WEBVTT NOTE This file was generated by Descript 00:00:00.039 --> 00:00:06.750 Lawrence: Welcome to The FED Weekly for 29 June - 5 July 2025, your essential 00:00:06.750 --> 00:00:10.630 weekly briefing on the policies and proposals shaping your career, 00:00:11.029 --> 00:00:13.270 your benefits, and your retirement. 00:00:13.930 --> 00:00:17.860 Whether you’re a current federal employee navigating changes in the civil service, 00:00:18.260 --> 00:00:23.090 or a retiree keeping a close watch on your hard-earned pension and healthcare, this 00:00:23.090 --> 00:00:27.399 is your source for the latest news from Capitol Hill and the executive branch. 00:00:27.995 --> 00:00:32.186 Each week, we cut through the noise to bring you the critical updates on budget 00:00:32.186 --> 00:00:37.666 negotiations, pay raises, workforce policies, and the legislative battles that 00:00:37.666 --> 00:00:40.025 directly impact the federal community. 00:00:40.626 --> 00:00:43.895 Let's get you up to speed on what happened this past week. 00:00:44.503 --> 00:00:47.783 Issues That Affect Current and Retired Federal Workers 00:00:48.411 --> 00:00:51.741 In this period the biggest development was on Capitol Hill. 00:00:52.442 --> 00:00:55.482 Both the House and Senate were working on H.R.1 00:00:55.582 --> 00:00:59.422 (the “One Big Beautiful Bill” budget reconciliation package). 00:01:00.241 --> 00:01:04.572 Early reports noted that the House-passed version included several proposed cuts 00:01:04.572 --> 00:01:09.372 to federal retirement and health benefits – for example, eliminating the FERS annuity 00:01:09.372 --> 00:01:13.681 supplement for most early retirees and switching annuity calculations from 00:01:13.681 --> 00:01:16.562 a “high-3” to a “high-5” salary basis 00:01:17.183 --> 00:01:21.124 . However, the Senate parliamentarian later ruled those provisions out of 00:01:21.163 --> 00:01:26.503 order under Senate rules, and by June 29 media reported that the Senate’s version 00:01:26.503 --> 00:01:31.513 contained no cuts to current workers’ or retirees’ earned benefits or union rights. 00:01:32.107 --> 00:01:35.978 The Senate package was pared down to non-controversial items (an 00:01:35.978 --> 00:01:40.687 audit of FEHBP enrollment and budget efficiency initiatives) with all 00:01:40.687 --> 00:01:42.988 contested pension and pay cuts dropped. 00:01:43.599 --> 00:01:47.179 Retired and active employees alike cheered the outcome. 00:01:47.670 --> 00:01:51.959 The National Active and Retired Federal Employees Association (NARFE) noted 00:01:51.959 --> 00:01:56.959 on July 1 that “no federal workforce provisions opposed by NARFE made it into 00:01:56.959 --> 00:01:59.039 the final [Senate] version” of H.R.1. 00:01:59.970 --> 00:02:03.759 NARFE President Bill Shackelford called this “a huge victory” for 00:02:03.759 --> 00:02:07.369 workers and retirees, emphasizing that cuts to vested pension 00:02:07.369 --> 00:02:10.129 benefits and FEHB had been blocked. 00:02:10.770 --> 00:02:14.879 As enacted and signed into law, current feds and annuitants will see their 00:02:14.879 --> 00:02:20.259 existing retirement and health benefits preserved – a dramatic reversal from 00:02:20.259 --> 00:02:21.999 what had been in earlier drafts. 00:02:22.611 --> 00:02:25.581 Aside from the budget bill, one legislative change of note 00:02:25.581 --> 00:02:29.021 affecting federal retirees went into effect earlier this year. 00:02:29.432 --> 00:02:31.931 The Social Security Fairness Act (H.R. 00:02:31.931 --> 00:02:37.181 82) was signed into law January 5, 2025, and repealed the Windfall 00:02:37.181 --> 00:02:41.492 Elimination Provision (WEP) and Government Pension Offset (GPO). 00:02:42.322 --> 00:02:44.702 In practice this means over 2.8 00:02:44.732 --> 00:02:48.732 million workers – including many Civil Service Retirement System (CSRS) 00:02:48.732 --> 00:02:53.591 retirees – will see higher Social Security checks beginning in 2025. 00:02:54.235 --> 00:02:57.866 The Social Security Administration reports that affected retirees 00:02:58.206 --> 00:03:02.626 started receiving the new, higher benefits in the spring, with backpay 00:03:02.626 --> 00:03:05.675 to January 2024 already disbursed. 00:03:06.327 --> 00:03:10.458 On the investment side, federal employees’ retirement savings did well in June. 00:03:10.878 --> 00:03:14.607 Thrift Savings Plan (TSP) funds all rose in value last month. 00:03:15.203 --> 00:03:18.794 The S Fund (small- and mid-cap stocks) surged 5.40% 00:03:18.794 --> 00:03:23.053 in June, bringing its 2025 gain back into positive territory, 00:03:23.403 --> 00:03:25.004 and the C Fund (large U.S. 00:03:25.004 --> 00:03:26.664 stocks) was up 5.08%. 00:03:27.418 --> 00:03:30.038 Bond-like funds (F and G) also gained modestly. 00:03:30.627 --> 00:03:33.937 Even those close-to-retirement “L Funds” saw gains (e.g. 00:03:33.937 --> 00:03:35.798 the L Income Fund +1.57%, 00:03:35.798 --> 00:03:37.747 and all L Funds +3–4%). 00:03:38.386 --> 00:03:43.256 These robust returns in June should help preserve the value of TSP balances for 00:03:43.256 --> 00:03:45.776 current employees and retirees alike. 00:03:46.339 --> 00:03:48.740 Legislative summary (affecting all feds): 00:03:49.335 --> 00:03:49.765 H.R. 00:03:49.765 --> 00:03:54.386 1 (One Big Beautiful Bill Act) – A budget reconciliation package in Congress. 00:03:54.796 --> 00:03:57.796 The House had originally included provisions cutting federal 00:03:57.796 --> 00:03:59.896 retirement benefits (e.g. 00:03:59.896 --> 00:04:04.636 eliminating the FERS supplement, moving to “high-5” salary) and raising 00:04:04.636 --> 00:04:06.925 pension contributions for many workers. 00:04:07.595 --> 00:04:11.135 The Senate’s version (passed July 1) removed all such cuts 00:04:11.135 --> 00:04:13.336 to current or retired employees. 00:04:13.951 --> 00:04:18.361 As enacted, the law does not reduce any earned annuities or benefits for current 00:04:18.361 --> 00:04:24.002 feds or retirees (the FERS supplement cut is delayed to 2028, with current 00:04:24.002 --> 00:04:25.951 employees already vested exempted). 00:04:26.650 --> 00:04:30.759 This outcome means both working and retired federal staff avoid 00:04:30.759 --> 00:04:34.489 the drastic benefit changes that were in the earlier House proposal. 00:04:35.087 --> 00:04:38.837 In practical terms, active feds and annuitants should see no change to 00:04:38.837 --> 00:04:43.308 their current retirement annuities or FEHB benefits from H.R.1, 00:04:43.697 --> 00:04:47.627 and many CSRS retirees will receive higher Social Security 00:04:47.627 --> 00:04:49.287 checks under the fairness act. 00:04:49.915 --> 00:04:52.516 Issues That Affect Current Federal Workers 00:04:53.127 --> 00:04:57.658 Workforce and hiring: Job-seekers and employee movement remain active topics. 00:04:58.098 --> 00:05:03.817 Government Executive reported July 1 that after a surge in early 2025, the 00:05:03.817 --> 00:05:08.037 rate of federal workers applying to other jobs has “leveled out” in May. 00:05:08.614 --> 00:05:12.054 Data from Indeed showed that job applications by federal workers grew 00:05:12.054 --> 00:05:17.954 ~150% from January to April 2025, particularly in agencies targeted 00:05:17.954 --> 00:05:20.713 for cuts, but then fell 4% in May. 00:05:21.463 --> 00:05:25.594 The analyst attributed the May decline to hiring uncertainties and “deferred 00:05:25.594 --> 00:05:30.264 resignations” (programs letting employees postpone departure until fall), as well as 00:05:30.264 --> 00:05:36.424 tightening openings at major contractors (which saw 15% fewer postings YTD). 00:05:37.083 --> 00:05:41.603 In short, current feds may find fewer outside opportunities, and some are 00:05:41.603 --> 00:05:43.893 delaying leaving federal service for now. 00:05:44.471 --> 00:05:48.631 On July 2 Government Executive reported a significant stall in pay 00:05:48.631 --> 00:05:51.011 for non-supervisory DoD workers. 00:05:51.442 --> 00:05:56.121 When Defense Secretary Hegseth abruptly shut down all DoD advisory committees, 00:05:56.331 --> 00:06:01.032 it indirectly froze the Federal Wage System (blue-collar) pay adjustments. 00:06:01.542 --> 00:06:07.981 Over 60,000 wage-grade feds (across 87 of 248 wage areas) are now waiting 00:06:07.981 --> 00:06:12.261 for their 2025 pay raise, because the wage adjudication panels can’t 00:06:12.261 --> 00:06:13.802 meet without those committees. 00:06:14.406 --> 00:06:19.725 This freeze affects about 30% of all wage-grade federal employees nationwide. 00:06:20.125 --> 00:06:24.105 As the article notes, federal law requires annual pay adjustments for 00:06:24.105 --> 00:06:28.536 these workers, so the delay means tens of thousands of DoD blue-collar 00:06:28.536 --> 00:06:32.685 employees are essentially on pay-hold until the committees are reconstituted. 00:06:33.314 --> 00:06:38.483 DoD says it plans to fix the process, but meanwhile the affected workers have had 00:06:38.483 --> 00:06:40.894 their raises postponed well into the year. 00:06:41.734 --> 00:06:45.213 Another personnel issue arose with OPM guidance on hiring. 00:06:45.713 --> 00:06:49.513 Government Executive reported July 3 that the Office of Personnel Management 00:06:49.823 --> 00:06:53.673 quietly told agencies to stop heavily weighting the politically-charged 00:06:53.983 --> 00:06:57.923 “favorite Executive Order” essay question in federal applications. 00:06:58.567 --> 00:07:03.087 OPM’s internal memo said answers to those questions “are not scored or 00:07:03.087 --> 00:07:07.978 rated” and should be treated as optional – effectively rescinding an earlier plan 00:07:07.978 --> 00:07:10.268 to use them as a qualification screen. 00:07:11.061 --> 00:07:14.341 The change came amid legal challenges that the questions amounted 00:07:14.341 --> 00:07:16.702 to an ideological litmus test. 00:07:17.202 --> 00:07:21.311 The Public Employees for Environmental Responsibility (PEER) group praised 00:07:21.361 --> 00:07:25.611 OPM’s “retreat” from what they called an “illegal screening tactic”. 00:07:26.231 --> 00:07:30.041 For current job applicants, this means that agencies will not use the 00:07:30.041 --> 00:07:35.201 controversial essay on allegiance to the President as a factor in hiring decisions. 00:07:35.855 --> 00:07:40.645 Union rights and collective bargaining: On July 5 Reuters reported a major 00:07:40.645 --> 00:07:42.705 court decision on federal unions. 00:07:43.305 --> 00:07:46.845 A federal judge (Thomas Donato in New York) permanently blocked 00:07:46.845 --> 00:07:51.376 President Trump’s 2023 executive order that sought to end collective 00:07:51.376 --> 00:07:53.565 bargaining at most federal agencies. 00:07:54.214 --> 00:07:59.373 Donato’s ruling applied to seven agencies (Justice, Treasury, HHS, etc.) 00:07:59.734 --> 00:08:03.214 plus five more (VA, Agriculture, State, Labor, etc.) 00:08:03.214 --> 00:08:04.144 that had been added. 00:08:04.644 --> 00:08:07.953 He found the order was essentially a retaliatory move against unions 00:08:07.953 --> 00:08:09.644 for opposing Trump’s policies. 00:08:09.943 --> 00:08:13.714 Unions cheered the verdict: AFGE President Everett Kelley called 00:08:13.714 --> 00:08:16.923 the blocked order a “retaliatory attempt to bust federal unions”. 00:08:17.522 --> 00:08:19.652 The White House said it would appeal. 00:08:20.031 --> 00:08:24.821 In effect, current federal employees in nearly all agencies will continue to have 00:08:24.821 --> 00:08:29.362 union representation and bargaining rights intact, despite the administration’s 00:08:29.392 --> 00:08:31.501 earlier attempt to revoke them. 00:08:32.243 --> 00:08:36.993 Legislation affecting current employees: Aside from the budget bill discussed 00:08:36.993 --> 00:08:40.584 earlier, another bill in Congress is aimed mainly at active workers. 00:08:41.044 --> 00:08:43.224 The Federal Retirement Fairness Act (H.R. 00:08:43.224 --> 00:08:50.033 1522) was reintroduced February 24, 2025, with strong bipartisan support. 00:08:50.658 --> 00:08:55.827 This act would help employees (especially Postal Service letter carriers and similar 00:08:55.827 --> 00:09:01.208 noncareer staff) by allowing them to purchase service credit in FERS for time 00:09:01.208 --> 00:09:06.418 they worked in non-career jobs (like casual or transitional posts) after 1988. 00:09:07.179 --> 00:09:11.370 In practice, it lets people whose careers began in low-grade or part-time 00:09:11.370 --> 00:09:15.480 roles (but doing the same work) count that time toward their pensions. 00:09:16.259 --> 00:09:21.020 NALC union leaders highlight that more than 132,000 letter carriers 00:09:21.020 --> 00:09:25.879 did not get retirement credit for such periods, so H.R.1522 00:09:25.879 --> 00:09:28.459 would let them “buy” that missing service. 00:09:29.098 --> 00:09:34.037 (The bill has 24 cosponsors and mirrors a prior version that had 131 00:09:34.037 --> 00:09:36.008 bipartisan backers last Congress.) 00:09:36.558 --> 00:09:40.617 If passed, this law would benefit current workers by boosting their 00:09:40.617 --> 00:09:45.388 future annuity amounts; there is no effect on those who are already retired. 00:09:46.065 --> 00:09:48.805 The Federal News Network noted that Department of Government 00:09:48.805 --> 00:09:52.115 Efficiency actions continue to ripple through the workforce. 00:09:52.586 --> 00:09:57.296 For instance, the blocked Defense RIFs (above) stem from DOE’s RIF 00:09:57.325 --> 00:09:59.206 orders being tied up in court. 00:09:59.916 --> 00:10:03.486 The Federal Reduction Tracker (a special ongoing report) shows 00:10:03.486 --> 00:10:05.595 many RIF actions remain enjoined. 00:10:06.231 --> 00:10:10.521 Meanwhile, one data point from Indeed suggests moderate hiring activity 00:10:10.521 --> 00:10:12.541 at agencies targeted for cuts. 00:10:13.152 --> 00:10:17.261 It remains a fluid situation: current employees are watching for any new 00:10:17.261 --> 00:10:22.162 reduction-in-force or reorganization plans (for example, USAID faced 00:10:22.162 --> 00:10:25.851 proposals to eliminate it), and many have delayed retirement through 00:10:25.851 --> 00:10:27.542 the Deferred Resignation Program. 00:10:28.122 --> 00:10:32.491 Overall, though, the news this week on personnel policy has been largely 00:10:32.491 --> 00:10:35.792 favorable to current feds – the administration’s big cuts have been 00:10:35.792 --> 00:10:41.111 halted by courts or Congress, and even pay proposals have avoided immediate harm. 00:10:41.737 --> 00:10:44.247 Issues That Affect Retired Federal Workers 00:10:44.815 --> 00:10:48.855 Retired federal employees have been mostly spared negative developments this week. 00:10:49.415 --> 00:10:50.986 As noted above, H.R.1 00:10:51.085 --> 00:10:54.206 ultimately removed all cuts to retiree annuities. 00:10:54.806 --> 00:10:58.746 The enacted version preserves retirees’ earned benefits and does 00:10:58.746 --> 00:11:01.065 not change current annuity formulas. 00:11:01.727 --> 00:11:05.328 In plain terms, current annuitants will continue receiving the same 00:11:05.328 --> 00:11:06.907 pension amounts they had before. 00:11:07.378 --> 00:11:11.528 One legislative item of special relevance to retirees is the recently-enacted 00:11:11.528 --> 00:11:14.007 Social Security Fairness Act (H.R.82). 00:11:14.667 --> 00:11:19.167 Although it passed earlier this year, its effects are only now being felt. 00:11:20.267 --> 00:11:21.468 Under H.R.82 00:11:21.468 --> 00:11:26.817 the WEP and GPO penalties were removed, meaning many CSRS retirees are getting 00:11:26.817 --> 00:11:29.118 higher Social Security checks this year. 00:11:29.718 --> 00:11:34.678 This change takes hold retroactively to 2024, and affected retirees 00:11:34.678 --> 00:11:38.327 began seeing the results in spring 2025 (with back-pay). 00:11:39.554 --> 00:11:43.523 This law benefits some federal retirees by substantially increasing 00:11:43.523 --> 00:11:45.123 their Social Security income. 00:11:45.643 --> 00:11:49.314 Another administrative development could help retirees eventually: the 00:11:49.314 --> 00:11:52.264 modernization of OPM’s retirement system. 00:11:52.663 --> 00:11:56.553 Although announced last spring, it will roll out in 2025 and 00:11:56.553 --> 00:11:58.733 should speed retiree processing. 00:11:59.483 --> 00:12:05.274 The Office of Personnel Management has mandated that by July 15, 2025, all new 00:12:05.274 --> 00:12:07.854 retirements be submitted electronically. 00:12:08.555 --> 00:12:13.066 In theory, moving to a fully digital application will cut the current backlog 00:12:13.356 --> 00:12:17.805 (which can run several months) and deliver final annuity calculations faster. 00:12:18.305 --> 00:12:22.686 NARFE noted this could “cut back on burdensome delays for federal retirees 00:12:22.906 --> 00:12:25.286 awaiting their full retirement annuities”. 00:12:25.975 --> 00:12:29.916 It remains to be seen if the new system will fully eliminate processing lags, 00:12:30.236 --> 00:12:34.385 but it is a positive step for those already retired or about to retire. 00:12:35.276 --> 00:12:40.236 On the benefits front, no news arose this week about FEHBP or COLAs for 00:12:40.236 --> 00:12:44.686 retirees (the next federal COLA will be announced in late 2025). 00:12:45.206 --> 00:12:49.046 Retirees should note that health insurance rules remain stable: those 00:12:49.046 --> 00:12:53.776 who met the 5-year FEHBP vesting rule at retirement continue to have premium 00:12:53.776 --> 00:12:56.645 support (about 72% government share). 00:12:57.267 --> 00:13:01.208 And many retirees coordinate Medicare with FEHB, often with cost 00:13:01.208 --> 00:13:03.407 savings as Medicare becomes primary. 00:13:04.031 --> 00:13:07.551 (For example, long-time FEHBP carriers encourage new annuitants 00:13:07.551 --> 00:13:11.631 to enroll in Medicare Part B once eligible, since Medicare pays first.) 00:13:12.321 --> 00:13:14.861 This week’s news did not change any of those facts. 00:13:15.202 --> 00:13:17.561 One current issue involves surviving spouses. 00:13:18.252 --> 00:13:21.401 Federal annuities for survivors will continue to be deducted for 00:13:21.401 --> 00:13:24.051 FEHB or FEGLI premiums as before. 00:13:24.541 --> 00:13:28.461 (If a retiree was carrying family FEHB, a surviving spouse must keep 00:13:28.461 --> 00:13:30.272 FEHB or convert to self-only.) 00:13:30.451 --> 00:13:34.721 There were no new proposals to alter survivors’ or widows’ benefits this week. 00:13:35.323 --> 00:13:39.724 In summary, retirees continue to receive COLAs, FEHBP, and Social 00:13:39.724 --> 00:13:43.344 Security under the old rules, and the Social Security Fairness Act 00:13:43.344 --> 00:13:45.044 is increasing checks for many. 00:13:45.534 --> 00:13:49.844 The major legislative fights this period all focused on current employees’ future 00:13:49.844 --> 00:13:54.634 benefits; for now, retirees’ hard-earned pensions and insurance remain intact. 00:13:55.311 --> 00:13:58.821 And that’s a wrap on this week’s Federal Workforce Roundup. 00:13:59.362 --> 00:14:03.572 The landscape for federal employees and retirees is constantly shifting, 00:14:03.942 --> 00:14:08.292 with major decisions being made about everything from pay and job security 00:14:08.492 --> 00:14:12.181 to retirement benefits and the very structure of the civil service. 00:14:12.972 --> 00:14:15.272 Staying informed is your best tool. 00:14:15.692 --> 00:14:19.821 Be sure to subscribe wherever you get your podcasts, so you never miss an update. 00:14:20.442 --> 00:14:21.462 Thanks for tuning in. 00:14:21.801 --> 00:14:24.352 We’ll be back next week to track the latest developments 00:14:24.352 --> 00:14:25.632 and what they mean for you. 00:14:25.971 --> 00:14:29.222 Until then, stay engaged and be well.