Staffing cuts, federal agency and program relocation, and contract review (and potential cancellation) have started across the federal government. In conjunction with the Administration's “Department of Government Efficiency” (DOGE) (it is not a formal Cabinet department as it has not been established by law), all federal agencies have been ordered to put together a plan to reduce the federal workforce (starting with last month’s termination of thousands of probationary employees) by mid-March. The agencies must also draw up plans, by mid-April, to move agencies and programs out of Washington, DC to less expensive parts of the country. Agencies are also reviewing contracts they have with private sector service providers, with an eye to cancelling those that are not required by law or are otherwise not “mission critical.”

The effort has triggered blow-back by government employees and in some cases the members of Congress (House and Senate, Republican and Democrat) that represent them. Lawsuits brought by government worker unions and others abound. There is heavy and growing criticism of Elon Musk (who so far has “total support” from President Trump), the titular head of DOGE.

Uncertainty is rife about which federal jobs will remain and who will do the work of the literally tens of thousands or more of federal workers who have been or will be let go. There is also something of a legislative battle brewing about the extent of the savings these actions could throw off, and whether the budget and appropriations bill writers can claim credit for those savings as this year’s government funding and budget initiatives get underway.

Prospects: There are already reports of difficulty in getting paid for services provided to the federal government, in accessing government services, and in dealing with numerous government agencies. This is something NAIFA members (and their clients) should be aware of if and when they have dealings with any government agencies. Tax refunds, visa and passport applications and renewals, Social Security disability benefit and other determinations (already a problem) and multiple routine services are likely to be delayed or otherwise affected in the coming months.

NAIFA Staff Contact: Jayne Fitzgerald – Director – Government Relations, at jfitzgerald@naifa.org.