The FED Weekly

(Ep 66) The FED Weekly 30 Aug - 5 Sep 2026
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[00:00:00] Weekly Briefing Intro
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Welcome to The FED Weekly for 30 August - 5 September 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.

[00:00:44] Funding Bill Signed
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[00:00:44]  Issues That Affect Current and Retired Federal Workers
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Issues That Affect Current and Retired Federal Workers

H.R. 6500 — Continuing Appropriations and Extensions Act, 2027

We begin with the most important government-wide development of the week. On 2 September [00:01:00] 2026, President Trump signed H.R. 6500, the Continuing Appropriations and Extensions Act, 2027. The legislation provides temporary fiscal year 2027 funding for federal agencies through 11 December 2026. That means the government will not face the funding lapse that otherwise could have occurred when the new fiscal year begins on 1 October 2026.

For federal employees, the practical consequence is straightforward. Agencies now have appropriations authority to continue operating beyond the end of September. Employees do not need to prepare for an October shutdown resulting from the expiration of fiscal year 2026 appropriations. Most programs and activities will continue at approximately fiscal year 2026 funding levels while Congress works on the regular fiscal year 2027 appropriations bills.

The continuing resolution also contains targeted [00:02:00] exceptions allowing different funding levels or additional flexibility for certain programs, including disaster relief, wildfire suppression, the Indian Health Service, Justice Department activities, small-business lending, and nutrition programs. It also extends several expiring federal authorities and programs involving transportation, cybersecurity, housing, agriculture, veterans benefits, flood insurance, defense production and other government activities.

[00:02:28] Shutdown Deadline Ahead
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This is an important distinction: Congress has prevented an October shutdown, but it has not completed the fiscal year 2027 appropriations process. The next government-wide funding deadline is now 11 December 2026. Between now and then, Congress must either enact regular appropriations legislation, approve another continuing resolution, or some combination of the two. Otherwise, another shutdown deadline will emerge in December.

For current federal employees, the [00:03:00] immediate benefit is stability. A funding lapse beginning on 1 October could have resulted in furloughs for some employees and required other employees classified as excepted to continue working while awaiting appropriations. That immediate uncertainty is now gone. For federal retirees, the effect is more indirect. Federal retirement annuities themselves are not simply dependent on Congress passing a new annual appropriations bill every year. But a shutdown can disrupt administrative operations across government, including customer service, personnel actions and processing at agencies that serve current employees and retirees.

H.R. 6500 therefore provides operational stability across the government through early December. There is another important employee provision contained in the legislation that we will discuss later in this episode: an extension of the overtime-pay-cap waiver for federal wildland firefighters. So the key date to put [00:04:00] on your calendar is now 11 December 2026. Congress has bought itself a little more than two additional months to finish the fiscal year 2027 funding process.

[00:04:11] OPM Workforce Data Update
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OPM Releases New Federal Workforce Numbers

Another significant government-wide development came on 2 September 2026, when OPM released updated Federal Workforce Data covering July. OPM's latest figures show approximately 2.02 million civilian federal employees in the workforce covered by its data. The release is important because it provides another official measurement of the federal workforce following the extraordinary personnel reductions that began in 2025. OPM's workforce-change data now records 139,963 employees as having participated in the Deferred Resignation Program.

That number is particularly useful because various estimates of deferred-resignation participation have circulated since the [00:05:00] program began. OPM's own personnel database now gives us a clearer official picture based on processed personnel actions. There is, however, an important qualification. OPM says some Defense Department components did not initially submit complete June and July workforce data because of a change in data processing. Most of that information has now been received, but some components remain outstanding.

So the July government-wide figures should not be treated as perfectly complete until those remaining records are incorporated. Even with that limitation, the data reinforces a trend we have been following throughout 2026. The federal workforce that exists today is substantially different from the workforce that entered 2025. Deferred resignations, retirements, hiring restrictions, agency reorganizations and other separations have reshaped staffing across the executive branch.

For employees, [00:06:00] the numbers matter because workforce reductions eventually influence workload, promotion opportunities, succession planning, hiring and the ability of agencies to carry out their missions. For retirees, the data helps quantify the scale of the workforce transition many recently retired federal employees experienced firsthand.

[00:06:20] Retiree Updates Quiet Week
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[00:06:20]  Issues That Affect Retired Federal Workers
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Issues That Affect Retired Federal Workers

No Major New Retirement-Specific Policy This Week

For federal retirees, the reporting period from 30 August through 5 September 2026 was relatively quiet. After reviewing developments during the week, there was no major new law or regulation changing the Federal Employees Retirement System or Civil Service Retirement System annuity formulas. There was also no new government-wide OPM announcement during this reporting period changing survivor benefits, retirement eligibility, Federal Employees Health Benefits coverage for annuitants, or Thrift [00:07:00] Savings Plan withdrawal rules.

And importantly, there is no new 2027 federal retiree cost-of-living adjustment number to report this week. We discussed the beginning of the 2027 COLA calculation in Episode 63, when the July CPI-W figure became available. The August inflation number needed for the next stage of that calculation had not yet been released during this reporting period.

Rather than repeat that earlier discussion or present estimates as though they were official, we will wait for new inflation data before returning to the 2027 COLA. The same principle applies to Federal Employees Health Benefits coverage and the upcoming Open Season. Those issues remain important, but unless there is a new premium announcement, rule, eligibility change or other material development, we will not recycle information from previous episodes simply to fill this section.

The one development retirees should keep in [00:08:00] mind from this week's broader coverage is the enactment of H.R. 6500, the Continuing Appropriations and Extensions Act, 2027. That legislation keeps federal agencies funded through 11 December 2026, providing continuity for the government organizations that administer federal programs and benefits. For this week, however, there is no additional retiree-specific action you need to take based on a new federal policy announcement.

[00:08:29] New RIF Rules Effective
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[00:08:29]  Issues That Affect Current Federal Workers
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Issues That Affect Current Federal Workers

OPM's New Reduction-in-Force Rules Are Now in Effect

One of the biggest developments for active federal employees this week is not the announcement of a new rule, but the effective date of rules previously announced. We first discussed OPM's major reduction-in-force and appeals overhaul in Episode 61. The new development this week is that the rules officially took effect on 2 September 2026. That date matters [00:09:00] enormously for employees who could face a reduction in force.

Under OPM's revised RIF regulations, employee performance receives substantially greater weight in determining retention during a reduction in force, while traditional factors such as length of federal service receive less weight than under the previous system. The rules also change where many RIF appeals are heard. For covered employees, qualifying reduction-in-force appeals now go to OPM rather than the Merit Systems Protection Board.

But there is an important grandfather provision. If an agency issued an employee's specific RIF notice before 2 September 2026, the agency generally must process that RIF under the regulations that were in effect when the notice was issued. If the agency issues the specific RIF notice on or after 2 September 2026, the new regulations apply. Under the new appeal system, a covered employee can challenge a RIF action if [00:10:00] the employee believes the agency failed to follow governing law or OPM regulations and that the error caused the employee to suffer a RIF action that otherwise would not have occurred.

Covered RIF actions can include separation, demotion and certain extended furloughs. OPM's Merit Systems Accountability and Compliance organization now serves as the adjudicative body for these appeals. The 2 September effective date also applies to OPM's new procedures involving probationary and trial-period employee appeals and suitability-action appeals. For probationary and trial-period employees, appeal rights remain considerably narrower than those available to most employees who have completed probation.

Appeals generally involve allegations that an action was based on partisan political reasons, marital status, or that the agency failed to follow required procedures involving conditions arising before appointment. The practical message for employees is that 2 [00:11:00] September 2026 is now a dividing line. If you receive a RIF notice, suitability action or probationary termination, do not assume the appeal process is the same one a coworker may have used earlier this year. The applicable procedures can depend on both the type of personnel action and when that action occurred.

[00:11:21] MSPB Discipline Rule Shift
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MSPB Changes the Douglas-Factor Framework for Employee Discipline

Another potentially far-reaching personnel change was finalized on 3 September 2026. The Merit Systems Protection Board issued a final rule titled “Determining the Appropriate Penalty for Federal Employees Charged With Misconduct.” For approximately 45 years, the so-called Douglas factors have played a central role in federal employee disciplinary cases. Those factors came from the MSPB's 1981 decision in Douglas v. Veterans Administration.

The traditional framework identified 12 considerations that agencies and the [00:12:00] Board could use when determining whether a disciplinary penalty was reasonable. Those considerations included issues such as the seriousness of the offense, the employee's past disciplinary record, length of service, work record, consistency of the penalty with penalties imposed on other employees, mitigating circumstances and the potential for rehabilitation. Under the new MSPB rule, the Board will no longer require consideration of all 12 Douglas factors in every misconduct appeal.

Instead, MSPB will determine whether the agency's chosen penalty falls within what the Board describes as the tolerable limits of reasonableness based on the totality of the circumstances in the individual case. The rule becomes effective 5 October 2026. That effective date is critical. The new framework applies to appeals filed with MSPB on or after 5 October 2026.

Appeals already pending before the Board on [00:13:00] that date will continue to be adjudicated under the framework that was in effect when they were filed. For supervisors and employee-relations specialists, this could provide greater flexibility when determining disciplinary penalties. For employees and their representatives, it changes a framework that has been deeply embedded in federal disciplinary practice for decades.

The change does not mean agencies can impose any punishment they choose without review. MSPB will still examine whether a penalty is reasonable under the circumstances. What changes is the requirement that every case be analyzed through the same 12-factor checklist.

[00:13:40] Firefighter Overtime Extended
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Federal Wildland Firefighter Overtime Protection Extended Through 2027

Federal wildland firefighters received an important compensation development this week. The continuing resolution enacted as H.R. 6500, the Continuing Appropriations and Extensions Act, 2027, [00:14:00] extends the special waiver of the federal overtime-pay cap for wildland firefighters through the end of calendar year 2027. This matters because wildland firefighters can accumulate extraordinary amounts of overtime during major incidents and long fire assignments.

Without the waiver, statutory pay limitations can prevent firefighters from receiving full compensation for all the overtime they work. The waiver has been extended several times, and this week's legislation prevents that protection from expiring in the near term. There is also pending legislation that would make the policy more permanent. The House measure is H.R. 9444, the Support our Firefighters Act, and the Senate companion is S. 4271, the Support our Firefighters Act.

The legislation would permanently address the overtime-pay-cap problem for federal wildland firefighters and would establish paid rest-and-recuperation leave following [00:15:00] qualifying wildfire deployments. Under the Senate proposal, covered firefighters could receive three days of paid rest and recuperation leave following a 14-day deployment and four days following a 21-day deployment. The bills have not become law.

For now, the immediate change comes from H.R. 6500: the overtime waiver has been extended through the end of 2027.

[00:15:25] FY2027 Per Diem Increase
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Federal Travel Per Diem Rates Increase for Fiscal Year 2027

Federal employees who travel on official business will see a modest increase in the government's standard lodging reimbursement beginning 1 October 2026. The General Services Administration's fiscal year 2027 per diem schedule raises the standard continental United States lodging rate from 110 dollars to 113 dollars per night. Meals and incidental expense rates will continue to range from 68 dollars to 92 dollars per [00:16:00] day, depending on location.

The standard meals and incidental expense rate remains at the lower end of that range. Per diem rates determine how much federal employees can generally be reimbursed for lodging, meals and incidental expenses while traveling on authorized government business. Many higher-cost locations have their own locality-specific rates, so employees should not assume the 113-dollar standard lodging rate applies everywhere. The new rates take effect with the beginning of fiscal year 2027 on 1 October 2026.

For frequent travelers, a three-dollar increase may not sound substantial. But multiplied across long temporary-duty assignments and thousands of federal travelers, even small changes in reimbursement rates can become meaningful.

[00:16:50] Wrap Up and Subscribe
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And that’s a wrap on this week’s Federal Workforce Roundup. The landscape for federal employees and retirees is constantly shifting, with major [00:17:00] 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. Subscribe wherever you get your podcasts​