This week in Federal Policy Watch: Elon Musk’s DOGE takes over federal government

The Trump-Vance administration continued to use its newly created Department of Government Efficiency (DOGE), led by unelected billionaire Elon Musk, to attack the federal workforce and government services. It was reported that the DOGE office gained access to the federal payment system through the U.S. Treasury Department, a complex system that distributes trillions of dollars a year in federal funds and contains the sensitive personal data—including Social Security numbers—of millions of Americans. This action is reckless, illegal, and unconstitutional.

It has also been widely reported that DOGE attempted to access personal data on workers at the Department of Labor. This could include access to sensitive information about ongoing investigations into Musk’s companies and potential violations of workers’ rights. EPI joined the AFL-CIO and a coalition of its affiliated unions in an emergency lawsuit seeking to protect this confidential information. In addition to the lawsuit to protect workers’ information, the AFL-CIO launched the Department of People Who Work for a Living—a new campaign to hold DOGE accountable and make sure the federal government is responsive to working people.

You can find a comprehensive catalogue of all policies relevant to working people and the economy at Federal Policy Watch, an EPI online tool documenting actions by the Trump administration, Congress, federal agencies, and the courts. You can subscribe to daily Federal Policy Watch updates here.

Significant revisions to labor market data don’t change underlying story of a strong economy

Below, EPI senior economist Elise Gould offers her insights on today’s release of the jobs report for January. Read the full thread here.

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EPI’s updated Family Budget Calculator shows that states like Virginia need a higher minimum wage

EPI’s Family Budget Calculator (FBC) is a widely cited tool for determining what it takes to make ends meet for different family types in all counties and metro areas in the United States. For more than 20 years, we have calculated family budgets for basic expenses like housing, food, health care, child care, transportation, other necessities, and taxes. In doing so, we create a more location-specific and realistic assessment of cost of living than traditional poverty thresholds.

We use government-provided data where possible and stay up to date with changes in policy and data availability. Because of this, and due to related changes in methodology, we don’t recommend comparing budgets over time. For more details on the construction of EPI’s family budgets and all of the datasets we use, see the full methodology.

The FBC interactive tool can be used to compare family budgets within and across family types and counties and metro areas. Using the family budget tool, one could, for example, compare annual and monthly budgets for three different family types in a specific county or metro area. They could also compare the same family type across three different counties or metro areas, or a combination of these. For a video tutorial on how to use the FBC, see here. The full dataset is downloadable at the bottom of our FBC page.

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“No tax on tips” will harm more workers than it helps: Proposals in Congress and now 20 states could encourage harmful employer practices and lead to tip requests in virtually every consumer transaction

When President Trump proposed exempting tipped income from taxation during his 2024 presidential campaign, many viewed it as a politically expedient gimmick to win support among tipped service workers. Unfortunately, then-Vice President Harris soon followed suit, and since the election, a federal “no tax on tips” bill has been reintroduced and lawmakers in at least 20 states have proposed similar bills (see map below).

Now that lawmakers in a multitude of states have supported the idea, it’s worth unpacking just how incredibly foolish and dangerous these proposals are. In summary, exempting tips from taxes would:

  1. help very few workers and undermine pay increases for many more;
  2. expand the use of tipped work—a system rife with discrimination and worker abuse— potentially leading to consumers being asked to tip on virtually every purchase; and
  3. deplete state and federal budgets and create new avenues of tax avoidance, especially for high earners.
Map

Lawmakers in 20 states have proposed misguided "no tax on tips" bills: States where bills to exempt tip income from taxes are being considered

 

State Key Bill number
Alabama
Alaska
Arizona 1 HB 2081
Arkansas
California 1 SB 17
Colorado
Connecticut 1 HB 5975, HB 5728
Delaware
Florida
Georgia 1 SB 2
Hawaii 1 HB 282, HB 520 / SB 1153, HB 575
Idaho
Illinois
Indiana 1 HB 1001
Iowa
Kansas 1 Bill not yet filed
Kentucky 1 HB 26
Louisiana
Maine
Maryland 1 HB 1005
Massachusetts 1 HD 425
Michigan
Minnesota
Mississippi
Missouri 1 HB 198
Montana
Nebraska 1 LB 28
Nevada
New Hampshire
New Jersey 1 A 4911, A 5006 / S 3741
New Mexico
New York 1 S 587
North Carolina 1 HB 11
North Dakota 1 HB 1324
Ohio
Oklahoma 1 SB 100, SB 297, SB 383
Oregon 1 SB 560
Pennsylvania
Rhode Island
South Carolina 1 S 234 / H 3779, S 126 / H 3435
South Dakota
Tennessee
Texas
Utah
Vermont
Virginia 1 HB 1965, HB 1562 / SB 763
Washington
Washington D.C.
West Virginia
Wisconsin
Wyoming

 

Note: In 18 of these 20 states, a draft bill has been filed. In some states, there are multiple bills under consideration. In Massachusetts, the bill has a number but is still being drafted. In Kansas, there has been local media coverage of a proposed bill, but the bill has not yet been filed as of this publication. 

Source: Bills were identified using a combination of keyword searches on FiscalNote and internet searches.

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Job openings continued to trend down in December

Below, EPI senior economist Elise Gould offers her insights on today’s release of the Job Openings and Labor Turnover Survey (JOLTS) for December. Read the full thread here.

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Work requirements for Medicaid do not address the real barriers to work and risk throwing many into health insecurity

Last week in a confirmation hearing, Russell Vought, President Trump’s nominee to run the Office of Management and Budget, said he would support work requirements for Medicaid, the government health insurance program for low-income people. His position—which has also shown up in Republican proposals for the House reconciliation package—was couched in language to “encourage people to get back into the work force, increase labor force participation and give people again the dignity of work.”

In reality, work requirements have nothing to do with getting people into the workforce. While increasing labor force participation and helping people obtain the dignity of work are important goals, people don’t actually need encouragement to do this. The incentive to work is already there: It gives people sufficient income to not live in grinding poverty. People with income low enough to qualify for social safety net benefits need support from policymakers to access programs like Medicaid and SNAP, not new rounds of bureaucratic paper pushing, which is what work requirements mainly achieve.

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This week in Federal Policy Watch: Trump-Vance administration paralyzes worker protection agencies and leaves workers without ability to enforce the right to a union

The Trump-Vance administration continued to focus its policy initiatives on attacking the federal workforce and government services, beginning the week with the Office of Management and Budget (OMB) issuing a memo ending all federal grants and loans. That action—which would have ended funding for things like Head Start programs’ early childhood education services and cancer research—was temporarily blocked by a federal judge, leading the administration to rescind the memo. But the memo made clear the administration’s desire to halt funding for programs it deems to be out of line with its political ideology.

Similar political purges occurred at two key independent worker protection agencies: the Equal Employment Opportunity Commission (EEOC) and the National Labor Relations Board (NLRB). While some agency positions are susceptible to political churn, President Trump fired EEOC commissioners and NLRB officials confirmed by the Senate to serve terms that stretched beyond 2025. The firings set up potential legal challenges. Both agencies now lack the quorum required to engage in certain enforcement actions, leaving workers who depend on the agencies without recourse.Read more

DOGE is not worth engaging. You can’t cut your way to a federal government that does more.

The Department of Government Efficiency (DOGE) is the effort largely associated with Elon Musk. The stated goals are to reduce wasteful spending and eliminate unnecessary regulations. Unsurprisingly, the Trump administration and congressional Republicans are taking it seriously. More worryingly, there are good-faith proponents of improving the federal government’s capacity who seem willing to take it seriously.

This would be a mistake, as it’s clearly a bad-faith effort rooted in ignorance and a knee-jerk desire to shrink the federal government, both for ideological reasons and the creation of space to preserve the tax cuts for the rich and corporations that will be locked-in later this year.

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Paid sick leave improves workers’ health and the economy

Beginning this year, Americans in three more states—Alaska, Missouri, and Nebraska—will have access to paid sick leave, bringing the total number of states that provide paid sick leave up to 18 (plus Washington D.C.). These policies provide workers short-term leave to care for themselves or their family when they become sick.

Paid sick leave laws have passed at state and local levels in record numbers over the last few years. These laws improve public health by reducing the spread of illness, and their costs to businesses are extremely modest—generally requiring no measurable change to business practices. Yet new evidence is building support for a benefit that workers have long known about, and employers are only recently getting hip to: Paid sick leave is a key work support that may increase employment and workforce attachment.

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Is Trump taking the wrong turn for U.S. truck manufacturing?

President Trump’s executive order to revoke federal funding for investments in manufacturing clean vehicle technologies portends a bleak future for the jobs and communities building big trucks and buses in the United States, our new report co-authored with the BlueGreen Alliance details.  

Medium- and heavy-duty vehicles are a backbone of U.S. economic life. Transitioning these vehicles from internal combustion engines (ICE) to low- and no-emission technologies is a critical step for eliminating greenhouse gas and other toxic emissions from the transportation economy. At the same time, this transition could have serious implications for the ICE vehicle manufacturing industry and auto workers—as well as the steel and aluminum industries that contribute so much to vehicle manufacturing—that have long been hammered by outsourcing and offshoring, union-busting, and intensifying international competition.

If done right, the transition to manufacturing clean trucks and buses presents a rare opportunity to reverse these trends and revitalize long-beleaguered industries with expanding investment, creation of good jobs, and broadly rising incomes in the United States. If done wrong, the transition risks exacerbating the current trends that see companies moving production offshore or to U.S. states embracing anti-worker policies, threatening the security of the good jobs that remain.

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