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Supreme Court lets Trump proceed with broad workforce cuts, including IRS

July 8, 2025
in Accounting
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Supreme Court lets Trump proceed with broad workforce cuts, including IRS
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The U.S. Supreme Court let President Donald Trump move ahead with plans to dramatically reduce the size of the federal government, lifting a court order that had blocked 19 federal departments and agencies from slashing their workforces.

Granting a Trump request over one dissent, the justices on Tuesday cleared the administration to implement Trump’s Feb. 11 executive order, which opponents say could cause hundreds of thousands of federal workers to lose their jobs. The Supreme Court decision will apply while litigation goes forward.

In an unsigned order, the court said the administration is likely to succeed in arguing that Trump’s executive order and a joint memo from the Office of Management and Budget and Office of Personnel Management were lawful. But the justices made clear they weren’t taking a position at this stage on whether individual agency plans for how to carry it out would pass legal muster.

Justice Ketanji Brown Jackson dissented, writing that a California federal judge’s “temporary, practical, harm-reducing preservation of the status quo was no match for this court’s demonstrated enthusiasm for greenlighting this president’s legally dubious actions in an emergency posture.”

Justice Sonia Sotomayor joined the majority, a rarity in cases involving Trump administration actions that so far have largely divided the court along ideological lines.

Although the high court order isn’t designed to be the final word in the case, it marks a significant milestone in Trump’s campaign to transform the federal workforce. The affected agencies include the Health and Human Services Department, Internal Revenue Service, Veterans Affairs Department, Labor Department, Energy Department and Environmental Protection Agency.

It’s the second time the Supreme Court has backed Trump in a mass firing case, following an April 8 decision that meant the administration didn’t have to reinstate employees in six government departments. The high court is still weighing a separate administration request to resume dismantling the Department of Education.

In the latest case, U.S. District Judge Susan Illston in San Francisco had temporarily blocked the reductions in force, saying they would render many federal agencies unable to perform the tasks mandated by Congress. 

“The president has the authority to seek changes to executive branch agencies, but he must do so in lawful ways and, in the case of large-scale reorganizations, with the cooperation of the legislative branch,” Illston wrote in a May 22 preliminary injunction.

In urging the Supreme Court to intervene, U.S. Solicitor General D. John Sauer said Illston’s order was undermining the president’s constitutional role as the head of the government’s executive branch.

The district court decision is “compelling the government to retain — at taxpayer expense — thousands of employees whose continuance in federal service the agencies deem not to be in the government and public interest,” Sauer wrote.

A group of labor unions, advocacy organizations and local governments sued to challenge the executive order, along with a Feb. 26 memorandum that gave specific instructions to agencies about the steps they needed to take and the required timeline. The memo said the Department of Government Efficiency, the office once led by billionaire Elon Musk, would play a central role in the downsizing.

The challengers told the justices it was vital to keep the plan on hold until courts could rule on its legality. The mass firings were designed to be implemented in a matter of months.

“If the courts ultimately deem the president to have overstepped his authority and intruded upon that of Congress, as a practical matter there will be no way to go back in time to restore those agencies, functions, and services,” the challengers argued.

The 9th U.S. Circuit Court of Appeals had left Illston’s order in force, prompting the Trump administration to turn to the nation’s highest court.

The case is Trump v. American Federation of Government Employees, 24A1174.

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