S. 3844 — Fiscal Harms of Federal Firing Act

This section defines, for purposes of the Act, (1) Comptroller General as the Comptroller General of the United States; (2) reduction in force as a reduction under subchapter I of chapter 35 or §3595 of title 5, U.S. Code, or any other significant downsizing of civil service employees (i.e., appointive positions in the executive, judicial, and legislative branches except uniformed services positions, per 5 U.S.C. §2101); and (3) State as each of the several states, the District of Columbia, and each territory and possession of the United States.

This section states congressional findings that federal reductions in force may displace workers and alter their living and working locations; increase demand for state-administered services such as unemployment insurance, Medicaid, workforce retraining, housing assistance, and other social services; and reduce economic activity and tax revenues in regions with high federal employment concentrations. It further finds that state and local governments vary in fiscal capacity to absorb such impacts and that, as of enactment, no comprehensive federal assessment exists of reductions in force effects on state and local budgets, revenues, and expenditures.

This section directs the Comptroller General of the United States to conduct a comprehensive study on the impacts of federal reductions in force (RIFs) on state and local government budgets. The study must examine, at a minimum, (1) changes in state and local expenditures for unemployment insurance, Medicaid and other health programs, workforce development and retraining, and housing and income assistance; (2) effects on tax revenues from income, sales, and property taxes; (3) regional economic effects including employment shifts and private sector impacts; (4) administrative and operational challenges; (5) differences in impacts based on RIF size, geographic concentration of federal employees, and state/local fiscal capacity and labor markets; (6) historical case studies of significant RIFs in the prior 20 years; and (7) mitigation strategies used by state and local governments. In conducting the study, the Comptroller General must consult state and local budget officers and workforce agencies, governors' offices, relevant federal agencies such as the Office of Personnel Management and Department of Labor, and experts in economics, labor markets, and public finance; the Comptroller General may use administrative data, surveys, economic modeling, and public statistics. Not later than 18 months after enactment, the Comptroller General must submit a report to the Senate Committees on Homeland Security and Governmental Affairs and Health, Education, Labor, and Pensions and the House Committees on Education and Workforce and Oversight and Government Reform. The report must include study findings and analysis (including whether studied RIFs improved agency efficiency and recommendations for statutory or administrative changes to support affected individuals and governments), identification of most fiscally impacted state and local governments, projected short- and long-term budgetary impacts, and policy options for Congress such as federal assistance or coordination mechanisms; the Comptroller General must make the report publicly available on the Government Accountability Office website.