Lawrence: Welcome to The FED Weekly for 14-20 December 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
The week of 14 to 20 December 2025 opened with a significant intersection
of policy that bridged the interests of both the active civil service
and the retired federal community.
Perhaps the most prominent development during this window was the official
finalization and signing of the National Defense Authorization Act for Fiscal Year
2026, which occurred on 18 December 2025.
While the National Defense Authorization Act is traditionally viewed as a
military policy vehicle, its reach extends into the civilian workforce
through procurement reforms, health benefit shifts, and broader national
security workforce mandates.
For the sixty-fifth consecutive year, Congress managed to pass this massive
policy bill, which President Donald Trump signed after it cleared the
Senate on 17 December 2025 with an overwhelming 77-20 bipartisan vote.
One of the most immediate impacts for the entire federal communityâcurrent
workers, their families, and by extension, the retirees who utilize
federal servicesâstems from the National Defense Authorization Actâs
integration of the BIOSECURE Act.
This legislation has far-reaching consequences for the federal supply chain.
It prohibits federal agencies from contracting with certain
biotechnology companies of concern, specifically targeting those
with ties to foreign adversaries.
For current employees, this means a shift in administrative procurement
protocols and potential changes in health service providers that
utilize specific laboratory services.
For retirees, the Act includes specific clarifications to protect access to
healthcare for those living abroad, ensuring that the manufacturer of a
drug will not lose eligibility for federal rebate agreements solely
because of these new restrictions.
This nuance is critical for maintaining the stability of the
VA Federal Supply Schedule and preventing unintended spikes in drug
pricing for the retiree population.
Beyond legislative milestones, the executive branch initiated a major
shift in holiday operations that affects the rhythm of government for everyone.
On 18 December 2025, President Trump issued an Executive Order
excusing federal employees from duty on Wednesday, 24 December
2025, and Friday, 26 December 2025.
By granting these two days as administrative leave, the administration
created a five-day holiday break, as Christmas Day falls on a Thursday.
While retirees do not receive "days off" in the traditional sense, the wholesale
closure of federal departments for nearly a week has a significant ripple
effect on the processing of benefits, the availability of agency helplines,
and the speed of administrative services.
The order explicitly treats these two days as federal holidays for pay and leave
purposes under statutes like 5 U.S.C.
5546 and 6103(b), meaning active employees previously scheduled for annual leave
on those dates will not be charged.
For retirees, this signals a likely pause in OPMâs retirement processing
activities during the final weeks of the year, which is particularly relevant
given the currently surging backlog.
The healthcare landscape for 2026 also saw significant updates
during this mid-December window.
Although the Federal Benefits Open Season concluded on 08 December
2025, the week of 14 to 20 December 2025 served as the primary period
for agencies to begin processing the results of these selections.
Data clarified during this week highlights that the Federal Employees
Health Benefits program will see an overall average premium increase of 10.2
percent in 2026.
While this is a slight decrease from the 11.2
percent increase seen in 2025, the financial burden remains a shared
concern for active and retired workers whose pay and cost-of-living
adjustments have not kept pace with double-digit healthcare inflation.
The new Postal Service Health Benefits program will see a 9.0
percent increase, driven by the same market forces: rising provider costs
and the massive utilization of GLP-1 medications and other specialty drugs.
The implementation of benefits for 2026 also includes a series of policy
shifts finalized during this period.
OPM announced that for the 2026 plan year, all plans in the Federal Employees
Health Benefits and Postal Service Health Benefits programs have removed
coverage for the medical or surgical modification of sex traits, including
gender transition procedures for all ages.
Conversely, the federal community will see expanded access to behavioral health,
with carriers now required to allow out-of-network care when wait times
for in-network providers are excessive.
These changes represent a broader administrative pivot toward
traditional medical priorities and behavioral health resilience.
Furthermore, the week saw continued movement on the implementation of the
Social Security Fairness Act, which became law earlier in the year to repeal
the Windfall Elimination Provision and the Government Pension Offset.
During this window in December 2025, the Social Security Administration continued
its evaluation of how to revise benefits for nearly three million retirees, many
of whom are former federal employees under the Civil Service Retirement System.
This repeal is a landmark achievement for federal advocacy groups like NARFE,
as it corrects what many viewed as an unfair reduction in the Social Security
benefits earned through private-sector work or as a surviving spouse.
Lastly, on 18 December 2025, the Office of Personnel Management
released the final results of its annual review of special rates.
This review is pivotal because it affects the competitive pay structures
for technical and high-demand roles, influencing both the retention of
current staff and the long-term pension calculations for those
nearing the end of their careers.
The review coincides with the 1 percent across-the-board pay raise for 2026,
which continues to be a point of contention for both the active workforce
and retiree advocacy groups, who argue that such small increases erode the
appeal of federal service and the real value of the federal pension over time.
Issues That Affect Retired Federal Workers
The narrative for retired federal employees during the week of 14 to
20 December 2025 was dominated by a deepening crisis in the processing
of retirement applications.
By 16 December 2025, news reports and OPM data confirmed that the retirement
application backlog has swelled to nearly 50,000 cases, a staggering increase that
has left many new retirees in a state of financial limbo during the holiday season.
Specifically, the inventory of pending applications grew in November
2025 to approximately 49,400, up from 34,600 in October 2025.
When compared to the same period in 2024, the figures are even more alarming: OPM
had only 13,844 pending applications in November 2024, meaning the backlog
has more than tripled in a single year.
This surge is not accidental.
It is the direct result of massive downsizing programs initiated earlier
in the year, most notably the "Fork in the Road" initiative and the
"Deferred Resignation Program".
These programs offered federal employees incentives to leave
their careers before their planned retirement dates, leading to a wave of
departures that culminated at the end of September 2025 and October 2025.
OPM reported that it received 23,400 applications in November 2025 aloneâ3,000
more than were received in October 2025 and significantly higher than the 6,095
applications received in September 2025.
The delay in processing is further complicated by OPMâs ongoing
transition to a digital infrastructure.
Earlier in the year, OPM issued a mandate that all new retirement applications
be submitted electronically through the Online Retirement Application portal.
However, during the week of 14 December 2025, it was revealed that
thousands of applications were still being submitted on paper, creating
a massive paperwork bottleneck.
For those who managed to utilize the digital portal, the results were
relatively positive: the average processing time for digital applications
dropped to 38 days in November 2025, compared to 45 days in October 2025.
In stark contrast, paper-based applications averaged
94 days for processing.
This processing delay has real-world consequences for retirees.
Many are forced to rely on interim payments, which are often only a
fraction of their actual earned benefit.
This "holiday heartache" for new retirees is a recurring theme in news coverage
during this period, as the combination of administrative closures and the
sheer volume of applications suggests that full benefits for many will not
be finalized until well into 2026.
Retiree organizations have pointed out that while OPM claims 92 percent
of these 2025 departures were "voluntary," many employees felt they
had no choice but to take the buyouts or resignations as their units were
dissolved or their offices relocated.
In addition to processing delays, retirees received important updates regarding
their 2026 Cost-of-Living Adjustments.
The final determination for 2026, reinforced by reports
during this week, remains at 2.8
percent for Civil Service Retirement System annuitants
and Social Security benefits.
However, those under the Federal Employee Retirement System are facing a capped 2.0
percent adjustment, as the underlying inflation rate
fell between 2 and 3 percent.
This disparity, often referred to as the "FERS COLA cap," is a primary
target for legislative advocacy, as it results in a permanent reduction in
purchasing power for younger retirees compared to their CSRS counterparts.
Furthermore, reporting errors on the December 2025 annuity statements were
a point of concern for many annuitants.
These errors, coupled with the ongoing backlog, have created a
sense of frustration among the retired community, who must now
navigate a system that is struggling to modernize while simultaneously
handling record-high volumes of claims.
The OPMâs retirement operations center in Pennsylvania remains under intense
pressure, and OPM officials have admitted that legacy processing systems were not
built for a surge of this magnitude.
Retirees also faced news regarding the Federal Employees Health
Benefits programâs transition.
Specifically, participants in certain plans that are dropping out of the
program in 2026, such as the NALC Health Benefit Plan CDHP and various
HMO options, were reminded that if they did not select a new plan during Open
Season, they would be automatically transitioned into default plans like
the GEHA Benefit Plan High Option.
For dental coverage, the Health Partners Dental Plan will no longer be offered
in 2026, and enrollees must select a new plan to maintain coverage.
Issues That Affect Current Federal Workers
For active federal employees, the week of 14 to 20 December 2025 was a
period of definitive executive action that reshaped the compensation and
management landscape for the coming year.
On 18 December 2025, President Trump issued the highly anticipated Executive
Order implementing the 2026 pay raise.
The order provides for a 1 percent across-the-board pay raise for the
General Schedule workforce, effective with the first full pay period
starting on or after 01 January 2026.
This 1 percent increase applies entirely to basic pay, as the
administration has chosen to freeze locality pay rates at 2025 levels.
This pay decision marks a notable departure from previous years.
The 1 percent raise is the smallest since 2021 and a significant decrease from the 2
percent raise provided in 2025 and the 5.2
percent raise in 2024.
However, the order includes a significant carve-out for
federal law enforcement officers.
OPM Director Scott Kupor was directed to assess whether to implement
a total increase of up to 3.8
percent for select law enforcement categories, aligning them with the pay
increase authorized for the military.
OPM indicated it would use special salary rate authority to address recruitment
and retention crises at the border and in other critical security agencies.
The finalized 2026 pay tables were made available on the White House
and OPM websites during this period.
While the pay raise was finalized, a more transformative change was
brewing in the form of a draft rule from OPM that would overhaul the
federal performance appraisal system.
Circulated during the week of 15 December 2025, the proposed rule aims
to end "rating inflation" across the more than two million civil servants.
The draft rule proposes a "forced distribution" of performance ratings,
effectively allowing agencies to set quotas on how many employees
can receive the highest marks.
Currently, OPM data shows that 99 percent of employees receive at
least a "fully successful" rating, a statistic the administration views as a
failure to distinguish top performers.
Under the proposed performance management structure, the current five-level
rating scale would be reduced to four levels by eliminating the "minimally
satisfactory" (Level 2) rating.
This change is intended to make a clearer distinction between
satisfactory and unsatisfactory work.
Furthermore, the rule would allow supervisors to issue "level one"
(unacceptable) ratings without the higher-level review currently
required, which OPM claims will speed up corrective actions.
Supervisors would also be held accountable for their compliance with these new
rating rules in their own appraisals.
Employee groups and HR officials have criticized the move, with some
describing it as a "continuation of the administration's playbook
of vilifying the civil service".
Agencies were given until 22 December 2025 to submit their
feedback on the draft proposal.
On the legislative front, the Protect America's Workforce Act (H.R.
2550) was received in the Senate on 15 December 2025.
This follows its passage in the House on 11 December 2025
by a bipartisan 231-195 vote.
The bill is a direct response to the administration's efforts to limit union
rights; it would nullify the Executive Order titled "Exclusions from Federal
Labor-Management Relations Programs" issued in March 2025 and ensure that any
collective bargaining agreement in effect as of 26 March 2025 remains in full force.
While the bill faces a challenging environment in the Senate, its reception
on 15 December 2025 marks a critical step for labor organizations like the
AFGE and the AFL-CIO, who are fighting against what they call "the largest act
of union-busting in American history".
The tension between the administration and federal unions escalated further
on 15 December 2025 when Homeland Security Secretary Kristi Noem
announced the unilateral termination of the collective bargaining
agreement between the AFGE and the Transportation Security Administration.
This revocation affects approximately 47,000 TSA officers and has prompted
the union to plan a legal challenge.
Similarly, on 15 December 2025, senior members of Congress and union leaders held
events to defend the collective bargaining rights of Veterans Affairs employees,
which they claim are also under threat.
Amidst these labor disputes, the administration launched a major
technological recruitment effort.
On Monday, 15 December 2025, the OPM officially launched "U.S.
Tech Force," a new governmentwide hiring program designed to fill critical
gaps in AI and technical expertise.
The program aims to recruit 1,000 individualsâranging from early-career
data scientists to experienced engineering managersâfor two-year
stints in federal agencies.
Unlike traditional federal careers, this program is designed for short-term
rotation, with OPM Director Scott Kupor noting that the goal is not
necessarily to secure "40-year careers" but to solve complex
problems using private-sector talent.
Partners for this initiative include industry giants like Microsoft, Meta,
Nvidia, and Amazon Web Services.
Simultaneously, the administration moved forward with "Federal HR 2.0,"
a project to consolidate all federal human capital management into a single
information technology platform.
A joint memo from OMB Director Russell Vought and OPM Director Scott Kupor,
finalized around 17 December 2025, outlined a two-year timeline for
transitioning the governmentâs disparate HR networks onto a "best-in-class
commercial Core HCM system".
As part of this transition, agencies have been directed to stop all current
projects related to their legacy systems unless they receive a specific exception.
At the Department of Agriculture, workers voiced strong opposition to the
administration's reorganization plans.
On 16 December 2025, the USDA reported that the "overwhelming majority" of
its employeesâroughly 82 percent of those who commentedâwere opposed to
the plan to close regional offices and relocate 2,600 staff members
away from the Washington, D.C.
area.
Critics argued that the move would replace localized knowledge with centralized,
"top-down management," potentially harming the agency's ability to manage
public lands and natural resources.
In other agency news, the GAO released a report on 16 December
2025 declaring the Postal Serviceâs business model "unsustainable"
despite recent legislative reforms.
The report noted that USPS has lost $118 billion since 2007 and suggested that
without further changes in lawâsuch as reducing delivery days or privatizing
certain functionsâthe agencyâs financial condition will continue to deteriorate.
This report adds pressure on the roughly 600,000 postal employees and
their management as they enter another high-stakes year for postal reform.
Finally, the week concluded with a whistleblower allegation at U.S.
Citizenship and Immigration Services.
On 19 December 2025, reports surfaced that the agency has implemented
"arbitrarily strict" FOIA policies that allow the rejection of
requests for immigration records.
Senator and staff-level criticism followed, arguing that these
policies reduce transparency and hinder the ability of immigrants to
dispute administrative narratives.
This development highlights the ongoing friction between the current
administrationâs enforcement priorities and the transparency requirements of
federal labor and immigration law.
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.