The FED Weekly

The FED Weekly 1-7 Mar 2026 (Episode 40)
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[00:00:00] Weekly Briefing Intro
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Welcome to The FED Weekly for 1-7 March 2026, 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.

[00:00:43]  Issues That Affect Current and Retired Federal Workers
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Issues That Affect Current and Retired Federal Workers

The first week of March 2026 was dominated by the deepening crisis surrounding the Department of Homeland Security funding stalemate. As of 6 March 2026, the [00:01:00] DHS shutdown entered its twenty-first consecutive day, having begun when a continuing resolution expired on 14 February 2026. This partial lapse in appropriations has created a human toll that is now being quantified in stark terms. A non-partisan report released on 6 March 2026, titled "DHS Shutdown Enters Third Week: Federal Employees Miss Paychecks Amid Iran War Escalation," highlighted that thousands of frontline homeland security workers are experiencing partial or total pay misses.The workforce impact is staggering: approximately 61,000 Transportation Security Administration officers, over 13,000 Federal Emergency Management Agency employees, and 3,500 Cybersecurity and Infrastructure Security Agency personnel are among those working without current compensation.

For many TSA officers, the pay cycle due on 3 March 2026 was the first to hit with a full miss, [00:02:00] and some civilian personnel in the Coast Guard have remained unpaid since 16 February 2026. While the Government Employee Fair Treatment Act ensures that every worker will eventually receive back-pay once the shutdown ends, the current delay has forced these essential employees to rely on credit cards, private loans, or family support to meet basic living expenses. This financial strain is exacerbated by the fact that this is the third shutdown in the 2025-2026 congressional cycle, leaving many families with no remaining financial cushion.The operational risks are equally concerning.

On 5 March 2026, House Appropriations Committee Chairman Tom Cole emphasized that the shutdown has left cybersecurity operations at a limited capacity at a time when adversaries like China, Russia, and Iran are actively seeking to exploit vulnerabilities in American infrastructure. Furthermore, [00:03:00] FEMA grants used by local and state entities for safety and anti-terrorism efforts are currently inaccessible, and first responder training has been cancelled across the country. Even security preparations for massive future events, such as the America 250 celebrations and the 2028 Los Angeles Olympics, are facing disruptions due to the lack of authorized funding.In the halls of Congress, there was significant movement on 5 March 2026, when the House of Representatives passed H.R. 7744, the Department of Homeland Security Appropriations Act, 2026, by a vote of 221 to 209.

This legislation is intended to fully fund the department through the end of the fiscal year and end what House leadership has termed the "Senate Democrat-instigated shutdown".

Chairman Cole argued that the bill provides the bicameral funding necessary to ensure the Department of Homeland Security can execute its [00:04:00] constitutional duty without its personnel being used as a "political bargaining chip".

[00:04:05] Shutdown Fairness Act Push
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Despite the House passage, the path forward in the Senate remained uncertain throughout the week, prompting a coalition of labor groups to intensify their advocacy. On 2 March 2026, American Federation of Government Employees National President Everett Kelley called on Congress to go beyond temporary funding and pass the Shutdown Fairness Act, identified as S. 3168 and H.R. 7137. This bipartisan bill, which has gained significant traction during the first week of March 2026, aims to protect the livelihoods of federal employees, contractors, and military members by requiring the government to pay them in full and on time during any future funding lapses. The act would allow agency heads to access necessary funds to disburse standard compensation within seven days of a lapse's enactment or on [00:05:00] scheduled pay dates, effectively de-weaponizing the shutdown process.

[00:05:04] Social Security Fairness Snag
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Representative Dusty Johnson, a lead sponsor of the House version, stated that no federal worker should have to worry about putting food on the table because of congressional dysfunction. While the shutdown captured much of the news cycle, the implementation of the Social Security Fairness Act remained a critical concern for both current and retired workers. This legislation, which became law on 5 January 2025, repealed the Windfall Elimination Provision and the Government Pension Offset. During the week of 1 March 2026 to 7 March 2026, the focus shifted to the "six-month retroactivity" problem.

Although the law is retroactive to 1 January 2024, the Social Security Administration's standard policy generally limits back-payments to six months from the date of an application. This has resulted in a situation where [00:06:00] retirees who never applied for benefits in the past—because they were told the offsets would reduce their payments to zero—are now applying but being denied benefits for the early months of 2024. On 5 March 2026, reports surfaced that a bipartisan group of senators, including Susan Collins and John Fetterman, had petitioned the Social Security Administration to review this policy to ensure that public servants receive the full retroactive payments intended by the act. In the interim, the National Active and Retired Federal Employees Association (NARFE) advised its members on 5 March 2026 to file Form SSA-561, a Request for Reconsideration, to protect their rights while the administrative and legal issues are resolved. The Social Security Administration also issued a warning on 6 March 2026 regarding potential scams related to the act, reminding the public that the agency will never ask for [00:07:00] payment to start or increase benefits.

[00:07:02]  Issues That Affect Retired Federal Workers
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Issues That Affect Retired Federal Workers

For the community of retired federal employees, the news from 1 March 2026 through 7 March 2026 centered on a massive administrative effort to modernize retirement processing amid a record-breaking surge in applications. The Office of Personnel Management, led by Director Scott Kupor, has achieved what it calls a "tipping point" in its digital transformation, though this progress is being tested by a backlog that nearly doubled over a four-month span. As of 6 March 2026, OPM reported that the backlog of retirement applications pending processing had reached over 65,200 by the end of February 2026, a sharp increase from the 36,500 pending cases in October 2025. This influx is primarily due to an historically large number of retirements between September and [00:08:00] December 2025, driven by agency-wide reorganization incentives and voluntary retirement programs launched at the beginning of the administration.

OPM estimates that current retirement volumes are roughly 50 percent higher than historical averages and could eventually reach twice the normal levels.In a blog post on 5 March 2026, Director Kupor shared that applications submitted through the Online Retirement Application (ORA) portal are now exceeding those coming in via traditional paper routes. The advantages of the digital system are becoming clear in the data: ORA applications are being processed in an average of 34 days, compared to 95 days for paper claims. However, the total lead time for a retiree remains significant. On 5 March 2026, OPM data revealed that it takes an average of 120 days from the moment an applicant starts an application to when OPM receives a [00:09:00] completed package. On average, applications spend 14 days with the applicant, 60 days in an agency's human resources department, and 51 days with payroll providers. Currently, 30 percent of the 107,000 applications in the ORA system are sitting with payroll providers, and 12 percent are with agency HR teams.

To mitigate the financial impact of these delays, OPM is issuing interim payments—typically 80 percent of the final monthly entitlement—in approximately 75 percent of cases immediately and in 100 percent of cases within an average of seven to eight days of the application reaching OPM. This rapid turnaround on interim pay is a critical priority for the agency as it manages the transition to a paperless system, which OPM expects to complete in 2026.The community also continues to navigate the complexities of the 2026 Cost-of-Living Adjustments.

[00:09:59] COLA FEHB Earnings Updates
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Effective [00:10:00] since the beginning of the year, CSRS retirees and Social Security beneficiaries received a 2.8 percent increase. However, FERS retirees saw a lower adjustment of 2.0 percent. During the first week of March 2026, the National Treasury Employees Union and NARFE renewed their call for the Equal COLA Act (H.R. 491 / S. 624), which would eliminate this disparity. Advocacy groups noted that 2026 marks the fifth consecutive year that COLAs have been 2.5 percent or higher—a trend not seen since the late 1980s and 1990s—underscoring the importance of preserving the purchasing power of all federal annuities equally. On 5 March 2026, additional guidance was issued regarding the "five-year rule" for maintaining Federal Employee Health Benefits in retirement. To keep health insurance, employees retiring in 2026 must have been continuously enrolled in [00:11:00] FEHB for the five years of service immediately preceding their retirement date.

OPM advised employees who do not meet this requirement to consider postponing their retirement to avoid the permanent loss of health insurance eligibility, a critical consideration for those planning an exit in the current calendar year.For retirees who are considering a return to the workforce, 5 March 2026 brought updates on 2026 earnings limits. For retirees younger than the full retirement age, the earnings limit is 24,480 dollars. For those reaching full retirement age in 2026, the limit increases to 65,160 dollars. Earnings above these thresholds result in a reduction of Social Security benefits: 1 dollar is deducted for every 2 dollars earned over the lower limit, and 1 dollar for every 3 dollars earned over the higher limit until the month the worker turns the full retirement [00:12:00] age.

These limits are particularly relevant given the administration's stated interest in re-hiring experienced retirees for specific technical and legal roles.The Thrift Savings Plan also saw its annual contribution limit increase to 24,500 dollars for 2026, with an IRA contribution limit of 7,500 dollars. Furthermore, the interest rate charged to federal employees who wish to buy back military service time or past civilian service for retirement credit dropped to 4.25 percent in 2026, down from 4.375 percent the previous year. This reduction provides a slight financial benefit to those looking to consolidate their service history before fully entering retirement.Finally, the first week of March 2026 saw the publication of the March edition of the NARFE Magazine, which focuses on the debate between a partisan and political workforce versus a nonpartisan, merit-based [00:13:00] one.

[00:13:00] At Will Civil Service Shift
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The issue also includes a deep dive into "stealth taxes" that can impact retirement savings and strategic planning for those who retired abroad, reflecting the increasingly complex financial landscape that federal retirees must navigate in the current economy.

[00:13:17]  Issues That Affect Current Federal Workers
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Issues That Affect Current Federal Workers

The first week of March 2026 may be viewed as a transformative period for the working federal employee, as the second Trump administration began the final stages of implementing a more "at-will" civil service model. On 5 March 2026, Office of Management and Budget Deputy Director for Management Eric Ueland stated at a government efficiency conference that reducing the size of the federal government remains "priority number one". Ueland described the administration's goal as "liberating" federal workers from "stultifying rules" by moving toward an at-will organization. He noted that after shedding more than 300,000 [00:14:00] employees, the administration will continue to shrink the workforce to tackle what it identifies as waste, fraud, and abuse. Central to this effort is the Schedule Policy/Career classification, which is set to become effective on 9 March 2026. This new employment category is a revival and refinement of the previous Schedule F concept, targeting career employees in policymaking, policy-determining, or policy-advocating roles.

OPM estimates that approximately 50,000 positions will be moved into this classification, though there is no explicit limit on future reclassifications. Employees in this category will lose traditional due process rights, including advance notice of removal and the right to appeal adverse actions to the Merit Systems Protection Board. On 5 March 2026, civil service advocates at a virtual Town Hall clarified that while reclassification does not mean an automatic [00:15:00] termination, it removes the independent oversight previously provided by the Office of Special Counsel and the MSPB. Instead, protections against prohibited personnel practices will be enforced through internal agency procedures. In preparation for this shift, the MSPB issued a final rule on 23 February 2026, that will go into effect on 9 March 2026, officially revoking its jurisdiction to hear appeals from employees converted to the Schedule Policy/Career classification. The administration is also moving to overhaul layoff procedures.

[00:15:35] RIF Rules And Pay Fight
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On 4 March 2026, OPM proposed new rules for federal reductions in force that would shift the primary factor for retention from seniority to performance. Under this proposal, an employee’s retention status would be determined by a weighted sum of their three most recent performance appraisals. Currently, tenure is the most important factor, but OPM now labels this practice as [00:16:00] "outdated" and "cumbersome". The proposed rule would also exclude career probationary employees and temporary workers from RIF protections altogether. Public comments on this overhaul are being accepted until 4 May 2026. Amidst these structural changes, the first week of March 2026 saw continued debate over federal compensation.

Federal employees are currently working under a 1 percent across-the-board pay raise for 2026, which is the smallest increase since 2021. Locality pay was frozen at 2025 levels for most employees, though some federal law enforcement officers received a 3.8 percent bump.In response, Democratic lawmakers reintroduced the Federal Adjustment of Income Rates (FAIR) Act on 10 February 2026, which became a focal point of legislative discussion during the first week of March. Sponsored by Representative James Walkinshaw and Senator Brian Schatz, [00:17:00] the bill calls for a 4.1 percent average pay increase in 2027—a 3.1 percent base raise plus a 1 percent boost for locality pay.

[00:17:10] Other Workforce Headlines
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Walkinshaw argued on 5 March 2026 that this raise is essential for the "backbone of America" to keep pace with the cost of living and ensure public service remains a competitive career. Other significant updates for current employees during this week include: On 5 March 2026, OPM launched a new Federal Attorney Career Page and Talent Network to help agencies attract legal professionals. This follows the 3 March 2026 appointment of Kurt Dykstra as OPM’s General Counsel, who will lead the agency’s legal strategy through the upcoming civil service reforms.

On 4 March 2026, OPM and NASA launched "NASA Force," a specialized recruitment initiative to attract top talent to the American space program. On [00:18:00] 2 March 2026, it was revealed that a third-party arbitrator ruled in favor of the AFGE, finding that the Department of Housing and Urban Development violated its contract by cancelling telework for nearly all bargaining unit employees.

On 2 March 2026, the Director of the Office of Federal Contract Compliance Programs informed staff that the agency would undergo a complete reorganization and restructuring, affecting job descriptions across several divisions. The first week of March 2026 also saw the reintroduction of legislation targeting specific groups within the workforce, such as the Federal Correctional Officer Paycheck Protection Act (H.R. 7033 / S. 3626), which would provide a 35 percent base pay increase for Bureau of Prisons staff. This reflects a broader trend of targeted raises for safety and security personnel even as the general workforce faces tighter budgetary constraints.

[00:18:59] Wrap Up And Next Week
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[00:19:00] 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.