Q&A – How Much Can We Save With Federal Government RIFS?

The annual total cost savings from cutting a quarter of the federal workforce would likely be around $75 billion, with the minimum coming in at $60 billion and the high end at around $90 billion depending on implementation details...

Episode Transcript

Speaker 1 (00:04):
Your questions, Brian's answers. It's time for today's Q and
A of today. This is the Brian mud Show. Yeah,
so today's Q and A how much can we save
with federal government riffs? This is brought to you by
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(00:26):
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(00:50):
are there, you'll see a little microphone button. You see it,
you tap it. You may lay down your message right there,
maybe for a future Q and A. Today's notice this, Brian,
what you've uncovered with cost savings associated with the federal
government layoffs is eye opening and I believe is much
larger than most would have imagined. My question is this,
do we know how many more layoffs the administration has planned?

(01:13):
Can you provide an estimated cost savings for these layoffs
as well? Thanks? Okay, so yeah, today's note is in
response to my top three takeaways from yesterday when I
offer this that on a going forward basis, the average
annual cost savings associated with an eleven point nine percent
reduction in the federal workforce, which again is now where

(01:35):
we stand after Monday's court ruling, with everything that's going
through that have been put in place, that stands at
thirty three billion dollars per year. And I said, you
know how the CBO scores things like on a ten
year cost basis, if you're to look at this through
that prism, what has already happened with reduction enforce measures
through the federal government with the Trump administration, that now

(01:59):
represents not even then inflation ingested money, but just in
real terms, three hundred and thirty billion dollars in cost
savings over the next ten years. And it's far from
being done. And so on that note, speaking of far
from being done, Florida's junior Senator Ashley Moody, she had
this to say yesterday, I.

Speaker 2 (02:19):
Expect fully that as we uncover and dig into these agencies,
as Trump has promised to continue proposing more spending cuts,
that Congress will step up and deliver.

Speaker 1 (02:30):
Yeah, so about that. Lots of delivering to be done here.
How far could cuts go? Let's dive into it. Now
that the Supreme Court has cleared the path for the
dozing of federal government agencies to commence, we're likely to
see many more take place now and attempting to estimate

(02:50):
the extent of the federal government's rifts under the Trump
administration first place to start with his executive order directing them.
It was on February eleventh, President signed the Executive Order
reforming the Federal Workforce to better serve Americans and among
other things in that order, just some of the bullets

(03:10):
the President had, he said, the order will significantly reduce
the size of government. We don't need a police clap
for that doing. No, I's just say it again, mister President,
and speak softly and sweetly. It's actually not necessary. You

(03:31):
get screaming in my ear, and it's just a warms,
the warms the cockles of my heart. It's a wonderful.
The order will significantly reduce the size of government, and
as we've seen it has now at this point with
the courts starting to get out of the way. Upon
expiration of the day one hiring freeze and implementation of

(03:52):
the hiring plan, agencies will be able to hire no
more than one employee for every four employees depart from
federal service, with appropriate immigration, law enforcement, and public safety exceptions. Okay,
this is important here, right, So the hiring freeze, that's
the thing. And then whenever that is done, even then

(04:14):
we're talking about only being able to replace one out
of every four that leads through attrition. And that's a
big clue I'm going to come back to in a moment.
President also said in the order, agencies will undertake plans
for large scale reductions and force and determine which agency
components may be eliminated or combined because their functions aren't

(04:37):
required by law. He also noted there are too many
federal employees. Amen, yes, And then he said one that
I'm like, you know what I might mister President? He said, no,
one knows exactly how many federal agencies exist, but the
Federal Register list over four hundred. Now, if you follow

(04:59):
in my coverage on this. Over the years I've done
I don't know how many hours of wark getting to
the bottom of these federal agencies. The last number I
actually did not go back and pull my latest research,
which is, you know, many months old at this point
out the minimum the number of the six of my
brain is four thirty two, so I could pull my
latest research and go I don't know in real time,

(05:21):
mister President, but when you were president, I could almost
swear to there being four hundred and thirty two, So
I might be able to help the President with that one.
But nevertheless, I mean, it just speaks to the greater thing,
right Like how I was telling you yesterday, it took
Team Rubio three months to find out how many employees
there even were at the State Department and where they worked,

(05:42):
because there are sixty different HR offices. I mean, just insanity.
And the President also noted the federal workforce contribute significantly
to federal spending and debt. In fiscal year twenty twenty two,
the federal government spent nearly three hundred billion on compensation
for civilian employees excluding pensions. So that order, which remains

(06:04):
in effect, that is the best clue as to what
the potential outloocate is here for what might be attempted
when you are taking a look at where the reduction
in the size of the federal workforce could end up.
The ultimate answer is obviously, well, we don't know. You
don't know yet, but you do see that there is
that inherent effort to cut the size of the federal workforce,

(06:28):
seemingly by at least a quarter. Right again, that directive
that after the freeze is done, even after your initial
rifts are done, you're still only replacing one out of
every four that are gone. So I think if we're
having this conversation and just looking at what might the
view of the possible be, I think a conservative number

(06:52):
we could start with is twenty five percent a quarter.
And again we're at an eleven point nine percent now,
so it's not like that's pyeing the sky talking about
a little over half more than what we've got so far.
And if we use a quarter as a baseline, here's
what that looks like. The total annual cost savings from

(07:12):
cutting a quarter of the federal workforce would likely be
around seventy five billion dollars, and the conservative end of
this would come in at sixty billion, the high end
at around ninety billion, depending upon exactly how the implementation
of the cuts would go. And you know the level
of employees salaries that are associated with them. Also, you

(07:35):
start talking about, you know, some of the essential services
that are likely to be unimpacted, like defense. So this
means that on a CBO styled scoring basis, in today's dollars,
not inflation ingested, we could be talking about approximately seven
hundred and fifty billion dollars. So may be the case
that the federal government reaches doja's original goals after all.

(07:57):
And as I recently mentioned, I think it's fifty to
fifty that one day, one day, Elon Musk might break
out that Trump was right about everything had once again