HR 7507

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IN THE HOUSE OF REPRESENTATIVES

February 11, 2026

Mrs. McClain Delaney (for herself, Mr. Subramanyam, Ms. Norton, Mr. Olszewski, Mr. Walkinshaw, Ms. Elfreth, Mr. Ivey, Mr. Moulton, Mr. Vindman, and Mr. Lynch) introduced the following bill; which was referred to the Committee on Oversight and Government Reform

A BILL

To require the Comptroller General of the United States to conduct a study of the impact of Federal reductions in force on State and local governments, and for other purposes.

Be it enacted by the Senate and House of Representatives of the United States of America in Congress assembled,

SECTION 1. SHORT TITLE.

This Act may be cited as the “Fiscal Harms of Federal Firings Act”.

SEC. 2. FINDINGS.

Congress finds the following:

(1) Federal Reductions in Force (RIFs) may displace workers, altering where affected individuals live and work across States and localities.

(2) Such workforce reductions may increase demand for State-administered services, including unemployment insurance, medicaid, workforce retraining, housing assistance, and other social services.

(3) RIFs may reduce economic activity and tax revenues in regions with a high concentration of Federal employment.

(4) States and local governments vary significantly in their fiscal capacity to absorb the short- and long-term impacts of large-scale Federal workforce reductions.

(5) There is currently no comprehensive Federal assessment of how RIFs affect State and local government budgets, revenues, and expenditures.

SEC. 3. STUDY OF THE IMPACT OF FEDERAL REDUCTIONS IN FORCE ON STATE AND LOCAL GOVERNMENT BUDGETS.

(a) In General.—The Comptroller General of the United States shall conduct a comprehensive study on the impacts of RIFs on the budgets of States and local governments.

(b) Scope of Study.—The study shall examine, at a minimum—

(1) changes in State or local government expenditures resulting from a RIF related to—

(A) unemployment insurance;

(B) Medicaid and other health programs;

(C) workforce development and retraining; or

(D) housing and income assistance programs;

(2) impacts on State and local government tax revenues as a result of a RIF, including income, sales, and property taxes;

(3) regional economic effects, including employment shifts and impacts on the private-sector;

(4) administrative and operational challenges faced by States and local governments responding to RIFs;

(5) differences in impacts on States and local governments based on—

(A) size and scale of the RIF;

(B) geographic concentration of Federal employees; and

(C) State and local government fiscal capacity and labor market conditions;

(6) historical case studies of significant RIFs on States or local governments occurring within the previous 20 years; and

(7) strategies used by States and local governments to mitigate fiscal and economic impacts.

(c) Consultation and Data Collection.—

(1) Consultation.—In conducting the study, the Comptroller General shall seek to consult with—

(A) State and local government budget officers and governors offices;

(B) State and local government workforce and labor agencies;

(C) relevant Federal agencies, including the Office of Personnel Management and the Department of Labor; and

(D) economists, labor market experts, and public finance researchers.

(2) Data sources.—The study may use administrative data, surveys, economic modeling, and publicly available fiscal and labor statistics.

(d) GAO Reports to Congress.—

(1) Deadline.—Not later than 18 months after the date of the enactment of this Act, the Comptroller General shall submit a report on the study to—

(A) the Committee on Education and Workforce of the House of Representatives;

(B) the Committee on Health, Education, Labor, and Pensions of the Senate;

(C) the Committee on Oversight and Government Reform of the House of Representatives; and

(D) the Committee on Homeland Security and Governmental Affairs of the Senate.

(2) Contents.—The report under paragraph (1) shall include—

(A) findings and analysis from the study, including—

(i) an analysis of whether each RIF studied improved the respective agency’s efficiency; and

(ii) any recommendations, including any recommendations for statutory or administrative changes to provide support for displaced employees and States and local governments impacted by RIFs;

(B) identification of States and local governments that experienced the greatest fiscal effects of RIFs;

(C) projected short-term and long-term budgetary impacts on States and local governments; and

(D) policy options for Congress to consider, including potential Federal assistance, coordination mechanisms, or advance planning tools.

(3) Public availability.—The Comptroller General shall make the report under paragraph (1) publicly available on the website of the Government Accountability Office.

(e) Definitions.—In this Act—

(1) the term “reduction in force” or “RIF” means a reduction in force under subchapter I of chapter 35 or section 3595 of title 5, United States Code, or any other significant downsizing of Federal civilian employees; and

(2) the term “State” means each of the several States, the District of Columbia, and any territory or possession of the United States. <all>