The Bill Comes Due: Partnership for Public Service Pegs the True Cost of DOGE-Era Workforce Cuts at $165.6B

One of the recurring claims of the Department of Government Efficiency was that aggressive cuts to the federal workforce would save the U.S. government real money. A new Fed Figures analysis from the Partnership for Public Service tries to put a number on the other side of the ledger and arrives at $165.6 billion in economic costs — the price the U.S. economy paid in 2025 for the way the federal workforce was reduced. The figure is conservative by the report's own admission, omits costs the researchers say cannot be cleanly quantified, and is several multiples larger than the headline savings the administration has claimed from the cuts. For the cohort of displaced federal employees, contractors absorbing former federal talent, and employers building federal-experienced teams, the report is the most thoroughgoing accounting yet of what the last fifteen months actually cost.

What's in the $165.6 Billion

The Partnership's tally, which Government Executive walked through when the report was released, pulls together four buckets that the researchers say are individually well-sourced and can be added without significant double-counting. The biggest line is roughly $94.6 billion in lost economic activity from terminated science grants — awards that had been issued by agencies including the National Institutes of Health, the Centers for Disease Control and Prevention, and the Environmental Protection Agency, but were canceled before the funds were drawn down. The Partnership multiplied unspent obligations by a 2024 NIH-economic-impact study's $2.56-per-dollar multiplier to arrive at the figure.

The second-largest line, at roughly $53.2 billion, is the productivity loss from civil-servant disengagement — an estimate built off Federal Employee Viewpoint Survey results showing record drops in engagement, satisfaction, and willingness to recommend government employment. The Partnership maps those declines onto established private-sector productivity-cost-of-disengagement studies, with the appropriate caveat that disengagement costs are a softer number than the dollar-for-dollar payments above. The remaining $17.8 billion blends multiple smaller lines: contractor cost growth tied to capacity gaps, the cost of recruiting replacements, and litigation expense from the wave of court challenges. Important to flag: the $165.6B figure is denominated in economic activity, not federal-budget outlays. It's the macro cost the country bears, not solely a Treasury check.

The DRP Tab: $4.5 Billion to Pay People Not to Work

The most attention-grabbing piece of the picture is what the Deferred Resignation Program ended up costing. According to a Federal News Network reconstruction of the program's payouts, the government paid roughly $4.5 billion in salary and benefits to federal employees who agreed to leave but kept drawing pay during the resignation window. About 137,000 employees opted in over the course of 2025. The duration of the paid period varied widely: roughly 86,000 received about 8.7 weeks of pay, and another 34,000 received about 17.4 weeks. A smaller cohort received pay for over 30 weeks, and some received as little as a week.

The DRP figure is consistent with the smaller buckets in the Partnership's broader tally. The Partnership separately credits the program with roughly $4.5 billion in direct DRP payments and roughly $764 million in RIF severance for the more than 10,000 employees laid off during 2025. RIF separations of that scale are themselves an outlier — the Partnership notes that over the past decade, federal RIFs have rarely exceeded a few hundred per fiscal year. The 2025 number is more than thirty times that historical baseline.

The Workforce That Left

The Partnership's underlying dataset puts more granularity on the displaced cohort than has previously been public. Between January 20, 2025 and January 2026, there were roughly 386,826 total separations of federal employees, with 136,822 of those leaving through the DRP. The federal civilian workforce contracted by about 12 percent between September 2024 and January 2026, the largest reduction since the federal-workforce drawdown of the 1990s. Outside the National Capital Region, the geographic concentration of the loss is telling: California shrank 10.3 percent, Florida 8.8 percent, and Georgia 11.7 percent. Texas, with the second-largest federal workforce in the country, also saw measurable contraction. For employers and recruiters, that geographic distribution is the map of where displaced federal talent is most concentrated and most actively job-seeking.

The Partnership's data also surfaces a structural shift inside what remains of the workforce. Career Senior Executive Service ranks fell from 8,127 at the end of the Biden administration to 5,837 by January 2026 — a record low. Schedule C and non-career SES political appointees, meanwhile, climbed past the 10 percent statutory cap, with an estimated 800 more political appointees serving than at the comparable point of the Biden term. The mid-to-senior career layer that has historically absorbed leadership transitions is materially thinner than it was eighteen months ago, and the Partnership flags this as one of the “harder-to-quantify” capacity gaps that does not show up in the $165.6 billion line but compounds it.

What the Administration Says

The administration's public position is that the workforce reductions, separately considered, will save tens of billions of dollars over a multi-year window once the recurring salary, benefits, and overhead obligations of the departed positions are netted out. The Partnership does not contest that some recurring savings exist; its argument is that the up-front transition costs, science-grant terminations, contractor cost growth, and disengagement-driven productivity losses are several times larger than those recurring savings, and that the administration's public scoring has not accounted for them. Max Stier, the Partnership's president and CEO, summarized the contention on the report's release call: “This is an administration that has claimed that it is trying to reduce waste, and yet the choices that it has made have created phenomenally larger waste.”

The Government Accountability Office is conducting its own audit of the workforce-reduction costs, which is expected to land later in 2026 and is likely to produce a competing dollar figure. GAO's methodology will not include the disengagement productivity bucket the Partnership uses, so the GAO topline will probably be smaller. It will also probably not include the science-grant multiplier; GAO tends to score on direct outlays. Both numbers will be useful; neither will likely match the administration's claimed savings figure.

What This Means for the Job Market

The displaced cohort the Partnership is describing is the cohort HireFiredFeds was built to serve. Several practical takeaways from the data are worth sitting with. First, the labor-market absorption of 386,000-plus federal separations is not finished. A meaningful share of DRP participants only left payroll late in 2025 or early in 2026; the actual job-seeking activity for that group is happening now. Employers actively recruiting federal-experienced talent — including agencies that are themselves rehiring — have a wider candidate pool in April and May than they did in the fall.

Second, the geographic concentration outside D.C. matters more than usual this cycle. California, Florida, Georgia, and Texas combined hold a quarter of the federal workforce, and the percentage drops in each state mean that regional employers in those markets are seeing a denser concentration of recently-separated federal candidates than at almost any point in recent memory. Defense contractors with Florida and Georgia footprints, healthcare and biopharma employers in California, and defense and energy primes in Texas are among the obvious absorbers.

Third, the science-grant termination losses translate directly into a private-sector talent flow. Researchers, program managers, and scientific administrators tied to the canceled NIH, CDC, and EPA grants are visible on the candidate market in numbers the biotech and contract-research markets have not seen before. The HHS rebuilding effort discussed in our post on the 12,000-hire HHS reversal will absorb a portion, but not the majority.

What to Watch Next

Several upcoming dates and dockets will determine whether the cost picture the Partnership has assembled gets revised, validated, or contested. The GAO audit of the workforce-reduction costs is the central one; its release is expected in the late summer or fall of 2026. The Office of Personnel Management is also expected to publish a fuller accounting of DRP participation by agency, which would let researchers refine the geographic and occupational-series breakdowns the Partnership currently has to estimate. House and Senate appropriations committees, which are now working through the FY27 budget proposals, will produce hearing testimony from agency leadership that will give a sharper sense of where the next round of separations is concentrated and which agencies are quietly rebuilding.

For displaced federal employees and the employers building teams around them, the practical signal in the Partnership's number is not that the cost was bigger than expected. It is that the cohort is bigger, more geographically dispersed, and more occupationally diverse than the early reporting captured — and that the absorbing private-sector economy is still in the middle of, not at the end of, that absorption.