RIFs Hit the DOE & Other Government Agencies & Reinflated Inflation – Top 3 Takeaways July 16th, 2025
Takeaway #1: Less than half of the department it used to be
The day that there’s an official end to the US Department of Education will be a great day. Until then, having the department shrunk to half of what it had been is a nice win. As I’ve spoken to many times over the years, including last November after Trump’s election win in my story: Addition By Subtraction – It's Time to Eliminate the Department of Education... The best and most efficient way to improve in any aspect of life is to identify “the bad stuff” and to stop doing it. Getting rid of the bad instantly makes whatever you’re working on better! It’s not complicated. The US was a world leader in education before the creation of the US Department of Education in 1980. We’ve gone nowhere but backwards since. So cut it out and stop doing “the bad stuff”. And from a point of practicality, not only could taxpayers save money while getting a better educational result in return, but the influence of the teacher’s unions and other political organizations that infest all D.C. bureaucracies, and that taint educational agendas and curriculum in the classrooms would go away as well. And in March, President Trump signed the executive order: Improving Education Outcomes by Empowering Parents, States, and Communities it stated this: Closing the Department of Education and Returning Authority to the States. (a) The Secretary of Education shall, to the maximum extent appropriate and permitted by law, take all necessary steps to facilitate the closure of the Department of Education and return authority over education to the States and local communities while ensuring the effective and uninterrupted delivery of services, programs, and benefits on which Americans rely. As Education Secretary Linda McMahon has discussed, President Trump gave her the job of putting herself out of a job, and that’s exactly what she’s been working on. At its recent peak during the Biden administration, the US Department of Education employed over 4,400 people out of Washington D.C. By March, at the time Trump signed the executive order, the number was down to 4,133. The decline of about 300 employees had been through attrition. As DOE employees left the agency, leading up to the Trump administration, and through the first couple of months, they weren’t replaced. But then came the DOE’s first major reduction in force. In a statement released announcing the RIF’s of 1,378 DOE employees, Secretary McMahon said the RIF: reflects the Department of Education’s commitment to efficiency, accountability, and ensuring that resources are directed where they matter most: to students, parents, and teachers. So of course, leftist interests sued because naturally the DOE employees are to enjoy lifetime job security at the taxpayer’s expense and how dare the world’s most powerful person have any say over hiring and firing decisions anyway. And of course, a leftist federal judge blocked the layoffs at the time – but on Monday the Supreme Court cleared the way for sanity to resume and for the Trump administration to resume the downsizing of one of the most detrimental federal government departments in American history. As of today, following the Supreme Court’s ruling, the DOE is down to 2,183 employees, or fewer than half of who was there just a year ago. In addition to the RIFs that have now gone through – there's been a lot of additional attrition too. And now that the Supreme Court has sided with sanity/the Trump administration – there's likely to be many more that jump ship before they’re potentially made by McMahon to abandon ship. The DOE is less than half of the department it used to be already, in under six months under Trump 2.0. Less is more – this was a big win in the Supreme Court – yes, for the country – yes, one that could likely create an accelerating effect with DOE employees leaving quickly, creating a self-fulfilling prophecy of sorts. This process and SCOTUS decision also...
Takeaway #2: Has applications in other government agencies.
Almost as soon as the SCOTUS ruling came down in the DOE case, Health and Human Services Secretary RFK Jr. finished what he started in April when he announced a RIF representing 10,000 employees, or a quarter of the HHS staff. Similarly to the DOE employees, when the RIFs went out leftist interest groups sued, and a San Fran judge stopped the RIFs. But the SCOTUS ruling cleared the path for these RIFs to advance and on Monday, HHS sent out an email to the impacted employees who’d been hanging on due to an ill-fated lawsuit, that read: You are hereby notified that you are officially separated from HHS at the close of business on July 14, 2025. Thank you for your service to the American people. And that wasn’t all, the state department just clipped 1,350 employees too. The federal government is rapidly shrinking, and the more wins the administration racks up, the more likely it is that additional self-deportations from federal positions will take place. DOGE, post Musk, may be done (technically it’s still around until July 4th of next year), but the departmental DOGEing is just now really getting going.
Takeaway #3: Inflation reinflated
Tuesday’s Consumer Price Index Report was the news that Wall Street expected to hear, but not the news President Trump or anyone else who wants lower interest rates wanted to hear. While inflation, at 2.7% annually most recently, is still lower than when Trump took over as President of the United States, when it was at 3% - it was up from 2.4% in the previous month and is trending in the wrong direction. And yes, the impact of Trump’s tariffs is largely to blame. Which means two things. 1) There’s no way the Federal Reserve will cut interest rates at their policy meeting at the end of this month – so rates will be staying higher for longer...and 2) With Trump’s recent tariff 2.0 announcements with August 1st deadlines on the horizon...the inflation risk may still be to the upside over the short term. In any event, the economists got it right this month on the topline number (CORE CPI came in lower than expected) and that’s not the news Trump wanted to see and locally, the rate was a bit higher. Inflation in June for the Miami-Fort Lauderdale-West Palm Beach metro bumped up to 3.1%, nearly a full point higher than it was in April. Inflation has slightly reinflated.