Lawrence: Welcome to The FED Weekly for [dd-dd month June 2025], your
essential weekly briefing on the policies and proposals shaping your career,
your benefits, and your retirement.
Whether youâre a current federal employee navigating changes in the civil service,
or a retiree keeping a close watch on your hard-earned pension and healthcare, this
is your source for the latest news from Capitol Hill and the executive branch.
Each week, we cut through the noise to bring you the critical updates on budget
negotiations, pay raises, workforce policies, and the legislative battles that
directly impact the federal community.
Let's get you up to speed on what happened this past week.
Issues That Affect Current and Retired Federal Workers
The primary focus for all stakeholders within the federal community during
mid-January 2026 was the precarious state of agency funding and the
legislative maneuvers intended to prevent a recurrence of the budgetary lapses
that characterized the previous year.
On 14 January 2026, the House of Representatives took a
significant step by passing H.R.
7006, the Financial Services and General Government and National Security,
Department of State, and Related Programs Appropriations Act, 2026.
This legislation, which passed with a bipartisan vote of 341 to
79, is a critical component of the "minibus" strategy designed to
provide full-year funding for over 20 independent agencies, including
the Office of Personnel Management and the Department of the Treasury.
For current employees, the bill represents a path toward operational stability; for
retirees, it secures the administrative funding necessary for the Office of
Personnel Management to process benefits and manage the multi-trillion-dollar Civil
Service Retirement and Disability Fund.
However, the passage of H.R.
7006 also signaled a period of fiscal contraction.
The legislation includes a 2.7
billion dollar reduction for the Internal Revenue Service, specifically
targeting enforcement funding.
Union representatives from the National Treasury Employees Union
have warned that such reductions will inevitably lead to a degradation of
taxpayer services and may jeopardize the agencyâs ability to modernize its
aging technological infrastructure.
This development impacts current employees through potential staffing
shifts and impacts retirees who rely on the Internal Revenue Service for
timely processing of tax documentation related to their annuities.
Further legislative activity aimed at systemic workforce protection
manifested on 16 January 2026, with the introduction of H.R.
7137 by Representative Dusty Johnson.
This bipartisan measure seeks to appropriate funds for the pay and
allowances of federal employees, contract employees, and members of
the Armed Forces specifically during any future lapse in appropriations.
The bill addresses a persistent grievance among federal workers and
retirees: the use of the workforce as a pawn in fiscal negotiations.
By providing a permanent appropriation for pay, H.R.
7137 aims to mitigate the financial trauma associated with shutdowns, such
as the 43-day event in 2025 that left 1.4
million employees without paychecks.
The relevance for retirees lies in the billâs broader intent to stabilize
government operations, ensuring that the agencies managing retiree
benefits remain sufficiently staffed even during budgetary impasses.
A pivotal development in the integrity of benefit administration
occurred on 12 January 2026, when the House of Representatives passed S.
269, the Ending Improper Payments to Deceased People Act.
This bill, which had previously passed the Senate, permanently
authorizes the Department of the Treasury to access the Social Security
Administrationâs full death records through the Do Not Pay system.
The implications of S.
269 are twofold.
First, it serves a critical fiscal oversight function by identifying and
stopping improper payments made to individuals who are no longer living,
a problem that has historically cost the government billions of dollars.
Second, for the retired community, the bill includes protections advocated by
Representative John Larson to prevent the Social Security Administration from
erroneously recording a death unless there is verified proof, thereby safeguarding
living retirees from the accidental termination of their earned benefits.
The modernization of data transparency reached a milestone on 16 January
2026, with the launch of the Federal Workforce Data (FWD) website by
the Office of Personnel Management.
In a blog post titled "Saying goodbye is such sweet sorrow, but alas we
must move FWD," Director Scott Kupor announced that the FWD platform would
replace the antiquated FedScope system, which had been in use since 2000.
The new platform provides a monthly, interactive view of the workforce,
tracking 2,084,618 federal civilian employees across several key metrics.
For current employees, the site offers transparency regarding
performance ratings, administrative leave, and telework participation.
For retirees and those planning their exit from the civil service,
the platform includes critical data on retirement eligibility and
agency-specific departure trends.
Director Kupor emphasized that "transparency only works when people
can see the full picture," noting that better data leads to better decisions
for both policymakers and the public.
Perhaps the most widespread development impacting both active and retired
personnel is the continued implementation of the Social Security Fairness Act, which
was signed into law on 05 January 2025.
This historic legislation repealed the Windfall Elimination Provision (WEP)
and the Government Pension Offset (GPO), two provisions that for over 40
years reduced or eliminated the Social Security benefits of public servants
who also received a government pension.
During the week of 11 January 2026, the Social Security Administration
provided updates on the massive manual review process required
to adjust the records of 3.2
million beneficiaries.
For retirees, the repeal is retroactive to January 2024,
and most affected individuals are expected to receive one-time
lump-sum payments for their withheld benefits by the end of March 2026.
For current employees under the Civil Service Retirement System (CSRS), the
law ensures that they will receive the full Social Security benefits they
earned through private-sector work without the penalties that historically
discouraged dual-career service.
The implementation of the Social Security Fairness Act also holds
significance for railroad workers.
On 15 January 2026, the Railroad Retirement Board announced that it
had nearly completed the issuance of retroactive payments for the non-covered
service pension (NCSP) reduction.
The board noted that fewer than 12 complex cases remained for manual review, marking
a successful administrative transition for those previously penalized by the offset
of their railroad retirement annuities.
Issues That Affect Retired Federal Workers
The financial landscape for retired federal employees in 2026
is defined by a modest adjustment in annuities and significant
changes in healthcare obligations.
Effective in January 2026, federal retirees received a cost-of-living
adjustment (COLA) that reflects the inflationary pressures measured
during the previous fiscal year.
For those retired under the Civil Service Retirement System
(CSRS), the COLA was set at 2.8
percent, matching the increase provided to Social Security beneficiaries.
However, retirees under the Federal Employees Retirement
System (FERS) received a 2.0
percent adjustment.
This discrepancy is a result of the statutory FERS COLA formula, which
mandates that if the Consumer Price Index for Urban Wage Earners and
Clerical Workers (CPI-W) increase is between 2 percent and 3 percent, the
FERS COLA is capped at 2 percent.
Organizations such as the National Treasury Employees Union and the
National Active and Retired Federal Employees Association have continued
to lobby for the Equal COLA Act to rectify this perceived inequity, which
they argue diminishes the purchasing power of FERS retirees over time.
The real-world benefit of the 2026 COLA has been partially eroded
by an increase in Medicare costs.
In mid-January 2026, retirees saw the first deductions for the 2026 Medicare
Part B premiums, which rose to 202.90
dollars per month, up from 185.00
dollars in 2025.
This 17.90
dollar monthly increase absorbs nearly 32 percent of the average
56-dollar monthly COLA raise seen by Social Security and CSRS recipients.
Financial analysts have observed that the "COLA catch-22" remains a primary concern
for the retired community, as healthcare and housing inflation often outpace the
general CPI-W index, leading to a net decline in disposable income despite
the headline-level increase in benefits.
The administration of retirement benefits also remains a
point of operational tension.
As of January 2026, the Office of Personnel Management has
been managing a backlog of over 50,000 retirement applications.
This administrative strain has led to significant delays in the finalization
of annuities, often leaving new retirees on "interim pay"âa fraction of their
full expected benefitâfor several months.
While the Office of Personnel Management has announced moves toward a "fully
digital retirement process," including a new online portal launched in late
2025, the transition has not yet fully alleviated the wait times that
have plagued the agency during the recent surge in federal departures.
For retired postal workers, the week of 11 January 2026 included
specific administrative updates regarding the new Postal Service
Health Benefits (PSHB) program.
This program, which officially replaced Federal Employees Health Benefits (FEHB)
for postal personnel on 01 January 2025, requires Medicare-eligible postal
retirees to enroll in Medicare Part B to maintain their health coverage.
On 14 January 2026, the United States Postal Service announced a webinar
scheduled for 21 January 2026 to discuss "USPS Retirement Health
Benefits: Medicare, Dental and Vision".
This session is designed to clarify the mandatory Part B enrollment rules and
the integration of supplemental benefits like the Federal Employees Dental and
Vision Insurance Program (FEDVIP), which remain available alongside PSHB.
Retirees were cautioned that failure to maintain Medicare Part B enrollment
results in the loss of PSHB coverage, representing a significantly
stricter legal requirement than that found in the broader FEHB program.
Finally, retirees were updated on tax-related adjustments for 2026.
The Internal Revenue Service announced that the maximum annual contribution
limit for an Individual Retirement Account (IRA) increased to 7,500
dollars, up from 7,000 dollars in 2025.
Additionally, the interest rate charged to federal employees and
retirees who need to "buy back" military service time or pay for past
service where retirement contributions were not withheld dropped to 4.25
percent for 2026, down from 4.375
percent the previous year.
This decrease in the interest rate provides a small but welcome
financial window for retirees seeking to maximize their length-of-service
credits for annuity calculations.
Issues That Affect Current Federal Workers
The week of 11 January 2026 was marked by the official implementation of
the 2026 federal pay adjustments, which saw a divergence between
the general civil service and specialized law enforcement sectors.
Pursuant to the executive order issued on 18 December 2025, the
majority of the General Schedule (GS) workforce received a 1.0
percent across-the-board pay increase.
This raise, which is one of the smallest in recent history, did not
include any increase in locality pay, meaning geographic pay differentials
remained frozen at 2025 levels.
The Office of Personnel Management published the new 2026 salary
tables, which took effect on 11 January 2026 for most employees.
For those in the Senior Executive Service (SES) and senior-level (SL/ST)
positions, the minimum rate of basic pay was adjusted to 151,661 dollars for 2026.
In contrast, federal law enforcement officers received a more substantial
adjustment to address chronic recruitment and retention challenges.
On 11 January 2026, a new special salary rate schedule went into effect for certain
law enforcement personnel, providing a total pay increase of approximately 3.8
percent.
This adjustment, approved by Director Scott Kupor, combines the 1.0
percent base increase with an additional 2.8
percent special rate, matching the pay raise provided to
the United States military.
These special rates apply to critical positions within Customs and Border
Protection, the Secret Service, and the Bureau of Prisons, and are designed
to support the administration's priorities regarding border security
and federal law enforcement efficacy.
Additionally, bipartisan legislation was proposed on 16 January 2026 to
establish a 35 percent special pay rate for federal prison workers
until the Bureau of Prisons reduces its reliance on mandatory overtime.
A major judicial development affecting labor relations occurred
on 15 January 2026, when Judge Jamal Whitehead of the U.S.
District Court for the Western District of Washington issued a ruling halting
the administration's second attempt to strip union rights from Transportation
Security Administration (TSA) employees.
The Department of Homeland Security had planned to implement a new
"policy determination" on 18 January 2026 that would have terminated
the collective bargaining agreement between the agency and the American
Federation of Government Employees.
Judge Whitehead ruled that this move "plainly" violated
a 2025 preliminary injunction.
He ordered the agency to immediately notify its 47,000 security screeners
that their 2024 collective bargaining agreement remains "applicable and binding"
and that all grievances and arbitrations must continue to be processed.
Union President Everett Kelley thanked the court for preventing the administration
from "ripping up their union contract again," noting that many of these
officers are veterans who deserve a voice in their working conditions.
In the executive branch, a significant reversal of personnel policy occurred
on 13 January 2026, when the Department of Health and Human Services rescinded
layoff notices for hundreds of employees at the National Institute for
Occupational Safety and Health (NIOSH).
These employees, who primarily investigate workplace outbreaks
and illnesses, had been on paid administrative leave since the massive
job cuts announced in April 2025.
The rescission of the reduction-in-force (RIF) was first reported by Bloomberg
News and confirmed by Health and Human Services spokesperson Andrew Nixon,
who stated that the administration is committed to protecting
essential public health functions.
While the employees returned to work on 14 January 2026, union leaders noted
that the nine months of uncertainty have caused "incalculable damage"
to the agency's research projects.
A contrasting situation emerged at the Consumer Financial Protection Bureau
(CFPB), where on 16 January 2026, reports indicated that while the agency staved
off immediate furloughs after receiving funding, the administration continued
to push for its eventual dismantlement.
Under current directives, the agency is cutting pay and benefits for employees
as it seeks to lay off virtually all of them, complying with court orders
while simultaneously "squeezing" staff in an effort to shut itself down.
This remains one of the most volatile areas of federal employment as
the agency transitions toward an internal merger and eventual closure.
The Office of Personnel Management also issued critical guidance
on 13 January 2026 regarding the modernization of federal hiring.
The memorandum, "Reinvigorating Merit-Based Hiring through
Candidate Ranking," formally operationalizes the "Rule of Many".
This change replaces the outdated "Rule of Three," which required hiring managers
to select from only the top three candidates on a numerically ranked list.
The new "Rule of Many" allows agencies to consider a broader
pool of qualified applicants based on skills-based assessments.
This process aims to remove barriers to entry for highly qualified candidates
while maintaining veterans' preference through a points-based ranking system.
Agencies must be in full compliance with these new regulations by 09 March 2026.
Beyond these administrative shifts, the week saw a flurry of new legislative
proposals that could redefine the requirements of federal service.
On 15 January 2026, Representative Abraham Hamadeh introduced H.R.
7102, which would require all federal civilian career employees
to pass a citizenship test as a condition of employment.
On the same day, Senator Rick Scott introduced S.
3681, providing continuing appropriations for Customs and Border Protection and
Immigration and Customs Enforcement personnel during government shutdowns.
On 16 January 2026, Representative Bill Foster introduced H.R.
7132 to establish minimum staffing levels for the Financial
Stability Oversight Council.
These bills represent a broader congressional effort to either
increase accountability or provide targeted stability to specific
segments of the federal workforce.
Finally, the federal workforce continued to navigate the
implementation of "Schedule Policy" (formerly known as Schedule F).
Under the Office of Management and Budgetâs memorandum M-26-03, agencies
have been directed to "aggressively use" new job classifications to
reclassify tens of thousands of career civil servants as "at-will" employees.
This policy targets "policy-related" positions and strips employees of their
rights to appeal adverse actions to the Merit Systems Protection Board.
As 2026 begins, agencies have already started turning over lists of positions
to the Office of Personnel Management for conversion, a shift that the
administration frames as essential for presidential accountability
but which labor advocates warn will eradicate the non-partisan
nature of the federal bureaucracy.
Amidst these structural changes, the administration also reinforced its "Return
to Office" directives, with Director Kupor arguing in a 16 January 2026 blog post
that in-person collaboration is essential for building the relationships that enable
optimal decision-making in government.
And thatâs a wrap on this weekâs Federal Workforce Roundup.
The landscape for federal employees and retirees is constantly shifting,
with major decisions being made about everything from pay and job security
to retirement benefits and the very structure of the civil service.
Staying informed is your best tool.
Be sure to subscribe wherever you get your podcasts, so you never miss an update.
Thanks for tuning in.
Weâll be back next week to track the latest developments
and what they mean for you.
Until then, stay engaged and be well.