New York City just took President Donald Trump to court over $80 million the federal government ripped straight out of its bank account through the D.O.G.E agency. The city says FEMA, backed by other federal agencies, seized the money without warning on February 11. The funds were meant to cover migrant housing costs after Homeland Security processed and released noncitizen immigrants into the city.
The lawsuit, filed in Manhattan federal court, calls it a “lawless money grab” and demands the funds be returned. The city also wants the court to invalidate FEMA’s actions entirely. No one at the Justice Department responded to comment requests.
Meanwhile, Trump’s administration is pushing full-speed ahead with its D.O.G.E initiative, led by Elon Musk, which is slashing federal spending, gutting agencies, and laying off government workers en masse.
Federal lawsuit escalates as Trump’s crackdown tightens
New York’s lawsuit comes at a time when Trump’s immigration policies are hitting major Democratic cities the hardest. FEMA had already paid the city the $80 million a week prior but suddenly yanked it back without notice.
The money was supposed to cover the costs of emergency shelters for noncitizens. New York argues the funds were legally allocated and had already been spent when the administration reversed course and emptied the account.
Adding to the chaos, Mayor Eric Adams—a former Trump critic—has been forced to work with the administration on immigration. But Adams is also fighting federal corruption charges. A judge on Friday refused to dismiss the case against him, keeping his legal problems—and his political career—on the edge.
The Justice Department tapped Paul Clement, a former U.S. Solicitor General, to review its case against Adams. Critics say it’s a political move, arguing Adams’ freedom might depend on how well he cooperates with Trump’s immigration agenda.
Elon Musk pushes deeper spending cuts under D.O.G.E
While New York fights to get its money back, Elon Musk is moving ahead with his plan to slash federal spending by $2 trillion. His Department of Government Efficiency (D.O.G.E) is gutting everything from welfare programs to entire agencies.
At a right-wing political event on Thursday, Musk walked on stage to thunderous applause, wearing a MAGA hat and sunglasses. He held up an actual chainsaw, handed to him by Argentine President Javier Milei, who shouted “Viva la Libertad, carajo!” Musk grinned, lifting the chainsaw over his head. “This is the chainsaw for bureaucracy!” he declared.
The moment underscored D.O.G.E’s aggressive approach to cutting federal programs. Republican Congressman Rich McCormick—one of the few conservatives questioning the strategy—warned that some of the cuts could go too far. But for Musk, it’s full steam ahead.
Markets react as Steve Cohen warns of economic slowdown
Hedge fund billionaire Steve Cohen has turned bearish on the U.S. economy. He’s citing Trump’s tariffs, immigration crackdown, and the federal budget slashes under D.O.G.E as major reasons for concern.
“Tariffs cannot be positive, okay? I mean, it’s a tax,” Cohen said at the FII Priority Summit in Miami Beach. He warned that slowing immigration means the labor force will shrink, and Musk’s massive spending cuts will pull billions out of the economy.
“When that money has been coursing through the economy for years and now it’s suddenly being cut off, it’s gotta be negative,” Cohen said.
The hedge fund manager believes a stock market correction is coming. He predicts U.S. growth will slow from 2.5% to 1.5% by the second half of the year.
“I think we’re seeing the regime shift a little bit,” Cohen said. “Wouldn’t surprise me to see a significant correction.”
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This articles is written by : Nermeen Nabil Khear Abdelmalak
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