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- [00:03]
Luke Vargas
More than 40,000 federal workers take a buyout deal, but the number risks falling short of the White House's cost saving target. Plus, US Lawmakers move to ban Deepseek on government owned devices and a legal battle heats up around President Trump's move to end birthright citizenship.
- [00:22]
Legal Expert
To actually end birthright citizenship, Trump would need to either amend the Constitution that's something that legal experts say would be very difficult. Or the other option is to go to the Supreme Court and asked the court to endorse his interpretation of the 14th Amendment. And this second pathway is what the administration is banking on.
- [00:40]
Luke Vargas
It's Thursday, February 6th. I'm Luke Vargas for the Wall Street Journal, and here is the AM edition of what's news, the top headlines and business stories moving your world today. Today is the final day for American federal government workers to decide whether to take a buyout offer from the Office of Personne or opm, part of a broader Trump administration effort to cut government spending. The White House had said it expected between 5 and 10% of the about 2 million civilian federal employees to accept the deal. However, with the deadline nearing, we report that number is closer to 40,000 workers, or roughly 2%, according to OPM. Those who opt to resign will be paid through September and don't have to work, though unions and a dozen attorneys general say the offer isn't guaranteed. Journal reporter Lindsay Ellis says widespread uncertainty about the buyout working as advertised has deterred employees from taking it, but that the job security of those who turn it down is far from certain either.
- [01:49]
Lindsay Ellis
Hanging over the buyout offer is that workers who opt to keep their jobs could be targeted for layoffs down the line. Employees have been pretty unnerved by signs of increasing pressure to push out government workers, either through the DEI executive orders or what has been unfolding with USAID in the last few days. In the meantime, it's really hard to do your jobs when all of this is unfolding, federal workers are telling me. With all of this tumult and message after message on this deferred resignation plan, it's tough to focus on the mission of these agencies. And that might be even harder with fewer staff after Thursday's deadline.
- [02:33]
Luke Vargas
Federal Employees have until 11:59pm tonight to respond to the resignation offer. Meanwhile, we are exclusively reporting that more than 100 Environmental Protection Agency workers are set to be placed on leave in connection with the president's executive order targeting DEI programs. The planned cuts will unwind a Biden administration program meant to help poor communities recover from exposure to health risks from industrial activity. House Republicans are considering extending President Trump's expiring tax credits by as little as five years, putting them at odds with Treasury Secretary Scott Scott Besant and Senate Finance Committee Chair Mike Crapo, who want the tax cuts to be permanent. The shorter extension would limit revenue declines within a broad tax and border bill Republicans hope to push through Congress as a core group of conservative lawmakers advocates for up to $2.5 trillion in cost savings over the next decade, including via significant changes to programs like Medicaid. In another journal scoop, we report that lawmakers plan to introduce legislation today that would ban AI Chatbot Deepseek on government owned devices over concerns it could provide user info to the Chinese government. The bipartisan legislation echoes a strategy Congress used to ban TikTok from government devices. After seemingly emerging out of nowhere last month, Deepseek's Chatbot has risen to the top of Apple and Google's US App Store rankings. Deepseak didn't respond to a request for comment. We are exclusively reporting that Honeywell, one of America's last big industrial conglomerates, is preparing to split into three companies, according to people familiar with the matter. Honeywell is expected to announce plans today to separate its aerospace division from its automation business while moving ahead with previously reported plans to spin off its advanced materials arm. Reporter Lauren Thomas says activist investor Elliott Investment Management has been pushing for such a breakup after seeing how successful General Electric's recent split proved.
- [04:48]
Lauren Thomas
For years now investors have really clamored for leaner businesses with more simplified operations and that really have more of a honed in strategic focus. One of the best examples really what Honeywell might in part hope to achieve here is what General Electric did a number of years ago. So GE's Aerospace and Healthcare units are now standalone businesses that together have market values nearly four times bigger than what GE had when that trio was a single company just a couple years ago. And GE's aerospace unit now, for example, has a value of over $200 billion. So these are massive numbers. Honeywell in particular with its aerospace business had really been outshining other parts of the company that in turn were a drag on that business. So I think by separating that business, certainly hope to see some more value unlock there.
- [05:45]
Luke Vargas
Honeywell is due to report earnings at 6am Eastern, while also due later today are earnings from Amazon. The company may be America's top online retailer, but it's been struggling to compete in the competitive arena of physical stores since early 2023. It's closed about half of its US based Amazon Go convenience stores which use so called just walk out technology that charges customers electron, allowing them to skip waiting to pay for their purchases. The pullback is part of a broader retrenchment in Amazon's brick and mortar portfolio, though as Journal reporter Kate King told our Tech News Briefing podcast, just walk out tech isn't going away.
- [06:30]
Kate King
Amazon licenses this technology to over 200 third party retailers. That includes colleges and universities, hospitals, those convenience type stores in airports, stadiums, and someone I interviewed who was really critical of Amazon's physical locations, said Amazon Go. While it didn't really work as a standalone store, it wasn't a waste of time or money because it allowed Amazon to really research, develop and refine this technology, which it's now selling to other retailers.
- [06:59]
Luke Vargas
And on deck today, earnings are due from Eli Lilly, Hershey and ConocoPhillips before the market opens. And the bank of England is expected to cut interest rates for a third time in a row, with its expected at 7:00am Eastern. Coming up, President Trump's executive order to end birthright citizenship has kicked off a legal battle, and we'll look at how it could play out after the break.
- [07:27]
Tax Expert
It's tax season, so what's new this year that could save you money?
- [07:31]
Lauren Thomas
The IRS says that taxpayers spend 13.
- [07:35]
Luke Vargas
Hours and $290 preparing and paying just.
- [07:39]
Lauren Thomas
For the tax prep, so it's worth.
- [07:42]
Tax Expert
Looking into different Opt on the youe Money Briefing podcast from the Wall Street Journal. We're breaking down the latest tax rules, how to keep your tax data safe, and ways to file for free. Catch our Series tax season 2025 what's new February 2nd and 9th on your money Briefing.
- [08:03]
Luke Vargas
It is shaping up to be a busy week for the legal fight over President Trump's executive order to end birthright citizenship, the automatic granting of citizenship to children born in. A federal judge in Maryland yesterday issued a nationwide pause of the order, and a Seattle judge who had previously questioned the constitutionality of Trump's move will hear arguments today over whether to issue a similar injunction. States have also waded into the debate, with attorneys general representing 22 states challenging the order and 18 others formally expressing their support for it. My colleague Kate Bullivant spoke to Journal video journalist Josephine Chu about the legal battle underway.
- [08:47]
Josephine Chu
Josephine, you have just finished working on a video which gets into Trump's strategy here. Can you start by telling us what the Constitution says about birthright citizenship and what Trump makes of this?
- [09:02]
Legal Expert
Yeah. So birthright citizenship is written into the 14th Amendment of the Constitution, and it was first established to guarantee citizenship to black Americans after civil war. And it goes something like this, that all people born in the US and subject to the jurisdiction thereof are citizens of the US and the phrase subject to the jurisdiction thereof is included in the citizenship clause to exclude three groups of people. Children of diplomats because they have diplomatic immunity, children of Native Americans born on tribal lands, and then children of members of an invading and occupying army. The vast majority of legal experts agree that the meaning of the 14th amendment is very clear, and the federal government has basically operated on this understanding of it for decades. The Trump administration is offering an alternative interpretation of the 14th Amendment. The administration is focusing on the phrase subject to the jurisdiction thereof. And their argument is that children of immigrants in the US Illegally are one of those groups that should be excluded from birthright citizenship. So children of immigrants in the US Illegally are not subject to the jurisdiction thereof and therefore should not get the right of birthright citizenship.
- [10:21]
Josephine Chu
So let's say that Trump manages to successfully end birthright citizenship in the U.S. what will happen?
- [10:29]
Legal Expert
So if Trump successfully ends birthright citizenship, children born in the US Wouldn't get citizenship unless at least one of their parents is a citizen or a legal permanent resident. And if the executive order does take effect, the federal government would stop issuing citizen affirming documents like Social Security cards and passports to children of non citizens and local governments. So cities and states, they also stand to lose funding for certain federal benefit programs like health care services, educational services. These are programs where eligibility is based on Social Security numbers. And if the executive order goes into effect, then states like New Jersey would have to pay substantially more to cover for that. The Trump administration has said that part of the intent of this policy is to deter what they call birth tourism. That's when pregnant women come into the US Specifically to give birth so that their children would automatically become U.S. citizens. The administration has argued that the birthright citizenship right has been abused and that it's a major incentive for illegal immigration.
- [11:35]
Josephine Chu
Let's hear now from some of the critics of this move. This is a clip from your interview with New Jersey Attorney General Matt Plack.
- [11:44]
Matt Plack
These are not children who have ties to any other country. They're born here. So what it would do is create this permanent underclass of people who are here that aren't entitled to the same healthcare or educational rights necessarily as American born children.
- [11:59]
Josephine Chu
Josephine we should note that Trump's executive order isn't just getting criticism, it's being challenged in court. How likely is the president to succeed in ending birthright citizenship?
- [12:12]
Legal Expert
The president doesn't have the right to change the Constitution by executive order. To actually end birthright citizenship, Trump would need to either amend the Constitution, which would require two thirds of both the House and Senate and three quarters of the states to agree. That's something that legal experts say would be very difficult. Or the other option is to go to the Supreme Court and ask the court to endorse his interpretation of the 14th Amendment. And this second pathway is what the administration is banking on. But there are many challenges underway in this legal case. Most experts say the executive order is unlikely to take effect, mostly because it violates not only the Constitution, but also several federal statutes. So laws passed by Congress. But this issue is bigger than just the legal case. This executive order is one of several that Trump has signed in his first few days in office that are essentially ways for him to test his powers as the president. And it's something that, that we haven't really seen before. And a lot of experts are saying that this is quite radical. So we're going to have to wait and see how this plays out.
- [13:20]
Josephine Chu
That was Journal video journalist Josephine Chu. Josephine, thanks so much for your time.
- [13:25]
Legal Expert
Thank you so much for having me.
- [13:26]
Luke Vargas
And that's it for what's news for this Thursday morning. Today's show was produced by Kate Bullivant and Daniel Bach, with supervising producer Christina Rocca. And I'm Luke Vargas for the Wall Street Journal. We will be back tonight with a new show. Until then, thanks for listening.