native California. In April 2020, the 46-year-old and his family moved to Orlando, which he said was more affordable than where they had been living in Colorado; a five-bedroom house cost around $90 a foot.

"I said, 'You know what? If we move now in our forties, we can be set up so that we'll have our house halfway paid off by the time we get close to retirement, and we'll have beaten all the baby boomers who are going to move down to Florida and make it more expensive,'" Hickman said.

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Many in his generation seem to be on the same page. An analysis of Census data from 2020 to 2023, exclusively shared previously with BI by University of Virginia demographer Hamilton Lombard, shows that many counties in the south experienced large net increases in movers ages 45 to 54, particularly in Florida, central Texas, north Georgia, and Tennessee. Many New England, Missouri, and Idaho counties also experienced large increases. Meanwhile, much of California, the Midwest, and the Deep South — such as Louisiana and Mississippi — were in the red.

Some of the most popular counties for Gen Xers were those with older populations living in retirement communities — Gen Xers moved to "retirement destination" counties at a net rate of 5.1% between 2020 and 2023, compared to the US growth rate of 1.6%. Lombard suspected this trend was due to ample available housing in these areas and the generation's rising savings.

In interviews with half a dozen Gen Xers who moved further south, most said they appreciated the lower cost of living, slower pace of life, and work opportunities. Still, some said they hated the weather, paid exorbitant insurance premiums, or didn't enjoy the politics.

Hickman's family liked Florida for a time. They landed in a predominantly 55-and-up community, visited a theme park often, and went to the beach six months of the year, but the humidity started to weigh on them. Plus, their homeowners' insurance was $3,500 a year, property taxes soared, and they spent hundreds a month on utilities. As expenses — and bugs — piled up, they decided it was time for another change.

Hickman and his family landed in Atlanta, where they found a younger community along with cheaper utility and insurance bills.

Moving south to save money, but not everything is cheaper

Many movers told BI they moved south to save more in preparation for retirement, though some discovered prices are, in some cases, much higher.

Randy Foster, a music promoter, lived all over the Eastern Seabord but moved to Seattle in 2015. With rising prices in his area and nine months of no sun a year, he wanted to move south.

After a recent divorce, Foster, 55, settled in Florida's Bradenton-Sarasota area in 2022, where his cost of living fell dramatically. Though he now has a car in Florida, he estimates he's saved about 30% compared to Seattle.

"I decided that Florida offered more opportunity, more freedom for me, more freedom to choose," Foster said. "I spent a heck of a lot less on rent and all of my bills now than I did in Seattle."

While he paid $3,000 monthly for a three-bedroom Seattle apartment, he pays about $2,000 in Florida for a four-bedroom house with a yard. His electricity bill is about 50% more in Florida, though his other utilities stayed consistent.

He said he enjoys earning $160,000 annually in a state with no individual income tax. Though he said he only has about $30,000 saved, as he hasn't prioritized his retirement planning until recently, he believes he can continue saving more in Florida.

Escaping high taxes

Some movers said they left for Southern states with fewer taxes and better business environments.

Tracy Rockney, 57, worked in pharmaceutical regulatory affairs and built a consulting firm. The mother of three considered some southern states when deciding to leave Illinois but found Florida unappealing due to its humidity, hurricanes, and aging populations in the areas they considered. Her husband's college roommate encouraged them to move to Dallas-Fort Worth.

"We would rather live a community where there's a mix of races and cultures and ages," Rockney said.

In 2020, she moved to a Dallas suburb with her retired husband and their youngest daughter to limit her tax liability — Texas has 0% state income tax — and to improve her daughter's education quality. She sold the Illinois home for $795,000 and bought her current Texas home for about $1.1 million.

She's found the healthcare options better in Texas, and she said prices are generally lower than Illinois'. Rockney sold her business in August 2022 and left her most recent role as an executive vice president in late 2024.

She's appreciated lower grocery prices, though her water bill skyrocketed to $150 monthly. Landscaping costs are "really expensive," for which she budgets between $5,000 and $10,000 annually.

She appreciates Texas' many outdoor activities, and her husband is the youngest person in his skydiving group. She said Texas' business-friendly environment may help her when she starts up new entrepreneurial ventures.

"We kick ourselves and say we wish we'd done this move sooner," Rockney said. "I wish I'd done it maybe when starting my business in 2015."

Taking advantage of remote work

Some movers told BI they left the commotion of busier, more expensive cities for more rural areas while working remotely.

Elisa Suetake, 51, is hovering somewhere between retirement and work.

Suetake and her husband spent six years in San Jose, working in Silicon Valley. The couple would go to Hawaii three to four times a year but thought they could never work from there without getting cabin fever.

The pandemic, however, proved that wrong. In July 2021, they moved to Maui, tripling their property size for just $250,000 more than their San Jose home.

Their new property has a main house with five bedrooms, with an attached ADU, and there's an additional smaller structure with three bedrooms. They plan on remodeling and renting out the smaller house while keeping the attached apartment for guests.

Suetake said that neither she nor her husband are planning on retiring traditionally — they'll never stop working, but they will stop working for someone else.

"We're never bored. We're always learning something," Suetake said. "It's just that we don't have a dedicated income stream from a company."

• Around 60 probationary employees at the Office of Personnel Management were terminated via video call on Thursday.
• The fired employees were told they would lose access at 3 p.m. ET.
• Two employees told BI that union representatives were not present on the call.

Dozens of probationary employees at the Office of Personnel Management were fired in a group video call Thursday afternoon and told their accounts would be deactivated by 3 p.m. ET, around 20 minutes after the call began.

"You will receive your termination notice via email shortly, and it will include the reason for termination," an official said on the call, according to a recording viewed by BI.

"As a result, your employment with the Office of Personnel Management will end today," the official said. "Your physical and IT system access will be deactivated by 3 p.m. ET today, and we ask that you gather your personal belongings and exit the premises by 3 pm ET as well."

A source familiar with the call also confirmed the terminations.

Two probationary employees told BI that around 60 people were on the call. They asked to remain anonymous; BI has verified their identities.

BI reviewed a screenshot of an email one probationary employee received earlier this afternoon with the subject line "URGENT MEETING MUST ATTEND."

An original call was scheduled between 2:00 and 2:30 pm ET, though no officials ever joined. Around 2:30 pm, employees received an invitation for another meeting, where the mass termination was announced.

After the second meeting ended, workers received a follow-up email with details about their terminations.

Two employee termination letters, copies of which were seen by BI, were from Charles Ezell, OPM's acting director.

A probationary employee at a federal agency has either worked in a career position for less than a year, or for less than two years in an expected service appointment that didn't require a competitive hiring process.

The two employees told BI that union representatives were not present on the call. Union officials at AFGE confirmed the terminations, and said that representatives were not in the meeting.

Representatives for the White House did not immediately respond to a request for comment.

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• Some probationary workers in the Small Business Administration have been fired, unfired, and re-fired.
• BI spoke to two workers who received termination notices that later got rescinded.
• Those workers both ended up getting terminated despite trying to take buyouts.

Small Business Administration probationary workers were told they were terminated, then not terminated, and then officially terminated, all within five days.

According to emails seen by Business Insider, workers received termination notices on February 7 set to take effect two weeks later, only to get an email on Monday rescinding those notices as "draft letters sent in error." On Tuesday, the workers received new termination letters, this time effective that day — just minutes after President Trump signed an executive order to reduce federal hiring.

"I'm in disbelief. My directors are shocked too since they didn't even know I had been terminated until I called them," said one SBA probationary worker, who requested anonymity due to the sensitivity of the situation.

"This is the government. You would think it would be more organized," said Stacy, a probationary worker who requested to be identified only by her first name. "I've never encountered anything like this."

The termination, un-termination, and re-termination come amid the Trump administration's attempt to reduce the size of the federal workforce. Since taking office, the White House has attempted to shutter USAID, mandated a return to office for all workers, and and implemented a "deferred resignation" program offering buyouts to federal employees. Overseen by the new Department of Government Efficiency headed up by Elon Musk, 65,000 federal workers have accepted buyout offers, according to the White House, while unions challenge the moves in court. Bloomberg News first reported the reversals at the SBA.

As of Wednesday, both Stacy and the other SBA worker were still being asked to attend large team meetings, even after receiving termination notices. The probationary SBA worker said they lost email and Teams access during one meeting, forcing them to dial in via personal cellphone.

All three termination documents directed workers to contact an SBA paralegal for appeals but the phone number listed connects to a luxury apartment leasing company's voicemail. An email sent to an address matching the paralegal's name went unanswered.

After the initial termination notice, Stacy and the other SBA worker attempted to take the administration's "Fork in the Road" deferred resignation proposal, which offers to pay departing federal employees through September 2025. "Multiple coworkers took the 'Fork in the Road' offer after learning about my termination because they feared they would be next, although they are unsure if they'll even see a dime from that offer," the anonymous worker said.

The White House, DOGE, and the SBA did not immediately respond to BI's request for comment.

On Tuesday, Trump signed an executive order to reduce federal hiring. Trump was joined in the Oval Office by Elon Musk, who's been leading the charge on the new Department of Government Efficiency, or DOGE; the executive order directs agency heads to work alongside DOGE for new hires.

"I don't like that federal employees are viewed in such a negative light," the SBA worker said.

"We are hardworking people, just like those in the private sector. We are not the enemy."

Stacy said she understands the need to scale down — she believes there are many people working for the government who should not be. But she doesn't agree with the current methodology for making cuts, which she called a "slash job."

"Cutting the government — doing it this way — is not the right way," she said.

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The Silicon Valley mindset has swept through Washington, DC.

Over the past 17 days, Donald Trump and Elon Musk have quickly applied the industry's "move fast and break things" maxim as they seek to remake the federal workforce.

The pace stands out, even for a president whose promises of swift action were central to his campaign.

"Forget the 100 days," said Sen. Joni Ernst, the Senate's DOGE Caucus leader, while speaking with Musk during a live broadcast on X. "It's going to happen a lot faster than that."

One federal worker told Business Insider that the flurry of action might be the entire point.

"It seems clear to me that they're just trying to wage a campaign to shock and demoralize federal workers," the worker said.

"It was obvious that things were going to be bad for federal workers with Trump and Elon," another longtime federal employee said. "What initially alarmed me is how fast everything is moving and changing."

If the Trump administration has worked swiftly, the courts have not. At least 33 legal challenges have been filed against Trump's 18 actions; judges have stopped three of those actions from taking effect.

All of this has left workers to navigate a shape-shifting patchwork of executive orders, agency directives, and advice from officials. And it comes amid a looming February 6 deadline to take a "deferred resignation" offer.

"The experience as a federal employee is every day, or every two days, you receive some new, extreme demand but no guidance or clarity on how it is supposed to be achieved," an employee at the US Agency for International Development said.

Here's how the first 17 days of Trump and Musk's clash with the federal workforce played out.

January 20: Day one

On the day of his first inauguration, Trump signed one executive order. This year, on the day of his second, he signed 26.

One executive order brought DOGE, Musk's government disruption squad, inside the White House. It repurposed the US Digital Service, an Obama-era mandate to bring private-sector know-how to federal websites and technology contracts.

The initial order seemed to suggest DOGE would lead a "software modernization initiative." It soon became clear the Musk-led outfit would exert its influence over a raft of federal agencies. A primary focus was shrinking the nation's workforce; other executive orders, including a return-to-office mandate for remote federal workers, followed suit.

Within minutes of Trump's swearing in, lawsuits against DOGE began trickling in. Hours later, its first member departed: Vivek Ramaswamy, the co-leader who helped write an op-ed article in The Wall Street Journal outlining DOGE's vision, announced he was stepping aside.

January 21: 'A hostile takeover'

On Trump's first full day in office, the Office of Personnel Management asked agencies to put together lists of workers they could easily fire, including probationary employees, which typically includes those in their first one or two years on the job. (A spokesperson for OPM referred BI to past statements and declined to comment.)

"I'm still crossing my fingers that I'll slip under the radar," one such employee told Business Insider.

DOGE representatives conducted interviews with USDS employees about their work and asked which colleagues could be fired, according to two people who were involved in these conversations. One told BI it felt like "a hostile takeover."

Publicly, DOGE was busy posting on X about the high cost of minting pennies.

Two more executive orders crossed Trump's desk, including one that undid decades of executive orders on affirmative action and equal employment opportunity.

January 22: Job offers clawed back

Following news of a federal hiring freeze, job offers to some candidates were revoked.

The Office of Personnel Management also ordered agencies to place all DEI employees on leave; the White House press secretary, Karoline Leavitt, wrote on X that she could "gladly confirm!" the news.

One longtime federal worker said their DEI team was "shut down within days."

DOGE also began eyeing other places to cut costs, including a new embassy in South Sudan.

January 23: DOGE loses another high-profile official

William McGinley confirmed his departure as DOGE's general counsel and told The Wall Street Journal that he was considering roles in the private sector.

"I support President Trump, Vice President Vance, and the great teams in the White House and across the administration 100%," McGinley told the Journal.

January 24: 'Rapid unscheduled disassembly'

The AP-NORC Center for Public Affairs Research released the results of a poll conducted roughly a week before Trump's inauguration that found support for DOGE was low, though most respondents said corruption, inefficiency, and red tape were major problems within the federal government.

At 1:46 p.m. ET, DOGE posted that $420 million worth of current and pending contracts had been canceled, along with two leases. ("Unoccupied buildings" were said to be part of the "initial focus.") Based on some back-of-the-envelope math, that number put DOGE way behind schedule.

That day, a federal worker told BI that the breakup of a SpaceX rocket the week before — described by the company as a "rapid unscheduled disassembly" — was a metaphor for the government.

"I feel like that's where we're heading," she said.

January 26: DOGE puts up its 'Help Wanted' sign

After a relatively uneventful day, DOGE was back in action. Its X account posted that it was looking for "world-class talent to work long hours identifying/eliminating waste, fraud, and abuse" and posted a job application portal. The application asked candidates to provide two to three bullet points "showcasing exceptional ability."

DOGE also added to its cost-cutting tally, posting that 16 Diversity, Equity, Inclusion, and Accessibility contracts — $145 million in total — had been canceled. BI has not been able to verify any of the claims about the value of canceled contracts.

Meanwhile, the State Department said it was pausing all US foreign assistance funded via USAID amid a review.

"President Trump stated clearly that the United States is no longer going to blindly dole out money with no return for the American people," a press release said. "Reviewing and realigning foreign assistance on behalf of hardworking taxpayers is not just the right thing to do, it is a moral imperative."

January 27: The freeze

DOGE said the General Services Administration had terminated three leases of mostly empty office space for savings of $1.6 million. DOGE also reported that GSA had repealed three internal DEIA policies and eliminated public-facing websites and language centered on DEIA.

In response to the news that USAID officials had been placed on leave, Musk posted two gun emojis.

Around 5 p.m. ET, the Office of Management and Budget sent a memo to executive branch agencies announcing a freeze on federal grants and loans.

The federal funding pause blindsided federal workers.

Federal agencies and nonprofits were left scrambling to figure out what came next. Aaron Fritschner, the deputy chief of staff for Rep. Don Beyer, a Virginia Democrat, said it was "total chaos" and "really, really awful."

"Our phones were ringing off the hook, we had grant-funded businesses and organizations telling us they were preparing large-scale layoffs if the freeze continued for more than a few days," Fritschner said.

January 28: The Fork

A federal judge blocked the federal funding pause shortly before the 5 p.m. ET, roughly 24 hours after it the memo was first sent out.

Thirty minutes later, federal workers received an email from OPM about "deferred resignation" — an offer to resign by February 6 and receive pay and benefits through September. The subject line, "Fork in the Road," echoed a similar message sent to employees at X, then Twitter, in 2022.

Workers said they were shocked and suspicious about the offer, though some seemed intrigued by it.

"I voted for Donald Trump twice, and on January 20 I had hope that he would fulfill his promises," one federal employee told BI on January 28. "However, when I received this email at 5:35 p.m. EST, that hope disappeared."

"You could feel the energy shift in that moment," said one federal worker who was at a scientific conference when they received the email. "People filed into the hallways, immediately on the phone, sending emails, discussing their confusion."

DOGE continued to use X as its press room, posting about doubling federally pumped water in Southern California.

January 29: A memo is rolled back

OMB's memo outlining the freeze on federal grants and loans was officially rescinded. The White House, though, argued that only the memo was rescinded, not the freeze itself.

"The President's EO's on federal funding remain in full force and effect, and will be rigorously implemented," Leavitt wrote on X.

US District Judge John McConnell said he was inclined to grant a temporary restraining order in relation to the freeze in a lawsuit brought by a slew of Democratic attorneys general.

In response to widespread confusion over the deferred-resignation offer, DOGE posted an FAQ, which said workers wouldn't be expected to clock in during their resignation period. (The FAQ was later updated with strong encouragement to join the private sector.)

DOGE also touted new savings: canceling $45 million for DEI scholarships in Burma. In total, it said, 85 DEIA contracts had been canceled.

January 31: The freeze thaws

McConnell, the district judge, officially granted a temporary restraining order that paused the funding freeze for the states involved in litigation.

"Congress has not given the Executive limitless power to broadly and indefinitely pause all funds that it has expressly directed to specific recipients and purposes and therefore the Executive's actions violate the separation of powers," McConnell wrote.

DOGE, meanwhile, posted a spreadsheet outlining canceled contracts and their subsequent savings, totaling almost $1.3 billion.

February 2: 'A ball of worms'

At noon ET, Musk posted that USAID was a "viper's nest of radical-left marxists who hate America." At midnight, he held the X livestream with Sen. Joni Ernst.

"What we have here is not an apple with a worm in it; what we have here is a ball of worms," he said.

"It's got to go. It's beyond repair," he added.

Lease terminations increased to 22 over six days, DOGE said, saving $44.6 million. DOGE didn't forget about pennies, but an unidentified DOGE spokesperson passed the buck to the Treasury.

February 3: Mr. Musk goes to Washington

A White House official confirmed that Musk was a special government employee, DOGE said 20 consulting contracts worth $26 million had been canceled, USAID employees were told to stay home after Musk said the agency should be shut down, and Secretary of State Marco Rubio said he was the agency's acting administrator.

February 4: Early results of the payout offer arrive

The White House said more than 20,000 federal workers had opted to accept buyouts. An OPM spokesperson told BI that the "number of deferred resignations is rapidly growing" and that the office was "expecting the largest spike to come 24-48 hours before the deadline."

A worker at OPM said that they were told cuts were possible and that career executives had been asked to prepare briefs on their work and the statute basis for it.

By that evening, USAID's website was updated with a note: Nearly all direct-hire personnel of the agency, which has about 10,000 employees, would be placed on administrative leave on February 7.

After reports that DOGE was poking around Treasury Department data, agency official Jonathan Blum told Congress that it was "read-only access." Sen. Elizabeth Warren said the response "raises more questions than answers." A union lawsuit alleged that Treasury Secretary Scott Bessent violated federal law by sharing Treasury data with DOGE.

February 5: Crunch time

As the deadline to accept the deferred-resignation offer bore down, federal workers expressed confusion over the terms — and weighed whether it was worth it to make the life-altering call.

"This was sent out indiscriminately to everyone with no concern for the effect it could have, and depending on who and how many take this 'offer' it could have national security implications," one of the longtime federal workers said.

"They are like time-share salesmen trying to meet a quota and failing!" another federal worker said.

Democrats in Congress continued to sound the alarm.

Sen. Ron Wyden said DOGE's access to data at the Treasury Department showed "they are seizing the tools they need for a coup."

Alice Tecotzky, Ayelet Sheffey, and Noah Sheidlower contributed reporting.

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• February 6 is the deadline for federal workers to accept or decline Trump's deferred resignation offer.
• On Tuesday, the White House said over 20,000 workers had already accepted the buyout.
• Some workers told BI they're still unsure whether the offer is the best choice for them.

Civil servants have hours left to decide whether to accept a buyout offer that could change their lives. Many don't feel prepared.

"I'm feeling like I need to make a decision when I don't have all the cards on the table," a 17-year federal employee said, adding that they voted for President Donald Trump but felt confused about the buyout offer. All federal workers who spoke to BI were granted anonymity and their identities have been verified.

February 6 is the deadline to accept the Trump administration's deferred resignation offer, which said it would pay federal workers through September 30 — without the requirement to work during that time — if they agree to resign.

BI spoke to over a dozen federal workers for this story, and many of them said they still have unanswered questions about retirement benefits, return-to-office requirements, and resignation payments, among other things.

Others have already made up their minds. Over 20,000 federal workers have accepted the buyout offer as of Tuesday, per the White House, and an OPM spokesperson said that the number of resignations was "rapidly growing," Business Insider previously reported.

Still, more workers reported feeling angry about the offer because they felt it failed to respect their years of service to the federal government.

"Fork Them!!" one federal worker told BI in response to the official resignation agreement circulated among employees this week — originally announced in an email titled "Fork in the Road" — saying that it "reeks of desperation."

"All of the emails and directives we've been receiving from [email protected] reek of social engineering, gaslighting, and a very strange brand of corporate groupthink," a longtime federal worker said, referring to the widely noticed similarities between the federal government's buyout offer and Elon Musk's X playbook.

Meanwhile, another federal worker previously told BI that they wanted to give the administration the benefit of the doubt given Trump's second term has only just begun.

Below are three of the main questions that federal workers said still remain unanswered.

How would a deferred resignation impact retirement?

Some of the workers BI spoke to said retirement benefits and how they would work with the buyouts made them nervous to accept.

One federal employee told BI that they're not considering the buyout because of pension requirements that specify 5 years of work in the federal government. They're worried accepting the resignation would impede those benefits.

"I'm in the middle of my working career and trying to continue building my retirement," they said.

The Office of Personnel Management posted an FAQ with additional details on the buyout. It said that employees who accept the offer will continue to accrue retirement benefits over the next eight months.

Additionally, it said that employees who are at least 50 years of age with 20 years of federal service are eligible for VERA, or Voluntary Early Retirement Authority, which allows agencies who are undergoing structural changes to expand the number of employees eligible for retirement.

How would the government funding deadline impact paychecks?

Labor unions representing workers have already raised alarm bells over the proposed buyout package since it offers pay past the date through which the government is funded. A February 5 legal challenge from several unions, including the American Federation of Government Employees, argues that, for most federal agencies, the current appropriation ends on March 14 — but the new directive is authorizing expenditures beyond that date.

"The Antideficiency Act forbids such a guarantee," the complaint said, referring to a law that, in part, bars agencies from expending or obligating funding ahead of an appropriation.

One federal worker noted concerns that should the government shut down, workers who took the offer could lose some money.

"What some people might not understand is the budget is only approved through March," they said. "The thought is they will kick the can down the road until the end of the fiscal year, but if that doesn't happen, people who take this offer could be out a lot of money."

Another federal worker said that "we're all concerned" about the payment beyond the date that the government is funded through and that "there's currently no precedent set for this type of offer."

The agreement template and FAQs circulated addressed a potential funding pause — the agreement said that should appropriations lapse, employees will be placed on furlough and then given backpay for that period.

Why the short timeline and could the offer be extended?

The deferred resignation agreement said that employees must work through February 28 to "ensure a smooth transition," and will be placed on leave no later than March 1. Workers also have to agree that they will not "pursue through any judicial, administrative, or other process" action against their respective agency, and that they're entering the agreement free from coercion or duress.

Additionally, the OPM FAQ said that the option to accept the deferred resignation "will generally not be available" for those who resign after February 6, while certain exceptions might be made for those who were on leave during the past couple of weeks.

Even so, the 17-year federal employee said that they wished the administration would extend the February 6 deadline to allow them to gather more information to determine if the buyout is the right choice. A group of federal worker unions filed a lawsuit on Tuesday seeking to extend the deadline, calling it a "short-fused ultimatum which workers may not be able to enforce."

"I would love to see some type of hold on the date to make the decision," the employee said. "We shouldn't have to make a major life decision in nine days."

Did you accept the federal buyout? Are you a federal worker with something to share? Reach out to these reporters at [email protected] and [email protected], or contact them securely on Signal at asheffey.97 or julianakaplan.33.

• The Office of Personnel Management updated its FAQ page this week to encourage private-sector work.
• The update, coming after federal workers got payout offers, calls private jobs "higher productivity."
• The Department of Government Efficiency said on X that workers could use the time off to "chill."

The Trump administration has a novel idea for federal workers who take its payout offer: Go work for corporate America instead.

"We encourage you to find a job in the private sector as soon as you would like to do so," the Office of Personnel Management's FAQ page now says. "The way to greater American prosperity is encouraging people to move from lower productivity jobs in the public sector to higher productivity jobs in the private sector."

The addition was made sometime between Wednesday night and Thursday afternoon, according to snapshots on the Internet Archive's Wayback Machine. The updated FAQ page, which includes several other tweaks, was also sent out to some federal workers, a National Park Service employee told Business Insider.

If white-collar work doesn't appeal to someone, the administration lists some tantalizing possibilities: "You are most welcome to stay at home and relax or to travel to your dream destination," the page says. "Whatever you would like."

In a post this week on X, the Department of Government Efficiency also touted things federal employees could do with their time off: Take a dream vacation, watch movies, or "chill." Musk also reshared a post advertising the payout as a "PAID VACATION!"

Representatives for DOGE did not respond to a request for comment.

OPM sent out the initial offer to federal employees on Tuesday. The administration is giving workers a choice: Resign by February 6 and receive full pay and benefits through September, or stay on and face likely downsizing and a return to in-person work.

A spokesperson for OPM told BI that some federal employees had expressed confusion about the nature of the payout. The agency updated the FAQ page to provide clarity, the spokesperson said.

One federal worker previously told BI they would look for work outside the government. Another said on Friday that they didn't understand the nudge toward the private sector.

"People who work for the government are public servants," they told BI. "They do it for the joy of serving their country, community, or helping people."

The guidance comes as Trump's administration has aligned itself with several private-sector leaders. Chief among them is Elon Musk, whose work with DOGE has advocated for reducing the size of the federal workforce. Now formally situated inside the White House, DOGE has weighed in on recent actions regarding federal employees, including a recent return-to-office mandate.

Do you work for the federal government or have a tip? Reach out to the reporters from a nonwork device: [email protected] and [email protected] or via Signal at alicetecotzky.05 and julianakaplan.33.

• Trump has said he'll institute tariffs on imports from China, Canada, and Mexico by February 1.
• Small businesses are bracing for potential price hikes and supply chain disruptions.
• Some stocked up ahead of time in hopes of keeping prices steady, others are in wait-and-see mode.

Customers at Mellow Monkey, a home decor and gift store in Connecticut, sometimes ask owner Howard Aspinwall why so many of his products are made in China. In response, he shows them the products he sources from the US — and their higher price points. He said they usually balk.

"Their wallet can only support buying from China," he said, adding, "The problem I see at the retail level is customers don't want to pay higher prices for the products that they're buying now."

But it looks like buying some imported goods is about to get more expensive. Trump has said he would enact a 25% tariff on goods from Canada and Mexico by February 1 with a potential 10% tariff on Chinese goods also on the table.

More than half a dozen small business owners BI spoke to are waiting to see how their goods might be impacted. Some placed advanced orders; others are negotiating new deals and finding new suppliers. One, who specializes in holiday goods, is sitting back, waiting, and hoping they don't have to go out of business.

The uncertain impact of tariffs

Angie Chua is the owner of the stationery line Bobo Design Studio, which has a retail location in Palm Springs, California, and imports goods from China. She started worrying about tariffs around the time of the election but wasn't sure if Trump's plans would ever come to fruition. As his self-imposed February 1 deadline nears, she's getting more concerned.

Unlike some artist friends she spoke to who put in orders early in case of price increases, Chua didn't want to expend too much upfront cash. For now, her orders from China are set to come in before February 1. If prices do rise, Chua said the business will remain transparent about growing costs.

"We might add an extra service fee," she said, adding that she may message to her customers that "this is a Trump tariff fee. This is not anything that we can control."

Upon taking office, Trump laid out his plans to use tariffs to enrich the US economy. So far, he's used them as a bargaining chip with Colombia. He told reporters in the Oval Office on Thursday that he would enact tariffs on goods from Canada and Mexico to incentivize the two countries to help mitigate America's fentanyl crisis. He also previously said he would consider a 10% tariff on China for the same purpose.

"In his first administration, President Trump instituted tariffs that resulted in historic job, wage, and investment growth with no inflation," White House Spokesman Kush Desai said in a statement to BI. "In his second administration, President Trump will again use tariffs to level the playing field and usher in a new era of growth and prosperity for American industry and workers."

Economists have warned that sweeping tariffs could lead to price hikes for consumers, and analysis has found that tariffs could reduce GDP and cost the equivalent of hundreds of thousands of jobs. However, tariff advocates have said that the levies can be an important negotiation tool — and potentially incentivize domestic production. President Joe Biden imposed tariffs on Chinese EVs in an effort to bolster US automakers.

"Tariffs play an important role in our trade policy when used in a strategic manner to really go after certain specific trade issues," Jonathan Gold, the vice president of supply chain and customs policy at the National Retail Federation, said. "I think the concern is going broad-based and hitting everyday consumer essentials."

Richard Kligman, the co-owner of two Trump Superstores in South Carolina, said that tariffs are not currently an issue for the store. He hasn't heard from any suppliers saying that prices are going up to reflect a tariff. He's already well-positioned because the store increased its domestic suppliers during the pandemic, and he said he doesn't have a problem finding new merchandise — every day, he has someone calling to offer a new Trump product for them to sell.

Kligman said though he's heard tariffs could lead business owners like him to raise prices for customers — which he would have to do if their raw materials prices were going up — that's currently not the case.

"I can only look at it from the perspective of my business and in my business it hasn't become an issue," he said.

Some businesses are stocking up, others worry about price hikes

Paulina Hoong recently ordered 5,000 tote bags from China. That's at least 10 times the usual order for her small business. She's stocking up in case President Donald Trump levies his promised tariffs on China on February 1.

"I am really anxious, actually, because I am uncertain if the whole stock will sell out," the owner of Menmin Made said.

Rebecca Haacke has also been stocking up on custom dog gear for her Utah-based business River Dog Gear. Haacke imports about 90% of her supplies, the majority from China; she's been stocking up as much as she can afford to fend off raising prices as long as possible.

"I haven't changed my shop prices and I'm trying hard not to as long as possible because my customer base are mostly disabled service dog handlers and they will be hugely impacted by any price increase," Haacke said.

And prices might be top of mind for consumers.

"Just the mere mention of these tariffs have a lot of us in a tailspin," Joe Hakim, the general manager of Ackroyd's Bakery in Michigan, told BI. The bakery imports items through distributors; most goods come from the United Kingdom, and some packaging is from China. Any tariff would stretch the bakery's already thin margins, he said. "All of these costs are being hoisted upon the shoulders of small business, which then have to be placed into our pricing structure."

Elizabeth Hudy, the owner and creator of The Peach Fuzz — which Hudy described as making "agitational propaganda" encouraging people to "give a damn about their neighbors and their community and to resist fascism" — put in an order for around $15,000 worth of supplies in the last two months of the year. Hudy said that they usually order 90 day supplies, but were doubling up this time around.

Gold at the NRF noted that some of their smaller retailers have shared concerns about their ability to operate should tariffs go into effect, a sentiment Hudy and other business owners echoed.

Hudy said she wished more people understood how tariffs work and that businesses like hers — and their customers — tend to pay them. "It isn't paid by the country that you're waging these tariffs against. It's paid by the importer — it's paid by me."

Are you a business or consumer who might be impacted by tariffs? Contact this reporter at [email protected].

• The White House told federal workers they could voluntarily resign by February 6 and be paid through September.
• The offer follows the Trump Administration's efforts to overhaul the federal workforce.
• Many workers BI talked to were defiant, but some are moving on, or taking a wait-and-see approach.

Shock and outrage. Hopelessness, suspicion, and defiance.

Federal workers say they feel a mix of all of the above and more after payout offers landed in their inboxes late Tuesday. The Trump administration says workers can either return to the office full-time and face likely downsizing, or quit now and keep getting paid for the next eight months.

"I voted for Donald Trump twice, and on January 20th, I had hope that he would fulfill his promises," one federal employee told Business Insider. "However, when I received this email at 5:35 pm EST, that hope disappeared."

A Social Security Administration employee said that workers aren't the only ones at risk. "The public will suffer the most and the only group they can blame is the current one."

Or, as a 15-year veteran of the State Department put it: "They can fuck off and we won't be intimidated."

Business Insider spoke with more than a dozen workers at departments across the government in the hours after the email was sent. They requested anonymity to speak openly about their jobs. Their identities are known to BI.

Some are digging in their heels.

"I have no intention of quitting," one employee wrote in a text message.

According to a "deferred resignation offer" email sent by a White House office, workers have until February 6 to say whether they will voluntarily resign.

If they decide to leave, they will be exempt from in-person work, according to the email, and will receive pay and benefits through September unless they decide to leave earlier.

"I certainly won't be accepting a buyout," another employee said, adding that their teammates likely wouldn't either. "It's unpatriotic that he's trying to put people out of work or provide incentives for people to leave their stable jobs."

"I'm so sick of these stupid harassing emails," they added.

Deepening distrust

Others worry the administration won't stick to its word of steady pay and benefits through September — and aren't even sure the offer is actually a buyout, despite the language used in some media coverage.

"Suffice it to say the people I've been talking to don't trust how this will play out," one Department of Justice worker said, adding that they didn't see a budgetary or legal mechanism that would guarantee continued compensation.

The spotlight has encouraged at least one federal to look at the private sector.

"I will be seeking employment outside of government," the worker said, though they caveated they might also look for a job in the Department of Defense or the Department of Homeland Security. "I have no desire to work for an unappreciative organization."

Administration officials previously told CBS they believe up to 10% of federal workers would depart due to the new directives.

Meanwhile, another is in wait-and-see mode. Trump's second term has only just started, the employee told BI, and they want to give the administration the benefit of the doubt.

A break from historical precedent

The government has previously offered incentives for employees to leave as attempts to trim the federal workforce. In the 1990s, former President Clinton presented tens of thousands of workers with the option to leave their jobs.

A lawyer who works for the federal government questioned why it didn't follow the precedent set by previous administrations.

"In the federal government, reductions in force are covered by a litany of laws and regulations," said the lawyer, who specializes in employment issues. "Workers get severance pay, career transition assistance or job search help, and preference for other positions in federal government. This veiled threat about being laid off — it's illegal, indefensible, and incorrect."

The American Federation of Government Employees, the biggest union for federal workers, published a FAQ on Wednesday telling members to not take the email "at face value." It was "riddled with inconsistencies and uncertainties," the union said, and it was unclear if the office that issued the memo had the legal authority or budget to make good on its promises.

The National Treasury Employees Union President Doreen Greenwald urged federal workers to reject the "request to voluntarily quit their jobs. It is a bad deal for employees and the American people they serve."

The latest in a string of chaotic moves

The Tuesday email — which carries the same "Fork in the road" subject line as an Elon Musk memo sent to employees at X, then Twitter, in 2022 — is the latest in a string of chaos-causing, high-impact directives.

On Monday, the Trump administration announced that it was putting a "temporary pause" on federal grants and loans. A federal judge halted the freeze from taking effect before the administration itself rescinded the memo, BI reported.

"It's kind of like Whac-A-Mole. What do you respond to? Personally, I think I'm a little bit numb to it," said one federal employee who has worked in facilities management for more than a decade.

Federal workers have been a particular focus for the administration. Trump issued a return-to-work order for all federal employees on January 20, and has also put forth an executive order to reclassify certain civil servants, removing legal protections and making it easier to fire them.

According to a FAQ posted Tuesday, several categories of employees are ineligible for deferred resignation, including military personnel, USPS staff, and those working in immigration enforcement and national security roles.

The remaining federal workers will have six working days to weigh their options. If the initial offer had been more generous, the federal government lawyer said they may have taken it.

"If they were offering me a guaranteed check for seven months that I could take to the bank, I might consider it," they said. "But it's difficult to trust promises that aren't legally binding."

• Trump's administration announced a temporary freeze on federal grants and loans set to begin Tuesday evening.
• The Education Department said student loans and Pell Grants will not be impacted.
• It's still unclear which federal programs, like rental aid and nutrition assistance, will be impacted.

Some student loan borrowers won't have to worry about President Donald Trump's sweeping federal funding freeze.

The Department of Education said in a statement to Business Insider that the funding pause only applies to "discretionary grants" at the agency. The Department did not immediately clarify what is considered a discretionary grant. A federal judge temporarily blocked the freeze right before it was set to go into effect at 5 p.m. ET Tuesday.

"The temporary pause does not impact Title I, IDEA, or other formula grants, nor does it apply to Federal Pell Grants and Direct Loans under Title IV, HEA," Madi Biedermann, spokesperson for the Department of Education, said in a statement. "The Department is working with OMB to identify other programs that are not covered by the memo."

Pell Grants are awarded to low-income students who demonstrate financial need, with the maximum award now standing at just over $7,000. Additionally, over 40 million Americans rely on federal student loans to help them finance their higher education, and those loans will continue to be disbursed during the funding freeze.

The Office of Management and Budget's memo sent to federal agencies Monday night sparked confusion due to its lack of clarity on which programs would be impacted by the funding freeze. The memo appeared to be partly focused on ensuring federal agency spending aligned with Trump's agenda, saying that paused payments must include "financial assistance for foreign aid, nongovernmental organizations, DEI, woke gender ideology, and the green new deal."

Other federal agencies told BI that they're reviewing the executive orders, and pausing accordingly. The National Science Foundation, for instance, has said that "all review panels, new awards, and all payments of funds under open awards will be paused as the agency conducts the required reviews and analysis." An EPA spokesperson said the agency "is temporarily pausing all activities related to the obligation or disbursement of EPA Federal financial assistance at this time."

Some experts also told Business Insider that programs scheduled to receive funding in a matter of days, including Head Start and Section 8 housing vouchers, are at a higher risk. Democratic Sen. Chris Murphy wrote in a post on X that in his state of Connecticut, "the Head Start reimbursement system IS shut down. Preschools cannot pay staff and will need to start laying off staff very soon and sending little kids home."

As of Tuesday afternoon, BI reporters had contacted more than 65 federal, state, and nonprofit agencies and universities. Those who responded overwhelmingly said they had no idea how the federal funding freeze would affect their work and were actively trying to figure it out.

The funding pause was set to begin at 5 p.m. ET on Tuesday. A follow-up memo from the OMB said that "any program that provides direct benefits to Americans is explicitly excluded from the pause and exempted from this review process," which includes student loans, SNAP, Social Security, and Medicare.

Are you a federal worker, or do you receive some form of federal assistance? Contact these reporters at [email protected] and [email protected].

• Some workers said Trump's federal grant freeze threw government agencies into disarray, creating confusion.
• At agencies like FEMA, some tried to get payments out the door before the 5 p.m. ET Tuesday deadline.
• "The general chaos is grinding things to a halt," one SBA employee told Business Insider.

The Trump administration's "temporary pause" on federal grant and loan awards sparked a range of reactions from rank-and-file workers within the federal government, from frustration to outright surprise.

Speaking before a federal judge temporarily prevented the freeze from taking effect, one Federal Emergency Management Agency employee who spoke to Business Insider Tuesday morning was blindsided by news of the funding freeze.

"The grants are frozen, is that what you said?" she asked.

Another FEMA employee described working with colleagues to try to cut checks for aid as quickly as possible. "We're trying to get as much obligated as we can before 5 p.m. today," the employee said Tuesday. But the employee was skeptical everything would get done; granting FEMA aid is a multi-stage process and some claims hadn't advanced far enough to be approved by the oncoming deadline.

Another federal worker said the freeze endangered two congressional grants to private foundations as well as a grant to their own agency. "They were put on hold today," the employee said. "No payments in or out."

For others, the freeze simply adds to the mounting issues facing the federal workforce. "We are thinking about the impact but there's no official word," one federal worker said. They said that Trump's return-to-office order, the resignation of colleagues, and attempts to scrub language surrounding DEI were taking precedence.

All of the workers were granted anonymity in order to speak freely about their work. Their employment was confirmed by BI.

One former federal worker and Biden administration official, who left the government two weeks ago, said that even a brief pause can have outsize impacts. Short delays, they said, lead to much longer delays, particularly when private workers who contract with the federal government can't be paid.

Two employees at the Small Business Administration said they hadn't been given any indications about how their work would be impacted. The SBA gives out loans to businesses to aid in job creation and recovery from emergencies.

It's been "mostly just chaos, with all the HR changes," one of the SBA employees said. "The general chaos is grinding things to a halt as people don't know what is going to come next."

Minutes before the freeze was set to take effect, U.S. District Judge Loren L. AliKhan temporarily blocked the action. The administrative stay pauses the freeze until Monday.

The decision to withhold funds isn't unprecedented. In 2017, shortly after President Trump first took office, ProPublica reported that the Environmental Protection Agency was stopped from making grants and signing new contracts.

However, the size and nature of the most recent freeze, with only Social Security and Medicare benefits and direct benefits to individuals exempted, is notable.

On Tuesday morning, nonprofit organizations filed a lawsuit in an attempt to stop the freeze, and six attorneys general announced they plan to sue. At a press conference on Tuesday morning, Sen. Chuck Schumer called the freeze "unconstitutional" and "illegal."

Have a tip? Know more? Reach Jack Newsham via email ([email protected]) or via Signal (+1-314-971-1627). Do not use a work device.

• Americans ages 18 to 29 were more likely to report feeling lonely than older adults, per a survey.
• Older Americans were also more optimistic about their lives than the younger cohort.
• Gen Z's loneliness may stem from fewer social connections and later marriages.

As social life rebounds uneasily from pandemic-era shocks, Gen Z is still feeling lonely.

A new survey from the Pew Research Center of 6,204 American adults, conducted from September 3 through 15, looks at how optimistic and lonely different age groups feel. Broadly, 16% of all American adults say that they feel lonely or isolated from those around them all or most of the time.

But loneliness starkly varies by age. Nearly a quarter of Americans ages 18 to 29 said that they felt lonely, compared to just 6% of those 65 and older. At the same time, adults 65 and older were the most likely to say that they felt optimistic about their lives all or most of the time, while just under half of 18- to 29-year-olds said they felt the same.

"Older people are almost always the happiest age group," in research on happiness, Kim Parker, Pew's director of social trends research, told Business Insider. However, she was surprised by the more negative opinions of the younger cohort.

"It's interesting to see that two-thirds of adults 65 and older say they feel optimistic about their life all or most of the time when only 48% of 18- to 29-year-olds do when they have so much time ahead of them," Parker said. "But it may be that there's just so much more unknown at that stage of life that it's harder to feel optimistic."

Gen Z's loneliness woes could have something to do with weakening social connections. As BI previously reported, Gen Zers are coming up against a fringe friend crisis: They're lacking wider connections and social networks that were more easily accessible to prior generations. At the same time, community-building groups like unions and religious institutions are fading away, as are third spaces — places that aren't work or home, but instead centered on congregating and socializing.

Part of the loneliness and optimism chasm might also have to do with how much Gen Z is socializing: Younger Americans have been spending more time alone. In 2010, Americans between 20 and 24 years old spent about four hours a day alone, a number that's since gone up, peaking at an average of 6.7 hours a day spent alone in 2021 — a likely result of time spent solo during the thick of the pandemic. Notably, time-use data isn't available for 2020, as the Bureau of Labor Statistics ran into issues running its survey during COVID's early spread.

Of course, not every boomer and older American is optimistic or avoiding loneliness. Older Americans who rely almost entirely on Social Security, for instance, have told BI that they feel isolated and can't afford social activities that might otherwise help keep loneliness at bay.

Another factor contributing to Gen Z's loneliness could be chalked up to larger societal and demographic trends. Eight percent of married Americans said that they felt lonely or isolated all of the time, compared to 24% of those who are unpartnered.

With 86% of 18- to 24-year-olds unpartnered as of 2023, Gen Z's relationship status might also be weighing on them, especially as dating becomes more costly and Americans get married increasingly later in life.

"We always see that married adults are happier than unpartnered adults are. It doesn't bode well for a population that's increasingly likely to not be married about how they might feel about optimism, about their life, and what we'd be looking at in the future in terms of a trend," Parker said. "But we won't know until we get there."

Are you dealing with loneliness, or found a solution? Contact this reporter at [email protected].

• Americans face potential tax bill changes as Trump's 2017 tax package is set to expire this year.
• The 2017 Tax Cuts and Jobs Act lowered rates and shifted brackets for filers.
• Republicans plan to prioritize tax policy, aiming to extend cuts and reduce other taxes.

Americans could see their tax bill change next year as a legislative battle looms.

Many provisions from President-elect Donald Trump's major tax package from his first term, 2017's Tax Cuts and Jobs Act, are set to expire this year. The legislation lowered tax rates for many Americans and shifted tax brackets. For many everyday Americans, TCJA's expiration would mean the possibility of a larger tax bill — the Tax Foundation estimates that 62% of filers would see a tax increase should TCJA expire.

With the GOP controlling the White House and both houses of Congress, however, it's likely that the bulk of the law will be extended.

"President Trump is committed to lowering the tax burden on the American people who elected him in November with an overwhelming mandate to Make America Wealthy Again," Karoline Leavitt, a Trump-Vance transition spokeswoman, said in a statement to Business Insider. "The Trump Administration will be dedicated to ensuring that American workers keep more of their hard-earned dollars in their pockets while growing the strongest and most resilient economy the world has ever seen."

To determine the potential tax impacts for Americans, we used the Tax Foundation's projections of what tax rates and brackets would be for single filers in 2026 under a TCJA extension and under a TCJA expiration scenario.

TCJA also impacts the deductions that filers can claim on their taxes, but, since those are often determined on an individual basis based on varying circumstances — such as having a child or business — they are not included in these calculations, which cover taxable income after any such deductions and adjustments.

Higher earners would end up with the biggest tax increases if TCJA expires. For instance, an American with $1 million of taxable income would see their tax burden grow by over $12,000 should TCJA provisions expire.

But the tax bills of Americans in the middle income band would see the highest percent increase should TCJA expire. For instance, a filer with $50,000 of taxable income would see their tax burden increase by nearly 20%; comparatively, a filer making $700,000 would see their tax burden grow by just around 2%.

Of course, this doesn't tell the whole tax story. Measures like the Child Tax Credit were expanded under TCJA, meaning that, should the bill expire, parents would owe more or get a smaller refund.

The TCJA also capped how much filers could deduct for paying hefty local taxes. For Americans in high-tax areas, which includes states like New York and New Jersey, the State and Local Tax deduction cap expiring could mean a bigger break on their taxes.

"The change in the tax brackets is only a small part of the story of the TCJA," Ernie Tedeschi, Yale Budget Lab's director of economics, told BI. "Most of the story is actually in the law's changes to deductions, exemptions, and credits."

Republicans are already lining up to tackle tax policy as one of their major priorities once they hold their House, Senate, and White House trifecta. The GOP may go even further than merely extending the TCJA's cuts through proposals from Trump to nix taxes on tips, overtime, and Social Security.

But slim Republican congressional majorities will likely mean that any tax changes could be contentious, although Republicans are gearing up for the fight. Rep. Jason Smith, the chair of the House Ways and Means Committee, said in his weekly report that he's been working closely with Trump on a bill.

"Passing one big, beautiful bill is the best way to ensure as much as possible of President Trump's agenda is enacted," Smith said. "In one fell swoop, we can secure the border, unleash American energy, and deliver tax relief to workers, families, farmers, and small businesses. These are the policies the American people are demanding. Now it's up to Congress to deliver."

Are you concerned about your tax bill changing, or did it change in the wake of 2017? Contact this reporter at [email protected].

A typical weekend for 28-year-old Olivia looks something like this: On Friday night, she'll catch a game, either in the stands or from the comfort of her couch in her home city of Philadephia. Saturday is for the girls — her book club might go out to brunch or convene at one of their houses. Sunday is for bonus activities like shopping and chores to help get ready for the week. While there might be alcohol at some of those events, Olivia won't be partaking. She's one of a growing cohort of Gen Zers who are opting out of America's drinking culture.

It's a choice that's become increasingly popular in Olivia's peer group. A few years ago, some of her friends would look at her like she was "crazy" for abstaining at social events. Now, some don't even notice — and more are joining her in cutting out alcohol completely, even in a city with a heavy drinking culture.

"I've noticed a lot of my friends have also started to give up drinking, or they're just not interested in spending the money," Olivia, who works in finance, said. "They don't like the feeling of it. Part of that I think, is getting older; part of it is it's just not as cool."

This year, Dry January came with a new warning for Americans: The US surgeon general, Dr. Vivek Murthy, published an advisory that said alcohol should come with a cancer warning, as multiple studies pointed to a link between the two — even as many Americans did not recognize it as a potential danger. Alcohol stocks tumbled immediately. But if the fresh warning about alcohol shocked millennials and older Americans, many Gen Zers met it with a shrug.

"The younger generations are just a little more risk averse than we were," Mary Charlton, a professor of epidemiology and the director of the Iowa Cancer Registry at the University of Iowa, told me. "I think they're a little less fatalistic about things." If older generations embraced an ethos of "I'm going to die anyways, I might as well smoke," Gen Z is rejecting that, Charlton said — or, at least, they're more aware of who's making money off of getting them hooked on those substances.

Existential considerations aside, for many younger Americans, drinking has become incidental to a good time. If millennials killed off everything from golfing to casual dining, Gen Z might put the final nail in the coffin of social and economic life centered on alcohol. It's cheaper and more rewarding for them to opt for a different kind of connection. And, for a growing subset of businesses, that could translate into huge dollar signs.

Becca Borowski, a 25-year-old Wisconsinite, said that she drank "way too much" in college. When she was 22, she began getting terrible hangovers and decided she wanted to cut down on her consumption.

"I feel like everyone kind of realized after COVID that we don't really have to drink to have fun," she said, adding: "That's kind of when I started to realize, oh, I really don't enjoy drinking as much. I kind of just enjoyed more so that everyone was there."

That seems to be a common sentiment among her peer group. Gallup polling found that the share of 18- to 34-year-olds who drink alcoholic beverages has tumbled to a record low.

Meanwhile, the share of 18- to 34-year-olds who think even drinking in moderation is bad for health has doubled since the early 2000s. Chloe Richman, a 29-year-old in New York City who cohosts the podcast "Litty and Sh*tty," has been sober for nearly a year. Her decision to ditch drinking came after she started watching videos about popular online wellness trends such as 75 Hard and cold plunges.

"It really got to me, and I was thinking, oh, that's an easy fix for me," Richman said.

She says she only drank on weekends but would go hard when she did. That meant a lost day on Sundays recovering from the inevitable hangover. So cutting out drinking completely seemed like a logical next step. At first, the decision felt "extremely isolating" — going out for a drink was an easy option for socializing that no longer existed. But soon, she became "obsessed with the idea of just treating my body the best it can be," and decoupled fun from alcohol. These days, her evening activities include going to paint at an art café.

The shifting attitudes toward drinking affect not only how Gen Zers spend their time, but it's also had a dramatic effect on how they spend their money. For some businesses, this has become a serious issue: Concert venues are struggling with lower alcohol sales, and some bars are having to pivot their offerings, bolstering their non-alcoholic options and crafting spaces for optimal socializing. At the same time, a Gen Z nonalcoholic economy is quietly booming — and creating an opening for new types of businesses. The global non- and low-alcoholic beverage business has ballooned to $13 billion and is projected to grow even more. An analysis from IWSR found that nonalcoholic drink volume rose by 29% from 2022 to 2023, and the industry is projected to grow by 7% from 2023 to 2027. Nonalcoholic beverages have also captured new fans: In 2023, for instance, 17% of the industry's consumers were new to the nonalcoholic market. It turns out that Gen Zers still want to see each other; it just doesn't have to be over a drink.

As with any social movement, some big corporations are trying to capitalize on the recent shift. The big alcohol companies have already been gearing up for the anti-booze revolution, with many launching alcohol-free versions of their products. Heineken's CFO Harold van den Beck said in an October earnings call that 4% of the company's portfolio is nonalcoholic beverages and that that could increase to 6% or 7% of the total portfolio in the foreseeable future. Even Gen Z icon Tom Holland — who has been sober since 2022 — has launched his own nonalcoholic beer, Bero, which touts itself as "the new gold standard in beer."

Beyond the big businesses trying to get in on the trend, local entrepreneurs are also trying to create a smaller-scale community that caters to Gen Z's booze-free proclivities. Alexandra Zauner, 34, quit drinking 10 years ago. She wanted to create a way for people to socialize without alcohol, something she felt was missing in her own sobriety journey. That led her to create Lucille's, a nonalcoholic bottle shop and tasting room in St. Paul, Minnesota.

"We're seeing more and more people that are craving opportunities to connect, and it's less about the alcohol and it's more about just creating spaces for people that feel exciting and fun and gets people out of the house," Zauner said. She thinks people still want to experience nightlife — they're just opting not to do that at bars. Whether she's at one of her own nonalcoholic events or someone else's, she feels she gets to connect with other people on a deeper level — and have "genuine fun."

That rings true for Borowski, the Gen Zer in Wisconsin, who wants to get out and meet people without feeling the need to down boozy drinks. For her, that's meant pursuing some of her more creative hobbies: She's a student at local pottery studio Cream City Clay, where she's been cultivating a few friendships out of class. Connecting with peers who share her hobbies — rather than just a drink — has led her to more like-minded, creative folks.

"It's really fun to be able to take our friendship out of the class," she said.

At Chaotic Good Cafe in Manhattan — a new board game and role-playing venue — Gen Zers are flocking to play weekly games of Dungeons and Dragons. After being laid off in January 2023, the café's owner, 39-year-old Andrew Panos, combined his love for board games and coffee to create a space that doesn't revolve around alcohol (although it's still available for patrons who want it).

"We get a lot of people in their 20s and 30s coming in just to sit down and do work. We have WiFi and lots of outlets and 45 seats," Panos said. "We encourage people to sit down. So we're getting a lot of people who just want a cozy, warm spot right now."

That's pretty much the definition of an ideal third space — a place to gather that isn't home or the office but open to those who want to hang out for longer unstructured stretches. If millennials found themselves constricted by a loss of third spaces that funneled primarily into bars, Gen Zers' appetite to hang out sans alcohol might bring third spaces back and then some. A quick glimpse at the type of activities Gen Z is resurrecting — like speed dating or book clubs — shows that there's a larger cultural shift undergirding the patrons keeping these businesses afloat.

Gen Z sobriety still has its own nuances — many Gen Zers are still drinking, even if just a little. Others might be more motivated by current wellness trends and an acute need for connection than a long-term dedication to sobriety.

In Ohio, the rock-climbing walls at RockQuest are hopping on a Friday night. The general manager, 34-year-old Tyler Carson, has noticed an influx in younger folks who aren't just serious outdoorsy types. That includes everyone from older high schoolers to college groups to first dates. Carson said that the pandemic was a catalyst, of sorts — people were stuck inside and getting antsy. Now, some are opting for the thrill of the climb instead of the high of an alcohol buzz.

"There's enough fear even when doing it properly that's like, ooh, this is kind of a rush for people, especially new to the industry. And so they get that excitement, they get that thrill," Carson said.

Indeed, some of the Gen Z focus on sobriety might be tied to the overarching wellness culture and a focus on weight-loss and body transformations fueled by drugs like Ozempic. As Meir Statman, a professor of finance at Santa Clara University, said, "thin is in" in America right now, and younger people (many of whom are frequently on camera, whether it be a Zoom call or an Instagram story) are more concerned about how they look to potential mates. Emily Wilson, a 28-year-old in New York City who cohosts the "Litty and Sh*tty" podcast with Richman, said, much of the new wellness culture — including the sober-curious movement — is centered on selling new products to Gen Zers.

"Wellness is kind of a scam, but I think the fact that it's making people be healthier in some ways — like sobriety — is good, but there's definitely other ways where it's like the Ozempic culture is terrible," Wilson said.

While more members of Gen Z are sober-curious or cutting out alcohol, it doesn't mean all members of the younger generation are dialing back, and other substances might see more Gen Z support: 19% of 18- to 34-year-olds surveyed by Gallup in 2023 and 2024 said they smoke marijuana, the highest among age groups. Even weed companies are adapting to the younger generation's desire for a less intoxicating experience — Curaleaf recently launched a new seltzer with a 2.5-milligram dose of hemp THC, half the dosage of its 5-milligram seltzer launched over the summer. Curaleaf chairman and CEO Boris Jordan said their products are getting a boost as young people search for alcohol-free alternatives.

"As cannabis legalization expands and the hemp market grows, we are seeing adults shift from alcohol use to cannabis consumption, particularly in the 21-27 age group," Jordan told me in a statement.

These changes started taking hold even before the surgeon general's advisory, which may help to accelerate Gen Z's shift — and grow the market for alcohol-free fun. After completing her own research on the link between drinking and cancer, Charlton abandoned her habit of having a glass of wine at night as a reward for getting work done. Now, she only drinks socially. She thinks the longer-term effect of the prominent cancer warning might help people broaden their perspectives on how they want to spend their time.

Kam Kobeissi, 44, has witnessed the Gen Z transformation firsthand. Kobeissi, an elder millennial and a nonprofit worker in the Albany region, has never been much of a drinker; in the past year or so, he's been trying to find a community of people who don't rely on drinking-based socializing. But who he finds isn't exactly his cohort: "I'm definitely a minority in my age bracket." As a millennial, he's familiar with the generation's reputation for killing off certain activities and brands (rest in peace, diamonds). Now, he's getting to see the younger generation perform their own economic sleight of hand. When Kobeissi went to check out a board game café the other night, he was the oldest person there by 10 to 15 years.

"I really like this new generation and how it stands out in such different ways from what traditional business and marketing kind of is used to," he said. "I think it's challenging everything across the board."

Juliana Kaplan is a senior labor and inequality reporter on Business Insider's economy team.

• Gen Xers are moving to retirement hot spots in Florida and Texas.
• Meanwhile, they're leaving behind big coastal cities in New York and California.
• Lower interest rates, remote work, and a strong economy might be driving Gen X migration patterns.

Gen Xers are living like they're 20 years older — or at least moving to the favored locales of their retiree counterparts.

An exclusive analysis of Census data for BI from the University of Virginia demographer Hamilton Lombard reveals the areas in the US that Gen Xers have left behind and where they went.

Between 2020 and 2023, counties in Florida and Texas, many of which are retirement havens, experienced the largest increases in their Gen X populations — defined as those who were between 45 and 54 years old in 2023 — per the analysis.

The analysis also found that the population of that demographic in "retirement destination" counties rose by 5.1% between 2020 and 2023, over three times as fast as the country's 1.6% growth rate in the same period. The USDA defined those counties as having at least a 15% increase in their populations age 60 and up from net migration between 2000 and 2010.

Lombard said it's likely that many Gen Xers were lured to retirement destinations by a strong stock market amplifying retirement savings, remote work options, and a robust housing market. During the first two years of the pandemic, before the Fed began its interest-rate hikes to fight inflation, low mortgage rates could have been another incentive to move.

Gen Xers weren't necessarily retiring early — although some may have been — but instead potentially seizing the moment of a strong economy, Lombard said. It echoes a similar migration in the 2000s housing boom, per Lombard, which also came amid a long stretch of economic growth.

"People felt like they had more options where they could live," he said. "And with interest rates where they were, that was a lot easier to do."

Lombard said that the Gen Xers who moved into retirement areas might fall into three buckets: People who actually retired, flexible Gen X workers who wanted to move in early before fully retiring, and Gen Xers who moved to cater to the first two groups.

He gave the example of a hypothetical Gen X dentist who moved from New York to Florida after their clients relocated or retired.

Lee County, Florida, home to Fort Myers and Cape Coral, saw the largest change between 2020 and 2023, with a net increase of over 10,500 Gen Xers. Meanwhile, over 9,700 net residents moved to Polk County, in central Florida, to the east of Tampa. Another nearly 8,500 net residents relocated to Pasco County on Florida's western coast.

Three Texas counties were in the top six destinations for Gen X movers. Montgomery County, north of Houston, had a net gain of about 7,500 residents, while Collin County, north of Dallas, grew by nearly 7,400. Fort Bend County, southwest of Houston, attracted over 6,900 net residents.

Seventeen of the top 25 counties for Gen X movers were in Florida, while six were in Texas. South Carolina's Horry County, home to Myrtle Beach, and Arizona's Pinal County, home to Florence, rounded out the top 25.

Another popular destination for Gen Xers: The Villages in Florida, often thought of as the Disney World of retirement. Sumter County, Florida, which contains The Villages, gained nearly 2,000 members of that generation from 2020 to 2023, bringing the population to about 9,800.

Gen Xers may have been drawn to the ample amenities — and unique golf cart culture — that the area offers. The median age in Sumter County has fallen slightly from 68.9 in 2019 to 68.2 in 2023, per the Census Bureau's American Community Survey.

Gen X is leaving behind LA and NYC

Counties experiencing the largest net declines in this demographic included Los Angeles County, with nearly 66,000 members leaving; Cook County, the home of Chicago, with about 33,000; Kings County, or Brooklyn, at 29,800; and Queens County, with nearly 22,600. Other major urban counties in California, New York, and Texas lost thousands of net residents.

Many of the areas that Gen Xers are leaving behind have high costs of living. The generation has faced its own economic headwinds, and has already been struggling to pay bills and taking on additional jobs to cope financially. Lombard also said that some of that exodus could come from Gen Xers who were already considering moving and saw how willing people were to pay a premium for their homes.

The Gen Xers who opted to move might also be part of the group still clinging to remote work. From September to December, 12.4% of 40 to 49-year-olds were fully working from home, per the latest figures from the Survey of Working Arrangements and Attitude, slightly up from the same period a year prior.

A Gen X influx in retiree-heavy areas has meant more age diversity, and median ages coming down, Lombard said. It can also be an economic boon: The new population has wealth, and is ready to spend it.

"That's really invigorating some of these local economies and that's causing a lot of business growth," he said.

Are you a Gen Xer who moved in the 2020s? Contact these reporters at [email protected] and [email protected].

• The US economy added 256,000 jobs in December, more than the forecast of 164,000.
• Unemployment was expected to hold steady at 4.2% but fell to 4.1%.
• Economists expect 2025 to be a tough labor market for job searchers.

The US labor market ended 2024 on a high note, adding 256,000 jobs in December, above the forecast of 164,000.

Unemployment unexpectedly dropped from 4.2% in November to 4.1% in December. The consensus expectation was that the rate would hold steady.

"We are very proud of our ability to leave with such a strong labor market," Acting Secretary of Labor Julie Su told BI. "People have come into the labor market and are looking for jobs — and they're finding them."

Cory Stahle, an economist at the Indeed Hiring Lab, said there were some concerns in the job market at the start of 2024, but the data indicated signs of equilibrium in the second half.

"In the first half of 2024, we saw unemployment start rising, and it was a pretty good cause for concern," Stahle said. "But then in the back half of the year, we've seen that the unemployment rate has really stabilized."

Labor force participation remained at 62.5% in December. The employment-population ratio increased from 59.8% in November to 60% in December.

Wage growth cooled slightly. Average hourly earnings increased to $35.69 in December, a 3.9% increase from a year earlier. Earnings rose by 4.0% in October and November.

Many sectors saw job growth, especially in healthcare. However, manufacturing, mining and logging, and utilities lost jobs in December.

The new jobs report likely won't derail the Federal Reserve's widely expected pause in its interest-rate easing campaign at its coming meeting after three rate cuts in a row.

CME FedWatch, which shows what traders think will happen to interest rates based on market activity, indicated after the jobs report a 97% chance that rates wouldn't be changed in the first scheduled Federal Open Market Committee meeting of 2025 on January 28 and 29, up from around 93% before the jobs report. There are eight scheduled FOMC meetings in 2025, but the Committee's members signaled in December that the Fed plans only two cuts this year.

In a press conference after the December meeting — where the Fed cut rates by 25 basis points — Fed chair Jerome Powell said that "the labor market is now looser than pre-pandemic" and is gradually still cooling down. He added further cooling isn't needed to reach the Fed's 2% inflation target.

"We're starting to see evidence that the Fed's 100 basis points of cuts are translating into real improvements, improvements in the real economy," Julia Pollak, chief economist at ZipRecruiter, said. "While the labor market often lags behind quite substantially, it seems like perhaps the labor market rebound is starting to take hold."

Economists predict the job market in 2025 will be challenging for job searchers, and employers might be cautious in their hiring plans during the start of the year.

"While business sentiment has picked up somewhat since the election, there is still a lot of uncertainty about future policy changes that will likely make businesses hesitant to ramp up hiring, particularly in the first half of 2025," Dante DeAntonio, a labor economist with Moody's Analytics, said in a written statement in 2024.

The new data could provide a little more optimism. Stahle said even if the labor market is cooler than in recent years, "we're really going into the year with a decent amount of momentum."

• President-elect Donald Trump signaled on Sunday that one of his first big moves will be ending taxes on tips.
• The proposal would likely impact a small segment of workers in the US.
• Those workers are likely to be younger and to work in the restaurant industry.

Gen Zers, waiters, bartenders, and delivery workers might end up with a lower tax burden if President-elect Donald Trump gets his way.

In a Sunday post on Truth Social, Trump said, "Members of Congress are getting to work on one powerful Bill," that will eliminate taxes on tips as part of a wider push to extend the tax cuts passed in his first term. The post also said that his plan will be paid for through tariffs. Trump proposed making tips exempt from federal income tax on the campaign trail, as well as slashing taxes on overtime and Social Security benefits.

Economic experts pointed out that Trump's proposal — and one from Harris that followed similar contours — would have little impact on lower-earning workers, with many exempt from taxes already due to how little they make. The Yale Budget Lab found that just around 4% of families on average between 2017 and 2022 reported tips to the IRS.

Ernie Tedeschi, Yale Budget Lab's director of economics, also found that over one-third of tipped workers already had low enough earnings that they owed no federal income tax, meaning they wouldn't see benefits from the proposal.

"It is a relatively low-cost way of trying to provide relief to highly visible low-income workers," Tedeschi told BI. But it could also be felt unevenly among otherwise similarly-paid workers. Tedeschi gave the example of a cashier at McDonald's and a tipped waiter at Waffle House. Both are in fast food service, but the tipped waiter would benefit based on tipping conventions, while the cashier would not.

Even so, a subset of workers would stand to benefit from the proposal. The Yale Budget Lab studied who would be impacted by eliminating taxes on tips. Tipped workers tended to skew younger, per a June analysis of Census Bureau data from Tedeschi. The median tipped worker in 2023 was 31 years old, and a third of tipped workers were under the age of 25.

The Yale Budget Lab also looked at what roles and industries tipped workers are concentrated in. Across industries, restaurants and other food services had the greatest share of total tips — which is unsurprising, considering how compensation is generally structured in that industry. In 2023, the median pay for food and beverage serving and related workers was $14.29 per hour, according to the Bureau of Labor Statistics.

The Yale Budget Lab also looked at which occupations were getting the lion's share of tips. Waiters and waitresses received over a quarter of all tips, while bartenders raked in about a fifth. Couriers and messengers were also getting a larger share of tips — increasing from under 1% in 2017, per the analysis. That group includes, in part, delivery gig workers.

Some economists and tax experts previously told Business Insider that unless care is taken, some higher-paid professionals could restructure their compensation to take advantage of a tax exemption for tips by reclassifying salary pay as a "gratuity" instead.

The Trump campaign did not respond to BI's request for comment on the policy proposals and their impact.

Should an end to paying federal taxes on tips become law, families impacted could see an average tax cut of $1,700, per the analysis, although lower earners would see a much more modest cut. But right now, nothing is set in stone — Republicans and Trump are still crafting their tax plans, and any potential package could emerge much different than it began.

Are you a tipped worker who would benefit from eliminating taxes on tips? Contact this reporter at [email protected].

• Trump's 2017 tax cuts are set to expire this year, which could impact Americans' wallets.
• Trump's Tax Cuts and Jobs Act lowered individual rates and doubled the child tax credit.
• Experts shared how individual taxes, along with tax breaks for parents and EVs, could change.

President-elect Donald Trump and the incoming Republican congressional majorities could have a big impact on your taxes next year.

Many provisions from President-elect Donald Trump's 2017 Tax Cuts and Jobs Act are set to expire by the end of this year unless Congress renews the tax bill. On the campaign trail, Trump proposed extending many of the law's provisions and adding more.

"We refer to this next year as the Tax Super Bowl. It's a big one," said Mark Baran, the managing director at the financial and professional services firm CBIZ's National Tax Office in Washington, DC.

If the TCJA is extended, and Trump's new provisions — such as eliminating taxes on tips — are added, many Americans could see their individual tax rates drop, or at least stay low. Additionally, Republicans are eyeing an even bigger increase to the original child tax credit from the TCJA while Biden-era tax provisions like the electric-vehicle credit are on the chopping block.

Trump's 2017 tax package had an immediate effect on many Americans — it brought down individual tax rates for almost all filers, doubled the child tax credit to $2,000 per child from $1,000, and doubled the standard deduction that Americans could claim, among other measures. If the Tax Cuts and Jobs Act isn't extended, more than 62% of filers would face a tax increase in 2026, per an analysis from the Tax Foundation.

"President Trump is committed to lowering the tax burden on the American people who elected him in November with an overwhelming mandate to Make America Wealthy Again," Trump spokesperson Karoline Leavitt said in a statement to BI. "The Trump Administration will be dedicated to ensuring that American workers keep more of their hard earned dollars in their pockets while growing the strongest and most resilient economy the world has ever seen."

"From a planning standpoint, I would love to see the Tax Cuts and Jobs Act extended," said Brian Kearns, a CPA and the founder of the financial planning and tax consulting firm Haddam Road.

Kearns said an extension would mean easier planning and lower rates for clients. "Will it happen? I honestly have no idea."

Here are the biggest changes that could be coming.

Tax rates for most Americans will probably stay low

Baran said that taxpayers could be cautiously optimistic about an extension on the TCJA's reduced individual tax rates.

"The election has created a little more certainty. However, the challenges are still there," he said.

The table below compares tax rates and brackets under the TCJA and if the TCJA expires.

A break for high-income filers in high-tax cities and states is a big question mark

Another provision from TCJA that could save taxpayers money is the State and Local Tax deduction, known as SALT. That provision allows taxpayers in areas with high local taxes — such as prominent blue states like New York and California — to claim those taxes as a deduction.

The deduction was unlimited before the TCJA capped it at $10,000, meaning some high-income residents of those high-tax jurisdictions ended up owing more to the federal government after the law went into effect. That's drawn the ire of strange legislative bedfellows, with Democrats and Republicans in those blue states calling to roll back the cap. But there's already Republican dissent over how to tackle the cap, if at all.

Some Republicans — and Trump advisors — proposed raising the amount to $20,000, giving some relief to Americans paying a lot in local taxes. Trump himself has said he would "get SALT back."

But the cap may end up staying where it is. "It would be great if they raised it because there's a lot of people that are needing relief, but I can't tell you where that's going to head," Scott Brillhart, a partner and the director of tax at Founder's CPA, said.

Promises to wipe out taxes on tips and Social Security could be difficult to keep

The tax experts BI spoke with questioned how feasible proposals like eliminating taxes on tips, overtime, Social Security, and auto loans would be — all of which were talking points for Trump on the campaign trail. Brillhart said eliminating taxes on tips could be a "logistical nightmare for employers."

"I think it would be more complicated than the benefit it would be for a lot of this stuff," he said.

But Kearns said that the impact of reducing those taxes could be felt among a big slice of Americans.

"This matters a lot for all different segments of the population. You're younger, you're waitering or waitressing — no tax on tips, that's a big deal," Kearns said. "If you are receiving Social Security, that's a really big deal to not be paying taxes on your Social Security."

The child tax credit is another wild card

Another provision that could impact many Americans is the child tax credit. Parents could lose out on a $1,000 tax break if the TCJA expires this year. However, at least one Republican lawmaker — Sen. Josh Hawley of Missouri — is pushing a potential increase from $2,000 to $5,000. Vice-president-elect JD Vance also floated a $5,000 child tax credit on the campaign trail.

"You, of course, have to work with Congress to see how possible and viable that is," Vance told CBS's "Face the Nation."

Brillhart said that a higher child tax credit would be "very helpful" for many families and should be seriously considered.

Tax breaks for electric cars are on the chopping block

Additionally, Americans interested in going electric may want to plug in now — at least if they want some tax benefits. Brillhart said that the tax credit of up to $7,500 for electric vehicles that President Joe Biden passed in 2022 could be on the chopping block.

"If that is a deciding factor for you to be purchasing an EV, I'm not telling them to go run out and purchase something, but it's something to consider," Brillhart said.