The Disappointing Results of Trump's 'Deferred Resignation' Plan Are Part of a Pattern
Elon Musk, the president's cost-cutting czar, has a habit of overpromising and underdelivering.
A federal judge in Massachusetts yesterday allowed the Trump administration to go forward with its "Fork in the Road" plan, which aims to reduce the federal work force by paying employees to quit. That initiative was announced with much fanfare but will have little practical impact on spending or the size of the federal government. In that respect, it is typical of the cost-cutting measures we have seen so far from Elon Musk's so-called Department of Government Efficiency (DOGE). Like the government he criticizes, which he is now part of as a "special government employee," Musk has a habit of overpromising and underdelivering.
On January 28, the Office of Personnel Management (OPM) sent about 2 million federal employees an email under the header "Fork in the Road." The message noted that President Donald Trump had issued executive orders aimed at achieving "significant" reform of the federal work force, including downsizing of agencies, stricter "performance standards," "enhanced standards of conduct," and a requirement that most employees work in offices rather than from home. That introduction aimed to foster uncertainty about employees' job security.
"If you choose to remain in your current position, we thank you for your renewed focus on serving the American people to the best of your abilities and look forward to working together as part of an improved federal workforce," OPM Acting Director Charles Ezell said. "At this time, we cannot give you full assurance regarding the certainty of your position or agency but should your position be eliminated you will be treated with dignity and will be afforded the protections in place for such positions."
For employees who did not want to take their chances, the OPM offered an alternative. "If you choose not to continue in your current role in the federal workforce, we thank you for your service to your country and you will be provided with a dignified, fair departure from the federal government utilizing a deferred resignation program," Ezell said. "If you resign under this program, you will retain all pay and benefits regardless of your daily workload and will be exempted from all applicable in-person work requirements until September 30, 2025 (or earlier if you choose to accelerate your resignation for any reason)." The deadline for making that decision, originally February 6, was later extended to yesterday.
Several labor unions challenged the deferred resignation plan in the U.S. District Court for the District of Massachusetts on February 4, arguing that it violated the Administrative Procedure Act. In a decision issued on Wednesday, U.S. District Judge Gerald A. O'Toole Jr. lifted a temporary restraining order that had blocked the plan and denied the preliminary injunction sought by the unions after concluding that they did not have standing to sue. "The unions do not have the required direct stake in the Fork directive," he wrote, "but are challenging a policy that affects others, specifically executive branch employees. This is not sufficient."
That decision cleared the way for the deferred resignation plan to proceed. What does that mean? Not much.
Musk seemed excited about the plan. The day the emails went out, he reposted an X message from his America PAC: "BREAKING: Trump administration to offer all 2 million federal workers the chance to take a 'deferred resignation' with a severance package of eight months of pay and benefits. 5-10% of the workforce is estimated to quit, which could lead to around $100 billion in savings."
That prediction proved to be excessively optimistic. Bloomberg notes that the Trump administration "repeatedly warned workers that the so-called 'buyout' offer could be their best chance," given the president's plans to trim federal personnel through less voluntary means. Yet the OPM reports that just 75,000 or so employees accepted the offer. They represent about 3 percent of the federal government's civilian employees, who together cost about $300 billion a year in salaries and benefits. Those numbers suggest the annual savings could amount to something like $10 billion, one-tenth of Musk's estimate.
That's assuming all of those 75,000 employees would have stuck with their jobs but for the deferred resignation offer, which surely is not true. In FY 2023, the Partnership for Public Service reports, 5.9 percent of federal employees voluntarily left their jobs. It is unclear to what extent the "Fork in the Road" initiative will boost that rate. But it seems likely that many of the employees who accepted the OPM's offer would have quit anyway. To the extent that is true, the eight months of pay and benefits for no work look like an unnecessary expense rather than a cost-cutting investment.
One possible reason more employees did not take advantage of what looked like a pretty sweet deal: There was considerable uncertainty about whether the OPM would actually do what it promised and whether employees would have a legally enforceable right to the pay described in the offer. Whatever the explanation, the disappointing results of this initiative are part of a pattern.
Although the Trump administration may yet deliver bigger personnel cuts by other methods, Musk routinely overestimates the savings that can be achieved by focusing on "executive action based on existing legislation" rather than "passing new laws," which is the only way to achieve spending cuts big enough to deal with the nation's looming fiscal crisis. Musk may sincerely believe he can cut the $2 trillion federal budget deficit in half by attacking "waste, fraud, and abuse." But even the best-case scenario falls far short of that target.
Even while noting the modest impact of the deferred resignation offer, The New York Times warns that "almost every facet of the government could be significantly affected by mass resignations, and a culling of the federal work force would have wide-reaching impacts on the lives of many Americans." How so? "Regular activities like traveling, renewing passports or filing for a tax return could be delayed or disrupted," the Times speculates. "The operation of national parks and museums, and the administration of benefits like Social Security, Medicare, veterans' care and food stamps could also be affected. Regulators and inspectors for food, water, drugs and workplace safety could also leave the government."
If cutting the federal government's civilian work force by maybe 3 percent (probably less, once you take into account employees who would have quit anyway) inspires this sort of panic, one can only imagine the response to more serious cuts. But while you might see such hyperbolic consternation as evidence that Musk is on the right track, the proof will be the savings that DOGE actually delivers. And given the limits to what can be accomplished without congressional approval, those savings will not come close to achieving his avowed goal.
