Lawrence: Welcome to The FED Weekly for 10-16 August 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.
Section 1: Issues That Affect Current and Retired Federal Workers
Government Funding Uncertainty and Potential Shutdowns
Both the House of Representatives and the Senate adjourned for their August
recess with substantial unfinished work, leaving a critical September 30
deadline looming to extend government funding into fiscal year 2026.
The House, for its part, had only managed to pass two of the twelve appropriations
bills through the full chamber, with seven others having cleared committee.
The Senate, before adjourning on August 1, passed three of the twelve
appropriations bills and approved five others out of committee.
This ongoing legislative impasse creates a considerable risk of a lapse
in appropriations and a subsequent government shutdown on October 1.
The House's proposed non-defense spending for the upcoming fiscal year stands
at $15 billion less than the previous year's allocation and $148 billion
more than the White House's request.
Senate totals, conversely, are anticipated to surpass the House
figures for both defense and non-defense spending, setting the stage for
complex multi-party negotiations as the fiscal year-end deadline approaches.
The immediate consequence of this uncertainty for federal employees is
the potential for disrupted paychecks, while retirees face concerns regarding
the continuity of agency operations and services upon which they depend.
The divergent budget proposals from the House, Senate, and the White House,
coupled with the Trump Administration's stated refusal to spend all previously
appropriated funds based on ideological opposition to certain programs, signify
a deep ideological battle over the very scope and funding of government.
This is more than a procedural disagreement; it reflects a
fundamental friction between the executive and legislative branches.
The mention of potential "court challenges" further emphasizes a breakdown
in traditional checks and balances.
This intense political friction makes a straightforward resolution highly
improbable, likely pushing Congress towards short-term continuing resolutions
that merely defer the problem and prolong the period of uncertainty.
Broader Challenges to Federal Employee Union Rights and Civil Service Integrity
The period also saw continued challenges to the rights of federal employees and
the integrity of the civil service.
On August 13, 2025, the American Federation of Government Employees (AFGE),
the largest union representing D.C.
public employees, publicly condemned President Trump's D.C.
Takeover.
This action signals ongoing political battles that extend beyond
agency-specific issues, reflecting a broader administration agenda
impacting public sector employees.
Further underscoring these concerns, the August 2025 NARFE Magazine
reported that NARFE submitted official comments in opposition to the Office
of Personnel Management's (OPM) Schedule P/C Rule, citing significant
risks to civil service integrity.
This refers to an ongoing concern about the reclassification of
federal jobs, a move that could shift them out of competitive
service and into at-will employment.
Such a change would substantially erode civil service protections for current
employees and undermine the stability of the federal workforce as a whole.
The National Treasury Employees Union (NTEU) also mobilized its members
through "August Recess Actions," urging them to contact Congress.
Their calls included directives to "Protect federal employee rights by
opposing bills and efforts by the administration to undermine unions and
union rights" and to "Stop mass firings and the dismantling of federal programs".
This demonstrates a unified front among federal employee unions
against what they perceive as systemic attacks on their collective
bargaining rights and job security.
These issues are not confined to active employees; they affect the
entire federal workforce, including retirees who have benefited from these
protections throughout their careers.
There is a clear, coordinated effort by federal employee unions and advocacy
groups to resist administration policies that they believe undermine civil
service protections and union rights.
The condemnation of the D.C.
Takeover , NARFE's opposition to the Schedule P/C Rule , and NTEU's call
to action against "mass firings" and the "dismantling of federal programs"
collectively illustrate a broad, multi-front challenge to the established
framework of federal employment.
This is not an isolated incident but rather a consistent pattern of executive
action and proposed policy changes aimed at weakening the collective
power and job security of federal workers across various agencies.
Such aggressive and widespread actions against unions and civil
service protections, if successful, could severely damage morale among
current federal employees, potentially leading to a significant exodus
of experienced personnel, often referred to as a "brain drain."
It would also likely make federal service a far less attractive career path for
new talent, especially when compared to opportunities in the private sector.
This erosion of institutional knowledge and expertise could ultimately hinder
the effectiveness of federal agencies in delivering critical services
to the American people, impacting both current citizens and future
retirees who rely on these services.
The focus of federal employment could shift from public service stability to
a state of increased job insecurity.
GAO Report on OPM Priority Open Recommendations
The Government Accountability Office (GAO) published a report titled "Priority
Open Recommendations: Office of Personnel Management" on August 6, 2025, which was
publicly released on August 13, 2025.
While the specific recommendations were not detailed in the available
information, the very existence of a "priority open recommendations" report
signals areas of weakness or inefficiency within OPM that require attention.
These are issues that affect the entire federal workforce and its administration.
The GAO's role is to audit and investigate how the federal government utilizes
taxpayer funds and to provide Congress with objective, fact-based information.
A "Priority Open Recommendations" report specifically for OPM indicates
that critical, unaddressed issues persist within OPM's operations or
policy implementation that the GAO deems important enough to highlight.
This suggests that despite OPM's ongoing efforts to modernize, as seen
in other initiatives like the digital retirement process, fundamental
or systemic challenges remain.
Addressing these challenges is crucial for ensuring the effective and efficient
management of the federal workforce.
Section 2: Issues That Affect Current Federal Workers
2026 Federal Employee Pay Raise Outlook and Legislative Proposals
As of June 2025, the outlook for a federal employee pay raise in 2026
remained uncertain, characterized by divergent proposals from the
executive and legislative branches.
President Trump's fiscal year 2026 budget proposal notably includes a pay
freeze for federal civilian employees, marking the first such freeze since 2013.
In contrast, this proposal suggests a 3.8%
pay raise for military service members.
On the other hand, Democratic lawmakers have introduced the
Federal Adjustment of Income Rates (FAIR) Act, which proposes a 4.3%
average pay raise for federal employees in 2026.
While no new updates specifically within August 10-16 were provided on this topic,
the discussion around the 2026 pay raise is an ongoing and critical consideration
for current federal employees monitoring their future compensation.
There is a significant divergence in proposals for the 2026 federal
employee pay raise, with the administration advocating for a
freeze and Democratic lawmakers pushing for a substantial increase.
This stark contrast between President Trump's proposed pay freeze for
civilian employees and a 3.8%
raise for military service members highlights a potential widening of
the compensation gap between different segments of the federal workforce.
This disparity, particularly when viewed alongside reports indicating that
private sector employees already earn significantly more than their federal
counterparts, could negatively impact morale, recruitment, and retention
within the civilian federal workforce.
Employees may perceive themselves as undervalued compared to their military
colleagues or private sector peers.
The administration's proposal for a pay freeze can be interpreted not
merely as a budget-saving measure but also as a strategic tool to
reshape the federal workforce.
By limiting pay increases, it could disincentivize certain individuals from
joining or remaining in federal service.
This aligns with a broader agenda to potentially reduce the size or alter the
composition of the federal bureaucracy.
In this context, pay policy transforms from a simple compensation matter
into a powerful lever for workforce control and ideological alignment.
New OPM Guidance on Performance Awards and Management
On August 11, 2025, the Office of Personnel Management (OPM) issued new
government-wide guidance concerning awards for federal employees.
This updated policy directs agencies to strengthen their performance
management practices, normalize ratings, and explicitly reserve the largest
awards and bonuses for employees who have demonstrated exceptional
contributions to their agency's mission.
The guidance also encourages agencies to expand the use of non-cash awards,
such as time-off and quality step increases, and to recognize real-time
accomplishments throughout the year.
OPM Director Scott Kupor articulated the rationale behind this shift, stating
that "Too often in the past, awards have been spread thinly across the
board in ways that dilute their impact."
He emphasized that this new approach aims to incentivize excellence,
reward those who truly go "above and beyond," and ultimately help build the
"high-performance culture the American people deserve from their government".
OPM is thus implementing a more targeted and merit-based system
for federal employee performance awards, placing a strong emphasis
on exceptional contributions.
OPM's explicit directive to "normalize ratings" and "reserve the largest awards
and bonuses for employees who have demonstrated exceptional contributions"
signals a significant departure from a more egalitarian approach to awards.
This move is designed to foster a more competitive environment within agencies,
where performance differentiation is not just encouraged but mandated.
It reflects a broader administrative philosophy aimed at cultivating
a "high-performance culture" by more substantially rewarding a
select group of top performers.
While the stated goal is to incentivize excellence, a system that normalizes
ratings and concentrates rewards on a small percentage of "top performers" could
lead to several unintended consequences.
Employees who consistently "meet expectations" but do not "significantly
exceed" them might feel undervalued or demotivated if they receive no or minimal
recognition, especially if a forced distribution of ratings is implied.
This approach could inadvertently foster internal competition over
collaboration, create perceptions of unfairness if performance metrics
are subjective or inconsistently applied, and ultimately affect
overall workforce morale and cohesion.
Updated Guidance on Strengthening Probationary
Periods in the Federal Service
Updated guidance on President Trump's Executive Order "Strengthening
Probationary Periods in the Federal Service" was issued by Veronica E.
Hinton, Associate Director of the OPM Office of Workforce Policy
and Innovation, on August 7, 2025.
This indicates ongoing implementation and refinement of policies aimed at increasing
accountability and potentially making it easier to remove underperforming employees
during their initial probationary periods.
This executive order was initially issued in April 2025.
OPM continues to issue guidance related to strengthening probationary periods,
aligning with the administration's focus on federal employee accountability.
The updated guidance suggests a continued emphasis on rigorous evaluation during
the initial phase of federal employment.
This implies that new federal employees will face heightened scrutiny and
potentially a lower threshold for removal during their probationary period.
This policy aims to make it easier for agencies to dismiss employees who are
deemed not to be a good fit, thereby reducing job security during this
critical initial phase of federal service.
Major Union Contract Terminations and Legal Battles
On August 11, 2025, the Department of Veterans Affairs (VA) terminated
its collective bargaining agreements with AFGE and other labor unions
representing over 400,000 VA workers.
AFGE President Everett Kelley condemned this action by VA Secretary Doug Collins
as a clear case of retaliation against AFGE members for speaking out against
the Trump administration's "illegal, anti-worker, and anti-veteran policies".
VA Secretary Collins cited Executive Order 14251 as the basis for the
termination, despite OPM guidance instructing agencies not to terminate
collective bargaining agreements until the conclusion of litigation.
This termination affects most VA employees, with the exception of
police officers, firefighters, and security guards, who are
exempt from the executive order.
AFGE is currently assessing its legal options to challenge
Secretary Collins' decision and restore its members' union rights.
The union is also urging VA employees to contact their congressional offices
and advocate for the "Protect America's Workforce Act," a critical bill that
would overturn the executive order and restore collective bargaining
rights to all federal workers.
In a similar development on August 11, 2025, AFGE's council
representing over 8,000 employees at the Environmental Protection
Agency (EPA) announced its intent to continue fighting after the agency
cancelled their negotiated contract.
This indicates a pattern of the administration targeting union contracts
across multiple federal agencies.
However, not all administration efforts to cut or reorganize
agencies have been successful.
On August 11, 2025, a powerful Senate committee rejected President Trump's
proposed budget cuts to the Centers for Disease Control and Prevention
(CDC) and the National Institute for Occupational Safety and Health (NIOSH),
marking a win for public health workers.
This demonstrates ongoing legislative pushback against some executive actions.
Furthermore, AFGE announced a "Save the Date August 14: SSA Day of Action"
for Social Security Workers United, aimed at raising awareness about
administration attacks on SSA workers.
This highlights continued union activism and organized resistance to
perceived threats to federal workers.
The Trump administration is aggressively terminating collective bargaining
agreements with major federal employee unions, leading to widespread union
resistance and legal challenges.
The termination of collective bargaining agreements at the VA (affecting 400,000
workers) and EPA (affecting 8,000 workers) on August 11, 2025, represents a direct
and aggressive executive action aimed at weakening federal employee unions.
The fact that VA Secretary Collins proceeded despite OPM guidance to
await litigation outcomes highlights the administration's determination.
In response, unions like AFGE are not only pursuing legal challenges but
also actively mobilizing members to push for legislative remedies, such
as the "Protect America's Workforce Act" , indicating a full-spectrum
battle to preserve union rights.
The termination of these major collective bargaining agreements,
coupled with the ongoing legal and legislative battles, signals a
fundamental and potentially irreversible shift in federal labor relations.
If these actions stand, they could severely diminish the ability of federal
employee unions to advocate for their members on issues ranging from working
conditions and pay to job security.
This would leave individual federal employees with significantly less
collective power and recourse, potentially leading to a more
autocratic management style within federal agencies and a decline in
employee protections and benefits.
AFGE Restructures Key Departments to Meet New Challenges
On August 12, 2025, AFGE announced that it had restructured key
departments to meet new challenges.
This internal organizational change by the largest federal employee union
reflects its adaptation to the current environment of increased challenges
and attacks on federal workers' rights.
AFGE's decision to restructure key departments in mid-August 2025, amidst
the backdrop of aggressive union contract terminations and broader
challenges to federal employee rights, is a clear strategic adaptation.
This indicates that the union perceives the current environment as
fundamentally altered and requiring a more agile and effective internal
structure to defend its members and counter the administration's policies.
This is a direct response to perceived threats, aiming to enhance their
advocacy capabilities and effectiveness.
GAO Report on Federal Workforce Name Change Process
The Government Accountability Office (GAO) published a report on August
14, 2025, titled "Federal Workforce: Selected Agencies Need to Improve
Employee Name Change Process".
This report identifies administrative inefficiencies within federal agencies
regarding a basic personnel process.
It points to a need for improved internal operations that directly
affect current employees' personal records and, by extension, potentially
their benefits or identification.
A GAO report specifically highlighting the need for improvement in the
"Employee Name Change Process" suggests that even fundamental
administrative functions within federal agencies are not operating optimally.
While seemingly minor, inefficient name change processes can lead to
significant headaches for current employees, impacting their official
records, benefits, and identification.
This points to broader systemic issues in data management and administrative
responsiveness within the federal bureaucracy, directly affecting
the daily lives and administrative burdens of current federal workers.
Section 3: Issues That Affect Retired Federal Workers
2026 Retiree Cost-of-Living Adjustment (COLA) Projections
As of August 12, 2025, the projected 2026 Cost-of-Living Adjustments (COLAs) for
federal retirees have been announced.
For those under the Civil Service Retirement System (CSRS),
the projected COLA is 2.5%,
while Federal Employees Retirement System (FERS) retirees are
projected to receive a 2.0%
adjustment.
Additionally, the Federal Employees' Compensation Act (FECA)
COLA projection stands at 2.4%
as of July 2025.
These crucial projections are based on the July 2025 Consumer Price Index
for Urban Wage Earners and Clerical Workers (CPI-W) data, which was released
by the Bureau of Labor Statistics.
These projections are vital as they directly influence the purchasing power
of federal retirees in the upcoming year.
It is important to note that the final COLA calculation for CSRS
and FERS benefits will be confirmed in October 2025, following the
release of the September CPI-W data.
The FECA COLA, conversely, will be finalized later, in January 2026, upon the
publication of the December 2025 CPI-W.
Federal retirees can thus anticipate a moderate COLA for 2026, which is intended
to help offset the effects of inflation.
However, it is notable that FERS retirees are projected to receive a lower
adjustment than their CSRS counterparts.
Ongoing Transition to Fully Digital Retirement Process
The August 2025 issue of NARFE Magazine highlighted an ongoing initiative by the
Office of Personnel Management (OPM): the "Transition to Fully Digital Retirement,
Deadline for Federal Agencies...".
While OPM had initially announced the launch of its fully online retirement
application system earlier in 2025, specifically on May 12, 2025, the
continued mention in August implies that this transition is an active and evolving
process with sustained relevance for federal agencies and prospective retirees.
This suggests that OPM is likely continuing its efforts to ensure
agencies adopt the new digital process, possibly through established
deadlines or ongoing guidance.
OPM's initiative for a fully digital retirement process is actively being
implemented, aiming to modernize and streamline the retirement application
experience for federal employees.
This digital transformation aligns with OPM's earlier memorandum on
"Implementing the President's Department of Government Efficiency (DOGE)
Initiative for a Modernized, Efficient, and Expedient Retirement Process,"
which was issued on May 7, 2025.
This connection suggests that the digital transition is part of a
broader, administration-wide push for government efficiency and modernization.
The mention of a "deadline for Federal Agencies" further indicates a top-down
mandate for the adoption of this new system, reinforcing the commitment
to this digital transformation.
A fully digital retirement process, if implemented effectively, has the
potential to significantly reduce processing times and alleviate backlogs,
thereby providing a more efficient and expedient experience for retirees.
This would address long-standing frustrations associated with the
traditional paper-based system.
However, for some older retirees or those with limited digital literacy,
this transition could present challenges.
To ensure equitable service delivery, it will be crucial for OPM and
individual agencies to provide robust support, comprehensive guidance, and
potentially alternative access methods.
The ultimate success of this modernization effort hinges on its user-friendliness
and the availability of thorough support systems for all users.
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.
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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.