WASHINGTON (AP) — President Donald Trump's administration on Friday asked the Supreme Court to pause a court order to reinstate Education Department employees who were fired in mass layoffs as part of his plan to dismantle the agency.
The Justice Department’s emergency appeal to the high court said U.S. District Judge Myong Joun in Boston exceeded his authority last month when he issued a preliminary injunction reversing the layoffs of nearly 1,400 people and putting the broader plan on hold.
Joun’s order has blocked one of the Republican president’s biggest campaign promises and effectively stalled the effort to wind down the department. A federal appeals court refused to put the order on hold while the administration appealed.
The judge wrote that the layoffs “will likely cripple the department.”
But Solicitor General D. John Sauer wrote on Friday that Joun was substituting his policy preferences for those of the Trump administration.
The layoffs help put in the place the “policy of streamlining the department and eliminating discretionary functions that, in the administration’s view, are better left to the states,” Sauer wrote.
He also pointed out that the Supreme Court in April voted 5-4 to block Joun's earlier order seeking to keep in place Education Department teacher-training grants.
The current case involves two consolidated lawsuits that said Trump’s plan amounted to an illegal closure of the Education Department.
One suit was filed by the Somerville and Easthampton school districts in Massachusetts along with the American Federation of Teachers and other education groups. The other suit was filed by a coalition of 21 Democratic attorneys general.
The suits argued that layoffs left the department unable to carry out responsibilities required by Congress, including duties to support special education, distribute financial aid and enforce civil rights laws.
Education Department employees who were targeted by the layoffs have been on paid leave since March, according to a union that represents some of the agency’s staff. Joun’s order prevents the department from fully terminating them, but none have been allowed to return to work, according to the American Federation of Government Employees Local 252. Without Joun’s order, the workers were scheduled to be terminated Monday.
The Education Department said Friday it is “actively assessing how to reintegrate” the employees. A department email sent Friday asked them to share whether they had gained other employment, saying the request was meant to “support a smooth and informed return to duty.”
Trump has made it a priority to shut down the Education Department, though he has acknowledged that only Congress has the authority to do that. In the meantime, Trump issued a March order directing Education Secretary Linda McMahon to wind it down “to the maximum extent appropriate and permitted by law.”
Trump later said the department’s functions will be parceled to other agencies, suggesting that federal student loans should be managed by the Small Business Administration and programs involving students with disabilities would be absorbed by the Department of Health and Human Services. Those changes have not yet happened.
The president argues that the Education Department has been overtaken by liberals and has failed to spur improvements to the nation’s lagging academic scores. He has promised to “return education to the states.”
Opponents note that K-12 education is already mostly overseen by states and cities.
Democrats have blasted the Trump administration’s Education Department budget, which seeks a 15% budget cut including a $4.5 billion cut in K-12 funding as part of the agency’s downsizing.
Associated Press writer Collin Binkley contributed to this report.
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FILE - The Supreme Court is seen on Capitol Hill in Washington, Dec. 17, 2024. (AP Photo/J. Scott Applewhite, File)
NEW YORK (AP) — Stocks of credit-card companies are tumbling on Monday after President Donald Trump threatened moves that could eat into their profits. The rest of Wall Street, meanwhile, was showing only modest signals of concern after tensions ramped to a much higher degree between the White House and the Federal Reserve.
The S&P 500 edged down by 0.1% from its all-time high as U.S. stocks drifted through mixed morning trading, while prices for gold and other investments that tend to do well when investors are nervous rose. The value of the U.S. dollar also dipped against the euro and other currencies amid concerns that the Fed may have less independence in setting interest rates to keep inflation under control.
The Dow Jones Industrial Average was down 179 points, or 0.4%, as of 10 a.m. Eastern time, and the Nasdaq composite was nearly unchanged.
Some of the market's sharpest drops came from credit-card companies, as Synchrony Financial, Capital One Financial and American Express all fell between 4% and 7%. They sank after Trump said he wanted to put a 10% cap on credit-card interest rates for a year. Such a move could eat into profits for credit card companies.
But it was a separate move by Trump that was grabbing more attention on Wall Street. Over the weekend, the Federal Reserve's chair, Jerome Powell, said the U.S. Department of Justice subpoenaed the Fed and threatened a criminal indictment over his testimony about renovations underway at its headquarters.
With an unusual video statement released on Sunday, Powell said his testimony and the renovations are “pretexts” for the threat of criminal charges, which is really “a consequence of the Federal Reserve setting interest rates based on our best assessment of what will serve the public, rather than following the preferences of the President.”
The Fed has been locked in a feud with the White House about interest rates. Trump has been loudly calling for lower interest rates, which would make borrowing cheaper for U.S. households and companies and could give the economy a kickstart.
The Fed did cut its main interest rate three times last year and has indicated more cuts may be arriving this year. But it’s been moving slowly enough that Trump has nicknamed Powell “Too Late.”
In a brief interview with NBC News Sunday, President Donald Trump insisted he didn’t know about the investigation into Powell. When asked if the investigation is intended to pressure Powell on rates, Trump said, “No. I wouldn’t even think of doing it that way.”
Powell’s term as chair ends in May, and Trump administration officials have signaled that he could name a potential replacement this month. Trump has also sought to fire Fed governor Lisa Cook.
The Fed has traditionally operated separately from the rest of Washington, making its decisions on interest rates without having to bend to political whims. Such independence, the thinking goes, gives it freedom to make unpopular moves that are necessary for the economy’s long-term health.
Keeping interest rates high, for example, could slow the economy and frustrate politicians looking to please voters. But it could also be the medicine needed to get high inflation under control.
In the bond market, the yield on the 10-year Treasury ticked up to 4.19% from 4.18% late Friday. A less independent Fed and higher inflation in the long term could also erode the value of the U.S. dollar, and it slipped 0.3% against the euro and 0.4% against the Swiss franc.
In stock markets abroad, indexes rose across much of Europe and Asia. Stocks jumped 1.4% in Hong Kong and 1.1% in Shanghai for two of the world’s bigger gains following reports that Chinese leaders were preparing more help for the economy.
AP Business Writers Matt Ott and Elaine Kurtenbach contributed.
Traders work on the floor at the New York Stock Exchange in New York, Friday, Jan. 9, 2026. (AP Photo/Seth Wenig)
James Lamb works on the floor at the New York Stock Exchange in New York, Friday, Jan. 9, 2026. (AP Photo/Seth Wenig)
Specialist Anthony Matesic works on the floor of the New York Stock Exchange, Thursday, Jan. 8, 2026. (AP Photo/Richard Drew)
Daniel Kryger works on the floor at the New York Stock Exchange in New York, Friday, Jan. 9, 2026. (AP Photo/Seth Wenig)
Dealers watch computer monitors near the screens showing the foreign exchange rate between U.S. dollar and South Korean won at a dealing room of Hana Bank in Seoul, South Korea, Monday, Jan. 12, 2026. (AP Photo/Lee Jin-man)
A dealer walks near the screens showing the foreign exchange rate between U.S. dollar and South Korean won and the Korean Securities Dealers Automated Quotations (KOSDAQ) at a dealing room of Hana Bank in Seoul, South Korea, Monday, Jan. 12, 2026. (AP Photo/Lee Jin-man)
Dealers talk near the screens showing the Korea Composite Stock Price Index (KOSPI), left, and the foreign exchange rate between U.S. dollar and South Korean won at a dealing room of Hana Bank in Seoul, South Korea, Monday, Jan. 12, 2026. (AP Photo/Lee Jin-man)
A dealer walks near the screens showing the foreign exchange rates at a dealing room of Hana Bank in Seoul, South Korea, Monday, Jan. 12, 2026. (AP Photo/Lee Jin-man)
