The FED Weekly

(Ep 67) The FED Weekly 6-12 Sep 2026
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[00:00:00] Weekly Briefing Intro
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Welcome to The FED Weekly for 6-12 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]  Issues That Affect Current and Retired Federal Workers
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Issues That Affect Current and Retired Federal Workers

[00:00:48] OPM Workforce Overhaul
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The Office of Personnel Management used this week to provide a clearer picture of where federal workforce policy is heading after the rapid personnel reductions and executive actions that dominated [00:01:00] 2025 and the first part of 2026. OPM Director Scott Kupor said the agency is now increasingly focused on longer-term structural changes involving performance management, employee surveys, recruiting, and government-wide human-resources technology. This is important because some of these initiatives have been discussed separately during previous episodes. The new development this week is the clearer implementation roadmap OPM provided on 11 September 2026.

[00:01:30] Performance and Surveys
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One major priority is implementing the government's new performance-management system. OPM finalized regulations earlier this summer that allow agencies to limit the percentage of employees receiving the highest performance ratings. We have previously discussed those regulations and the fact that agencies are already preparing for the new system. This week, Kupor said OPM has been meeting with senior agency human-resources officials to work through implementation [00:02:00] and will conduct another round of implementation feedback. OPM also intends to track how agencies use the new performance system so it can determine whether the changes are producing the results the administration expects.

Another major initiative involves the Federal Employee Viewpoint Survey, or FEVS. The government canceled the government-wide FEVS in 2025, and OPM is now shifting much of the responsibility for surveying employees to individual agencies. Rather than OPM administering the same lengthy government-wide survey, agencies will have greater flexibility to design surveys around their own workforce needs while still asking certain required questions. OPM is also encouraging agencies to survey employees more frequently rather than relying on one annual survey.

The practical impact for federal employees could be noticeable. Employees at different agencies may begin receiving substantially different [00:03:00] workforce surveys. Questions may increasingly focus on whether employees understand agency objectives, whether supervisors hold poor performers accountable, whether high performers are recognized, and whether management communicates effectively.

[00:03:15] Recruiting and HR Tech
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OPM is also moving toward more centralized recruiting. Rather than having every agency independently recruit for common occupations, OPM wants to conduct broader recruiting campaigns and create shared lists of qualified applicants that multiple agencies can use. That approach could become especially important for occupations such as human resources, information technology, cybersecurity, and other skills needed across government. Finally, OPM provided another update on its effort to consolidate federal human-resources technology.

The federal government currently operates scores of separate HR systems. OPM is pursuing a government-wide platform that could eventually handle personnel transactions across [00:04:00] agencies. OPM expects the first agencies to begin moving toward the new system this fall, with early versions operating in 2027. For current employees, these changes could affect everything from hiring and promotions to performance reviews and personnel records.

For future retirees, modernization of personnel records is also important because accurate service history, pay records, insurance elections, and retirement deductions are essential when OPM eventually calculates an employee's annuity. The larger story is that the federal workforce transformation is moving into another phase. The focus is shifting from simply reducing headcount toward rebuilding the systems used to recruit, evaluate, manage, and retain the employees who remain.

[00:04:48]  Issues That Affect Retired Federal Workers
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Issues That Affect Retired Federal Workers

[00:04:51] 2027 COLA Update
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August Inflation Moves the 2027 COLA Estimate Higher. We now have the second of the three inflation numbers that will determine the [00:05:00] 2027 federal retiree cost-of-living adjustment. On 11 September 2026, the Bureau of Labor Statistics released its August Consumer Price Index data. The Consumer Price Index for Urban Wage Earners and Clerical Workers — the CPI-W — reached 328.481 in August. That was up 0.4 percent during the month before seasonal adjustment and approximately 3.5 percent compared with August 2025. For federal retirees, however, the most important calculation involves the third-quarter average.

Federal retirement COLAs are determined by comparing the average CPI-W for July, August, and September 2026 with the average from the third quarter of 2025, which was 317.265. We now know two of those three numbers. The July CPI-W was 327.104. The August figure is 328.481. September remains unknown.

Using the inflation [00:06:00] data available through August, the current trend is pointing toward approximately a 3.5 percent COLA for Civil Service Retirement System retirees and Social Security beneficiaries. But that does not mean the 2027 COLA is officially 3.5 percent. We still need September.

The Bureau of Labor Statistics is scheduled to release the September CPI report on 14 October 2026. Once that final number is available, the average of July, August, and September can be compared with last year's third-quarter average, and the official adjustment can be calculated. There is another important distinction for retirees under the Federal Employees Retirement System. FERS does not always provide the same COLA as CSRS and Social Security. Under current law, if the measured inflation increase is more than 3 percent, eligible FERS retirees generally receive one percentage point less.

So if the final CSRS and Social [00:07:00] Security COLA were ultimately 3.5 percent, the corresponding FERS COLA would generally be 2.5 percent. Again, that is an illustration based on the current trend — not the official 2027 adjustment. September inflation could move the final figure higher or lower. This week's development is important because we have gone from one preliminary month to two. The estimate is therefore becoming more informative, although it is still incomplete.

For retirees receiving Social Security as well as a federal annuity, remember that the Social Security COLA and the CSRS adjustment normally track the same inflation percentage, while the FERS annuity may receive the reduced formula. The key date now is 14 October 2026. That is when we should receive the September CPI-W figure and finally be able to calculate the 2027 COLA rather than estimate it.

[00:07:56]  Issues That Affect Current Federal Workers
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Issues That Affect Current Federal Workers

[00:07:59] Hiring Loyalty Question Blocked
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One of the [00:08:00] week's biggest federal workforce decisions came from the United States District Court in Massachusetts. On 11 September 2026, Judge George O'Toole blocked the Trump administration from continuing to require federal civil-service applicants to answer a question about how they would help advance the President's executive orders and policy priorities. The question was part of the administration's Merit Hiring Plan.

Applicants were asked to identify one or two presidential executive orders or policy initiatives that were meaningful to them and explain how they would help implement those policies if hired. OPM had maintained that answering the essays was optional and that applicants should not be rejected simply for leaving them unanswered. But unions challenging the policy produced evidence showing that, for some vacancies, applicants could not complete the online application without responding.

The plaintiffs [00:09:00] included the American Federation of Government Employees, the American Federation of State, County and Municipal Employees, and the National Association of Government Employees. They argued that the question effectively became a political test for employment in the nonpartisan career civil service.

Judge O'Toole concluded that the unions were likely to succeed in showing that the government lacked a legitimate interest in investigating the political beliefs of applicants for ordinary civil-service positions. He also found that the policy likely violated the Administrative Procedure Act because of its effect on First Amendment speech rights. The scope is significant. Plaintiffs estimated that the question had appeared on more than 70,000 federal job postings.

The vacancies were not limited to political or policymaking positions. They included jobs ranging from air-traffic-control specialists to crane operators and [00:10:00] nuclear-materials couriers. For federal employees seeking promotions or transfers, and for outside applicants trying to enter government service, the immediate development is that continued use of this particular question has been blocked by the court.

The litigation itself may continue, and the administration may appeal. But for now, this represents a significant judicial limitation on one part of the administration's Merit Hiring Plan.

[00:10:27] FEMA Cuts Ruled Unlawful
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A second major workforce ruling arrived this week involving the Federal Emergency Management Agency. On 12 September 2026, U.S. District Judge Susan Illston ruled that the Department of Homeland Security acted unlawfully when it directed FEMA toward cutting its workforce approximately in half. The case centers partly on thousands of FEMA disaster-response reservists who work on temporary appointments and can be activated when major hurricanes, wildfires, floods, and other disasters occur.

[00:11:00] The Department of Homeland Security had restricted FEMA's ability to renew many of those appointments. Judge Illston concluded that DHS improperly interfered with FEMA's authority over its own personnel.

A federal law enacted following Hurricane Katrina prohibits DHS from substantially reducing FEMA's authorities, responsibilities, or functions.

According to the court, FEMA projected staffing of approximately 11,383 employees for the coming fiscal year — roughly half its previous staffing level — without adequate justification for selecting that number. This week's ruling does not immediately establish exactly how many employees FEMA must retain. The judge said remedies will be determined separately, and the parties will have an opportunity to argue about what relief the court should order.

That distinction is important. The court has determined that the workforce-reduction approach violated federal law, but the practical remedy is [00:12:00] still to come. For FEMA employees, reservists, and other DHS personnel, this is therefore a major ruling but not necessarily the final chapter. We will return to this case when the court determines what DHS and FEMA are actually required to do.

[00:12:16] USDA Relocation Lawsuit
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Another important workforce battle is underway at the Department of Agriculture. On 8 September 2026, four federal employee unions filed a new lawsuit seeking to stop USDA's planned reorganization and relocation of employees. The plaintiffs include AFGE, AFSCME, the National Federation of Federal Employees, and the National Treasury Employees Union.

The reorganization could ultimately move thousands of Washington-area USDA employees to regional hubs elsewhere in the country. USDA expects that no more than about 2,000 of the 4,600 employees currently working in the National Capital Region will remain there after the restructuring. The [00:13:00] unions argue that USDA is proceeding without required congressional authorization and that forcing employees to relocate will cause additional loss of experienced personnel and institutional knowledge.

The issue became more urgent this week because some employees have already received management-directed reassignment letters. At a hearing on 10 September, U.S. District Judge Vince Chhabria indicated that he intends to issue a brief administrative stay while he reviews the case. The judge said the temporary pause would not indicate how he intends to decide the merits. Instead, it would give the court additional time to review a complicated dispute before employees begin reporting to new locations.

Approximately 200 employees reportedly face new reporting dates beginning 21 September 2026, while others have later relocation dates. The next major hearing is scheduled for 29 September 2026. [00:14:00] For USDA employees affected by reassignment, this case is now particularly important because court action could directly affect when — or whether — some relocations proceed.

[00:14:11] RIF Rules Performance Points
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Finally, we have an important follow-up to last week's discussion of OPM's new reduction-in-force regulations. Episode 66 covered the fact that the rules took effect on 2 September 2026. The genuinely new development this week is detailed guidance explaining how agencies must actually rank employees. Under the new system, performance ratings translate directly into retention points. An employee rated at Level 5 receives seven points. Level 4 receives five points. Level 3 receives three points. Levels 1 and 2 receive zero points. Veterans' preference points are then added.

Tenure and length of federal service — factors that historically played a much larger role — now function primarily as tiebreakers. OPM also [00:15:00] confirmed that competitive-service and excepted-service employees will generally be placed on separate retention registers. And another longstanding RIF feature has disappeared. The traditional bump-and-retreat system is no longer part of the process. Instead, affected employees generally have a single right to reassignment when they meet qualification requirements.

Probationary employees and employees in certain political or excepted-service categories are excluded from the normal RIF procedures. These details make clear why performance ratings will matter far more than they did under the previous RIF system. They also demonstrate why OPM's separate overhaul of performance evaluations is so consequential. The government's performance-rating system and its RIF system now operate much more directly together.

For employees, that means your performance rating can affect more than recognition or an award. Under the new system, it can materially influence your [00:16:00] position on a retention register if your agency later conducts a reduction in force.

[00:16:05] 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 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​