WEBVTT

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Lawrence: Welcome to The FED Weekly
for 12-18 October 2025, your essential

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weekly briefing on the policies
and proposals shaping your career,

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your benefits, and your retirement.

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Whether youâre a current federal employee
navigating changes in the civil service,

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or a retiree keeping a close watch on your
hard-earned pension and healthcare, this

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is your source for the latest news from
Capitol Hill and the executive branch.

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Each week, we cut through the noise to
bring you the critical updates on budget

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negotiations, pay raises, workforce
policies, and the legislative battles that

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directly impact the federal community.

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Let's get you up to speed on
what happened this past week.

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Issues That Affect Current
and Retired Federal Workers

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The Deepening Financial Crisis
and Back Pay Uncertainty

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The lapse in annual appropriations,
which began on October 1, 2025, pushed

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the federal workforce past a critical
financial threshold during this period.

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For hundreds of thousands of civilian
federal employees, the failure of Congress

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and the President to resolve the funding
impasse resulted in the first full missed

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paychecks around October 15, covering
the pay period that ended on October 18.

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This financial shock affects two
distinct groups: the estimated 700,000

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or more employees who have been
officially furloughed, and the nearly

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equal number of "excepted" personnel,
who are required to work without

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compensation during the shutdown.

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The stress on federal families has
intensified, with union leaders

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claiming workers are being "held
hostage by a political dispute".

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This period also saw
significant uncertainty

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surrounding guaranteed back pay.

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Although receiving back pay after
a shutdown has been a long-standing

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practice, President Donald Trump
suggested on Tuesday of this week

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that furloughed employees would not
necessarily receive this benefit.

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The administration later issued
guidance suggesting that only

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excepted employees working without
pay were guaranteed back pay.

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This threat, widely seen as a
strong-arm negotiating tactic, created

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substantial unease and panic throughout
the workforce, as employees already

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facing the loss of an entire paycheck
confronted the possibility that their

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lost income might never be recovered.

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An acute disparity arose regarding
pay for military personnel.

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Active-duty service members
were facing the prospect of

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missing a paycheck on October 15.

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To mitigate this potential political
pressure point, President Trump

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directed the Pentagon to repurpose
approximately $8 billion in military

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research and development funds to
ensure active-duty troops received

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payment for up to two pay periods.

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This executive maneuver temporarily
removed one major element of financial

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pressure from the budget negotiations,
although it simultaneously drew

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criticism and legal scrutiny concerning
the Executive Branch's authority to

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unilaterally divert congressionally
appropriated funds from one

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purpose (R&D) to another (payroll).

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The decision to secure military pay while
civilian workers faced threats to their

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back pay amplified the perception that
the financial distress of the civilian

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workforce was being deliberately utilized
as leverage to push political demands.

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Shocking Increase in 2026 Health
Benefits Premiums and Open Season

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A major announcement from the Office
of Personnel Management (OPM) this

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week delivered a severe financial blow
to both current and retired federal

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employees: the details of the 2026 Federal
Employees Health Benefits (FEHB) program.

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OPM announced on October 9, 2025,
that the average enrollee share

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of premiums under the FEHB program
will increase sharply by 12.3%

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for the 2026 plan year.

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This increase marks the second consecutive
year of double-digit premium hikes, a

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trend that federal employee advocacy
groups, such as the National Active and

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Retired Federal Employees Association
(NARFE), have decried as unsustainable.

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This announcement is particularly
impactful because it occurred

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while current employees are facing
financial ruin due to the shutdown.

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Employees currently navigating the
stress of missed paychecks must soon

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begin comparing coverage options during
the 2025 Federal Benefits Open Season,

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scheduled to run from November 10
through December 8, 2025, knowing they

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must budget for significantly higher
healthcare costs in the coming year.

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Furthermore, the new plan year brings
instability in carrier options.

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For 2026, six plans, offering a total
of eight options, will be dropping

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out of the FEHB program, including the
NALC Health Benefit Plan Standard and

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High options, and various options from
carriers such as Health Alliance HMO,

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AvMed Health Plan, Independent Health,
and Blue Care Network of Michigan.

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This forces thousands of employees
and annuitants to select a new plan

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during Open Season, compounding
the financial stress with

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complex administrative choices.

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Thrift Savings Plan Stability
and Financial Relief Legislation

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Amidst the economic turmoil, the
Thrift Savings Plan (TSP) provided

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crucial stability and operational
reassurance to its participants.

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The TSP confirmed that, despite the
ongoing lapse in appropriations, it

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continues its normal daily operations.

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For active participants who have
outstanding TSP loans and have been

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placed in a non-pay status due to
the shutdown, the TSP proactively

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stated it will automatically
update the employee's status.

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This ensures that the participantâs loan
remains in good standing, thus preventing

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a default that could incur substantial tax
penalties, even if scheduled repayments

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are missed during the funding lapse.

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In Congress, several bills were
introduced or advanced to protect

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federal workers from the financial
collateral damage of the shutdown.

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Congressman Suhas Subramanyam, along
with co-sponsors, introduced the Shutdown

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Guidance for Financial Institutions Act.

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This bill aims to shield furloughed
and excepted employees from losing

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access to credit and suffering negative
consequences on their credit scores

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due to temporary payment difficulties.

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It mandates federal financial regulators,
such as the Federal Reserve and the

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Consumer Financial Protection Bureau, to
issue guidance encouraging institutions

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to offer relief, such as loan modification
or new credit extensions, and requiring

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them to prevent adverse credit
reporting related to shutdown hardship.

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A related measure co-sponsored by
Congressman Subramanyam is the Emergency

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Relief for Federal Workers Act, which
would allow federal workers to make

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penalty-free withdrawals from their
retirement accounts during a shutdown.

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These legislative proposals collectively
underscore the critical need for systemic

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protections when the governmentâs failure
to fund itself places the financial

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security of its workers at risk.

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Issues That Affect Retired Federal Workers

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Delayed COLA Announcement
and the FERS Penalty

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The government shutdown caused a direct
logistical delay in the calculation and

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announcement of the 2026 Cost-of-Living
Adjustment (COLA), affecting all federal

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annuitants and Social Security recipients.

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The annual COLA calculation relies on
the release of the September Consumer

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Price Index for Urban Wage Earners
and Clerical Workers (CPI-W) data by

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the Bureau of Labor Statistics (BLS).

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The CPI release, originally scheduled for
Wednesday, October 15, 2025, was postponed

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due to the funding lapse, effectively
delaying the final COLA announcement.

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The Social Security Administration
(SSA) confirmed on October 14, 2025,

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that the COLA announcement would be
delayed until the BLS releases the

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September CPI figures, now rescheduled
for Friday, October 24, 2025.

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While officially delayed, projections
based on inflation data through

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August 2025 anticipate the 2026
COLA will be approximately 2.7%.

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This delay forces retirees to
budget for 2026 based on two highly

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uncertain figures: an official COLA
rate that has not yet been confirmed,

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and a confirmed, staggering 12.3%

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average increase in their FEHB premiums.

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The postponement of the COLA, while only
nine days, creates immediate financial

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planning difficulties for those on fixed
incomes who require the precise rate to

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assess their purchasing power against
rising costs, especially healthcare.

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The period also provided a reminder
of the permanent legislative

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disadvantage faced by Federal Employees
Retirement System (FERS) annuitants.

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The current law dictates that when the
inflation rate (CPI-W) falls between 2.01%

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and 3.0%,

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FERS retirees receive a
capped increase of only 2.0%,

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which is lower than the full
increase received by Civil Service

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Retirement System (CSRS) retirees
and Social Security beneficiaries.

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For the 2025 COLA, FERS
retirees received 2.0%,

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compared to the 2.5%

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applied to CSRS and Social Security.

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This structural difference leads to
a continuous, compounding erosion of

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FERS retirement benefits over time,
motivating support for legislation

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such as the Equal COLA Act (H.R.

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866 and S.

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3194) aimed at eliminating this penalty.

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The OPM Retirement Processing Crisis

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The retirement system for federal
employees is currently facing

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an unprecedented crisis of
capacity, amplified significantly

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by the ongoing shutdown.

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This crisis stems from the historic
mass exodus of the federal workforce,

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driven by a combination of standard
retirements, buyouts, and the

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Deferred Resignation Program (DRP).

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Leading up to the end of Fiscal Year
2025 (September 30), the federal

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government experienced a massive wave
of departures, including approximately

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154,000 employees who accepted buyout
offers and were removed from the payroll,

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alongside an 18% surge in regular
retirements compared to the previous

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year, totaling nearly 105,000 annuitants.

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Many of the 60,000 workers who
retired via the DRP are among those

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currently awaiting their benefits.

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This volume has overwhelmed the Office
of Personnel Management (OPM), which

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handles final annuity processing.

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As of mid-October 2025, OPM is grappling
with a backlog of over 35,000 unprocessed

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retirement claims, resulting in average
processing times stretching to 76 days.

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The fundamental problem is that
the wave of mass departures was not

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matched by administrative capacity.

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The government's push for rapid
workforce reduction effectively

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dismantled the administrative
infrastructureâboth at OPM and in

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agency Human Resources officesânecessary
to administer the benefits owed

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to those departing employees.

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The operational complexities of the
shutdown have worsened this problem.

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OPM workers responsible
for handling paperwork and

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payroll have been furloughed.

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Furthermore, final retirement
applications cannot be processed

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until the separating agency issues
the employeeâs final paycheck, a step

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that is itself disrupted by the agency
furloughs imposed by the shutdown.

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This bureaucratic logjam leaves thousands
of recent retirees in financial limbo,

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receiving only interim annuity payments
or waiting for the FERS Annuity Supplement

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to begin after case finalization.

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OPM Director Scott Kupor acknowledged
the crisis, characterizing the legacy

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paper-based retirement process, centered
at the Retirement Operations Center

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in Boyers, Pennsylvania, as archaic.

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Kupor stated he remains optimistic and is
pursuing modernization efforts, including

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mandating the use of the new Online
Retirement Application (ORA) system, which

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provides OPM early visibility into the
projected 60,000 claims in the pipeline.

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Additionally, OPM is coordinating with
other agencies to detail HR staff to OPM

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to assist with the overwhelming workload.

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Legislation to Enhance
Retirement Creditable Service

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For employees approaching retirement,
the Federal Retirement Fairness Act (H.R.

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1522) remains a vital piece
of pending legislation.

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This bill proposes to
amend Title 5 of the U.S.

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Code to allow civilian service
performed in a temporary position after

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December 31, 1988, to be counted as
creditable service under the Federal

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Employees Retirement System (FERS).

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If enacted, this measure would allow
thousands of employees to buy back

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time previously deemed non-creditable,
potentially increasing their

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retirement annuity calculation and
accelerating their eligibility date.

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Issues That Affect Current Federal Workers

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Implementation of Targeted
Mass Layoffs (RIFs)

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The defining event for current federal
workers during this week was the beginning

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of mass, permanent layoffs across the
civil service, implemented under the

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guise of the ongoing funding lapse.

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The administration had utilized the lack
of appropriations to execute planned

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workforce elimination, targeting programs
inconsistent with the Presidentâs agenda.

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On Friday, October 10, 2025 (just
preceding the start of this reporting

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period), White House Office of Management
and Budget (OMB) Director Russell

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Vought announced that Reductions in
Force (RIFs) were officially underway.

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These layoffs are highly strategic,
directed specifically at programs and

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activities that satisfy three conditions:
discretionary funding lapses on October

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1, 2025; no other funding source is
available; and the program is inconsistent

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with the Presidentâs priorities.

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OMB Director Vought was quoted as saying
that the targeted programs "are never

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going to come back, in many cases".

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Reports by October 14, 2025,
confirmed that RIF notices had

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been issued to approximately 4,200
federal employees across seven

00:14:33.159 --> 00:14:35.100
agencies in the initial phase.

00:14:35.629 --> 00:14:39.840
The agencies facing the deepest immediate
cuts included the Treasury Department,

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which issued RIF notices to 1,446
employees, and the Department of Health

00:14:45.250 --> 00:14:51.410
and Human Services (HHS), which targeted
between 1,100 and 1,200 employees.

00:14:51.449 --> 00:14:56.620
Other agencies included the Department
of Education (466 employees), Department

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of Housing and Urban Development (442
employees), Commerce Department (315

00:15:02.019 --> 00:15:06.589
employees), Energy Department (187
employees), and the Department of

00:15:06.589 --> 00:15:09.589
Homeland Security (176 employees).

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However, in a confusing development,
700 firings issued to staff at the

00:15:15.150 --> 00:15:19.490
Centers for Disease Control and
Prevention (CDC) were abruptly reversed

00:15:19.490 --> 00:15:22.139
over the weekend of October 12â13.

00:15:22.765 --> 00:15:25.396
Procedural Chaos and
Administrative Cruelty

00:15:25.953 --> 00:15:30.264
The process of issuing these RIF
notices during the shutdown created

00:15:30.264 --> 00:15:34.694
widespread administrative chaos
and intensified employee distress.

00:15:35.184 --> 00:15:39.173
Employees who had been furloughedâwhich
applies to most personnel in departments

00:15:39.173 --> 00:15:43.854
like Educationâwere unable to access
their official government email accounts.

00:15:44.403 --> 00:15:49.483
Since RIF notices were sent to these
inaccessible official emails, employees

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at the Department of Education reported
being "in a panic" because they had no

00:15:54.153 --> 00:15:56.204
way to confirm if they had been fired.

00:15:56.954 --> 00:16:00.653
They were forced to seek permission
to check their accounts or rely

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on communication from "excepted"
co-workers who retained access.

00:16:05.570 --> 00:16:09.500
This communication failure during
a high-stakes personnel action

00:16:09.809 --> 00:16:14.700
exacerbated the already severe anxiety
gripping the workforce, which had

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endured months of reductions and
threats leading up to the shutdown.

00:16:19.769 --> 00:16:23.979
The timing of the firings was also
heavily criticized, with one employee

00:16:23.979 --> 00:16:28.360
noting the RIFs in the special education
program office were conducted the

00:16:28.360 --> 00:16:32.179
day before the funeral of a longtime
division director, underscoring the

00:16:32.179 --> 00:16:36.880
perceived lack of consideration for
the human impact of the downsizing.

00:16:37.499 --> 00:16:42.599
Executive Order 14356: Restructuring
Federal Hiring and Accountability

00:16:43.218 --> 00:16:47.318
In a move cementing the administrationâs
structural control over the workforce,

00:16:47.608 --> 00:16:53.478
President Trump signed Executive Order
14356, "Ensuring Continued Accountability

00:16:53.478 --> 00:16:57.237
in Federal Hiring," on October 15, 2025.

00:16:57.798 --> 00:17:01.688
This order fundamentally restructures
how the government hires career

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employees, extending political
oversight over personnel decisions far

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beyond the immediate shutdown crisis.

00:17:08.907 --> 00:17:13.317
The order imposes a strict constraint,
stipulating that no vacant civilian

00:17:13.317 --> 00:17:17.617
position may be filled, and no new
position may be created, except as

00:17:17.617 --> 00:17:19.678
explicitly provided for in the order.

00:17:20.468 --> 00:17:24.708
This mandate effectively institutionalizes
an indefinite hiring freeze,

00:17:24.937 --> 00:17:29.148
requiring every agency to justify the
necessity of filling any position.

00:17:29.735 --> 00:17:33.515
The primary mechanism for this control
is the mandated establishment of

00:17:33.515 --> 00:17:38.975
a Strategic Hiring Committee (SHC)
within 30 days of the orderâs issuance.

00:17:39.515 --> 00:17:43.265
These committees are composed of
senior agency leadership, including

00:17:43.265 --> 00:17:47.275
the deputy agency head and the
chief of staffâpositions typically

00:17:47.275 --> 00:17:49.046
held by political appointees.

00:17:49.665 --> 00:17:53.005
The SHC is tasked with approving
the creation or filling of

00:17:53.005 --> 00:17:54.956
each vacancy within the agency.

00:17:56.121 --> 00:18:00.392
Crucially, the SHC must ensure that
agency hiring is consistent with "the

00:18:00.392 --> 00:18:04.591
national interest, agency needs, and
the priorities of my Administration".

00:18:05.241 --> 00:18:09.402
Agencies are also required to create
Annual Staffing Plans, which will be

00:18:09.402 --> 00:18:11.942
monitored quarterly by OPM and OMB.

00:18:11.942 --> 00:18:16.821
The incorporation of "Administration
priorities" as a mandatory criterion

00:18:16.821 --> 00:18:21.061
for approving career civil service
vacancies moves the hiring process

00:18:21.061 --> 00:18:25.891
away from traditionally non-partisan,
merit-based selection and centralizes

00:18:25.962 --> 00:18:29.441
political control over the
composition of the career workforce.

00:18:29.882 --> 00:18:34.161
This directive is seen by critics as
a long-term mechanism to ensure that

00:18:34.161 --> 00:18:38.621
the federal bureaucracy is staffed by
individuals aligned with the incumbent

00:18:38.621 --> 00:18:43.242
political agenda, regardless of the
agency's specific mission requirements.

00:18:43.959 --> 00:18:46.939
Pending Congressional
Relief for Active Employees

00:18:47.555 --> 00:18:51.765
To directly counter the threats facing
current federal workers, specific

00:18:51.765 --> 00:18:54.296
legislation remains pending in Congress.

00:18:54.836 --> 00:18:59.165
The Securing Assurance for Federal
Employees (SAFE) Act was introduced to

00:18:59.165 --> 00:19:03.595
explicitly prohibit the administration
from conducting Reductions in Force

00:19:03.925 --> 00:19:06.206
(RIFs) during a government shutdown.

00:19:06.835 --> 00:19:09.575
Its passage would prevent
the weaponization of funding

00:19:09.575 --> 00:19:13.395
lapses as a mechanism for
permanent workforce reductions.

00:19:14.034 --> 00:19:16.924
Additionally, in response to
the operational burden imposed

00:19:16.924 --> 00:19:20.734
by the shutdown, Representative
Ilhan Omar introduced H.R.

00:19:20.734 --> 00:19:25.404
5720, which aims to provide
reimbursement to federal employees

00:19:25.593 --> 00:19:29.614
for childcare expenses incurred
due to the lapse in appropriations

00:19:29.824 --> 00:19:32.914
that began on October 1, 2025.

00:19:33.154 --> 00:19:37.863
This acknowledgment of the ancillary
costs and logistical challenges imposed

00:19:37.863 --> 00:19:42.143
on working federal parents during a
shutdown highlights the comprehensive

00:19:42.143 --> 00:19:44.764
disruption caused by the funding crisis.

00:19:45.387 --> 00:19:48.667
And thatâs a wrap on this weekâs
Federal Workforce Roundup.

00:19:49.048 --> 00:19:53.537
The landscape for federal employees
and retirees is constantly shifting,

00:19:53.887 --> 00:19:58.268
with major decisions being made about
everything from pay and job security

00:19:58.507 --> 00:20:02.448
to retirement benefits and the very
structure of the civil service.

00:20:03.018 --> 00:20:04.968
Staying informed is your best tool.

00:20:05.368 --> 00:20:09.997
Be sure to subscribe wherever you get your
podcasts, so you never miss an update.

00:20:10.717 --> 00:20:11.758
Thanks for tuning in.

00:20:11.997 --> 00:20:14.747
Weâll be back next week to
track the latest developments

00:20:14.747 --> 00:20:16.187
and what they mean for you.

00:20:16.847 --> 00:20:19.458
Until then, stay engaged and be well.