A second wave of buyout offers has gone out to federal workers inside some agencies, including Transportation, GSA and the Housing department, Axios has learned.

Why it matters: The context for these offers, sent to at least five agencies, has shifted radically since the initial "Fork in the Road" email went out in February — employees have been through the fire over the past month, laid off, forced out or embroiled in court fights to keep their jobs.

• Folks are more receptive this time around, per the Washington Post, which first reported on the new buyouts.
• Thousands of new workers are eligible, the paper reports. It says employees at the Energy Department and USDA also received offers.
• Deadlines to decide range between April 7 and April 15.

Zoom in: Distinct from round 1, an Office of Personnel Management official said these offers are being initiated at the agency level.

• The Department of Transportation, the General Services Administration and the Department of Housing and Urban Development (HUD) each confirmed to Axios that new offers had gone out.

An email, viewed by Axios, went out to all USDA employees on Monday with the subject line "Deferred Resignation Program 2.0" — the wording a far cry from the Elon Musk-infused language of the first version.

• USDA employees have until April 8 to respond. Those who accept will be on the payroll until September 30 but will be exempt from in-person or remote work, the email says.

Zoom in: The email, from the office of Secretary Brooke Rollins, provides the kind of details that were missing the last time.

• It explains why they're doing this: The agency will be restructuring, "Optimizing and reducing the dize of the workforce to become more efficient," it says. And employees may be relocated. The USDA will be "eliminating unnecessary management layers."
• Probationary and term-limited workers are also eligible for the 2.0 version, per the email. And individual departments will carve out exceptions for people they deem necessary. (USDA in February rehired the bird flu officials it fired, during the ongoing alarm over the virus.)

What they're saying: "We're providing DOT employees a second chance to voluntarily leave," said a spokesperson. "This is just one part of our effort to make DOT more efficient and accountable to the taxpayer. "

• "Those who perform safety-critical functions are exempt from this program."
• Opting into the deferred resignation program "is voluntary," a spokesperson from the General Services Administration said. Employees have through April 18 to opt in.

The Department of Housing and Urban Development sent out a new offer on March 31, and announced it on X:

• "The option to take the fork in the road closed on February 12, 2025. Since then, we have heard from staff who wish they had taken it," the agency said.
• "The media villainized DRP [deferred resignation program] and said its promises couldn't be kept – they were wrong."

Catch up quick: About 75,000 workers took the first buyout offer, according to the Trump administration. It gave employees the option of staying on payroll through September.

• At the time, federal unions urged employees not to take the offer, which appeared unlawful and they succeeded in getting a key deadline pushed back in court.
• This time around, the offers are being viewed less warily.

Other agencies, including NOAA, had already offered workers a way out through existing federal programs that offer voluntary early retirement or voluntary separation.

• Some workers who did take the original buyout offer have told Axios they were uncertain whether or not to trust it, but felt they had no choice given the administration's job purge. For right now, they are still getting paid.

If you're a federal worker who has taken a buyout or is contemplating one, you can reach out confidentially to Emily Peck on Signal at EmilyRPeck.71 or by email emily.peck@axios.com

Editor's note: This story has been updated with details from an emailed voluntary leave proposal.

Tariff pain is not shared equally: The less money you make, the more President Trump's proposed higher taxes on imports will hurt.

Why it matters: Tariffs are another blow to lower-income earners already struggling with higher prices.

By the numbers: The lowest income households could see their disposable income fall by as much as 5.5%, in a scenario of 20% across-the-board tariffs where other countries retaliate with levies of their own, per an analysis from the Yale Budget Lab.

• For the highest-income households, that drop is just 2.1%.

Zoom out: That does not mean middle-class or wealthy Americans are going to escape unscathed. In pure dollar terms, the tariff burden on the highest earners is, well, higher. They make more money and spend more money.

• For households in the middle, the big tariffs would cost an average of $3,800 per household, per year. For those in the top tenth, it averages $9,500 per household, per the Yale Budget Lab.

In the long term, the authors write, tariff effects start hitting the wealthy, too, as prices on assets decline.

• Tariff inequality fades, but only because it gets worse for folks who hold stocks, bonds and real estate.

The big picture: Tariffs are just one part of Trump's agenda, a White House official told Axios. Other levers like deregulation and government spending cuts should keep inflation in check and the economy growing, they said.

• Trump campaigned on the promise of lower prices, but inflation has gone up recently.

The bottom line: Ouch.

BlackRock CEO Larry Fink reassures investors that this moment of economic anxiety will pass in his annual letter out Monday morning.

Why it matters: Fink runs the world's biggest asset manager and is hugely influential — his widely read letter typically reflects the business trends of the current moment.

• This year it comes at a time of high market uncertainty, as tariff disruptions rock the business world.

Where it stands: Fink treads cautiously in the 27-page letter, never explicitly mentioning President Trump, and only touches glancingly on politics at the very top.

• "I hear it from nearly every client, nearly every leader—nearly every person—I talk to: They're more anxious about the economy than any time in recent memory. I understand why. But we have lived through moments like this before. And somehow, in the long run, we figure things out," he says in a draft of the letter viewed by Axios.

The intrigue: Fink's letter comes at a politically fraught moment for BlackRock.

• The firm's deal to buy two Panama Canal ports from Hong Kong's CK Hutchison has become a political football among the governments of the U.S., Panama and China.
• What looked like an off-ramp for U.S. complaints that China had too much influence at the canal now threatens to become a bargaining chip in a larger geopolitical reordering.

Between the lines: In past years, Fink has used the letter to espouse views on topics that are now toxic flashpoints for the Trump administration — like climate change, flexibility for workers or corporate social responsibility.

• This year, as fierce backlash has grown, the firm joined many others in walking back its DEI policies.

Zoom in: Instead of politics, Fink focuses on private markets, a more opaque area of investment that's ballooned in popularity in recent years — and where BlackRock has made a series of deals over the past year, trying to become a dominant player.

Some letter highlights:

With deficits ballooning, governments are going to need private-market money to build bridges, power plants and other critical public buildings and utilities, he writes.

• "The markets are eager to step in where governments and corporations are stepping out."
• Instead of a traditional 60/40 split between stocks and bonds, Fink wants investors to diversify into these private market assets, a mix he calls 50/30/20 (stocks, bonds, private assets like infrastructure and real estate).

"Economic democracy": Fink says capitalism has worked for "too few people" and wants to give more investors access to those private markets.

• Not coincidentally, bringing more investors into the markets is good for the firm's bottom line.

Fink endorses the idea of baby bonds, proposed by Sens. Cory Booker (D-N.J.) and Todd Young (R-Ind.). "Imagine a child born today whose personal wealth grows in step with America's. That's what an economic democracy could look like: a country where everybody has a new avenue— investing—to pursue happiness and financial freedom."

Dollar dominance under threat: "The U.S. has benefited from the dollar serving as the world's reserve currency for decades. But that's not guaranteed to last forever," Fink warns.

• "If the U.S. doesn't get its debt under control, if deficits keep ballooning, America risks losing that position to digital assets like Bitcoin."
• BlackRock was the first to launch a Bitcoin spot ETF in 2024 — a move that helped legitimize cryptocurrency in the traditional investing world.

Energy pragmatism: The world faces growing demand for energy that can't be filled with renewables alone, he said.

• Fink makes the case for nuclear power, an idea gaining steam as demand for electricity — fueled by AI — is surging.
• He also joins a bipartisan chorus pushing for permit reform to make it faster and easier to get things built.

💭 Thought bubble, from Axios Generate's Ben Geman: The annual letter is a sign of the times from Wall Street — light on climate. But that said, Fink makes a competition-based case for clean tech.

• He notes China is aggressively building nuclear plants because "they see decarbonization as a way to own the future of industry."
• Fink also shouts out Chinese electric vehicle heavyweight BYD's remarkable rise.

The bottom line: Finance executives like Fink are staying in their lane these days.

Ben Geman contributed.

Go Deeper: Read Larry Fink's letter to investors

So much for the Trump bump: An index that measures small business owners' confidence fell nearly 7 points in the first quarter, erasing last year's post-election surge.

Why it matters: The index, published by the U.S. Chamber of Commerce on Wednesday, is a sign of just how much tariff worries are weighing on the business world right now.

By the numbers: Researchers surveyed 755 small business owners and operators who run companies with 500 or fewer people.

• The index fell to 62.3 in the first quarter, down from 69.1 last quarter, and the exact same level as this time last year. (A higher score indicates more positive sentiment.)

Between the lines: Overwhelmingly, inflation was owners' top concern.

• 58% said inflation is their biggest challenge, the highest level since they first asked in 2021 — even as the rate of price growth is well off the highs seen three years ago.

What they're saying: "There was tremendous optimism that the election would sweep in measures and policies that would lower costs," says Tom Sullivan, vice president of small business policy at the Chamber of Commerce.

• "Not only do small businesses not believe that's happened, but the uncertainty, specifically around tariffs, has led [them] to believe that inflation isn't going down."

The big picture: Small business owners are hardly alone here — CEOs of major companies also saw a drop in confidence in the first quarter.

• And regular folks, AKA the spenders who drive our economy, are also showing signs of anxiety.
• Consumer confidence fell for the fourth straight month, per data from The Conference Board out Tuesday — also weighed down by concerns with Trump policies.

Reality check: This is a pretty negative crew.

• Only 29% say the economy is in good health — that's roughly in line with the 32% who said the same last year, when the economy was in pretty good health.
• It still looks that way. Most official data suggests healthy conditions, as Axios' Macro newsletter pointed out Tuesday.

The bottom line: For now, it looks like we're watching Vibecession 2: Return of the Bummer.

Job applications from federal workers inside DOGE-targeted agencies have surged this year, according to data out Tuesday morning from Indeed, the jobs site.

Why it matters: This is a highly educated bunch, spread around the country — and they're entering the job market at a time when hiring for those with advanced degrees has stalled out.

The big picture: The precise number of federal workers who will end up unemployed isn't known — some firings are tied up in court. It's still unclear what the broader impact on the economy could look like.

• There was a decline of 10,000 federal government jobs in February, per the jobs report. But more cuts are coming.

How they did it: Indeed looked at the profiles and resumes of those who are either still employed by the federal government or were recently working there.

• They compared their job search activity to 2022 levels. Back then, lots of federal employees were job hunting — along with many American workers, as the hiring market was hot.

By the numbers: This year, for most federal employees, applications aren't back to that 2022 level yet.

• But the big exception is among those working at DOGE-targeted agencies like USAID, the Consumer Financial Protection Bureau and the USDA.
• Applications from workers at these agencies spiked more than 75% above 2022 levels in February.

Anybody want to hire a horticulturalist? Searches for that term grew the fastest, per Indeed, likely because of USDA layoffs. "Employee relations" came in second — perhaps from all the fired people working in diversity, equity and inclusion.

Between the lines: Federal workers tend to be more educated than the workforce overall, and at DOGE-targeted agencies that's even more true.

• 31.5% of federal workers have a Bachelor's degree or higher, per Pew — but nearly 70% of the federal employees active on Indeed in February had a Bachelor's or more.

Stunning stat: Two-thirds of employees at USAID held a master's degree, doctorate or other advanced degree, per Pew — the most highly educated federal agency among those with at least 1,000 employees.

• Overall, job postings for roles with higher education requirements have fallen more than for those that don't require advanced degrees, per Indeed's data.

Zoom out: There are fewer opportunities right now that match these workers' education and experience, says Cory Stahle, an economist at Indeed.

• "That's creating a friction in the labor market."
• The risk is the job market won't be able to absorb them all, he added.

What to watch: The March jobs report will be out next week.

The Social Security Administration is rushing cuts to phone services at the White House's request, the agency's acting commissioner told Social Security advocates in a meeting on Monday, two sources who attended tell Axios.

Why it matters: These changes will strain the already struggling Social Security system and could even deprive some people of benefits entirely, according to current and former employees and advocates for retirees.

• Some of the most vulnerable Americans — including people who are hospitalized, kids in foster homes and those living in remote areas — will face more hurdles applying for disability benefits, according to one advocate who spoke with Axios and was at the meeting.
• Some beneficiaries could effectively be blocked from receiving benefits, per an internal Social Security memo, viewed last week by Axios.

Driving the news: Acting commissioner Leland Dudek said the changes in question would usually take two years to implement, but will be made in two weeks instead, the two sources said, on condition of anonymity due to fears of retaliation.

• Dudek also said the changes, happening so fast and with little public understanding, will create opportunities for scammers, one of the sources said.
• Dudek acknowledged the policy could increase fraud risks for beneficiaries, according to one attendee. He said in the past Social Security had been too "thoughtful" in considering beneficiaries before making changes.

For the record: A White House official said the administration was moving quickly to root out "waste, fraud and abuse" at Social Security, and that no one would be denied their lawful benefits.

Reality check: While the changes will make it harder for many to apply for benefits, those who are already receiving checks aren't expected to face any disruptions.

What to watch: On Tuesday the Senate Finance Committee is holding a hearing with Trump's nominee for Social Security commissioner, Frank Bisignano, the CEO of financial technology firm Fiserv and a Republican donor.

• He'll face questions about these changes, as well as job cuts and office closures at the agency.
• "These new developments leave us deeply concerned that DOGE and the Trump Administration are setting up the SSA for failure—a failure that could cut off Social Security benefits for millions of Americans—and that will then be used to justify a 'private sector fix,'" Sens. Elizabeth Warren (D-Mass.) and Ron Wyden (D-Ore.), who both serve on the committee, said in a letter to Bisignano on Monday.
• They called efforts to "gut" Social Security a "prelude to privatization."

Editor's Note: This story has been updated with details on Tuesday's congressional hearing.

The Trump administration's drive to eradicate a small amount of fraud in Social Security is risking the agency's longstanding mission to serve the public, current and former Social Security Administration officials tell Axios.

Why it matters: The DOGE-led effort threatens a system that provides critical benefits to more than 74 million Americans. It's also starting to ignite some political blowback for the Trump administration.

The big picture: "Social Security has always talked about its twin missions of stewardship and service," says someone familiar with the agency's longstanding effort to combat fraud.

• But now, we're in a moment where fighting fraud is in the driver's seat. "That's probably going to be bad for a lot of people around the edges," this person said.

Catch up quick: With the agency's most recent cuts to phone services, experts say field offices could flood with people, who'll see delays in getting service or may not be able to access benefits at all.

• "It's always a trade-off," says a former employee at the U.S. Digital Service (now renamed the U.S. DOGE Service), who worked at the Social Security Administration.
• "Preventing every possible case of fraud often places an undue burden on legitimate users trying to access what they need."

Zoom out: The stakes with Social Security are higher than in the private sector.

• "The trade-off isn't just efficiency — it's life or death," the former Digital Service worker said. "Many rely on these benefits for food, shelter and health care. If the system is too strict and prevents legitimate access, people can literally die."

Reality check: Former SSA officials are clear-eyed that the agency can be a very slow-moving, inefficient bureaucracy, which also doesn't necessarily have the same strict identity controls as a bank.

• But they contend DOGE's efforts are counterproductive.

The other side: The Trump administration says it won't touch Social Security. "Any American receiving Social Security benefits will continue to receive them," White House press secretary Karoline Leavitt told Axios last week. "The sole mission of DOGE is to identify waste, fraud and abuse only."

• The administration insists the fraud is much larger than the $100 million per year acting commissioner Lee Dudek cited last week at a press conference — into the billions of dollars, instead.
• The White House said on Sunday that more changes are coming.
• "President Trump has consistently pledged to ensure the federal government is a responsible steward of taxpayers' dollars," spokesperson Liz Huston said in an email Sunday night. "The previous fraud strategy has failed, and as a result, necessary changes are coming."

Where it stands: Comments from Trump officials — particularly from Elon Musk, who has called Social Security a "Ponzi scheme" — have even some Trump allies on edge, per reporting from NBC.

• Commerce Secretary Howard Lutnick touched off a frenzy last week when he suggested seniors wouldn't complain if they missed a check, and the only people who would complain were fraudsters. His spokesperson told Axios over the weekend that Lutnick "is committed to protecting Social Security for all eligible Americans."
• Dudek sparked concerns Thursday when he claimed a court order restricting DOGE access to sensitive data left him no choice but to cut IT access for almost all his employees. (That interpretation was incorrect, a federal judge repeatedly told him Friday.) Dudek later backed down.

Other changes are impeding services, as well. The agency is seeing experienced staff leave and is planning job cuts and office closures.

• Return-to-office orders are also slowing productivity, particularly for those who handle disability claims.
• "Employees have reported crowding issues in workspaces, in-office health hazards (pests, COVID, mold) or that management advised employees to work in conferences rooms ... due to lack of space," said an email from the American Federation of Government Employees union to some workers, which went out Thursday and was viewed by Axios.

"There's gonna be a slowdown, a complete slowdown, in people getting any of the services they need," says a current employee, who requested anonymity because they're not authorized to speak to the press and are fearful of retaliation.

• "People who actually are qualified for disability benefits will not get them in any kind of timely manner," they said. "It feels like we don't serve the public anymore."

The unemployment rate is pretty low at the moment, but under the hood Americans sure are nervous about the job market.

Why it matters: Add rising job anxiety to the growing list of soft economic indicators that may be signaling trouble ahead.

By the numbers: The share of consumers who expect unemployment to rise over the next year surged to 66% in March, the highest level in a decade, per University of Michigan data analyzed by Bank of America Institute.

• Meanwhile, the ZipRecruiter Job Seeker Confidence index fell 3.6 points in the first quarter this year. That's in line with another employee confidence measure, from Glassdoor, that Axios' Courtenay Brown reported on earlier this month.
• Government workers, in the midst of unprecedented disruptions, saw their confidence index levels plunge the most, according to ZipRecruiter.

Yes, but: People's feelings about the economy aren't always lining up with their actions, as Federal Reserve Chair Jerome Powell pointed out at a press conference earlier this week.

• "There have been plenty of times where people are saying very downbeat things about the economy and then going out and buying a new car," he said.

Zoom out: The big issue in the labor market at the moment is hiring. It's slow, and back to 2013 levels, says Julia Pollak, the chief economist at ZipRecruiter.

• "People are really struggling a bit more to find new jobs," she says, adding that the firm is seeing more applications per job posting than a year ago.

Those struggling most? Workers in the middle of the labor market, those with some college education or just a Bachelor's degree.

• In other words, a "pretty large share of the workforce," she says.

All over the country, fired federal workers got a bit of good news this week — they're getting their jobs back. For now, anyway.

Why it matters: The recently rehired could soon become the newly re-fired, and the productivity of the entire federal workforce is taking another hit.

Where it stands: Two federal judges have ordered agencies to reinstate the tens of thousands of probationary workers they've terminated over the past month, but the White House is appealing those orders.

• Meanwhile, the administration has also told agencies to do even more layoffs — this time through the more formal process of reductions in force, or RIFs.

The big picture: In other words, people were fired, now they're being rehired and it's quite possible they'll lose their jobs again — either via a court ruling or another round of layoffs.

By the numbers: More than 24,000 probationary workers who were fired across 18 agencies are in the process of being reinstated, according to data provided to the U.S. District Court in Maryland by the agencies Monday night.

Zoom out: The situation is a hit to productivity at these agencies, and to the economic and psychological well-being of these individuals. It's not great for the economy overall, either.

• "If your employee feels as though they could be cut loose any minute, that no matter what they do, whether they perform well or poorly, they can just be laid off tomorrow, the incentive to perform well disappears," says Julia Pollak, chief economist at job site ZipRecruiter.
• Plus, people who worry about being fired spend less money, she says.
• That means the considerable amount of money the government is spending on rehiring (more on that below) isn't getting funneled back into the economy the form of consumption "because these workers are terrified," says Pollack.

For example: "We really ramped down our spending to just the essentials," says a woman who was just reinstated to her job at the Commerce Department and isn't authorize to speak to media.

• She doesn't trust the reinstatement will last. For starters, like many of these folks, she is on administrative leave and not back to the office.
• She and her husband, also a federal employee, chose not to re-enroll their young child at preschool next year, canceled some home remodeling and put off a plan to have a third child.
• Instead they're planning for disasters — selling the house or other assets, moving.

Adding to the fear, there's some ambiguous language in her reinstatement letter that says it's possible she'd be re-terminated.

• She's not alone, either.

"I'm thrilled, but only to a limit," a reinstated employee at the Department of Transportation told Axios, requesting anonymity to speak freely about work. "There's always a feeling it's going to be taken away again," says this worker, a veteran who's struggled with PTSD.

• "My mental health has taken a major hit."

Between the lines: Many workers weren't simply put on leave, but instead are actually going back to work. That will have costs, too.

• The onboarding process for federal employees is even more expensive than in the private sector — partly due to the cost of security clearances, and the arduous procurement process for equipment. It can take weeks to get a laptop, for example.
• It may cost a bit less to "re-onboard," but a conservative estimate published by a cadre of former employees at the federal U.S. Digital Service, familiar with the inner workings of the federal bureaucracy, puts it between $120 million and $480 million.
• Adding to the problem, many human resource and administrative staffers have been fired, and there are fewer employees to help with the process. "Every task takes forever," one supervisor at the VA tells Axios.

Zoom in: Agencies cite the burden of this work in filings to the Maryland court.

• 11 agencies, including the Commerce Department, USDA and EPA, use some version of this language in their documents:
• Employees "would have to be onboarded again, including going through any applicable training, filling out human resources paperwork, obtaining new security badges, reinstituting applicable security clearance actions, receiving government furnished equipment."
• Even more acknowledge this isn't the end of the road for anyone: "Employees could be subjected to multiple changes in their employment status in a matter of weeks," is a sentence that appears in filings from 13 different agencies.

The bottom line: Efficient, this is not.

The Social Security Administration will implement cuts to phone service in an effort to combat fraud, its acting commissioner said Tuesday.

Why it matters: Advocates and former agency officials have warned the costs of implementation could cripple Social Security.

Catch up quick: As Axios reported Monday, changes to phone service were proposed in a memo sent to acting commissioner Lee Dudek last week — and early versions of that memo warned of "significant" impacts for a broad range of benefit recipients.

How it works: The changes will be implemented quickly, he told a news conference Tuesday.

• "We're spending the next two weeks to train our field offices to respond to these changes," Dudek said.
• "These changes are not intended to hurt our customers."
• "I've made a commitment that we would monitor the situation closely," he added. "If it is to the detriment of the citizens we serve then we'll take necessary actions. If that means backing out the policy then we'll back it out. But we need to see what the results are."
• It's not clear by what measures results would be judged.

By the numbers: Dudek said the agency sees about $100 million a year in direct deposit fraud — a big number, but a very small fraction of the $1.6 trillion the agency pays out in benefits annually.

Yes, but: Advocates and former agency officials previously told Axios changes like these will curtail phone support for critical Social Security services — including when applicants first sign up for benefits.

• The agency has already announced plans to cut 12% of its workforce, and to close field offices — even as benefit recipients report delays in getting help with claims, and agency data shows backlogs.
• Dudek said some of those closures were of offices merely used for hearings that are now held online, while others were closed for health and safety reasons.

Between the lines: The pressure to tighten fraud controls came from DOGE, a former SSA official told Axios.

• A second former official, who recently worked in operations and spoke on condition of anonymity due to fear of retaliation, said the money it would cost to implement these changes would dwarf any savings that would come from cracking down on identity fraud.

An internal memo from the Social Security Administration proposes changes to its phone service that could derail the benefits application process for many Americans.

Why it matters: The Trump administration has repeatedly said it doesn't plan changes to Social Security, other than to address fraud and waste — but these proposals risk "crippling" a system already plagued by delays, and facing staffing cuts, former agency officials tell Axios.

The latest: Axios obtained a draft of the memo, signed by acting deputy Social Security commissioner for operations Doris Diaz on March 13, and written on behalf of the agency's operations department.

• Its existence was first reported by Popular.Info, which published screenshots of a subsequent version, sent to acting commissioner Leland Dudek a little later that day.

Context: The memo was sent one day after the agency denied, in a press release, a report it was scrapping its toll-free phone line.

• The agency, at the time, said the change would only preclude people from changing their bank account information by phone.
• But the new memo — issued one day later — proposes changes that will further limit what people can do by phone. Under the proposal, phone service would still be available to people who call the agency and don't need to verify their identity, like someone making a general inquiry.
• The draft of the memo viewed by Axios says the proposed limitations will be "significant" for those living in rural areas in particular.

Zoom in: The memo's focus is on identity verification. Currently, if you are unable to verify your identity using their online system, you can complete the process by phone.

• The March 13 memo proposes ending that option, and recommends the agency address "fraud risk" by requiring applicants, who can't use online verification, to do it in-person at local field offices.
• It was crafted at the request of DOGE staff, says a former Social Security Administration official, who left the agency because of this memo.
• The identity verification changes would mean that people who previously could apply for, or update, benefits over the phone would have to travel to a local field office to do so. That presents many hurdles.

What they're saying: These changes, if implemented, would "cripple field office operations, and they're already badly paralyzed," that former official told Axios, requesting anonymity because they were on a job search and might work in the future with the Social Security Administration.

• Benefits are adjusted regularly as people's incomes change, they explained. Forcing all those folks to come into a field office "would, in essence, break the agency."
• DOGE representatives are well aware of these risks, the former official said.
• A second former official, who recently worked in operations and spoke on condition of anonymity due to fear of retaliation, said the money it would cost to implement these changes would dwarf any savings that would come from cracking down on identity fraud.
• "It is a big deal," says Kathleen Romig, a former Social Security official, and director of Social Security and disability policy at the Center on Budget and Policy Priorities, who worked at the agency for years under different administrations.
• The changes "create a real Catch-22."

Social Security "service disruption"

State of play: The version of the memo ultimately sent to Dudek acknowledges that "Service Disruption" and "Operational Strain" is "a risk and challenge" of implementing this plan.

• There would be "increased field office traffic, longer call wait times and delayed processing," Diaz writes.
• The agency is already plagued by long call wait times and delayed processing.
• Diaz acknowledges in the memo that the beefed-up verification requirements would affect more "vulnerable populations," though she doesn't explain who she is talking about.

But the earlier version of the memo goes into more detail about its significance, detail that was omitted from the final sent to Dudek.

• In it, Diaz notes that the agency general counsel's office "has advised that there is likely a segment of the public for whom internet ID proofing is not viable, and this proposal eliminates phones as a service channel for those customers."
• "The consequence of reduced service channels could be significant."
• "For example, an individual who closes a bank account could have benefits suspended if unable to access in-person service." Or, "an individual plainly entitled to benefits is prevented from applying."
• There would also be challenges for those living abroad, and legal challenges, the draft notes — such as discrimination claims from disabled Americans.
• There would be increased costs for identity proofing.

The intrigue: It's not clear if the new memo's proposals are still under consideration; there was no evidence as of Monday that Dudek accepted these recommendations or implemented the changes.

• When asked for clarification, the administration referred Axios to its earlier statement on Social Security changes, which pre-dates the memo.
• "Any American receiving Social Security benefits will continue to receive them. The sole mission of DOGE is to identify waste, fraud, and abuse only," press secretary Karoline Leavitt said in a statement emailed Monday.
• The Social Security Administration did not respond to a voicemail and email from Axios seeking clarification.

Between the lines: "People have a lot of trouble with the identification process," says Jen Burdick, a lawyer who provides free legal services for Americans trying to get Social Security disability benefits.

• A recent client tried to drop by an office last week and was told to make an appointment by phone. On the phone, they were put on hold for six hours on Monday, five hours on Tuesday and two blocks of time, each three hours, on Wednesday, she said.
• These proposed changes are "a way they're trying to use red tape to literally block people from getting benefits," Burdick said.

If you are a current or former Social Security employee and want to talk confidentially, you can reach out to Emily Peck on Signal at EmilyRPeck.71 or emily.peck@axios.com

A federal judge on Thursday ordered six government agencies to offer fired probationary federal workers their jobs back.

Why it matters: At least 30,000 probationary workers have been fired in DOGE's sweeping remaking of the government. A few federal agencies have called their people back, but most are still not working.

Zoom out: The order is effective immediately, ruled Judge William Alsup, a Clinton appointee who presides in the U.S. District Court for the Northern District of California.

• Alsup said the Office of Personnel Management's order and the firing process was basically a "sham," noting that some probationary workers had been told that they were fired based on their performance.
• "It is sad, a sad day," said Alsup. "Our government would fire some good employee, and say it was based on performance. When they know good and well, that's a lie."

Zoom in: The agencies ordered to re-hire workers include the Department of Agriculture, Department of Defense, Department of Energy, Department of the Interior, Department of Treasury, and Veterans Affairs.

• Notably the Treasury Department includes the IRS. The tax agency has been hit hard by job cuts in recent weeks.

The big picture: The order comes just as agencies are set to undertake even more firings, or "reduction in force" in federal jargon.

• These reduction memos from each agency are due Thursday and are expected to detail as many as 250,000 job cuts.
• Alsup's decision comes on top of a ruling last week from the Merit Systems Protections Board, a federal agency that reviews worker complaints, ordering the reinstatement of 6,000 workers at the USDA.

Where it stands: In his ruling, Alsup made clear that it is within an agency's right to conduct a reduction in force, as long as it complies with the law.

• "This case is really an attempt to do a reduction in force, but to force it through the OPM," Alsup said.

OPM argued that it did not order these firings — but the judge read from agency letters that made clear that the firings had been ordered by OPM.

• He also pointed to the firing of an employee of the U.S. Forest Service, who had just months earlier received a positive performance review but was told in her termination letter that she was being fired due to poor performance.
• The firing process, he said, "was a sham in order to try to avoid statutory requirements."

What they're saying: The White House "will immediately fight back against this absurd and unconstitutional order," press secretary Karoline Leavitt said in a statement Thursday.

• "A single judge is attempting to unconstitutionally seize the power of hiring and firing from the Executive Branch," she said. "If a federal district court judge would like executive powers, they can try and run for President themselves. "

Catch up quick: The lawsuit was filed by unions representing federal workers, as well as several advocacy groups, including the Coalition to Protect American's National Parks.

• The plaintiffs argued that the Office of Personnel Management didn't have that authority to order these firings, and in an initial ruling last month Alsup agreed.

Earlier this week, lawyers for the White House retracted testimony from the acting chair of the Office of Personnel Management, Charles Ezell, rather than comply with Alsup's request that he testify or be deposed.

• Alsup was not pleased about that — nor with the government's attempt to use press releases to argue that the firings were something agencies did on their own.
• "I want you to know that I've been practicing or serving in this court for over 50 years, and I know how that we get at the truth," Alsup said. "And you're not helping me get at the truth. You're giving me press releases. Sham documents."

Of note: As the hearing came to a close, Alsup apologized for getting worked up.

• "I want to make it clear that I don't think counsel for the government has done anything dishonorable. I've given him a hard time," he said. "He's doing the best he can with the case he's got. Thank you for your service in the Justice Department."

Editor's Note: This story has been updated to remove an erroneously attributed statement.

States are warning that huge headaches are on the way as a wave of fired federal workers try to file for unemployment insurance.

Why it matters: Tens of thousands of probationary workers were abruptly fired across multiple federal agencies, without severance. Many may struggle financially, with broader ripple effects on local economies.

• Unemployment insurance can be a lifeline.

Where it stands: State attorneys general laid out the situation in a lawsuit over the firings filed last week.

• Because the firings happened without any advance notice and in a "chaotic" manner, they're exacerbating strains on state unemployment systems, per the lawsuit.
• States are getting inundated with claims. Maryland now sees 30 to 60 new claims every day. In the first quarter of last year, the state received only 189 jobless claims for federal workers.
• The firings "impose a significant strain" on the Maryland department's resources, per the lawsuit. The effects will stretch beyond unemployment claims to other areas of state business, the lawsuit warns.

The big picture: State agencies are underfunded and underresourced, particularly at this moment when overall joblessness is low, says Michele Evermore, a senior fellow at the National Academy of Social Insurance, who worked on unemployment insurance in the Biden administration.

How it works: The unemployment process for federal workers works differently than the private sector, where employers pay into the system through a payroll tax.

• The federal government doesn't pay up until firings happen, and is then responsible for reimbursing states and providing agencies with verification on wages and other information, like the reason for "separation."
• Since agencies are giving different reasons for the firings — some citing performance and others restructuring — the unemployment investigators will have to look deeply into each claim, per the lawsuit. That will be a time-consuming process.

Between the lines: Ordinarily, when there are dismissals on a wide scale, they proceed in an orderly way, with advance notice given to states. That's not what happened here.

• Evermore said many state agencies aren't hearing back from federal agencies as they investigate claims: "This is where the real hold-up is."

For example: Jacob Bushno, a veteran in southern Illinois fired from his job at the U.S. Forest Service on Feb. 18, filed for unemployment right away.

• The state agency is still investigating his claim, with an interview set for Wednesday. The battle to get unemployment insurance, on top of the abrupt firing, has "been another struggle," Bushno tells Axios.

For the record: When asked for comment about the status of these workers, the White House declined to address the specific situation. Instead deputy press secretary Harrison Fields said the president has a mandate to uproot "waste, fraud, and abuse."

• "The personal financial situation of every American is top of mind for the President, which is why he's working to cut regulations, reshore jobs, lower taxes, and make government more efficient."

What to watch: We're still at the beginning stages here. Observers expect unemployment claims to pick up in the coming weeks, but for now, some workers are waiting to see if they wind up getting their jobs back.

Not only have home prices soared over the past decade, but it's the "affordable" homes that have seen the biggest price increases.

Why it matters: Rising prices, exacerbated by a shortage of affordable homes, put homeownership out of reach for many, driving them to a rental market that's also seen remarkable cost increases.

Zoom out: It's a doom loop. A shortage of affordable homes means that buyers compete fiercely for the cheapest ones, pushing up prices.

• Prices for the bottom third of homes are up 124% since 2015, while the top third increased 77%, per a new analysis by Moody's Analytics.

The big picture: The most desirable cities are becoming affordable only to the wealthy, while many of those of more modest means are forced into longer commutes, creating more traffic, more environmental strain, and greater social division, Mark Zandi, Moody's Analytics chief economist, wrote in the paper.

The latest: The paper endorses legislation set to be reintroduced Tuesday morning by Sen. Elizabeth Warren (D-Mass.), the ranking Democrat on the Senate Banking Committee, along with Sen. Raphael Warnock (D-Ga.) and Rep. Emanuel Cleaver (D-Mo.) in the House.

• The American Housing and Economic Mobility Act of 2025 is an ambitious piece of legislation that Warren's been backing since 2018.
• It would provide more than $500 billion over the next decade to build more homes, funded by an increase in the estate tax.
• The money would be used to incentivize localities to cut regulations that impede building, and would go to first-time homebuyers, among other things.

What they're saying: "My comprehensive bill would build 3 million new homes across America, bring down rents by 10%, and create incentives for local governments to cut unnecessary red tape that drives up costs," Warren said in a statement to Axios.

Between the lines: Cutting red tape sounds great — and may appeal to conservatives —  but the zoning restrictions that impede building are typically fiercely defended by Republicans, including the president.

• But there is a surprising amount of bipartisan agreement that something needs to be done about housing affordability.
• That includes a bill introduced in 2023 that would reform rural housing programs cosponsored by four Democratic senators and four Republicans; and another that would increase home buyer protection in credit reports that passed the Senate last year.
• Democratic banking committee staffers told Axios they're looking for some areas for compromise. They pointed to a part of Warren's bill that would restrict the ability of private equity firms to buy homes.

Reality check: Congress has little appetite for spending on folks in need these days, as lawmakers ponder slashing Medicaid in order to extend the 2017 tax cuts. Affordable housing funding also appears to be stalled by the administration.

What to watch: There will be a Senate hearing on the topic Wednesday.

The Trump administration's efforts to purge the federal workforce are hitting speed bumps, but they're not stopping.

Why it matters: The firings of tens of thousands of employees happened lightning fast, and more are coming.

• In the meantime workers are eyeing the exits, and the ability of critical government agencies to function is at stake.

Zoom in: In two words, an IRS employee who recently resigned from the agency explained why: "The uncertainty," he told Axios.

• There was the return to office order, but no office to go to. The agency didn't have the space for him. Then there was the "fork in the road" push to resign, rumors of layoffs, and the firings of probationary employees.
• Now the IRS plans to cut its workforce in half, the New York Times reported this week.
• "Are we going to have a job next week? An office?" the IRS employee said, requesting anonymity because he's still working there for a few more days.

Where it stands: Yesterday the USDA was ordered to reinstate nearly 6,000 employees. Last week a federal judge ruled the initial order from the Office of Personnel Management to fire probationary workers was unlawful.

• Though the judge ruled that OPM's orders were illegal, he did not order employees be reinstated for technical reasons, including the plaintiffs' standing to sue and the fact that agencies weren't named defendants.
• The plaintiffs hope the judge will eventually issue such an order, but they must first amend their lawsuit and have another court hearing next week.

Between the lines: Even as some of these fired workers are reinstated, agencies are moving ahead with the next step: Plans to do wide-scale reductions in force that will be harder to overturn.

• In a leaked memo, the Department of Veterans Affairs has outlined its intention to return to 2019 staffing levels, which would mean firing as many as 83,000 workers.

In the meantime, federal workers are in a terrible spot, with no severance, no benefits, and for some, unemployment insurance may be tricky to secure, Michele Evermore, a senior fellow at the National Academy for Social Insurance, told Axios.

The bottom line: Firings, once set in motion, are hard to slow down.

President Trump imposed sweeping tariffs Tuesday on America's largest trading partners, triggering a global trade war that promises to affect the wallets of everyday Americans.

Why it matters: After running — and winning — on a promise to curb inflation, Trump's trade war threatens to raise prices for everything from food and clothes to cars and computers.

• Some estimates suggest just Tuesday's tariffs alone could cost the average U.S. household $830 a year — and that's before you factor in the cost of anticipated retaliatory tariffs from Canada, China and Mexico.
• Already, the impacts are escalating — the map above, for example, was based on a 10% China tariff, which has now been raised to 20%.

Tariffs on the top U.S. import partners

Zoom out: More than 40% of all U.S. imports come from Mexico, Canada and China — over $1.3 trillion worth in 2024 alone, per Census data.

• The tariffs will affect big-ticket items like machinery and cars, but also consumer staples — everything from beer (more than 80% of U.S. imports come from Mexico) to oats (almost all U.S. imports come from Canada).

Tariffs as a regressive tax

Zoom in: Tariffs are generally regressive, in that they more heavily affect lower-income people who spend a greater share of their resources on goods, particularly necessities like food and fuel.

• As data from the Progressive Policy Institute shows, even before Trump's new levies this week, the existing U.S. tariff system already charged much higher rates for low-cost products than their luxury counterparts.

The China trade deficit

Between the lines: Tariffs, especially on China, do move the needle on trade a little, but over time it tends to rebound.

• The trade deficit with China has been more than $200 billion for 20 years now, and Chinese retaliatory tariffs will offset some of the benefit of the new duties Trump assessed.

Fentanyl realities

The intrigue: In assessing tariffs on Canada and Mexico in particular, Trump cited the flow of fentanyl across both borders.

Yes, but: As U.S. Customs and Border Protection data shows, over the last 40 months, fentanyl volume that's trafficked through Mexico is almost 1,000x the amount coming through Canada.

• In January 2025 alone, CBP stopped almost half a ton of fentanyl at the Mexican border — and about half an ounce at the Canadian border.

The next tariffs

What to watch: The tariffs are a long way from over — the White House has made clear more are coming, and they'll stack up on top of each other.

• Steel and aluminum tariffs come in next week, which will particularly impact automakers and beverage companies, among others.
• Reciprocal tariffs on April 2 could affect dozens of countries, with as-yet unknown impacts on almost everything the country imports.

Go deeper: Tariff worries, Trump cuts signal emerging economic growth risks

Editor's Note: This story has been updated with additional details on the tariff map.

Dozens of contracts critical to the functioning of the Consumer Financial Protection Bureau (CFPB), have either been canceled or are on their way to termination, according to a detailed affidavit filed in federal court last week.

Why it matters: The CFPB is an agency tasked with protecting people from financial fraud, but it has been gutted by the White House over the past two weeks as part of the broad purge of the federal government.

• The filing offers more detail on what may have happened.

Catch up quick: The affidavit was filed by someone calling himself Charlie Doe, who says he is a contracting officer at the agency, which is a person who negotiates, administers and terminates contracts.

• It is part of a lawsuit filed by the National Treasury Employees Union against Russell Vought, the CFPB acting director, that claims efforts to "shut down" the agency are unlawful.

Where it stands: The plaintiffs in the lawsuit were able to get the court to pause contract terminations. But that agreement will expire today, when another hearing in the case is scheduled.

• It is unclear what happens next. Doe warns that if there is no order prohibiting the termination to continue, the vast majority of these contracts will be fully terminated within the week.

Zoom in: Doe says he has worked in government for 25 years, but the past few weeks "are unlike anything I've ever seen at any agency during any change in administration."

• Agency staff were directed to cancel a total of about 174 contracts with vendors, for training of examiners who supervise banks, for handling cybersecurity, and for serving as expert witnesses in litigation.
• Canceled contracts are listed on DOGE's Wall of Receipts, and appear to also include mortgage data analytics and one for short- and long-term disability insurance services.

What they're saying: "These are the basics of what it takes to run an agency," Julie Morgan, former associate director at the CFPB, tells Axios.

Yes, but: The Trump administration, in a court filing, says it will continue to operate the CFPB and has nominated a new director.

The intrigue: Some contracts are related to maintaining the agency's much-lauded consumer complaint database, where members of the public can go to register issues they're facing with companies. It is generally viewed as one of the most popular and least controversial services the CFPB offers.

• After news got out that a contract for a complaint hotline was terminated, that agreement was reinstated. That doesn't mean the agency's complaint mechanisms are working. A different contract to maintain the complaint database remains canceled, per the affidavit.
• "There is now a backlog of thousands of complaints that haven't been forwarded to financial institutions," the affidavit says.

Between the lines: You don't need vendors or services if your agency isn't doing anything. Most employees were told earlier this month to stop their work.

• Over the past few days, the CFPB dropped at least seven lawsuits it had filed against financial institutions, alleging they had ripped off student loan borrowers, those who buy mobile homes and others.

The White House is directing federal agencies to prepare for large-scale layoffs, so-called reductions in force (RIF), according to guidance sent out by the Office of Management and Budget and the Office of Personnel Management on Wednesday.

Why it matters: To date, job cuts in the federal workforce have mostly affected probationary employees who are relatively easy to fire — RIFs are a more drastic step. Agencies were given two weeks to make plans for "significant" layoffs.

• Typically, in a RIF, positions are permanently eliminated.
• The guidance follows an executive order earlier this month requiring that agency heads prepare large-scale reductions in force.

Zoom in: Agencies must submit what the administration is calling "Phase 1 Agency RIF and Reorganization Plans" by March 13.

• Agencies should detail the number of full-time employees they can cut and detail the cost savings the cuts would provide over the next three years.
• The plans should include a "significant reduction" in full-time positions, per the guidance.
• "Agencies should focus on the maximum elimination of functions that are not statutorily mandated while driving the highest-quality, most efficient delivery of their statutorily-required functions."

By the numbers: There are about 2.3 million federal employees (not including the postal service). Thousands have recently been fired.

• The guidance doesn't appear to include any percentage target for cuts.

There are exemptions for postal workers, military personnel, political appointees and positions "necessary to meet law enforcement, border security, national security, immigration enforcement, or public safety responsibilities," per the guidance.

• Any cuts to workers who "provide direct services to citizens (such as Social Security, Medicare, and veterans' health care)" should not be implemented without first a review from OMB and OPM, per the document.

The rationale, the memo explains, is to consolidate duplicative functions and management layers, reduce "non-critical" positions, and implement technology that automates routine tasks.

• The document also asks agencies to cut their "real property footprint" and reduce their "budget topline."

Between the lines: Agency heads are directed to collaborate with the Department of Government Efficiency on these plans.

• There's been some friction lately between DOGE and agencies — as many pushed back over an Elon Musk-directed email to government workers over the weekend asking them, "What did you last week?"
• Musk threatened to fire workers who didn't respond, the White House then backed off that threat, but President Trump said Wednesday that workers who didn't respond are "on the bubble."

The big picture: The purge of the federal workforce began almost immediately when Trump took office.

• First, he called employees back to in-person work, a move that led some to resign.
• Then a so-called deferred resignation offer went out, telling workers if they voluntarily resigned they could receive eight months' pay.
• After that, federal agencies began firing so-called probationary workers — those in their positions for only a year or two (including some longtime federal workers who'd been recently promoted or taken on new roles).
• The administration has also fired many inspectors general and nearly the entire staff of USAID.

What we're watching: These latest firings, however, have the potential to dwarf the scale of the cuts that have already happened.

More than 1 million federal workers responded to an email asking them to document what they did last week, sent at Elon Musk's behest, White House press secretary Karoline Leavitt told reporters Tuesday.

Why it matters: That's only about half the federal workforce — perhaps to be expected, as many agencies told employees to ignore the email.

• The email created confusion and a bit of chaos inside agencies. Musk had said on X that workers who didn't respond would be fired, but the White House backed away from that threat on Monday.

Zoom in: "We've had more than 1 million workers who have chosen to participate in this very simple task of sending five bullet points to your direct supervisor or manager, cc'ing OPM [the Office for Personnel Management]," Leavitt said, noting that she herself had sent off her five bullet points.

• "Took me about a minute and a half."

Where it stands: Leavitt noted that asking workers to report on their accomplishments is a strategy that Musk has employed at his private companies.

• But it's often a more complicated question at the federal level — for example, for employees are often working on classified information.
• Many took exception to having to justify their labor. One trauma nurse who messaged Axios said she was insulted by the question.

In the private sector, such strategies for assessing productivity are out of fashion these days, as companies use more sophisticated measures to understand what workers are doing, as the WSJ reported Tuesday.

• Asking workers who are under threat of termination to talk about their accomplishments may not yield much in the way of useful information — they're likely to give the most rosy view possible.

Leavitt on Tuesday said the point of the email exercise "is to ensure that federal workers are not ripping off American taxpayers, that they are showing up to the office and that they are doing their jobs."

Despite his threats, Elon Musk can't simply fire federal employees for not responding to an email, attorneys and former senior federal officials told Axios.

Why it matters: So far legal barriers haven't stopped Musk's DOGE purge — and he even has President Trump's explicit support in his latest effort — yet Musk may now be bumping up against a harder boundary.

• For the first time, federal agencies appear to be pushing back, and they're getting support from the executive branch, despite what Trump is saying publicly.

The big picture: It's too early to tell if agencies will hold the line and terminate workers for failing to reply to the email, sent from the Office for Personnel Management on Saturday with the subject line "What did you do last week?"

• The deadline to respond was Monday at 11:59 pm EST.
• Still, it's clear that some agency heads — who've been confirmed by the Senate in contrast to Musk's more murky power — are flexing muscle against DOGE, said one former senior OPM official familiar with the agency's workings.
• OPM doesn't actually have the authority to reach into agencies and simply fire workers. That's in agency hands, and with Musk's latest move, "I think you're starting to see some of that tension playing out," the official said.

Late on Monday, OPM issued further guidance making clear that decisions are left to individual agencies, and that the president is not involved in such decisions.

• "It is agency leadership's decision as to what actions are taken," per the memo. "At Counsel's direction, in order to comport with the Presidential Records Act, the Executive Office of the President is exempted from this exercise."

Where it stands: Many federal agencies, including the FBI, the Pentagon and Department of Homeland Security, have already told workers not to respond to the OPM email. Some have explicitly told workers to reply.

• Before the OPM email went out, Musk posted about it on X and said those who didn't respond would be terminated.
• The threat was echoed by Trump on Monday. If employees don't respond, "you're sort of semi-fired or you're fired," he said.
• Musk doubled down Monday night. Responding to a post on X that called for anyone who didn't answer the email to be fired, he wrote: "Subject to the discretion of the President, they will be given another chance. Failure to respond a second time will result in termination."

Yes, but: There are threats and there are actions.

• The email that millions of federal workers received did not actually threaten anyone with termination.
• Perhaps more significantly, even after Trump's comments Monday, an administration official confirmed to Axios that it is up to agencies to decide what steps to take next regarding the "what did you do" email.
• In other words, notwithstanding Musk's threat or Trump's assertion, the federal government's own HR office is effectively saying no one has to face a penalty for not answering.

State of play: "Neither DOGE nor OPM has authority to fire these federal workers," said David Super, a professor at Georgetown Law School whose research focuses on administrative law.

• According to Tamara Slater, a shareholder at Alan Lescht & Associates, a D.C. law firm that represents federal employees, "I"m not aware of any authority that would allow OPM to direct an agency to fire somebody."

Between the lines: Even if agencies follow Musk's guidance, and try to fire employees for not responding, they would likely face challenges defending that move.

• "There are all of these limitations on the reasons why somebody can be fired," Slater said. "The idea that not responding to a single email is going to meet that standard is a legal question."
• It's hard to imagine such a firing would be upheld, she said.

Reality check: "DOGE has proven that it has the political power to force agencies to do pretty much anything that it chooses to do, whether legal or not," Georgetown's Super said.

• And answering the question — what did you do last week — for a lot of workers isn't as simple as you might imagine.
• Super noted that some workers are barred from sharing details of their work. Certain staffers at the Securities and Exchange Commission aren't supposed to disclose such information to guard against affecting stock prices. Other federal workers are dealing in classified information.
• Privacy and security are big concerns. "Assume that what you write will be read by malign foreign actors and tailor your response accordingly," Health and Human Services employees were told, per the Washington Post.