New Federal Bill Offers Cash Bonuses for Employees Who Spot and Return Unused Budget Money

The aptly named Bonuses for Cost-Cutters Act of 2025 is setting up a temporary, six-year program designed to get federal employees to act like internal auditors. The core idea is to create a formal process for identifying and returning what the bill calls “surplus salaries and expenses funds”—essentially, taxpayer money budgeted for an agency’s operations that just isn’t needed.

The Whistleblower Program with a Cash Reward

If you work for the federal government and you know where the agency is sitting on a pile of unused cash, this bill gives you a direct financial incentive to point it out. The process is straightforward: an employee flags potential surplus funds or mismanagement. That tip then goes through three levels of sign-off—the Inspector General (IG), the Chief Financial Officer (CFO), and the agency head—who all have to agree the money isn't needed and that taking it back won't hurt the agency's ability to do its job. Once confirmed as surplus, that money is transferred to the U.S. Treasury to reduce the federal deficit or debt.

The 10% Rule: How Your Tax Dollars Pay for Efficiency

Here’s the part that directly benefits the employees who speak up: when an agency successfully returns surplus funds to the Treasury, they get to keep up to 10% of that money. That retained 10% is primarily used to pay cash awards to the employee(s) who identified the savings. For example, if an employee flags $5 million in unused travel funds that the agency successfully returns, the agency can keep up to $500,000 to reward that employee and others involved. This creates a powerful, direct link between fiscal responsibility and personal reward, turning every federal worker into a potential cost-cutter.

Who Gets the Bonus and Who Doesn't

While this program is a win for the rank-and-file employee, the bill explicitly draws a line on who can collect these cash awards. Specifically, high-level officials—like agency heads, commissioners, board members, and anyone at Level I of the Executive Schedule—are barred from receiving these bonuses. This provision ensures that the financial incentive focuses on the people on the ground who are spotting the waste, rather than those at the top who are already responsible for budget management.

Why This Might Get Complicated

While the goal of reducing the deficit is great, the bill creates a potential internal tug-of-war. The entire process hinges on the CFO and agency head agreeing that returning the money “won’t hurt the agency’s ability to do its job.” This is a subjective standard. Agencies are naturally incentivized to protect their budgets, so a CFO might be reluctant to declare funds “surplus,” even if they are unused, just to maintain flexibility. If the process becomes too difficult or political, employees might stop flagging savings, defeating the purpose of the bill. It’s a great idea in theory, but the execution relies heavily on the willingness of agency leadership to prioritize deficit reduction over protecting their own future spending power. Since the entire program is set to expire after six years, it’s essentially a trial run to see if employee incentives can genuinely drive government efficiency.