WEBVTT NOTE This file was generated by Descript 00:00:00.050 --> 00:00:06.380 Lawrence: Welcome to The FED Weekly for 21-27 December 2025, your essential 00:00:06.380 --> 00:00:09.989 weekly briefing on the policies and proposals shaping your career, 00:00:10.319 --> 00:00:12.539 your benefits, and your retirement. 00:00:13.380 --> 00:00:17.530 Whether you’re a current federal employee navigating changes in the civil service, 00:00:17.870 --> 00:00:22.700 or a retiree keeping a close watch on your hard-earned pension and healthcare, this 00:00:22.700 --> 00:00:27.290 is your source for the latest news from Capitol Hill and the executive branch. 00:00:27.875 --> 00:00:32.116 Each week, we cut through the noise to bring you the critical updates on budget 00:00:32.116 --> 00:00:37.386 negotiations, pay raises, workforce policies, and the legislative battles that 00:00:37.386 --> 00:00:39.676 directly impact the federal community. 00:00:40.735 --> 00:00:43.535 Let's get you up to speed on what happened this past week. 00:00:44.431 --> 00:00:47.622 Issues That Affect Current and Retired Federal Workers 00:00:48.219 --> 00:00:52.310 The most immediate story dominating the week of 21 to 27 00:00:52.310 --> 00:00:56.929 December 2025 was, of course, the unprecedented holiday schedule. 00:00:57.379 --> 00:01:02.020 President Donald Trump issued an Executive Order on 18 December 2025, 00:01:02.369 --> 00:01:07.639 which closed executive departments and agencies on Wednesday, 24 December 00:01:07.710 --> 00:01:11.780 2025, and Friday, 26 December 2025. 00:01:12.339 --> 00:01:16.309 While the order was signed just prior to this reporting period, the operational 00:01:16.309 --> 00:01:19.120 impact was felt squarely during this week. 00:01:19.809 --> 00:01:23.860 This directive effectively created a five-day weekend for the majority of 00:01:23.860 --> 00:01:28.409 the federal workforce, spanning from Wednesday through the following Sunday. 00:01:29.015 --> 00:01:33.146 Moving beyond the holidays, the finalized pay and benefit structures 00:01:33.146 --> 00:01:36.215 for 2026 were a major focus this week. 00:01:36.996 --> 00:01:40.425 The President’s alternative pay plan has cemented a 1.0 00:01:40.425 --> 00:01:45.076 percent across-the-board pay increase for the General Schedule and other statutory 00:01:45.076 --> 00:01:48.285 pay systems, effective in January 2026. 00:01:48.846 --> 00:01:53.506 Crucially, this plan freezes locality pay percentages at 2025 levels. 00:01:53.805 --> 00:01:54.885 This 1.0 00:01:54.885 --> 00:01:58.535 percent increase applies to the base pay of current employees. 00:01:59.299 --> 00:02:03.049 However, there is a notable exception that emerged in the details this 00:02:03.049 --> 00:02:04.729 week regarding law enforcement. 00:02:05.529 --> 00:02:09.299 Recognizing the acute retention challenges in that sector, the 00:02:09.299 --> 00:02:13.350 administration directed the Office of Personnel Management to utilize 00:02:13.350 --> 00:02:16.829 special rate authorities to provide an additional increase to 00:02:16.829 --> 00:02:18.680 federal law enforcement officers. 00:02:19.460 --> 00:02:22.510 These officers will receive the standard 1.0 00:02:22.510 --> 00:02:25.909 percent increase plus an approximate 2.8 00:02:26.020 --> 00:02:32.140 percent special rate adjustment, bringing their total 2026 raise to roughly 3.8 00:02:32.140 --> 00:02:32.710 percent. 00:02:33.570 --> 00:02:35.769 This move creates parity with the 3.8 00:02:35.769 --> 00:02:40.590 percent pay raise secured by the military, acknowledging the distinct pressures on 00:02:40.590 --> 00:02:43.019 the federal police and security workforce. 00:02:43.613 --> 00:02:48.064 On the benefits front, this week marked the final transition period before the 00:02:48.064 --> 00:02:53.354 launch of the Postal Service Health Benefits program on 1 January 2026. 00:02:53.834 --> 00:02:57.573 For millions of postal employees and postal retirees, the Federal 00:02:57.573 --> 00:03:01.043 Benefits Open Season, which concluded earlier in December, was 00:03:01.043 --> 00:03:03.303 the last chance to select a plan. 00:03:03.854 --> 00:03:08.053 During the week of 21 December, the Office of Personnel Management and the 00:03:08.053 --> 00:03:12.723 Postal Service were in the final stages of processing "automatic enrollments" 00:03:12.723 --> 00:03:14.774 for those who did not make a selection. 00:03:15.573 --> 00:03:19.633 If you are a postal employee or retiree who did not actively choose a 00:03:19.633 --> 00:03:23.764 new plan, you are being automatically mapped to a corresponding Postal 00:03:23.764 --> 00:03:28.453 Service Health Benefits plan or the lowest-cost nationwide option that 00:03:28.453 --> 00:03:30.613 is not a High Deductible Health Plan. 00:03:31.433 --> 00:03:37.264 This administrative migration is massive, separating postal participants from 00:03:37.264 --> 00:03:41.243 the wider Federal Employees Health Benefits pool for the first time. 00:03:41.867 --> 00:03:45.498 Simultaneously, we saw developments regarding the federal budget. 00:03:46.058 --> 00:03:50.098 While a full government shutdown was averted with the passage of a Continuing 00:03:50.098 --> 00:03:56.437 Resolution extending funding through 30 January 2026, legislative activity 00:03:56.437 --> 00:03:58.877 regarding shutdown protections continued. 00:03:59.907 --> 00:04:05.008 The "Shutdown Fairness Act," introduced as Senate Bill 3012 by Senator Ron Johnson, 00:04:05.348 --> 00:04:09.537 remains a key piece of legislation for the entire federal community. 00:04:09.578 --> 00:04:13.338 This bill seeks to permanently appropriate funds for "excepted" 00:04:13.338 --> 00:04:18.118 employees—those required to work during a shutdown—ensuring they are 00:04:18.118 --> 00:04:22.877 paid on time rather than waiting for back pay after the government reopens. 00:04:23.508 --> 00:04:27.408 Although the bill struggled to overcome a filibuster earlier in the session 00:04:27.728 --> 00:04:31.938 due to disagreements over coverage for furloughed workers, it remains 00:04:31.938 --> 00:04:36.377 on the Senate calendar as a potential vehicle for future budget deals. 00:04:36.458 --> 00:04:40.647 The uncertainty of the March deadline hangs over both active agencies and 00:04:40.647 --> 00:04:45.138 retirement processing centers, making this bill a critical watch item. 00:04:45.795 --> 00:04:50.096 Finally, in this section, we must address the 2026 Federal 00:04:50.096 --> 00:04:52.295 Employees Health Benefits premiums. 00:04:52.766 --> 00:04:55.796 While announced earlier, the reality of the double-digit premium 00:04:55.796 --> 00:04:59.906 increases is hitting home as pay periods adjust for the new year. 00:05:00.586 --> 00:05:03.076 The average premium increase of 12.3 00:05:03.076 --> 00:05:08.686 percent for 2026 represents a significant absorption of the 1.0 00:05:08.686 --> 00:05:13.586 percent pay raise for employees and the Cost-of-Living Adjustment for retirees. 00:05:13.656 --> 00:05:18.625 This trend of rising healthcare costs outpacing income adjustments was a central 00:05:18.625 --> 00:05:22.995 theme of discussion among federal employee groups throughout the holiday week. 00:05:23.585 --> 00:05:26.075 Issues That Affect Retired Federal Workers 00:05:26.663 --> 00:05:32.343 For our retired listeners, the week of 21 to 27 December 2025 was 00:05:32.343 --> 00:05:36.794 the final countdown to the 2026 Cost-of-Living Adjustment, or COLA. 00:05:37.483 --> 00:05:41.334 The numbers are locked in, and the payment you receive on 2 January 00:05:41.334 --> 00:05:44.353 2026 will reflect these changes. 00:05:45.006 --> 00:05:51.006 Retirees under the Civil Service Retirement System, or CSRS, will see a 2.8 00:05:51.006 --> 00:05:53.636 percent increase in their gross annuity. 00:05:54.376 --> 00:05:57.745 This figure is based on the rise in the Consumer Price Index for 00:05:57.775 --> 00:06:01.425 Urban Wage Earners and Clerical Workers from the third quarter of 00:06:01.425 --> 00:06:05.146 2024 to the third quarter of 2025. 00:06:05.765 --> 00:06:08.796 This full inflation adjustment is designed to maintain the 00:06:08.796 --> 00:06:10.466 purchasing power of your pension. 00:06:11.031 --> 00:06:15.171 However, for those retired under the Federal Employees Retirement System, 00:06:15.171 --> 00:06:17.432 or FERS, the adjustment is capped. 00:06:18.142 --> 00:06:20.172 FERS retirees will receive a 2.0 00:06:20.172 --> 00:06:21.262 percent increase. 00:06:21.481 --> 00:06:25.971 This is due to the "diet COLA" provision in federal law, which dictates that if 00:06:25.971 --> 00:06:28.481 the inflation index rises between 2.0 00:06:28.481 --> 00:06:29.221 and 3.0 00:06:29.221 --> 00:06:32.662 percent, the FERS COLA is set flat at 2.0 00:06:32.662 --> 00:06:33.182 percent. 00:06:33.381 --> 00:06:34.332 This 0.8 00:06:34.332 --> 00:06:37.971 percent gap between inflation and your adjustment is a permanent 00:06:37.971 --> 00:06:42.612 reduction in your purchasing power relative to your CSRS counterparts. 00:06:43.211 --> 00:06:46.302 It is also important to remember the proration rule. 00:06:46.852 --> 00:06:51.871 If you retired during the calendar year 2025, you will not receive the full COLA. 00:06:52.552 --> 00:06:56.371 You will receive one-twelfth of the increase for each month you were on the 00:06:56.371 --> 00:06:59.622 annuity rolls before 1 December 2025. 00:07:00.251 --> 00:07:06.112 For example, if you retired in June 2025, you will receive half of the COLA amount. 00:07:06.813 --> 00:07:09.984 While the COLA increases your gross income, we must look at 00:07:09.984 --> 00:07:14.233 the net impact, specifically regarding Medicare Part B premiums. 00:07:15.004 --> 00:07:18.424 The Centers for Medicare and Medicaid Services established the standard 00:07:18.424 --> 00:07:22.744 monthly premium for 2026 at $202.90, 00:07:23.083 --> 00:07:25.284 an increase of $17.90 00:07:25.284 --> 00:07:26.773 from the 2025 rate. 00:07:27.314 --> 00:07:31.103 For many retirees, this increase in Medicare premiums will consume a 00:07:31.103 --> 00:07:33.384 significant portion of their COLA raise. 00:07:34.415 --> 00:07:38.366 Furthermore, high-income retirees need to be aware of the Income-Related Monthly 00:07:38.366 --> 00:07:42.145 Adjustment Amounts, or IRMAA, for 2026. 00:07:42.786 --> 00:07:46.816 Based on your modified adjusted gross income from your 2024 tax return, 00:07:47.135 --> 00:07:49.106 you may pay significantly more. 00:07:49.486 --> 00:07:56.165 Single filers with income over $109,000 and joint filers over $218,000 will see 00:07:56.165 --> 00:07:59.396 Part B premiums ranging from $284.10 00:07:59.595 --> 00:08:01.935 to $689.90 00:08:02.015 --> 00:08:03.116 per month per person. 00:08:03.276 --> 00:08:07.936 Notices regarding these determinations were mailed by Social Security throughout 00:08:07.936 --> 00:08:13.385 late December, so if you received a letter from Social Security this week, pay close 00:08:13.385 --> 00:08:15.596 attention to the premium adjustments. 00:08:16.335 --> 00:08:20.006 Legislatively, the disparity in COLA remains a hot topic. 00:08:20.426 --> 00:08:24.165 The "Equal COLA Act" continues to be a priority for organizations 00:08:24.165 --> 00:08:27.966 like the National Active and Retired Federal Employees Association. 00:08:28.476 --> 00:08:32.635 This bill aims to eliminate the discrepancy between CSRS and 00:08:32.635 --> 00:08:36.555 FERS adjustments, ensuring that FERS retirees receive the full 00:08:36.555 --> 00:08:38.376 measure of inflation protection. 00:08:38.825 --> 00:08:42.276 While there was no floor vote on this bill during the week of 21 00:08:42.276 --> 00:08:47.036 December, the finalized 2026 rates serve as a stark reminder of why 00:08:47.036 --> 00:08:48.906 this legislation is being championed. 00:08:49.555 --> 00:08:53.885 Another legislative item of note for retirees is the "Federal Retirement 00:08:53.885 --> 00:08:57.005 Fairness Act," House Bill 1522. 00:08:57.585 --> 00:09:01.215 While primarily affecting those transitioning to retirement, its 00:09:01.215 --> 00:09:06.466 passage would allow for the "buyback" of temporary service time post-1988. 00:09:07.315 --> 00:09:11.595 This would allow many current retirees who had temporary service that did not count 00:09:11.595 --> 00:09:16.386 toward their annuity to potentially adjust their service credit, though the current 00:09:16.386 --> 00:09:20.835 version focuses on active employees making deposits before retirement. 00:09:21.425 --> 00:09:24.955 It remains a bill to watch in the 119th Congress. 00:09:25.671 --> 00:09:30.441 We also tracked the "Social Security 2100 Act" discussions, though 00:09:30.441 --> 00:09:32.302 no movement occurred this week. 00:09:32.742 --> 00:09:37.121 However, the taxation of your benefits remains unchanged for 2026. 00:09:37.982 --> 00:09:42.252 Your federal annuity remains fully taxable at the federal level, and with 00:09:42.252 --> 00:09:46.181 the expiration of certain Tax Cuts and Jobs Act provisions looming at 00:09:46.181 --> 00:09:52.652 the end of 2025, tax planning for the 2026 tax year should be a priority as 00:09:52.652 --> 00:09:54.742 you receive your January statement. 00:09:55.602 --> 00:09:59.932 Finally, for retirees managing their accounts online, the Office 00:09:59.932 --> 00:10:04.202 of Personnel Management's "Services Online" portal is your primary tool 00:10:04.202 --> 00:10:08.802 for viewing your 1099-R tax forms and your Notice of Annuity Adjustment. 00:10:09.311 --> 00:10:12.691 Despite the holiday closure, these digital services remained 00:10:12.691 --> 00:10:16.941 largely accessible, allowing you to verify your new net payment amount 00:10:16.941 --> 00:10:19.281 before the 2 January disbursement. 00:10:20.047 --> 00:10:22.617 Issues That Affect Current Federal Workers 00:10:23.235 --> 00:10:26.525 The most explosive development involves the Transportation 00:10:26.525 --> 00:10:28.685 Security Administration workforce. 00:10:29.226 --> 00:10:33.895 Following an announcement earlier in the month, the week of 21 December saw 00:10:33.895 --> 00:10:38.095 continued fallout from the decision to decertify the union representing 00:10:38.095 --> 00:10:41.316 47,000 Transportation Security Officers. 00:10:42.095 --> 00:10:47.456 A new "Labor Framework" is set to take effect on 11 January 2026. 00:10:47.575 --> 00:10:51.695 This framework rescinds the 2024 Collective Bargaining Agreement 00:10:51.976 --> 00:10:56.376 between TSA and the American Federation of Government Employees. 00:10:57.139 --> 00:11:01.420 Under this new directive, union dues will no longer be deducted from payroll 00:11:01.420 --> 00:11:06.229 starting in January, and the formal grievance and arbitration procedures 00:11:06.489 --> 00:11:11.149 established under the contract will be replaced by agency-defined protocols. 00:11:11.630 --> 00:11:15.319 The Department of Homeland Security argues this move is necessary for 00:11:15.319 --> 00:11:19.520 national security agility and efficient stewardship of taxpayer dollars. 00:11:20.139 --> 00:11:25.850 In response, the House of Representatives passed a bill on 11 December 2025 to 00:11:25.850 --> 00:11:30.519 restore these bargaining rights, but with the Senate schedule congested and 00:11:30.519 --> 00:11:34.589 a veto threat from the White House, the implementation of this non-union 00:11:34.589 --> 00:11:37.449 framework appears imminent for January. 00:11:38.155 --> 00:11:42.286 In a sharp contrast to the reduction of traditional labor protections, 00:11:42.715 --> 00:11:46.056 the administration launched a massive new hiring initiative this 00:11:46.056 --> 00:11:49.046 month: the United States Tech Force. 00:11:49.626 --> 00:11:53.586 Officially announced in mid-December, this program is actively recruiting 00:11:53.586 --> 00:11:54.935 during the holiday period. 00:11:55.816 --> 00:12:00.296 The Office of Personnel Management is seeking to hire approximately 1,000 00:12:00.505 --> 00:12:05.265 artificial intelligence and cybersecurity experts for term appointments. 00:12:05.882 --> 00:12:08.752 This "Tech Force" initiative represents a departure from 00:12:08.752 --> 00:12:10.621 traditional civil service hiring. 00:12:11.042 --> 00:12:15.701 It explicitly prioritizes skills and industry experience over formal 00:12:15.701 --> 00:12:19.741 educational credentials and standard competitive service procedures. 00:12:20.271 --> 00:12:24.241 These recruits will be placed in agencies like the Department of Defense, Treasury, 00:12:24.241 --> 00:12:27.032 and Commerce to modernize legacy systems. 00:12:27.602 --> 00:12:31.942 For current federal IT professionals, this introduces a new layer of 00:12:31.942 --> 00:12:36.102 "elite" term employees, often hired at pay rates competitive with the 00:12:36.102 --> 00:12:40.412 private sector, raising questions about the long-term structure of 00:12:40.412 --> 00:12:42.232 the federal technical workforce. 00:12:42.936 --> 00:12:45.135 Telework also remains a battlefield. 00:12:45.705 --> 00:12:49.296 During the week of 21 December, discussions continued around the 00:12:49.296 --> 00:12:53.405 "SHOW UP Act," or House Bill 139, and the "Federal Employee Return 00:12:53.405 --> 00:12:55.766 to Work Act," House Bill 236. 00:12:56.336 --> 00:13:00.795 These Republican-sponsored bills seek to mandate a return to 2019 00:13:00.795 --> 00:13:02.766 pre-pandemic telework levels. 00:13:02.805 --> 00:13:06.915 The legislation would require agencies to justify any expansion of telework 00:13:06.915 --> 00:13:11.776 to Congress and could potentially link your locality pay to your actual 00:13:11.776 --> 00:13:16.766 telework location rather than your agency worksite—a change that could result 00:13:16.766 --> 00:13:21.705 in significant pay cuts for employees working remotely from lower-cost areas. 00:13:22.519 --> 00:13:26.019 While these bills are pending, the Office of Personnel Management issued 00:13:26.019 --> 00:13:29.809 new guidance that was previewed this week regarding "weather and safety 00:13:29.809 --> 00:13:31.799 leave" in the context of telework. 00:13:32.379 --> 00:13:37.900 The guidance, clarified in a memo dated 29 December 2025, reinforces 00:13:37.900 --> 00:13:42.289 that telework-eligible employees are generally expected to work from 00:13:42.289 --> 00:13:47.240 home when federal offices are closed due to weather or other emergencies. 00:13:47.580 --> 00:13:52.699 This effectively eliminates "snow days" for the telework-ready workforce, a 00:13:52.699 --> 00:13:57.649 policy nuance that becomes highly relevant as we enter the winter storm season. 00:13:58.227 --> 00:14:00.797 Regarding your paycheck, we detailed the 1.0 00:14:00.797 --> 00:14:04.537 percent general increase in Section 1, but there are other adjustments 00:14:04.537 --> 00:14:06.137 to note for current workers. 00:14:06.748 --> 00:14:13.528 The aggregate pay limitation for 2026 is set at $253,100, which is 00:14:13.528 --> 00:14:15.747 Level I of the Executive Schedule. 00:14:16.198 --> 00:14:19.337 For those in the Senior Executive Service with certified performance 00:14:19.337 --> 00:14:23.448 appraisal systems, the cap is $292,300. 00:14:23.938 --> 00:14:28.808 Additionally, the pay freeze for senior political appointees continues, meaning 00:14:28.808 --> 00:14:33.217 their pay remains locked despite the adjustments to the underlying schedules. 00:14:33.853 --> 00:14:37.784 It is also vital to check your Leave and Earnings Statement for the pay period 00:14:37.784 --> 00:14:40.843 covering 21 December through 3 January. 00:14:41.483 --> 00:14:46.044 With the 24 December and 26 December holidays, ensure your time and 00:14:46.044 --> 00:14:47.813 attendance was coded correctly. 00:14:48.363 --> 00:14:53.264 If you worked, verify your holiday premium pay; if you were off, ensure 00:14:53.264 --> 00:14:55.264 you were not charged annual leave. 00:14:56.042 --> 00:15:00.111 Finally, we are monitoring the "Federal Adjustment to Income Rates Act," 00:15:00.401 --> 00:15:05.522 or FAIR Act, which had proposed a significantly higher pay raise of 4.3 00:15:05.522 --> 00:15:07.572 percent for 2026. 00:15:08.392 --> 00:15:09.451 While the 1.0 00:15:09.451 --> 00:15:13.512 percent raise is now final, advocacy groups like the National Treasury 00:15:13.512 --> 00:15:16.951 Employees Union have already signaled they will push for a more 00:15:16.951 --> 00:15:22.281 substantial adjustment in the 2027 budget cycle to close the widening 00:15:22.281 --> 00:15:24.131 pay gap with the private sector. 00:15:24.807 --> 00:15:28.537 And that’s a wrap on this week’s Federal Workforce Roundup. 00:15:29.358 --> 00:15:33.368 The landscape for federal employees and retirees is constantly shifting, 00:15:33.677 --> 00:15:37.738 with major decisions being made about everything from pay and job security 00:15:37.988 --> 00:15:42.118 to retirement benefits and the very structure of the civil service. 00:15:42.577 --> 00:15:44.548 Staying informed is your best tool. 00:15:44.958 --> 00:15:49.368 Be sure to subscribe wherever you get your podcasts, so you never miss an update. 00:15:50.158 --> 00:15:51.267 Thanks for tuning in. 00:15:51.688 --> 00:15:54.608 We’ll be back next week to track the latest developments 00:15:54.608 --> 00:15:55.928 and what they mean for you. 00:15:56.238 --> 00:15:58.988 Until then, stay engaged and be well.