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Lawrence: Welcome to The FED Weekly
for 27 July - 2 August 2025, your

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essential weekly briefing on the policies
and proposals shaping your career,

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your benefits, and your retirement.

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Whether you’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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Section 1: Issues That Affect
Current and Retired Federal Workers

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This section examines the broad
implications of recent developments

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that impact both those currently serving
in the federal government and those

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who have transitioned into retirement.

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The Big Beautiful Bill Act introduces
several general tax changes that are

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relevant to all taxpayers, including
federal employees and retirees.

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Some of these changes are
effective retroactively to January

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First, Two Thousand Twenty-Five.

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These include:

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The permanent adoption of changes to
federal tax rates and standard deduction

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amounts that originated from the Tax Cuts
and Jobs Act (TCJA), with an increase

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for the Two Thousand Twenty-Five tax year
and subsequent adjustments for inflation.

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A temporary annual deduction
of $6,000, available through

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Two Thousand Twenty-Eight, for
taxpayers aged sixty-five or older.

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A temporary increase in the federal
cap on the State and Local Tax (SALT)

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deduction, raising it from $10,000 to
$40,000 (or $20,000 for those filing

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separately) beginning in Two Thousand
Twenty-Five, with inflation adjustments

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through Two Thousand Twenty-Nine.

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A new federal income tax deduction for
qualified overtime and qualified tips,

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effective for tax years Two Thousand
Twenty-Five through Two Thousand

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Twenty-Eight, subject to phase-outs for
higher Modified Adjusted Gross Income.

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Expanded benefits for child care and paid
family and medical leave tax credits.

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Executive Order 14319, "Preventing
Woke AI in the Federal Government"

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On July Twenty-Third, Two Thousand
Twenty-Five, President Trump issued

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Executive Order 14319, titled "Preventing
Woke AI in the Federal Government".

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This executive order mandates that
federal agencies procure large

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language models (LLMs) only if
these models adhere to two specific

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unbiased AI principles: "Truth-Seeking
and Ideological Neutrality".

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Furthermore, the Office of Management
and Budget (OMB) has been directed

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to issue guidance on implementing
these principles by November

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Twentieth, Two Thousand Twenty-Five.

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This Executive Order imposes stringent
new criteria on the acquisition

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and utilization of AI technologies
across the federal government.

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Agencies are now required to ensure
that any LLMs they procure align with

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principles of objectivity and neutrality.

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For federal employees involved in
technology procurement, information

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technology, or policy implementation,
this translates into navigating a new

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and potentially complex set of guidelines
for selecting and deploying AI systems.

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This Executive Order introduces
ideologically-driven criteria into

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what would typically be a technical
and operational decision-making

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process, thereby increasing scrutiny
and potentially politicizing

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federal technology procurement.

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This new layer of political oversight
could lead to delays in technology

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adoption, create potential conflicts with
vendors whose AI models may not explicitly

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meet these "unbiased" principles, or
even pose challenges in practically

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defining and measuring "Truth-Seeking
and Ideological Neutrality."

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For federal employees in IT and
procurement roles, this signifies

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navigating a more intricate and
potentially politically charged

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landscape for technology acquisition.

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By imposing specific ideological
constraints on AI procurement, the

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Executive Order could inadvertently
limit the range of available

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technologies or slow down the
adoption of advanced AI solutions.

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If agencies are restricted to a
narrower pool of vendors or must

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allocate significant resources to
verify "neutrality," it could hinder

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their ability to leverage cutting-edge
AI for improved efficiency, data

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analysis, or service delivery.

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This could create a competitive
disadvantage for federal agencies

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compared to the private sector in
terms of technological advancement,

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potentially affecting their
long-term operational effectiveness.

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OPM Guidance on Protecting Religious
Expression in the Federal Workplace

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On July Twenty-Eighth, Two Thousand
Twenty-Five, the Office of Personnel

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Management (OPM) issued a memorandum to
the heads of departments and agencies

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concerning "Protecting Religious
Expression in the Federal Workplace".

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This guidance serves to reinforce the
rights of federal employees regarding

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religious expression within the workplace.

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It likely outlines specific policies
and procedures designed to ensure

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reasonable accommodation for religious
practices and to prevent discrimination

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based on religious beliefs.

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In a period marked by significant
changes to civil service protections,

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reductions in force, and shifts in hiring
policies, OPM's guidance on religious

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expression stands out as a reaffirmation
of a specific employee right.

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While seemingly an isolated development,
it signals the administration's intent

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to shape workplace culture not only
through efficiency and accountability

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measures but also through specific
social and cultural directives.

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This can be interpreted as an effort to
balance the more restrictive workforce

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policies with an emphasis on certain
individual freedoms within the federal

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workplace, potentially to address
concerns about employee morale or to

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align with broader political priorities.

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Section 2: Issues That Affect
Retired Federal Workers

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Analysis of Specific Impacts
on Retired Federal Workers

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During this current period, the
available information does not indicate

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any new legislation or significant
news that specifically and exclusively

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targeted retired federal employees
with new provisions or changes to

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their benefits, beyond the broader
implications discussed in Section 1.

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While the current federal workforce faces
significant upheaval due to reductions

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in force, the introduction of new
excepted service schedules, and hiring

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constraints, retired federal employees
appear to be in a period of relative

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stability regarding their direct benefits.

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Changes to Medicaid and Affordable Care
Act (ACA) coverage detailed in H.R.

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1 could indirectly affect
retirees or their family members

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who rely on these programs.

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This emphasizes that while direct federal
retirement benefits might remain stable,

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the overall financial well-being of
retirees is still subject to broader

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legislative and economic shifts.

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Section 3: Issues That Affect
Current Federal Workers

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Memorandum: "Ensuring
Accountability and Prioritizing

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Public Safety in Federal Hiring"

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President Trump signed a memorandum
on July Eighth, Two Thousand

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Twenty-Five, titled "Ensuring
Accountability and Prioritizing

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Public Safety in Federal Hiring".

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This memorandum sets the governing
framework for the hiring of federal

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civilian employees within the
Executive Branch through October

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Fifteenth, Two Thousand Twenty-Five.

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The memorandum explicitly states
that "no federal civilian position

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presently vacant may be filled, and
no new position may be created, unless

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otherwise provided for in this memorandum
or required by applicable law".

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Furthermore, any hiring that does occur
must be consistent with OPM's Merit

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Hiring Plan, which was issued on May
Twenty-Ninth, Two Thousand Twenty-Five.

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This plan itself originates from
Executive Order 14170, focusing on

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"Reforming the Federal Hiring Process and
Restoring Merit to Government Service".

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While not explicitly termed a "hiring
freeze," the memorandum's directive that

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"no federal civilian position presently
vacant may be filled, and no new position

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may be created" effectively imposes a
significant constraint on federal hiring.

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This will inevitably lead to workforce
stagnation in many areas, exacerbating

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existing staffing shortages, particularly
in agencies already experiencing high

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attrition, such as IRS customer service.

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This serves as a direct mechanism
for shrinking the federal workforce

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through attrition, complementing
the ongoing reductions in force.

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The combined effect of a de facto hiring
freeze and ongoing reductions in force

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will undoubtedly place significant
operational strain on federal agencies.

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With fewer personnel available to
manage existing workloads, there

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is a high likelihood of increased
backlogs in services, slower

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processing times, and a reduced
capacity to respond to new challenges.

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This directly impacts the ability
of federal agencies to fulfill their

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missions and serve the public effectively,
potentially leading to frustration for

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citizens who rely on those services.

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The stated goal of "government
efficiency" could be undermined by the

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practical realities of understaffing.

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The Federal Employee
Return to Work Act (S.

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27)

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The "Federal Employee
Return to Work Act" (S.

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27) was introduced in the Senate on
January Seventh, Two Thousand Twenty-Five,

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by Senator Bill Cassidy of Louisiana.

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The bill has since been referred
to the Senate Committee on Homeland

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Security and Governmental Affairs
and currently holds "Introduced"

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status, indicating it is in the early
stages of the legislative process.

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The core provisions of this bill
propose to prohibit certain annual

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or locality-based pay increases for
federal employees who telework at

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least one day each week, or twenty
percent or more each week if they

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are on an alternative work schedule.

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Instead, these "covered employees" would
be compensated at the "Rest of U.S."

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locality pay rate, regardless of
their actual geographic location.

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The bill is designed to take effect
on the first day of the fiscal

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year beginning after its enactment.

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If enacted, S.

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27 could significantly alter compensation
for a substantial portion of the federal

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workforce that utilizes telework.

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It would create a financial
disincentive for telework, particularly

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for employees living in high-cost
areas who would experience a loss

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of their locality pay adjustments.

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S.

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27 represents a clear legislative
pushback against the expanded use of

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telework within the federal government.

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By targeting pay increases for teleworking
employees, the bill aims to financially

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disincentivize remote work and compel a
return to traditional office settings.

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This effort is not merely about physical
presence; it is also a mechanism

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to control federal compensation
costs, especially for employees in

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high-cost-of-living areas who benefit
significantly from locality pay.

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This legislative initiative
complements the executive order

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pushing for a "Return to In-Person
Work" , indicating a coordinated

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desire across branches of government
to reshape federal work arrangements.

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Should S.

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27 become law, its impact on
federal workforce recruitment and

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retention could be substantial.

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High-skill professionals, who often
have private-sector alternatives, might

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be deterred from federal service if
telework flexibility is curtailed and

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locality pay is significantly reduced.

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Such a policy could also lead to
a geographic redistribution of the

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federal workforce, as employees in
expensive urban centers might face a

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choice between a significant pay cut
or relocating to lower-cost areas.

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This could affect the diversity of talent,
the ability to attract specific expertise,

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and the overall competitiveness of federal
employment in a modern labor market.

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IRS Whistleblower Office Recognition
of National Whistleblower Day

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On July Twenty-Eighth, Two Thousand
Twenty-Five, the IRS Whistleblower Office

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publicly recognized the importance of
National Whistleblower Appreciation Day.

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This recognition highlights the critical
role that whistleblowers play in

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supporting the nation's tax administration
and in promoting accountability

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across government operations.

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It serves as a public acknowledgment
of their contributions and the

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legal protections afforded to them.

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The IRS's public recognition of National
Whistleblower Day, particularly amidst a

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period of increased scrutiny on federal
employee conduct and efficiency, functions

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as a strategic communication effort.

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It aims to project an image
of commitment to integrity and

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transparency within federal operations.

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By celebrating whistleblowers, the
government implicitly encourages

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ethical behavior and the reporting
of wrongdoing, which can be seen as

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a counter-narrative to the broader
focus on workforce reductions

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and increased executive control.

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This also reinforces the legal protections
available to those who come forward

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with information about fraud or waste.

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And that’s a wrap on this week’s
Federal Workforce Roundup.

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The landscape for federal employees
and retirees is constantly shifting,

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with major decisions being made about
everything from pay and job security

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to retirement benefits and the very
structure of the civil service.

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Staying informed is your best tool.

00:14:03.496 --> 00:14:08.046
Be sure to subscribe wherever you get your
podcasts, so you never miss an update.

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Thanks for tuning in.

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We’ll be back next week to
track the latest developments

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and what they mean for you.

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Until then, stay engaged and be well.