By Nermeen Nabil Khear 
A federal judge in Washington, D.C., has refused to block Elon Musk’s Department of Government Efficiency (D.O.G.E) from accessing US Department of Labor data. The ruling came on Saturday after the labor union American Federation of Labor and Congress of Industrial Organizations (AFL-CIO) filed a lawsuit against Elon.
In its court filing, the AFL-CIO said that Elon’s access to labor data could lead to a conflict of interest by giving him inside information about investigations into his companies (Tesla, SpaceX, X, and The Boring Company). Judge John Bates reviewed the case and said he was concerned about Elon’s actions but ruled that the AFL-CIO had failed to prove that any harm had occurred.
Bates’s decision is a temporary win for Elon and his cost-cutting mission but a blow to labor unions. In a press statement released after the ruling, AFL-CIO President Liz Shuler called the ruling “a setback, but not a defeat,” adding that the union plans to bring more evidence to the court in efforts to “save America from Elon.”
Elon’s D.O.G.E has critics scrambling
According to court documents, the AFL-CIO claims Elon’s team is seeking confidential information on government employees, including those filing labor complaints or involved in safety investigations. The union believes this could expose whistleblowers and give Elon an unfair advantage over competitors under investigation by agencies like the Occupational Safety and Health Administration (OSHA).
Another major concern is Elon’s potential access to Bureau of Labor Statistics (BLS) reports that show the state of the economy. These reports are highly sensitive and could affect both policy and business strategies. Critics say that Elon might manipulate such information for personal gain, though the White House insists Elon will recuse himself from any matter in which he has a financial conflict.
But Elon isn’t exactly bound by typical federal employee rules. As a “special government employee,” he dodges many ethics and conflict-of-interest regulations. This loophole is one reason unions are suing, saying Elon’s position gives him “unchecked power” over America’s 2.2-million-member federal workforce.
Meanwhile, in a separate legal battle, another coalition of federal employee unions and Democratic state attorneys-general is suing the Treasury Department to block Elon’s access to payment records. This case escalated when Judge Paul Engelmayer of New York issued an order temporarily blocking D.O.G.E from Treasury data.
Engelmayer warned that giving Elon and his allies access to payment systems would create a massive risk of data breaches.
His ruling, issued Saturday morning, ordered all special government employees and political appointees outside the Treasury Department to destroy any information they might have accessed since Trump’s inauguration. Treasury officials have agreed not to hand over more data until a court hearing scheduled for February 14.
Union, lawmakers, and states push back against D.O.G.E
New York Attorney General Letitia James is one of the loudest voices opposing Elon’s operations. “We’re suing over the free rein Donald Trump gave Elon Musk and D.O.G.E to access Americans’ private information,” she said in a public statement. James accused Elon of weaponizing government data to justify cutting essential services like education and healthcare. “This is unacceptable and illegal,” she added.
Elon fired back at the Democratic Party, accusing them of “ironically UNDEMOCRATIC tactics.” He pointed to past controversies, saying, “They stopped Bernie from being the candidate, trashed RFK unfairly, and switched Kamala for Biden without a primary! Now they’re relentlessly attacking D.O.G.E, which is just trying to stop fraud, waste, and abuse of taxpayer dollars!”
The next hearing in the Treasury case is scheduled for February 14. Until then, Elon’s team remains temporarily locked out of Treasury systems but retains access to Labor Department data.
Liquidity crunch hits as Fed’s RRP facility drains $2.5 trillion
As all this is happening, the Fed’s Reverse Repo Facility (RRP) is running dry, creating another headache for Elon. The RRP, which helps manage liquidity in the financial system, has lost $2.5 trillion since its all-time high in December 2022, hitting its lowest level in 1,386 days.
Here’s how it works: The Fed temporarily sells Treasury securities to financial institutions with an agreement to buy them back later at a higher price. But now, with the US government flooding bond markets to fund its deficit, the RRP’s liquidity is drying up fast, according to the latest data from the Fed.
Over the past 18 months, liquidity from the RRP and US Treasury has exceeded the Fed’s balance sheet reduction by $417 billion. This means the bond market is saturated with supply, and the Fed doesn’t need to inject excess liquidity to keep things balanced, but still, it is losing one of its key tools to stabilize the market.
Deficit spending is the core problem. The US holds $36.2 trillion in debt, and $9.2 trillion of that will mature or need refinancing in 2025. That’s 25.4% of the total debt, a huge burden on the bond market. President Trump launched D.O.G.E in an attempt to control the situation, with the task of reducing government spending by $1 billion per day.
If successful, this would save $365 billion by January 2026, reducing the deficit by 20% in year one. But going by the current numbers, cutting $5 billion per day would be needed in order to eliminate the deficit entirely.
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This articles is written by : Nermeen Nabil Khear Abdelmalak
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