A judge on Thursday paused a scheme masterminded by billionaire Elon Musk to slash the size of the US government by encouraging federal workers to quit through a mass buyout.

The federal judge in Massachusetts ordered a temporary injunction on the plan's deadline - midnight Thursday - given by Musk for the country's more than two million government employees. The offer was to quit with eight months' pay or risk being fired in future culls.

The deadline is now extended to Monday, when US District Judge George O'Toole will hold a hearing on the merits of the case brought by labour unions, US media reported.

Musk, the world's richest person and President Donald Trump's biggest donor, is in charge of a free-ranging entity called the Department of Government Efficiency (DOGE).

According to White House Press Secretary Karoline Leavitt, more than 40,000 staff have so far accepted the buyout deal - a relatively small number.

Unions representing some 800,000 civil servants and Democratic members of Congress are resisting the scheme and have challenged the legality of threats to fire civil servants.

But the broader budget cutting campaign has already severely disrupted departments and agencies that for decades have run everything from education to national intelligence.

USAID, the government's agency for distributing aid around the world, has been crippled, with foreign-based staff ordered home.

Trump has also repeatedly said he wants to shut down the Department of Education. The inducements to resign have further been extended to the CIA.

Leavitt told reporters that federal workers should "accept the very generous offer" of a deferred resignation.

She said "competent" replacements would be found for those who "want to rip the American people off."

Among the controversies swirling around the Musk plan is how much access the South African-born tycoon is getting to secret government data, including the Treasury's entire payment system.

Treasury Secretary Scott Bessent told Bloomberg TV on Thursday that there was "a lot of misinformation" and that access to such data was only given to two Treasury employees who are working with Musk.

Bessent said those employees had "read-only" access, meaning they couldn't change the data. (AFP)