They appear to be interested in monetary flow, for which such questions are irrelevant.
Even if the top level suggestion of 2 trillion eliminated fell entirely on people providing zero economic output (i.e. the cuts consisted of completely eliminating social security and all military/veteran pensions), and thus the private sector has no desire to absorb them at step 1, and consequently 2 and 3 didn't apply at all, the private sector still looses that much in revenue.
Even if the top level suggestion of 2 trillion eliminated fell entirely on people providing zero economic output (i.e. the cuts consisted of completely eliminating social security and all military/veteran pensions), and thus the private sector has no desire to absorb them at step 1, and consequently 2 and 3 didn't apply at all, the private sector still looses that much in revenue.