Bonuses for Cost-Cutters Act of 2025

This bill would change how federal employee cost-savings suggestion programs work. It amends title 5 of the U.S. Code to let agency employees identify "surplus salaries and expenses funds" — appropriated money that an Inspector General and the agency's Chief Financial Officer both determine is not needed for its original purpose and can be safely rescinded. Once confirmed, those funds would generally be transferred to the Treasury's general fund for deficit reduction (or debt reduction in years without a deficit). Agencies could keep up to 10% of the identified savings, which could be used to pay cash awards to the employees who flagged the funds, with any remainder available for agency use. The bill also bars certain senior officials — agency heads, Executive Schedule Level I officers, and voting members of independent boards or commissions — from receiving these cash awards. Agencies must report annually on savings and awards, OPM must certify compliance, and GAO must review the program periodically. Most of these provisions would automatically sunset six years after enactment, reverting the law to its prior form.

The bill affects federal agencies, their Inspectors General and Chief Financial Officers, and rank-and-file federal employees who could earn bonuses for identifying wasteful spending; senior political and agency leadership are excluded from eligibility.

Sponsored by Sen. Rand Paul (R-KY) and introduced September 8, 2025, the bill was referred to the Senate Committee on Homeland Security and Governmental Affairs. As of August 6, 2026, the committee ordered it reported favorably with an amendment in the nature of a substitute — meaning it has cleared committee with changes and can now be scheduled for consideration by the full Senate.

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