Lawrence: Welcome to The FED Weekly for 29 June - 5 July 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
In this period the biggest development was on Capitol Hill.
Both the House and Senate were working on H.R.1
(the âOne Big Beautiful Billâ budget reconciliation package).
Early reports noted that the House-passed version included several proposed cuts
to federal retirement and health benefits â for example, eliminating the FERS annuity
supplement for most early retirees and switching annuity calculations from
a âhigh-3â to a âhigh-5â salary basis
. However, the Senate parliamentarian later ruled those provisions out of
order under Senate rules, and by June 29 media reported that the Senateâs version
contained no cuts to current workersâ or retireesâ earned benefits or union rights.
The Senate package was pared down to non-controversial items (an
audit of FEHBP enrollment and budget efficiency initiatives) with all
contested pension and pay cuts dropped.
Retired and active employees alike cheered the outcome.
The National Active and Retired Federal Employees Association (NARFE) noted
on July 1 that âno federal workforce provisions opposed by NARFE made it into
the final [Senate] versionâ of H.R.1.
NARFE President Bill Shackelford called this âa huge victoryâ for
workers and retirees, emphasizing that cuts to vested pension
benefits and FEHB had been blocked.
As enacted and signed into law, current feds and annuitants will see their
existing retirement and health benefits preserved â a dramatic reversal from
what had been in earlier drafts.
Aside from the budget bill, one legislative change of note
affecting federal retirees went into effect earlier this year.
The Social Security Fairness Act (H.R.
82) was signed into law January 5, 2025, and repealed the Windfall
Elimination Provision (WEP) and Government Pension Offset (GPO).
In practice this means over 2.8
million workers â including many Civil Service Retirement System (CSRS)
retirees â will see higher Social Security checks beginning in 2025.
The Social Security Administration reports that affected retirees
started receiving the new, higher benefits in the spring, with backpay
to January 2024 already disbursed.
On the investment side, federal employeesâ retirement savings did well in June.
Thrift Savings Plan (TSP) funds all rose in value last month.
The S Fund (small- and mid-cap stocks) surged 5.40%
in June, bringing its 2025 gain back into positive territory,
and the C Fund (large U.S.
stocks) was up 5.08%.
Bond-like funds (F and G) also gained modestly.
Even those close-to-retirement âL Fundsâ saw gains (e.g.
the L Income Fund +1.57%,
and all L Funds +3â4%).
These robust returns in June should help preserve the value of TSP balances for
current employees and retirees alike.
Legislative summary (affecting all feds):
H.R.
1 (One Big Beautiful Bill Act) â A budget reconciliation package in Congress.
The House had originally included provisions cutting federal
retirement benefits (e.g.
eliminating the FERS supplement, moving to âhigh-5â salary) and raising
pension contributions for many workers.
The Senateâs version (passed July 1) removed all such cuts
to current or retired employees.
As enacted, the law does not reduce any earned annuities or benefits for current
feds or retirees (the FERS supplement cut is delayed to 2028, with current
employees already vested exempted).
This outcome means both working and retired federal staff avoid
the drastic benefit changes that were in the earlier House proposal.
In practical terms, active feds and annuitants should see no change to
their current retirement annuities or FEHB benefits from H.R.1,
and many CSRS retirees will receive higher Social Security
checks under the fairness act.
Issues That Affect Current Federal Workers
Workforce and hiring: Job-seekers and employee movement remain active topics.
Government Executive reported July 1 that after a surge in early 2025, the
rate of federal workers applying to other jobs has âleveled outâ in May.
Data from Indeed showed that job applications by federal workers grew
~150% from January to April 2025, particularly in agencies targeted
for cuts, but then fell 4% in May.
The analyst attributed the May decline to hiring uncertainties and âdeferred
resignationsâ (programs letting employees postpone departure until fall), as well as
tightening openings at major contractors (which saw 15% fewer postings YTD).
In short, current feds may find fewer outside opportunities, and some are
delaying leaving federal service for now.
On July 2 Government Executive reported a significant stall in pay
for non-supervisory DoD workers.
When Defense Secretary Hegseth abruptly shut down all DoD advisory committees,
it indirectly froze the Federal Wage System (blue-collar) pay adjustments.
Over 60,000 wage-grade feds (across 87 of 248 wage areas) are now waiting
for their 2025 pay raise, because the wage adjudication panels canât
meet without those committees.
This freeze affects about 30% of all wage-grade federal employees nationwide.
As the article notes, federal law requires annual pay adjustments for
these workers, so the delay means tens of thousands of DoD blue-collar
employees are essentially on pay-hold until the committees are reconstituted.
DoD says it plans to fix the process, but meanwhile the affected workers have had
their raises postponed well into the year.
Another personnel issue arose with OPM guidance on hiring.
Government Executive reported July 3 that the Office of Personnel Management
quietly told agencies to stop heavily weighting the politically-charged
âfavorite Executive Orderâ essay question in federal applications.
OPMâs internal memo said answers to those questions âare not scored or
ratedâ and should be treated as optional â effectively rescinding an earlier plan
to use them as a qualification screen.
The change came amid legal challenges that the questions amounted
to an ideological litmus test.
The Public Employees for Environmental Responsibility (PEER) group praised
OPMâs âretreatâ from what they called an âillegal screening tacticâ.
For current job applicants, this means that agencies will not use the
controversial essay on allegiance to the President as a factor in hiring decisions.
Union rights and collective bargaining: On July 5 Reuters reported a major
court decision on federal unions.
A federal judge (Thomas Donato in New York) permanently blocked
President Trumpâs 2023 executive order that sought to end collective
bargaining at most federal agencies.
Donatoâs ruling applied to seven agencies (Justice, Treasury, HHS, etc.)
plus five more (VA, Agriculture, State, Labor, etc.)
that had been added.
He found the order was essentially a retaliatory move against unions
for opposing Trumpâs policies.
Unions cheered the verdict: AFGE President Everett Kelley called
the blocked order a âretaliatory attempt to bust federal unionsâ.
The White House said it would appeal.
In effect, current federal employees in nearly all agencies will continue to have
union representation and bargaining rights intact, despite the administrationâs
earlier attempt to revoke them.
Legislation affecting current employees: Aside from the budget bill discussed
earlier, another bill in Congress is aimed mainly at active workers.
The Federal Retirement Fairness Act (H.R.
1522) was reintroduced February 24, 2025, with strong bipartisan support.
This act would help employees (especially Postal Service letter carriers and similar
noncareer staff) by allowing them to purchase service credit in FERS for time
they worked in non-career jobs (like casual or transitional posts) after 1988.
In practice, it lets people whose careers began in low-grade or part-time
roles (but doing the same work) count that time toward their pensions.
NALC union leaders highlight that more than 132,000 letter carriers
did not get retirement credit for such periods, so H.R.1522
would let them âbuyâ that missing service.
(The bill has 24 cosponsors and mirrors a prior version that had 131
bipartisan backers last Congress.)
If passed, this law would benefit current workers by boosting their
future annuity amounts; there is no effect on those who are already retired.
The Federal News Network noted that Department of Government
Efficiency actions continue to ripple through the workforce.
For instance, the blocked Defense RIFs (above) stem from DOEâs RIF
orders being tied up in court.
The Federal Reduction Tracker (a special ongoing report) shows
many RIF actions remain enjoined.
Meanwhile, one data point from Indeed suggests moderate hiring activity
at agencies targeted for cuts.
It remains a fluid situation: current employees are watching for any new
reduction-in-force or reorganization plans (for example, USAID faced
proposals to eliminate it), and many have delayed retirement through
the Deferred Resignation Program.
Overall, though, the news this week on personnel policy has been largely
favorable to current feds â the administrationâs big cuts have been
halted by courts or Congress, and even pay proposals have avoided immediate harm.
Issues That Affect Retired Federal Workers
Retired federal employees have been mostly spared negative developments this week.
As noted above, H.R.1
ultimately removed all cuts to retiree annuities.
The enacted version preserves retireesâ earned benefits and does
not change current annuity formulas.
In plain terms, current annuitants will continue receiving the same
pension amounts they had before.
One legislative item of special relevance to retirees is the recently-enacted
Social Security Fairness Act (H.R.82).
Although it passed earlier this year, its effects are only now being felt.
Under H.R.82
the WEP and GPO penalties were removed, meaning many CSRS retirees are getting
higher Social Security checks this year.
This change takes hold retroactively to 2024, and affected retirees
began seeing the results in spring 2025 (with back-pay).
This law benefits some federal retirees by substantially increasing
their Social Security income.
Another administrative development could help retirees eventually: the
modernization of OPMâs retirement system.
Although announced last spring, it will roll out in 2025 and
should speed retiree processing.
The Office of Personnel Management has mandated that by July 15, 2025, all new
retirements be submitted electronically.
In theory, moving to a fully digital application will cut the current backlog
(which can run several months) and deliver final annuity calculations faster.
NARFE noted this could âcut back on burdensome delays for federal retirees
awaiting their full retirement annuitiesâ.
It remains to be seen if the new system will fully eliminate processing lags,
but it is a positive step for those already retired or about to retire.
On the benefits front, no news arose this week about FEHBP or COLAs for
retirees (the next federal COLA will be announced in late 2025).
Retirees should note that health insurance rules remain stable: those
who met the 5-year FEHBP vesting rule at retirement continue to have premium
support (about 72% government share).
And many retirees coordinate Medicare with FEHB, often with cost
savings as Medicare becomes primary.
(For example, long-time FEHBP carriers encourage new annuitants
to enroll in Medicare Part B once eligible, since Medicare pays first.)
This weekâs news did not change any of those facts.
One current issue involves surviving spouses.
Federal annuities for survivors will continue to be deducted for
FEHB or FEGLI premiums as before.
(If a retiree was carrying family FEHB, a surviving spouse must keep
FEHB or convert to self-only.)
There were no new proposals to alter survivorsâ or widowsâ benefits this week.
In summary, retirees continue to receive COLAs, FEHBP, and Social
Security under the old rules, and the Social Security Fairness Act
is increasing checks for many.
The major legislative fights this period all focused on current employeesâ future
benefits; for now, retireesâ hard-earned pensions and insurance remain intact.
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.