From our Budget Breakdown series highlighting problems in fiscal policy to inform the 2025 tax and budget debate.
President Trump spent the first full week of his second term in office rolling out a series of executive actions aimed at radically reshaping the federal workforce. While the administration framed the moves as a fiscally responsible culling of a bloated bureaucracy, they will, in reality, hinder critical government responsibilities, create uncertainty for both Americans and civil servants, and may even cost taxpayers more than they save. Ultimately, these chaotic measures are more about politicizing the federal workforce to advance the president’s extreme ideological agenda than they are about improving government efficiency for taxpayers.
Trump’s sweeping executive actions have cut deeply across the entire federal workforce. He has imposed a general hiring freeze across most federal civilian positions and demanded that agencies submit plans for reducing the size of their workforce. He has moved to dismantle any program that could be construed as related to diversity, equity, and inclusion (DEI), directing all affiliated staff to be put on paid leave and eventually laid off. He fired senior officials that he deemed insufficiently loyal to the administration, including inspectors general and federal prosecutors that traditionally operate with independence. And earlier this week, he offered to pay eight months’ salary to any of the 2.3 million individuals employed by the federal government if they agree to resign by February 6 — adding that agencies “are likely to be downsized” if people choose to remain.
This flood of orders has sowed chaos and confusion across the government. Agencies are unsure what programs and personnel are impacted by the vaguely worded directives, while demoralized civil servants wonder whether their roles will be eliminated as they try to manage day-to-day operations. And like the president’s short-lived order to freeze wide swaths of federal spending, many of these efforts are legally dubious. Agencies can only offer severance payments in lump sums of up to $25,000 — a number that most buyouts under this order would likely exceed. The president is also required to give Congress at least 30 days advance notice and written justification for firing inspectors general, which Trump’s purge blatantly ignored.
But even if these moves are legal, they will still wreak havoc on critical government functions while likely costing taxpayers more than they save. Not all the workers who would accept the Trump buyout offer are contributing to wasteful spending; many are talented civil servants doing critical functions of government work that the administration ostensibly supports, including air traffic control, cybersecurity, and law enforcement — including those implementing the president’s immigration priorities. Replacing these workers or retraining existing civil servants to do their jobs would take time and come at a significant cost to both effective governance and American taxpayers, as replacements would lack the experience of former employees and could lead to the delay or degradation of important federal programs and services that many Americans rely upon.
Even worse, these responsibilities might ultimately be reassigned to employees hired not for their qualifications but their unquestioning loyalty to the president, or to an even more bloated system of expensive federal contractors that is estimated to be at least twice the size of the federal workforce. Purging inspectors general is especially irresponsible, because these are individuals primarily responsible and best-equipped to identify waste or fraud in their respective agencies. Removing them not only increases the risk of fraudulent or wasteful spending, but diminishes their political independence to act as agency watchdogs.
Furthermore, payrolls are only a fraction of government spending, meaning that reducing them wouldn’t meaningfully improve the bleak fiscal situation highlighted in last week’s Budget Breakdown. In 2024, the federal government ran a $1.9 trillion budget deficit but spends less than $300 billion on civilian payrolls annually. In other words, even if every single civilian government employee accepted Trump’s buy-out proposal — and doing so did nothing to compromise government functions — the federal budget deficit would shrink by less than one-sixth. Moreover, those savings would be wiped out if Republicans proceed with their plans to extend the expiring provisions of the Tax Cuts and Jobs Act enacted in Trump’s first term, which are projected to cost more than $4 trillion over the next 10 years.
None of these arguments are meant to defend an ossified status quo in need of reform. It has now been more than three decades since President Bill Clinton undertook the last major effort to reinvent government, meaning a well-intentioned re-evaluation of how the sprawling federal bureaucracy of agencies, personnel, and programs could be streamlined to cut costs and better serve the American people is long overdue. But rather than pursuing any thoughtful reforms, Trump’s flood of directives reflects a ham-fisted attempt to dismantle checks and balances, purge the civil service of those he considers disloyal, and chaotically push an extreme ideological agenda at the expense of both American taxpayers and effective governance.
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