The FED Weekly

Lawrence: Welcome to The FED Weekly
for [dd-dd month June 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 primary focus for all stakeholders
within the federal community during

mid-January 2026 was the precarious
state of agency funding and the

legislative maneuvers intended to prevent
a recurrence of the budgetary lapses

that characterized the previous year.

On 14 January 2026, the House
of Representatives took a

significant step by passing H.R.

7006, the Financial Services and General
Government and National Security,

Department of State, and Related
Programs Appropriations Act, 2026.

This legislation, which passed
with a bipartisan vote of 341 to

79, is a critical component of
the "minibus" strategy designed to

provide full-year funding for over
20 independent agencies, including

the Office of Personnel Management
and the Department of the Treasury.

For current employees, the bill represents
a path toward operational stability; for

retirees, it secures the administrative
funding necessary for the Office of

Personnel Management to process benefits
and manage the multi-trillion-dollar Civil

Service Retirement and Disability Fund.

However, the passage of H.R.

7006 also signaled a period
of fiscal contraction.

The legislation includes a 2.7

billion dollar reduction for the
Internal Revenue Service, specifically

targeting enforcement funding.

Union representatives from the
National Treasury Employees Union

have warned that such reductions will
inevitably lead to a degradation of

taxpayer services and may jeopardize
the agency’s ability to modernize its

aging technological infrastructure.

This development impacts current
employees through potential staffing

shifts and impacts retirees who rely
on the Internal Revenue Service for

timely processing of tax documentation
related to their annuities.

Further legislative activity aimed
at systemic workforce protection

manifested on 16 January 2026,
with the introduction of H.R.

7137 by Representative Dusty Johnson.

This bipartisan measure seeks to
appropriate funds for the pay and

allowances of federal employees,
contract employees, and members of

the Armed Forces specifically during
any future lapse in appropriations.

The bill addresses a persistent
grievance among federal workers and

retirees: the use of the workforce
as a pawn in fiscal negotiations.

By providing a permanent
appropriation for pay, H.R.

7137 aims to mitigate the financial
trauma associated with shutdowns, such

as the 43-day event in 2025 that left 1.4

million employees without paychecks.

The relevance for retirees lies in
the bill’s broader intent to stabilize

government operations, ensuring
that the agencies managing retiree

benefits remain sufficiently staffed
even during budgetary impasses.

A pivotal development in the
integrity of benefit administration

occurred on 12 January 2026, when the
House of Representatives passed S.

269, the Ending Improper
Payments to Deceased People Act.

This bill, which had previously
passed the Senate, permanently

authorizes the Department of the
Treasury to access the Social Security

Administration’s full death records
through the Do Not Pay system.

The implications of S.

269 are twofold.

First, it serves a critical fiscal
oversight function by identifying and

stopping improper payments made to
individuals who are no longer living,

a problem that has historically cost
the government billions of dollars.

Second, for the retired community, the
bill includes protections advocated by

Representative John Larson to prevent
the Social Security Administration from

erroneously recording a death unless there
is verified proof, thereby safeguarding

living retirees from the accidental
termination of their earned benefits.

The modernization of data transparency
reached a milestone on 16 January

2026, with the launch of the Federal
Workforce Data (FWD) website by

the Office of Personnel Management.

In a blog post titled "Saying goodbye
is such sweet sorrow, but alas we

must move FWD," Director Scott Kupor
announced that the FWD platform would

replace the antiquated FedScope system,
which had been in use since 2000.

The new platform provides a monthly,
interactive view of the workforce,

tracking 2,084,618 federal civilian
employees across several key metrics.

For current employees, the site
offers transparency regarding

performance ratings, administrative
leave, and telework participation.

For retirees and those planning
their exit from the civil service,

the platform includes critical
data on retirement eligibility and

agency-specific departure trends.

Director Kupor emphasized that
"transparency only works when people

can see the full picture," noting that
better data leads to better decisions

for both policymakers and the public.

Perhaps the most widespread development
impacting both active and retired

personnel is the continued implementation
of the Social Security Fairness Act, which

was signed into law on 05 January 2025.

This historic legislation repealed the
Windfall Elimination Provision (WEP)

and the Government Pension Offset
(GPO), two provisions that for over 40

years reduced or eliminated the Social
Security benefits of public servants

who also received a government pension.

During the week of 11 January 2026,
the Social Security Administration

provided updates on the massive
manual review process required

to adjust the records of 3.2

million beneficiaries.

For retirees, the repeal is
retroactive to January 2024,

and most affected individuals
are expected to receive one-time

lump-sum payments for their withheld
benefits by the end of March 2026.

For current employees under the Civil
Service Retirement System (CSRS), the

law ensures that they will receive
the full Social Security benefits they

earned through private-sector work
without the penalties that historically

discouraged dual-career service.

The implementation of the Social
Security Fairness Act also holds

significance for railroad workers.

On 15 January 2026, the Railroad
Retirement Board announced that it

had nearly completed the issuance of
retroactive payments for the non-covered

service pension (NCSP) reduction.

The board noted that fewer than 12 complex
cases remained for manual review, marking

a successful administrative transition for
those previously penalized by the offset

of their railroad retirement annuities.

Issues That Affect Retired Federal Workers

The financial landscape for
retired federal employees in 2026

is defined by a modest adjustment
in annuities and significant

changes in healthcare obligations.

Effective in January 2026, federal
retirees received a cost-of-living

adjustment (COLA) that reflects
the inflationary pressures measured

during the previous fiscal year.

For those retired under the
Civil Service Retirement System

(CSRS), the COLA was set at 2.8

percent, matching the increase provided
to Social Security beneficiaries.

However, retirees under the
Federal Employees Retirement

System (FERS) received a 2.0

percent adjustment.

This discrepancy is a result of the
statutory FERS COLA formula, which

mandates that if the Consumer Price
Index for Urban Wage Earners and

Clerical Workers (CPI-W) increase is
between 2 percent and 3 percent, the

FERS COLA is capped at 2 percent.

Organizations such as the National
Treasury Employees Union and the

National Active and Retired Federal
Employees Association have continued

to lobby for the Equal COLA Act to
rectify this perceived inequity, which

they argue diminishes the purchasing
power of FERS retirees over time.

The real-world benefit of the 2026
COLA has been partially eroded

by an increase in Medicare costs.

In mid-January 2026, retirees saw the
first deductions for the 2026 Medicare

Part B premiums, which rose to 202.90

dollars per month, up from 185.00

dollars in 2025.

This 17.90

dollar monthly increase absorbs
nearly 32 percent of the average

56-dollar monthly COLA raise seen by
Social Security and CSRS recipients.

Financial analysts have observed that the
"COLA catch-22" remains a primary concern

for the retired community, as healthcare
and housing inflation often outpace the

general CPI-W index, leading to a net
decline in disposable income despite

the headline-level increase in benefits.

The administration of retirement
benefits also remains a

point of operational tension.

As of January 2026, the Office
of Personnel Management has

been managing a backlog of over
50,000 retirement applications.

This administrative strain has led to
significant delays in the finalization

of annuities, often leaving new retirees
on "interim pay"—a fraction of their

full expected benefit—for several months.

While the Office of Personnel Management
has announced moves toward a "fully

digital retirement process," including
a new online portal launched in late

2025, the transition has not yet
fully alleviated the wait times that

have plagued the agency during the
recent surge in federal departures.

For retired postal workers, the
week of 11 January 2026 included

specific administrative updates
regarding the new Postal Service

Health Benefits (PSHB) program.

This program, which officially replaced
Federal Employees Health Benefits (FEHB)

for postal personnel on 01 January
2025, requires Medicare-eligible postal

retirees to enroll in Medicare Part
B to maintain their health coverage.

On 14 January 2026, the United States
Postal Service announced a webinar

scheduled for 21 January 2026 to
discuss "USPS Retirement Health

Benefits: Medicare, Dental and Vision".

This session is designed to clarify the
mandatory Part B enrollment rules and

the integration of supplemental benefits
like the Federal Employees Dental and

Vision Insurance Program (FEDVIP),
which remain available alongside PSHB.

Retirees were cautioned that failure
to maintain Medicare Part B enrollment

results in the loss of PSHB coverage,
representing a significantly

stricter legal requirement than that
found in the broader FEHB program.

Finally, retirees were updated on
tax-related adjustments for 2026.

The Internal Revenue Service announced
that the maximum annual contribution

limit for an Individual Retirement
Account (IRA) increased to 7,500

dollars, up from 7,000 dollars in 2025.

Additionally, the interest rate
charged to federal employees and

retirees who need to "buy back"
military service time or pay for past

service where retirement contributions
were not withheld dropped to 4.25

percent for 2026, down from 4.375

percent the previous year.

This decrease in the interest
rate provides a small but welcome

financial window for retirees seeking
to maximize their length-of-service

credits for annuity calculations.

Issues That Affect Current Federal Workers

The week of 11 January 2026 was marked
by the official implementation of

the 2026 federal pay adjustments,
which saw a divergence between

the general civil service and
specialized law enforcement sectors.

Pursuant to the executive order
issued on 18 December 2025, the

majority of the General Schedule
(GS) workforce received a 1.0

percent across-the-board pay increase.

This raise, which is one of the
smallest in recent history, did not

include any increase in locality pay,
meaning geographic pay differentials

remained frozen at 2025 levels.

The Office of Personnel Management
published the new 2026 salary

tables, which took effect on 11
January 2026 for most employees.

For those in the Senior Executive
Service (SES) and senior-level (SL/ST)

positions, the minimum rate of basic pay
was adjusted to 151,661 dollars for 2026.

In contrast, federal law enforcement
officers received a more substantial

adjustment to address chronic
recruitment and retention challenges.

On 11 January 2026, a new special salary
rate schedule went into effect for certain

law enforcement personnel, providing a
total pay increase of approximately 3.8

percent.

This adjustment, approved by Director
Scott Kupor, combines the 1.0

percent base increase
with an additional 2.8

percent special rate, matching
the pay raise provided to

the United States military.

These special rates apply to critical
positions within Customs and Border

Protection, the Secret Service, and
the Bureau of Prisons, and are designed

to support the administration's
priorities regarding border security

and federal law enforcement efficacy.

Additionally, bipartisan legislation
was proposed on 16 January 2026 to

establish a 35 percent special pay
rate for federal prison workers

until the Bureau of Prisons reduces
its reliance on mandatory overtime.

A major judicial development
affecting labor relations occurred

on 15 January 2026, when Judge
Jamal Whitehead of the U.S.

District Court for the Western District
of Washington issued a ruling halting

the administration's second attempt to
strip union rights from Transportation

Security Administration (TSA) employees.

The Department of Homeland Security
had planned to implement a new

"policy determination" on 18 January
2026 that would have terminated

the collective bargaining agreement
between the agency and the American

Federation of Government Employees.

Judge Whitehead ruled that
this move "plainly" violated

a 2025 preliminary injunction.

He ordered the agency to immediately
notify its 47,000 security screeners

that their 2024 collective bargaining
agreement remains "applicable and binding"

and that all grievances and arbitrations
must continue to be processed.

Union President Everett Kelley thanked the
court for preventing the administration

from "ripping up their union contract
again," noting that many of these

officers are veterans who deserve a
voice in their working conditions.

In the executive branch, a significant
reversal of personnel policy occurred

on 13 January 2026, when the Department
of Health and Human Services rescinded

layoff notices for hundreds of
employees at the National Institute for

Occupational Safety and Health (NIOSH).

These employees, who primarily
investigate workplace outbreaks

and illnesses, had been on paid
administrative leave since the massive

job cuts announced in April 2025.

The rescission of the reduction-in-force
(RIF) was first reported by Bloomberg

News and confirmed by Health and Human
Services spokesperson Andrew Nixon,

who stated that the administration
is committed to protecting

essential public health functions.

While the employees returned to work
on 14 January 2026, union leaders noted

that the nine months of uncertainty
have caused "incalculable damage"

to the agency's research projects.

A contrasting situation emerged at the
Consumer Financial Protection Bureau

(CFPB), where on 16 January 2026, reports
indicated that while the agency staved

off immediate furloughs after receiving
funding, the administration continued

to push for its eventual dismantlement.

Under current directives, the agency is
cutting pay and benefits for employees

as it seeks to lay off virtually all
of them, complying with court orders

while simultaneously "squeezing" staff
in an effort to shut itself down.

This remains one of the most volatile
areas of federal employment as

the agency transitions toward an
internal merger and eventual closure.

The Office of Personnel Management
also issued critical guidance

on 13 January 2026 regarding the
modernization of federal hiring.

The memorandum, "Reinvigorating
Merit-Based Hiring through

Candidate Ranking," formally
operationalizes the "Rule of Many".

This change replaces the outdated "Rule
of Three," which required hiring managers

to select from only the top three
candidates on a numerically ranked list.

The new "Rule of Many" allows
agencies to consider a broader

pool of qualified applicants
based on skills-based assessments.

This process aims to remove barriers to
entry for highly qualified candidates

while maintaining veterans' preference
through a points-based ranking system.

Agencies must be in full compliance with
these new regulations by 09 March 2026.

Beyond these administrative shifts, the
week saw a flurry of new legislative

proposals that could redefine the
requirements of federal service.

On 15 January 2026, Representative
Abraham Hamadeh introduced H.R.

7102, which would require all
federal civilian career employees

to pass a citizenship test
as a condition of employment.

On the same day, Senator
Rick Scott introduced S.

3681, providing continuing appropriations
for Customs and Border Protection and

Immigration and Customs Enforcement
personnel during government shutdowns.

On 16 January 2026, Representative
Bill Foster introduced H.R.

7132 to establish minimum
staffing levels for the Financial

Stability Oversight Council.

These bills represent a broader
congressional effort to either

increase accountability or provide
targeted stability to specific

segments of the federal workforce.

Finally, the federal workforce
continued to navigate the

implementation of "Schedule Policy"
(formerly known as Schedule F).

Under the Office of Management and
Budget’s memorandum M-26-03, agencies

have been directed to "aggressively
use" new job classifications to

reclassify tens of thousands of career
civil servants as "at-will" employees.

This policy targets "policy-related"
positions and strips employees of their

rights to appeal adverse actions to
the Merit Systems Protection Board.

As 2026 begins, agencies have already
started turning over lists of positions

to the Office of Personnel Management
for conversion, a shift that the

administration frames as essential
for presidential accountability

but which labor advocates warn
will eradicate the non-partisan

nature of the federal bureaucracy.

Amidst these structural changes, the
administration also reinforced its "Return

to Office" directives, with Director Kupor
arguing in a 16 January 2026 blog post

that in-person collaboration is essential
for building the relationships that enable

optimal decision-making in government.

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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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.