The FED Weekly

Lawrence: Welcome to The FED Weekly
for 22-28 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

During the week of June 22–28,
the major stories spanning both

active and retired federal workers
centered on proposed legislative

changes to benefits and retirement.

In Congress’s budget reconciliation
debate, dramatic cuts that had been

proposed for federal retirement
benefits were largely removed.

For example, a late June draft of
the Senate reconciliation text omits

provisions that would have forced
new hires to choose “at‑will” status

or pay much higher FERS pension
contributions, and does not include

the House plan to eliminate the FERS
annuity supplement for early retirees.

These omissions mean that, for now,
current employees will not suddenly

owe more to their retirement funds,
and future retirees will continue to

receive their earned supplements (the
full Social Security–bridge benefit).

The Senate version also drops a
controversial payroll-tax “fee”

on unions, which would have
affected unionized workers’ dues.

In short, the worst retirement-benefit
cuts in the House’s proposal (higher

contributions and loss of supplements)
appear off the table in this period.

Federal employees (both active and
retired) remain cautiously optimistic,

but union and retiree groups are
urging lawmakers to safeguard earned

benefits in the final legislation.

One piece of legislation moving
in this timeframe that affects

the broader federal workforce is a
bipartisan House bill to modernize the

federal workers’ compensation system.

On June 27, the House Education and
Labor Committee unanimously approved H.R.

3170, the “Improving Access
to Workers’ Compensation for

Injured Federal Workers Act.”

Sponsored by Rep.

Joe Courtney (D-Conn.),

this bill would revise the Federal
Employees’ Compensation Act (FECA)

to allow physician assistants and
nurse practitioners to provide

care for injured federal employees.

(Previously, only physicians or
chiropractors could treat most federal

workers’ compensation patients.)

If enacted, the bill would benefit
federal employees (and potentially

retirees eligible for FECA)
by expanding medical provider

options after on-the-job injuries.

Another issue spanning both current
and retired workers involves

cost-of-living adjustments (COLAs).

Under current law, Civil Service
Retirement System (CSRS) annuities rise at

full CPI, but Federal Employees Retirement
System (FERS) annuities are capped: if

inflation is between 2–3%, FERS gets
only 2%, and if inflation exceeds 3%,

FERS gets one point less than full CPI.

Retiree advocates note this
long-standing disparity.

Indeed, several lawmakers have
reintroduced the bipartisan

“Equal COLA Act” (H.R.

491/S.

624), which would give FERS
retirees the same COLA as

CSRS/Social Security beneficiaries.

(That bill is under consideration and has
broad support in federal retiree groups.)

During this week no new action was taken
on COLAs, but the issue remains under

discussion on Capitol Hill as active and
retired FERS annuitants call for parity.

In short, the main bipartisan legislative
developments of late June involve

retirement and benefit structures rather
than day-to-day pay or workplace rules.

Both current and retired workers can
breathe easier that key cuts proposed

in the House reconciliation plan (higher
contributions and lost supplements)

are not in the latest Senate draft.

Retiree organizations continue to press
Congress to protect all hard-earned

benefits, including adjusting
FERS COLAs, as the reconciliation

bill heads toward Senate debate.

Issues That Affect Current Federal Workers

Several stories this week focused
on active federal employees’ working

conditions—from court rulings and
agency policies to personnel rules:

Union Bargaining Rights – Court Blocks
Trump Order: On June 25, a San Francisco

federal judge granted a nationwide
preliminary injunction against President

Trump’s March 2025 executive order
that would have stripped collective

bargaining at dozens of agencies.

The judge agreed with unions that the
abrupt removal of bargaining rights

likely violates federal law and
constitutional free speech protections.

This block means hundreds of thousands
of current federal employees remain

entitled to negotiate working
conditions through their unions.

(A separate ruling in April had
already blocked the order at seven

large agencies; this week’s ruling
covers the remaining agencies).

The decision explicitly found the
administration’s order was targeted

at agencies deemed “hostile” to the
president, further affirming that agencies

cannot unilaterally terminate bargaining.

(The White House has vowed to appeal.)

Performance Management Overhaul:
In mid-June, OPM issued sweeping

new performance rules for federal
agencies, and news outlets

reported on the guidance this week.

An Office of Personnel Management memo
(published June 17) strongly urges

agencies to limit how many employees
receive “exceeds expectations”

ratings and to move more swiftly to
discipline or remove poor performers.

In effect, the guidance tells
managers to “make a disproportionate

number of employees not exceed
expectations” so that only truly

exceptional work merits top scores.

It also directs agencies to
update their discipline policies

so that “poor performers can be
swiftly removed or reassigned”.

In practice, this could make it easier
to fire or demote underachieving

employees (especially at agencies
recently exempted from bargaining).

Unions immediately criticized the changes
as a departure from negotiated contracts.

But at minimum, current workers
should expect stricter performance

evaluations and faster accountability
processes under these new rules.

Probationary Periods Rule: On June 24
the Federal Register published a final

rule aligning with President Trump’s
April 2025 Executive Order on probation.

This rule rescinds the old
probation regulations and requires

agencies to actively affirm the
value of a probationary employee.

In other words, employees no longer become
“career” by default after probation;

instead, agencies must certify that
retaining each probationer is in the

public interest, or else terminate them.

The rule explicitly removes prior
barriers to ending probationers,

allowing easier separations.

For current employees, this means new
hires must clear an extra hurdle at the

end of probation, and supervisors cannot
simply let probation expire automatically.

The intent is to weed
out poor fits earlier.

All federal agencies must update their
HR policies to implement this change.

Probationary employees (and
their unions) should be aware

that extension and termination
processes will now be more active.

Administrative Leave Concerns: Federal
News Network’s Federal Drive reported

on June 25 that over 100,000 federal
workers are on paid administrative

leave, often for extended periods.

Experts warn that this use of
administrative leave far exceeds

what Congress intended (max 10
workdays per year except for certain

investigations) and may be unlawful.

The Public Employees for Environmental
Responsibility (PEER) group has even

filed a complaint, noting that agencies
have broadly put employees on leave (e.g.

for DEI officers or RIF targets)
without evidence of wrongdoing.

If upheld, this issue primarily
affects current employees, since

they are the ones placed on leave.

The takeaway is that many more active
workers are effectively sidelined (on

paid leave) than in the past, raising
questions about due process and back pay.

Furloughs and RIFs – Courts,
State Department: Mass layoffs

were a hot topic this week.

A June 27 Supreme Court ruling (Trump v.

CASA) limited courts’ power to
issue nationwide injunctions.

While the decision generally curtails
broad injunctions, a footnote suggests it

does not disturb the existing lower-court
order blocking the Trump administration’s

plan for agency-wide layoffs.

In practical terms, federal employees
currently have some protection

against the administration’s proposed
workforce cuts, at least temporarily.

In line with that, the State
Department’s massive RIF (nearly

3,400 jobs) remains on hold.

In fact, State has been restructuring
how it would conduct those layoffs.

State recently rewrote its RIF rules
to create dozens of new “competitive

areas” (by post, bureau, etc.)

to make targeted layoffs easier.

State officials say they still intend
to reduce ~1,900 employees, but a

judge has barred the cuts for now.

So current State Department workers face
uncertainty: the process has been revamped

behind the scenes, but legal blocks (and
upcoming Supreme Court action) mean any

actual layoffs are paused for the moment.

Other Developments: A few
other announcements during

the week are noteworthy.

The Defense Department’s
FY2026 budget proposal (marked

up June 27) includes a 3.8%

military pay raise and quality-of-life
funding, but that concerns uniformed

personnel more than civilian employees.

The GSA issued its routine
summer “electricity curtailment”

alert (asking agencies in D.C.

to conserve power due to a heat
wave) – a minor energy-savings

notice rather than a personnel issue.

In short, the most substantive news
for active federal employees in

late June centers on personnel rules
(performance and probation), legal

fights over layoffs and unions, and
some legislative fixes (workers’ comp).

Key Legislation Affecting Current
Employees: Aside from the reconciliation

measure (see Section 1), the only
specific bill moving was H.R.

3170 (workers’ comp).

There was no new bill on pay or telework.

However, several bills are in the works
that could affect current workers:

The Federal Employee Train
Transportation Act (H.R.

725), for example, was introduced in
May to guarantee rail pass benefits

(it awaits committee action).

Proposals on expanding child care
or leave for federal workers have

been floated in other Congresses,
but none advanced this week.

Issues That Affect Retired Federal Workers

Late June brought no immediate
changes to veterans’ pensions or

retiree-specific benefits, but retirees
closely watched Congressional actions.

The House-passed reconciliation bill
had threatened to cut retiree income by

eliminating the FERS annuity supplement
for early retirees and switching from

a “high-3” to “high-5” salary basis.

As noted above, those provisions have
been removed from the latest Senate draft.

If the Senate language holds,
current and future retirees will

continue to receive their full earned
pension supplements and retire under

the familiar high-3 calculation.

Retiree groups had loudly protested the
proposed cuts – NARFE warned that clawing

back these benefits would violate workers’
earned compensation promises – and this

week’s developments mean those worst fears
did not materialize, at least for now.

Beyond the reconciliation debate, the
main retiree-focused legislative news

involves cost-of-living adjustments.

Supporters of FERS annuitants continue
pushing the Equal COLA Act (H.R.

491/S.

624), which would remove the
2%-cap penalty and give FERS

retirees the full CPI adjustment.

Although that bill has
been introduced by Rep.

Gerry Connolly and Sen.

Alex Padilla, it has not
advanced out of committee yet.

In the week of June 22–28 there was
no Congressional action on it, but

advocacy groups (like NARFE) were
publicizing the need for equal COLAs.

Retirees hoping for COLA reform
will be watching whether that bill

gains momentum later this summer.

Another issue on retirees’ radar
is retiree health insurance.

Congress has not proposed any new
changes to the Federal Employees

Health Benefits (FEHB) or other retiree
health programs during this week.

By law, FEHB premiums for 2026 will be
set during open season this fall, and no

news indicates anything new this June.

Similarly, premiums for the older
Preferred Provider (PPO) health

plan (PSHB) were recently updated,
with average increases of 10.1%

in government contributions
for FEHB and 5.1%

for PSHB (as per an OPM
release earlier this year).

No late-June announcements changed these;
retirees simply prepare to see those

premium changes in December paychecks.

In summary, retirees got relief
in late June insofar as proposed

retirement benefit cuts were shelved.

The Senate’s draft reconciliation
bill as of June 28 retains the FERS

supplement and the high-3 formula,
meaning current annuitants and soon-to-be

annuitants face no surprise reductions.

At the same time, Congress is
hearing continued calls (from

NARFE, Federal Retiree Board, etc.)

to protect retirement earnings
and consider bipartisan

proposals like the Equal COLA Act

No other retiree-specific
legislation passed this week.

Retired federal employees and their
advocates will remain vigilant, especially

once a final reconciliation bill is
actually debated on the Senate floor.

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.

Be sure to subscribe wherever you get your
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.