How Elon Musk Created 'So Much Destabilization' That the Government Paid $11B Just to Clear the Room

The Trump administration's Elon Musk-inspired bid to slash the US federal workforce ended up costing taxpayers between $11.1bn and $15.1bn by March 2026, after Washington paid nearly 140,000 civil servants not to work under a controversial scheme called the Deferred Resignation Program, according to a new report by watchdog group Public Citizen.

For context, the programme was launched nationwide on 28 January 2025, shortly after Musk's newly created Department of Government Efficiency sent its now infamous 'fork in the road' email to hundreds of thousands of federal employees. That message offered staff a stark choice: resign from government service yet continue collecting their salaries until 30 September 2025, or stay on in a radically slimmed-down bureaucracy shaped by Musk's vision of a leaner state.

Public Citizen's analysis, based on data from the Office of Personnel Management, concludes that the supposed government efficiency drive instead created a vast, expensive holding pattern. In effect, the US government agreed to pay a small city's worth of employees to walk out the door while agencies scrambled to work out who they actually needed to keep.

Musk's Government Efficiency Push Backfires on Cost Savings

The political sales pitch could hardly have been grander. Musk's America PAC claimed at the time that the shake-up 'could lead to around $100 billion in savings' as Trump officials talked up a once-in-a-generation chance to rip up what they cast as bloated bureaucracy.

The reality, according to Public Citizen researcher Douglas Pasternak, has looked very different. 'The Trump administration's efforts to shrink the federal government have been stupid, costly and deadly,' Pasternak said in the report, arguing that hollowing out agencies left gaps in services and oversight that Americans are still dealing with.

The watchdog estimates that by March 2026, the Deferred Resignation Program had cost between $11.1bn and $15.1bn in salary outlays and knock-on expenses. That is real money even by Washington standards, and a long way from the promised savings.

More than 106,000 federal employees reportedly separated from government service in September 2025 under the offer, with another 24,000 leaving by the end of December. The Defence Department alone lost more than 48,000 staff. The Treasury Department shed 23,000. The Department of Agriculture lost more than 14,500.

Nothing is confirmed yet so everything should be taken with a grain of salt regarding the exact long-term savings or costs, which will depend on future hiring, legal outcomes and policy reversals.

The 'Deferred Resignation Program' That Wouldn't Stay Deferred

The Deferred Resignation Program worked like this. Employees who took up the offer agreed to resign from federal service but continued to receive paycheques for months while doing no government work. On paper, that gave Trump and Musk's team a clean way to clear the decks before redesigning agencies. In practice, it created some wild bureaucratic knots.

Several federal courts ruled that parts of the Trump administration's layoffs were illegal and ordered that terminated employees at the Departments of Agriculture, Commerce, Energy, Interior, Labor and other agencies be reinstated. According to Public Citizen, some of those early rulings have since been overturned on appeal, and there is a thicket of ongoing court cases still working their way through the system.

At least ten federal agencies ended up rehiring people who had joined the Deferred Resignation Program after realising those staff were essential to work mandated by Congress. So, in some cases, the government paid employees not to work, then paid again to bring them back and repair the damage.

Democratic senator Tim Kaine of Virginia, whose state is home to tens of thousands of federal workers, argued from the outset that Trump had no legal authority to make such an open-ended offer. 'There's no budget line item to pay people who are not showing up for work,' he said at the time, warning of precisely the kind of financial sinkhole that the Public Citizen report now describes.

The Office of Personnel Management, which oversees the federal workforce, has been contacted for comment on the findings.

From Ideology To Real-World Impact

Musk's Department of Government Efficiency was born out of a familiar strain of right-wing frustration with what is seen as a sprawling, unaccountable 'deep state.' The Deferred Resignation Program was held up by allies as a bold way to break that system, a Silicon Valley-style pivot where you clear the room and start again.

The Public Citizen report paints a much less flattering picture, describing the programme as 'the epitome of inefficiency' that 'resulted in billions of dollars in wasted federal funds'. It predicts that the administration's 'inept and inefficient reductions in force policies are likely to be textbook examples of mismanagement in future business school classes.'

Behind the rhetoric sits a very tangible cost. When tens of thousands of experienced staff walk away from departments like Defence, Treasury and Agriculture, the impact does not stop at office doors in Washington.

It ripples out into military logistics, tax collection, farm support and food safety. The report bluntly warns that 'the long-term impact of these actions on virtually every facet of American life may be felt for years to come.'

That line will resonate with anyone who has tried to get a passport, a disability claim, a farm loan or a safety inspection through a system running on skeleton crews and overworked holdouts.

There is also the political bill. For all the talk of cutting waste, it is hard to spin paying people not to work, then in some cases paying them again to come back, as anything other than a mess. Musk's fans might argue that disruption was the point, that you cannot reform a creaking bureaucracy without breaking things first. But when the running total includes an $11bn-plus tab for 'clearing the room,' American taxpayers may reasonably ask what exactly they got in return.