The FED Weekly

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 you’re 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 community—current

workers, their families, and by
extension, the retirees who utilize

federal services—stems from the
National Defense Authorization Act’s

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 OPM’s 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 alone—3,000

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 OPM’s 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 OPM’s 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 program’s 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
individuals—ranging from early-career

data scientists to experienced
engineering managers—for 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 government’s 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 employees—roughly 82 percent of
those who commented—were 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 Service’s
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 law—such as
reducing delivery days or privatizing

certain functions—the agency’s 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

administration’s enforcement priorities
and the transparency requirements of

federal labor and immigration law.

And that’s a wrap on this week’s
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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podcasts, so you never miss an update.

Thanks for tuning in.

We’ll be back next week to
track the latest developments

and what they mean for you.

Until then, stay engaged and be well.