Planet Money - The last time we shrank the federal workforce

Episode Date: March 12, 2025

If you cut every single federal job President Donald Trump wants to cut, how much money would that save? A president has tried to massively shrink the size of the federal government before. It was in the 90s, under a Democrat.Today on the show: Where they found waste the last time we really looked. (Hint: it wasn't jobs.) And why the pace of firings under Trump might start to slow down.For more:- Lessons for the Future of Government Reform- Is government too big? Reflections on the size and composition of today's federal government- Creating a Government That Works Better and Costs Less This episode of Planet Money was produced by Willa Rubin. It was edited by Jess Jiang and engineered by Jimmy Keeley. We had fact-checking help from Sierra Juarez. Alex Goldmark is our executive producer. Special thanks to Ben Zipperer. Find more Planet Money: Facebook / Instagram / TikTok / Our weekly Newsletter.Listen free at these links: Apple Podcasts, Spotify, the NPR app or anywhere you get podcasts.Help support Planet Money and hear our bonus episodes by subscribing to Planet Money+ in Apple Podcasts or at plus.npr.org/planetmoney.Music: Audio Network - "West Green Road," "Raise Up," and "Blue and Green."Learn more about sponsor message choices: podcastchoices.com/adchoicesNPR Privacy Policy

This message comes from CNN. Terms of Service with Claire Duffy explores AI and other powerful new technologies. Learn how to experiment with these tools without getting played by them. Listen to CNN's Terms of Service with Claire Duffy. This is Planet Money from NPR. Tell me again how to pronounce your name. A tear. So think of a teardrop. Like a teardrop is rolling down? Okay. Yes, but happy tears.

Are you happy? I'm fine. I'm fine. A tear, Cole, is doing fine for a federal worker right now. For the past year and a half, a tear has been working on basically tracking biological things that can kill you. So like anthrax, zika, contaminated food, even like lead poisoning. Yeah. So like if someone eats some bad lettuce with E. coli, a doctor would flag it.

And then this system that Atiyah works on would help everyone try to identify where the E. coli outbreak is coming from. This system is where all the puzzle pieces come together and it's how you move quickly in a moment of emergency. Atiyah worked closely with the Centers for Disease Control and Prevention. Technically though, her job was at this government unit called the U.S. Digital Service.

But on the day of President Trump's inauguration, Atiyah found out that was changing. By the way, there was an executive order, we're now Doge. Doge. The U.S. Digital Service was now gonna be the Department of Government Efficiency, Elon Musk's team. So did anything change? Did your email change?

No, nothing, nothing. Was your boss like Elon Musk? No, my boss was still my boss. Atiyah says some Doge people did ask everyone on her team for this interview, like a tell us what you do here interview. The whole call didn't even last 15 minutes. I think we wrapped up within 10. The questions were softballs.

Like, what is your greatest achievement here? And what do you think about Doge? After your 15 minute, which wasn't even 15-minute, interview with Doge, did you have another interaction with anyone who worked on that side of things? Not a single one. For a tier, Doge seemed like a black box. And she was kind of like, I don't know

if I want to be on this team. The stated goal of Doge is to cut government. And they're trying to achieve that by gutting agencies, backing out of contracts, cutting jobs. And it's been a little chaotic. A lot of mixed messages. A lot of mixed messages. Like first, they offered buyouts to every single government employee, but not enough people took the buyouts. Then thousands of workers were fired in like a blanket way, but then, oh no, a judge said they actually can't do that. There was that email where government employees were asked to reply

with the five things they did that week. The White House told agencies they wanted maximum elimination of functions, but then the White House was like, oh wait, no, actually we don't have the authority to tell agencies what to cut. Some people have been rehired after they were fired. — We don't know exactly how many people have been fired. The Trump administration has said it wants to cut up to 76,000 jobs from the Defense Department, 80,000 jobs from Veterans Affairs.

The IRS is preparing to cut up to 50,000 jobs. The Education Department just announced it's cutting half of its staff, like 2,000 jobs. The goal seems to be ultimately hundreds of thousands of job cuts. That would be a lot of jobs. But we've done it before. We've actually cut more. Hello and welcome to Planet Money. I'm Sarah Gonzalez. And I'm Amanda Oranjik. This is not the first time the US has tried to massively shrink the federal workforce in a big, flashy way.

It happened in the 1990s under a Democrat. Though not quite at this pace. Today on the show, what we learned the last time, where they found waste, and why jobs just might not be the best place to look if you're trying to save taxpayers money. This message comes from Wyse, the app for doing things in other currencies. Sending or spending money abroad, hidden fees may be taking a cut. With Wyse, you

can convert between up to 40 currencies at the mid-market exchange rate. Visit WISE.com. T&Cs apply. Okay, the actual size of the federal government, like the number of federal employees, hasn't changed much in 50 years. Fifty years ago, there were 2.1 million federal employees. Today, there are 2.3 million. This is not including the military. We are only talking about civilian jobs here. Also this number doesn't include postal workers. So yeah, the number of federal jobs has stayed about the same even though the US population has grown by 68%. But you know, yeah, maybe there's still too many jobs. Okay, surely you think that there is some waste in the government, right?

Or that there are some federal positions maybe that shouldn't even exist. Absolutely. Yep. You think that? I do think that. I do think that. You can probably always find 5%, maybe 10% in waste and unnecessary workers. And you would know because you have done this exact thing 30 plus years ago. That's what we did.

Elaine K. Mark studies the federal workforce and government operations at the Brookings Institution. And Elaine knows probably better than anyone about bloat in the federal government because back in the 90s, the number of federal jobs actually peaked at over 3 million. And Elaine's job was to bring that number way, way down. But she did more than just that. Her job was to look at all government waste. Yeah. At the time, there was this story circling around about government waste and government inefficiency. And it all started with this mythical hammer. The story was if you bought a hammer,

like on the street, at your local hardware store, it would cost $6. But if the federal government bought a hammer, it costs $400, the $400 federal hammer. And it costs this much because of all the federal rules and regulations around buying something for the government. The paperwork, the red tape, the people involved in just procuring the hammer.

When Bill Clinton became president, he and Al Gore, in particular, vowed to cut government waste. Our goal is to make the entire federal government both less expensive and more efficient and to change the culture of our national bureaucracy. Clinton and Gore called their big effort to find government inefficiencies and shrink the federal workforce the National Performance Review. And it was sometimes also called reinventing government or RIGO.

You can kind of say that RIGO was the precursor to Doge, and they hired Elaine K. Mark to steer the ship for their big effort. Al Gore was my boss, yes. I reported to Al Gore. There were three prongs to Rigo's mission. They were gonna make the federal government more modern, like get every federal agency on email and actually just on the internet.

Back in 1993, no federal agency had a website. And we started telling agencies to build websites. They also wanted to improve customer service in the government, like reduce wait times if you were to call up, say, the IRS. Yeah, and of course, they wanted to also cut waste. And that is the side of things that we are going to focus on today.

Elaine and a team of government employees started by looking at all of the potential areas to cut. You have to go into the agencies and figure out what they're doing that's important, that you don't want to mess up, and what they're doing that frankly isn't all that important. After six months of looking around, they found that cutting jobs wasn't really going to bring the big big savings. A lot of times the inefficiencies were not people inefficiencies. A lot of times the inefficiencies were obsolete statutes or obsolete regulations that were requiring the civil service to do things in a sort of backwards convoluted way that was costing money and costing time.

— Elaine actually found that the most cumbersome regulations were around procurements, the way the government, mainly the Defense Department, had to buy things. It's this massive system of rules and checks and balances for even the tiniest purchases. — They added cost. They would add cost to everything from hammers and staplers to airplanes. The mythical expensive government hammer was real. And Alain says they also found, like, the over-regulated expensive ashtray and super expensive government floor wax.

They collected all their inefficiencies from across the government and on September 7th, 1993, Elaine and Al Gore presented their big report on the White House lawn with a lot of fanfare. If you want to know why government doesn't work, look behind you. Behind Al Gore with these giant stacks of paper taller than him on forklifts. The answer is at least partly on those forklifts. It's always a show, these things, you know? Al Gore also went on David Letterman to brag about all of the inefficiencies that they

found. Please welcome the Vice President of the United States, Al Gore. Al Gore actually showed up with the symbolic expensive government hammer to smash the symbolic expensive government ashtray. And I thought we would give it a try here. All right. I'll do it first. Cool.

Yeah. Today, Elon Musk is waving around a chainsaw like, look at all these jobs we're slashing. Back then, their chainsaw was this hammer. It was a hammer. Yeah. And their big report said, we are going to overhaul that massive procurement system, all the regulations around how the federal government can buy things. And also, yeah, a bunch of people were going to lose their jobs. Elaine found 252,000 jobs that she said should be cut.

So there was a while there where Elaine definitely knew that federal employees did not like her all that much. Elaine Hicks Oh, because, you know, because I heard that they didn't. People would say, oh, God, you're Elaine K. Mark. You know, and I think today they think I'm wonderful and wish I was back. Okay. Elaine honestly can't talk about what she did in the 90s

without like alluding to what is going on now. But even she will admit things got a little bit weird back then too. Yeah. Al Gore was giving out these awards to people and agencies that found the government the most savings, not just through job cuts, any savings. We introduced something called the Hammer Awards in the Clinton administration. And here it was what it consisted of. A big tacky picture frame with some blue velvet in the back and a hammer attached to it and a red, white,

and blue ribbon and a note from Al Gore, handwritten that said, thank you for creating a government that works better and costs less. We gave out more than a thousand. Now- Was it a real hammer, a real hammer in a frame? Yeah, it was a real hammer. Yeah, we put a real hammer in a real picture frame. I mean, it was pretty tacky looking.

Yeah, kind of tacky, but also their effort was pretty comprehensive. To be clear, that hammer, only $6. They were very proud of their $6 hammer awards. And you know, they did many, many rounds of reviews and cuts over many, many years. They cut jobs, they cut whole offices, and they got pretty granular. Like they found all of these small programs and agencies that were kind of like little snapshots of history that maybe they made sense at one point in time, but really, really did not anymore.

You point to a couple which is the Tea Tasters Board. What is the Tea Tasters Board? Well, obviously the Tea Tasters Board was left over from the Revolutionary War. Oh, right. Obviously. This was basically the start of our relationship with tea. Okay. Wait, these were tea tasters?

Yeah, they were tea tasters. Like a real little agency with paid government employees under the Food and Drug Administration, who met every year in a converted Navy warehouse in Brooklyn to sample the tea that was being imported into the U.S. So refined. Right. The board was technically a remnant from the 1890s when there were these tea exporters sending the U.S. So refined. Right? The board was technically a remnant from the 1890s when there were these tea exporters sending the U.S. like their bad scrap tea.

I don't know why they were still in the government, right? I guess to assure the quality of the tea coming into the United States. But it was obviously silly. It was obviously unnecessary and we closed it. Her team cut 250 of these programs and agencies. No more tea tasting. There were also subsidies that Elaine says were costing taxpayers money that they also got rid of, like the wool and mohair subsidy.

Mohair is a fabric, okay, that goes in sweaters and stuff. All right, it's like wool. A lot of wool and mohair were coming from sheep and goats in places like Wyoming. Before and during the Korean War, we knew that American soldiers were going to be fighting in very cold territory. And we wanted to make sure there was enough wool and mohair

for their uniforms. So in fact fact a subsidy was given to farmers under national defense thinking so that we'd have enough wool and mohair for uniforms. It was like to boost domestic production of wool basically? Yeah. Okay. Yeah, domestic of wool and mohair. Obviously since the Korean War, which was in the 1950s, right, it was no longer a national

defense priority to have enough wool and mohair around. And so we got rid of the subsidy. It can be quite hard to get rid of a subsidy. Like, it doesn't just go away, right? Yes. The Wyoming farmers, I'm sure, push back. Right. This wool and mohair thing is actually really indicative of how

difficult it is to undo things in the federal government. Even a really small, not that beneficial anymore subsidy. What was the pushback like? They pushed back on it and in fact the subsidy came back, of course, a couple years later it came back in a lesser form, but it did come back. To Elaine, nothing felt easy to get rid of. Everything took time. Clinton didn't just announce he wanted something, and boom, it happened. Oh, no, you go to Congress. Oh, you go to Congress.

You go to Congress. Yeah. To reverse the stat, they make them, they got to reverse them. So we went to Congress, and we had to go one by one to some of the really old guys and convince them that we needed a new bill. When they wanted to overhaul the way the government bought hammers or planes that the military uses

to move other planes, they passed a procurement bill through Congress. When they undid the tea tasters and the wool law, Elaine says, they needed bipartisan support. Congress voted on those things. It was a process, but we passed a lot of laws. We passed, I think, about 100 laws over the seven years. So, I mean, it's not impossible. By the end of Clinton's second term, Elaine and her team had cut the equivalent of 640,000 pages of internal agency rules.

They closed nearly 2,000 regional field offices, which they called obsolete because everyone could communicate by email now. They cut 78,000 managers and many more jobs too. By the end of the eight years, it was like almost 500,000 federal workers. Yeah, it was 426,000. Sorry, yes federal workers. Yeah, it was 426,000. Sorry, yes, running up. Yeah, so 426,000. So like you did fire a ton of people.

Well, but remember a lot of these were not firing. Some of them were. A lot of these were buyouts. We had buyout authority from the Congress, which these guys don't, by the way. We had hiring freezes, which these guys are using. When they finished their big effort, the Clinton administration had created the smallest federal government since Dwight D. Eisenhower and John F. Kennedy, and they ended up saving taxpayers about $136 billion in all over the whole eight-year effort. So, you know, not groundbreaking, but yeah, sizable.

It worked. It was not as dramatic as what they're doing now. But we did have backlash. What we did not have were lawsuits. Okay. Nobody sued us because we went through the established channels for doing these things. Yeah, what Elaine and her team did over eight years, the Trump administration says it will do

over a year and a half. Doge is supposed to cease to exist by July, 2026. And also Trump is just going about it totally differently than Clinton and Elaine. For example, not with Congress. I mean, this is the thing about Doge that's so weird, is that they're ignoring Congress so much. After the break, if we cut every single federal job that Trump wants, how much money would that save?

Also, Y. Elaine is actually a little optimistic about the future of Trump's job cuts. So the last time a president really focused on shrinking the size of the government was 32 years ago with Elaine K. Mark leading the effort. So she does have like unique insight into what Trump is doing now. Are you just like the most sought after you've ever been in a long time? Well, ironically, I have been talking to my former colleagues and we think we've gotten more press for the national performance review in the last six weeks than we did in the whole seven years the damn thing ran.

Since leaving the White House, Elaine has focused on government operations. She's published these big studies on things like, is the size of the government too big? Are there too many employees? The Trump administration says there are too many. So we asked Elaine, just how much money can you save by cutting jobs? And she says, here's one way to think about it. Let's say you cut every single federal worker. There were no more federal jobs, none. The US would save $271 billion a year.

That's salaries and benefits. $271 billion, that's how much we spend a year on federal employees? On federal employees, yep. That is everything, okay? $271 billion sounds big, and it is big, but for context, it's like 4% of the federal budget. 65% of the federal budget goes to paying for Social Security, Medicare, Medicaid, the other things the U.S. has to pay for, mandatory spending, right?

We pay trillions and trillions of dollars out in those benefits every year, which Elon Musk did just say maybe next. But the point is, federal jobs are just not the expensive stuff. And also, of course, the US is not going to fire every single federal employee to get that full $271 billion in savings. It's impossible to cut all $271 billion of this. You wouldn't have a government left. In other words, you're lucky to cut $50 billion.

Okay, but to be fair, if we only look at the official federal jobs, that doesn't really give us the whole picture because there's another kind of like hidden category of worker doing government-ish work that the government also pays for, federal contractors. Basically, the government can't do all the work it needs to do with just the official federal employees. So they hire contractors and there are a lot of them. Oh yeah, no, we've got more contractors than we have civil servants. We have more contractors than civil servants. Yeah, them. Oh yeah, no we've got more contractors

than we have civil servants. We have more contractors than civil servants. Yeah, that's the estimate. Yeah. We don't actually know how many federal contractors there are. According to Elaine's estimates there are 2.7 million individual contract workers, some say more, and that is on top of the official federal employee numbers. And contract workers have been losing their jobs too when the Trump administration stopped paying some of its contracts. Now there are two kinds of federal contractors. There's the contract workers that get paid to make goods for the U.S. So a contract for goods would be anything from trucks for the army to buying floor mats for a federal office building for when it rains, okay?

Or buying yellow legal pads for the Justice Department. A lot of the goods we contract out for are for defense. We pay contractors to build aircraft carriers and to make socks for the military. And this kind of contract work, people generally think it makes the government more efficient. We don't need the federal government to make yellow legal pads for judges or to manufacture floor mats for when it rains. Then there's contract workers we pay for services. Services are anything from scientific expertise to NIH NIH for cancer,

to janitorial services in the courthouse. It's also things like cybersecurity experts, nuclear physicists, translators. So that's who makes up the official and unofficial federal workforce. And Elaine says both are actually difficult to fire. Elaine can appreciate at least the spirit behind what the Trump administration is trying to accomplish with all these cuts.

But she says there's a process. Like when the government fires someone, Elaine says there has to be a reason. Like performance or we're getting rid of this whole division because we have email now. You can't just blanket everyone who is probationary is fired. Elaine says you have to do it piece by piece. And she says only each individual agency, like the Department of Defense, can fire its own employees. Which the Trump administration has not been doing.

That's why they've been getting pushback and lawsuits related to the firings. The White House Office of Personnel and Management mass-fired probationary workers. And a federal judge recently ruled that it did not have any authority whatsoever under any statute in the history of the universe to hire and fire employees at another agency. Direct quote. Elaine expects more and more people will be hired back. If not because of court orders, and there are many, then because, Elaine says, Congress will start to step in.

Like, let's take NOAA, she says, the National Oceanic and Atmospheric Administration. They track hurricanes and tsunamis and things like that. They give us lots and lots of warning when something bad is going to happen. They've cut a thousand, three hundred jobs already and are planning to cut another thousand. The first time NOAA misses or predicts a hurricane late or the first time they are three days later in forecasting a hurricane than they should be and people don't have a chance to get out on time,

what is Congress gonna do? It's gonna holy moly, put those people back. Okay? Or put some people back. The Trump administration has already tried to hire back a bunch of workers that were fired, like the people who work on the bird flu that is making egg prices so high right now, the people who work on the nuclear weapons programs. And Musk quickly reinstated some of those employees. Or tried. Yeah, that's right.

Because of the way they did it, where they simply cut them off and they cut off their email instantly and take them out of all systems, they can't find some of them. Elaine actually thinks things may not be so messy going forward. And there's a big reason why. Because the first rounds of firings were done before some cabinet secretaries were even confirmed. Now you have a cabinet secretary sitting there and Doge says, cut this many people. And the cabinet secretary says, hey, wait a minute, just hold your horses. Right? I want to look and see. Take the Defense Department. It was initially announced that the Defense Department would cut 76,000 defense-related civilian jobs. But there are laws that the cabinet secretary,

Pete Hegseth, has to follow. He then said, hold on, hold your horses. I under statute the Secretary of Defense has to justify before he does any firing He has to study and justify that the firing will not decrease our national defense readiness So he had to go through that step Okay, and he's still gonna cut people but it's I'm thinking that this may happen in a less chaotic and somewhat more sensible way. Once there are cabinet secretaries in place. And Elaine wonders if the Trump administration might focus more on the area that she found so ripe for savings 32 years ago. Regulations.

That was something that I was hoping the DOGE effort would do is cut regulations because I mean every couple years you got to do this because some regulations just get obsolete. Deregulation is coming. Trump issued an executive order telling all agencies they had 60 days to identify regulations that could go. And their deadline is late April. By the way, Atir Kohl, the federal worker who found herself suddenly on the Doge team, she was not fired.

She quit. She says she is not going to apply to any federal government jobs right now, but says she will in the future. The best way to support Planet Money and the work that we do is to become a member of Planet Money Plus or NPR Plus. You get sponsor-free listening and bonus episodes and it really means a lot to us. It is super helpful. You can learn more or sign up at plus.npr.org. And thank you to everyone who has already signed up. This episode of Planet Money was produced

and also reported a little bit by Willa Rubin. It was edited by Jess Jang and engineered by Jimmy Keighley with fact-checking help from Sierra Juarez. Alex Goldmark is our executive producer. We also want to give a special thanks to Ben Zipper at the Economic Policy Institute. He also really helped us understand who the federal workforce is. I'm Sarah Gonzalez and I'm Amanda Oranjic. This is NPR. Thanks for listening.

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