The Reducing the Federal Workforce Through Attrition Act directs the President, via OMB (in consultation with OPM), to shrink the federal civilian workforce so that, effective in FY2028, total federal employment across executive agencies does not exceed 90% of the number of federal employees reported as of September 30, 2025. The statute creates agency-specific ceilings, requires agencies to report baseline headcounts by October 31, 2025, and tasks OMB with issuing maximum allowable headcounts by the first quarter of FY2026.
To get there, the bill imposes a temporary replacement limit (one new appointment per three separations) from Q2 FY2026 through September 30, 2027, sets monitoring and notification duties for OMB, and triggers hiring and remote-work restrictions for any agency that exceeds its cap. The bill also restricts growth in service contracting absent a documented cost advantage and includes a presidential waiver for national-security or emergency needs.
The measure reshapes headcount management, contracting decisions, and remote-work approvals across the federal government, with operational and legal implications for agencies, unions, and private-sector partners.
At a Glance
What It Does
The bill requires the President, through the OMB Director (with OPM consultation), to limit total executive-branch civilian employment to 90% of its September 30, 2025 level beginning in FY2028 and to set agency-specific maximum headcounts. It imposes a temporary hiring rule—no more than one appointment for every three separations—during the phase-in period and enforces agency compliance with appointment and remote-work restrictions when caps are exceeded.
Who It Affects
All Executive agencies as defined in 5 U.S.C. 105, OMB and OPM for implementation, agency heads for reporting and accountability, and federal employees who face reduced hiring and limits on remote-work approvals or increases in official time. Contractors and private employers will see labor-market effects as departures accelerate.
Why It Matters
The bill replaces discretionary hiring controls with statutory, across-the-board limits and an explicit OMB enforcement mechanism, shifting how agencies must manage workforce planning, talent transfers, and contracting. It creates structural pressure to reduce headcount through attrition rather than targeted workforce redesign, with downstream impacts on mission capacity and procurement choices.
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What This Bill Actually Does
This bill turns a policy preference for a smaller federal workforce into a statutory requirement. It starts by fixing a baseline headcount: each executive agency must report how many employees it had on September 30, 2025, and OMB will translate those numbers into agency-level ceilings.
The net government-wide target is a 10% reduction, but OMB implements that by issuing maximum allowable headcounts to each agency.
To reach the goal without mass layoffs, the bill limits hiring during the transition: from the second quarter of FY2026 through September 30, 2027, agencies may appoint only one person for every three employees who retire or otherwise separate. OMB must monitor agencies continuously during the phase-in and thereafter, and it must notify the President and Congress within 14 days of any quarter in which an agency exceeds its OMB-set cap.If an agency is over its cap, the statute prescribes automatic operational constraints until OMB certifies the agency is back under its cap.
Those constraints include a freeze on filling vacancies, a ban on approving new remote-work arrangements (or increases in remote work), and a bar on increasing official time under 5 U.S.C. 7131. The President can waive these rules for national-security or extraordinary emergency reasons, and the law counts employees on a full-time equivalent basis (not subject to collective bargaining for the counting method).The bill also tries to limit substitution of contractors for federal staff: it prohibits an overall increase in procurement of service contracts because of this act unless a cost-comparison shows contracting is financially advantageous.
Finally, it preserves the ability of an individual federal employee to transfer to another agency that is in compliance, which allows some mobility while maintaining agency-level caps.
The Five Things You Need to Know
Agencies must file employee headcount reports (as of Sept. 30, 2025) with OMB by Oct. 31, 2025, which OMB will use to set agency-specific maximums by the end of Q1 FY2026.
The government-wide target is a 10% reduction: total Executive-branch civilian employment may not exceed 90% of the Sept. 30, 2025 level, effective FY2028.
From Q2 FY2026 through Sept. 30, 2027, agencies may appoint no more than one new hire for every three separations (a 1:3 replacement cap).
If OMB finds an agency exceeds its cap, OMB must notify the President and Congress within 14 days of the quarter-end and the agency faces immediate bans on making appointments, approving new or increased remote-work arrangements, and authorizing increases in official time under 5 U.S.C. 7131.
The statute requires FTE-based counting (full-time equivalent) and bars converting the headcount calculation into a subject of collective-bargaining agreements; it also forbids agencies from increasing service-contract spending due to the Act unless a cost comparison shows contracting saves money.
Section-by-Section Breakdown
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Definitions and scope
This subsection sets the statutory definitions that determine coverage: "agency" means an Executive agency under 5 U.S.C. 105; "Director" means the OMB Director; and "Federal employee" is the Title 5 definition (5 U.S.C. 2105) excluding political appointees. Practically, the definitions focus the statute on the civilian executive-branch workforce and exclude political schedules, which narrows the pool subject to the caps.
Government-wide headcount ceiling (90% target)
The Director must ensure the total number of federal employees across agencies does not exceed 90% of the Sept. 30, 2025 baseline, effective FY2028. This creates a statutory, date-certain reduction target rather than a discretionary hiring policy and places legal responsibility on OMB to translate that percentage into operational limits and compliance actions.
Agency reporting and OMB caps
Agency heads must report their employee counts (as of Sept. 30, 2025) to OMB by Oct. 31, 2025. OMB then has until the end of the first quarter of FY2026 to issue each agency’s maximum allowable headcount. That sequencing gives agencies a defined baseline and a relatively short lead time between reporting and receiving an enforceable cap, which will drive immediate short-term planning decisions within agencies.
Temporary replacement-rate limit (1-to-3)
To achieve reductions through attrition, the bill limits appointments between Q2 FY2026 and Sept. 30, 2027 to one new appointee for every three separations. This specific ratio forces agencies to prioritize which separations to backfill and accelerates internal reallocation of duties; it is the core operational lever for achieving the 10% target without statutory layoffs.
Monitoring, notification, and automatic operational restrictions
OMB, with OPM consultation, must continuously monitor agencies and, upon finding an agency over its cap, notify the President and Congress within 14 days after the quarter in which the determination is made. After such a finding, the agency cannot fill vacancies, cannot approve new or expanded remote-work arrangements, and cannot increase official time under 5 U.S.C. 7131 until OMB determines the agency is back under its cap. These are direct, non-discretionary penalties tied to OMB’s monitoring decisions.
Waiver, counting rules, procurement, and transfers
The President may waive restrictions for particular positions or categories when national security, war, or extraordinary emergencies threaten life, health, safety, or property. Employee counts are measured on a full-time-equivalent basis and expressly exclude conversion into collective-bargaining issues. The statute also instructs OMB to prevent increased procurement of service contracts due to the Act unless a cost-comparison shows contracting is financially advantageous, and it preserves the ability of employees to transfer to other agencies that are in compliance.
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Explore Government in Codify Search →Who Benefits and Who Bears the Cost
Every bill creates winners and losers. Here's who stands to gain and who bears the cost.
Who Benefits
- OMB and the Executive Branch leadership — gains a statutory tool to control headcount and force agency-level realignment of staff and priorities, reducing discretion-based variability in hiring practices.
- Agencies already below their OMB-assigned cap — retain hiring flexibility and can recruit talent displaced from over-cap agencies; they can position themselves to absorb mission-critical transfers.
- Private employers and recruiters — stand to benefit from increased availability of experienced former federal employees and reduced federal labor competition in certain labor markets, particularly in regions with large federal workforces.
Who Bears the Cost
- Executive agencies with mission workloads tied to staffing levels — must absorb separations without proportional replacements, potentially degrading service delivery or increasing overtime and contractor reliance for critical functions.
- Federal employees and managers — face slower succession, fewer promotions or backfills, reduced approvals for remote-work arrangements, and added workload as vacancies remain unfilled.
- OMB and OPM operational staff — will bear increased monitoring, reporting, and enforcement workloads to administer caps, perform cost comparisons for contracting, and process waiver requests in a short time frame.
Key Issues
The Core Tension
The bill forces a tradeoff between two legitimate goals: reducing federal headcount to achieve fiscal or governance objectives versus preserving operational capacity and institutional knowledge necessary for government functions. It solves the political problem of how to downsize—by statutory caps and hiring ratios—but creates operational risk and incentives to shift work to contractors or reclassify positions, meaning the policy’s savings and effects on service delivery will depend heavily on implementation choices and disputed cost comparisons.
Measurement and gaming are immediate implementation risks. The bill fixes counting on an FTE basis and excludes the counting methodology from collective bargaining, but it does not define key measurement details such as the treatment of temporary, detailee, or reimbursable-detail staff, or the threshold for what counts as a remote-work increase.
Agencies could attempt to re-categorize work (e.g., shift positions to contractors, interns, or grants) or rely on approved cost-comparisons to replace staff with contractors, undermining the stated goal. The procurement cost-comparison safeguard creates its own administrative burden and leaves room for disputes about cost assumptions, overhead allocations, and long-term value.
Operational readiness and mission-specific needs create legal and practical tension points. The 1:3 replacement rule applies across the board, but it does not distinguish mission-critical occupations, scientific and technical roles, or small agencies with specialized skill requirements, raising the prospect of degraded capabilities in areas where vacancy-driven risk is high.
The presidential waiver is a blunt instrument: it preserves flexibility for national-security priorities but gives broad discretion without a transparent standard for when and how waivers will be used. Finally, the forced restrictions on remote-work approvals and official time increases interact awkwardly with existing workplace policies and could spur litigation over supervisory decisions and bargaining-unit impacts that the statute seeks to immunize from bargaining only for counting rules.
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