S 3844

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IN THE SENATE OF THE UNITED STATES

February 11, 2026

Ms. Alsobrooks (for herself, Mr. Van Hollen, Mr. Warner, and Mr. Padilla) introduced the following bill; which was read twice and referred to the Committee on Homeland Security and Governmental Affairs

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 Firing Act”.

SEC. 2. DEFINITIONS.

In this Act:

(1) Comptroller general.—The term “Comptroller General” means the Comptroller General of the United States.

(2) Reduction in force.—The term “reduction in force” means—

(A) a reduction in force carried out under subchapter I of chapter 35 or section 3595 of title 5, United States Code; or

(B) any other significant downsizing of employees occupying positions in the civil service, as defined in section 2101 of title 5, United States Code.

(3) State.—The term “State” means each of the several States, the District of Columbia, and each territory and possession of the United States.

SEC. 3. FINDINGS.

Congress finds the following:

(1) Reductions in force may—

(A) displace workers, altering where affected individuals live and work across States and localities;

(B) increase demand for State-administered services, including unemployment insurance, Medicaid, workforce retraining, housing assistance, and other social services; and

(C) reduce economic activity and tax revenues in regions with high concentrations of Federal employment.

(2) State and local governments vary significantly in their fiscal capacity to absorb the short- and long-term impacts of large-scale reductions in force.

(3) As of the date of enactment of this Act, there is no comprehensive Federal assessment of how reductions in force affect State and local government budgets, revenues, and expenditures.

SEC. 4. STUDY OF THE IMPACT OF FEDERAL REDUCTIONS IN FORCE ON STATE AND LOCAL GOVERNMENT BUDGETS.

(a) In General.—The Comptroller General shall conduct a comprehensive study on the impacts of reductions in force on the budgets of State and local governments.

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

(1) the changes that reductions in force have on State and local government expenditures relating to—

(A) unemployment insurance;

(B) Medicaid and other health programs;

(C) workforce development and retraining; and

(D) housing and income assistance programs;

(2) the impacts on State and local government tax revenues as a result of reductions in force, including revenue generated from income, sales, and property taxes;

(3) the regional economic effects resulting from reductions in force, including employment shifts and impacts on the private sector;

(4) the administrative and operational challenges faced by State and local governments responding to reductions in force;

(5) the differences in impacts that reductions in force have on State and local governments based on—

(A) the size and scale of a particular reduction in force;

(B) the geographic concentration of Federal employees in a particular region; and

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

(6) historical case studies of significant reductions in force on State or local governments that were carried out during the 20-year period preceding the date on which the Comptroller General of the United States commences the study; and

(7) strategies used by State and local governments to mitigate the fiscal and economic impacts of reductions in force.

(c) Consultation and Data Collection.—

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

(A) State and local government—

(i) budget officers; and

(ii) workforce and labor agencies;

(B) offices of governors of States;

(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.—In conducting the study required under subsection (a), the Comptroller General may use administrative data, surveys, economic modeling, and publicly available fiscal and labor statistics.

(d) Report to Congress.—

(1) In general.—Not later than 18 months after the date of the enactment of this Act, the Comptroller General shall submit to the Committee on Homeland Security and Governmental Affairs of the Senate, the Committee on Health, Education, Labor, and Pensions of the Senate, the Committee on Education and Workforce of the House of Representatives, and the Committee on Oversight and Government Reform of the House of Representatives a report regarding the study conducted under subsection (a).

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

(A) findings and analysis from the study conducted under subsection (a), including—

(i) an analysis of whether each reduction in force studied improved the efficiency of the agency that carried out that reduction in force; and

(ii) any recommendations, including recommendations for statutory or administrative changes to provide support for—

(I) individuals displaced by reductions in force; and

(II) State and local governments impacted by reductions in force;

(B) an identification of State and local governments that experienced the greatest fiscal effects of reductions in force;

(C) the projected short- and long-term budgetary impacts on State and local governments as a result of reductions in force; and

(D) policy options for Congress to consider with respect to the impacts of reductions in force on the budgets of State and local governments, including potential Federal assistance, coordination mechanisms, or advance planning tools.

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