The FED Weekly 15-21 June 2025 (Episode 3)

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 Budget Reconciliation Targets Federal Employees: Congressional Republicans advanced a sweeping budget reconciliation package (nicknamed the “One Big Beautiful Bill”) with major implications for the civil service The Senate’s draft version, released on June 13, preserves controversial provisions forcing new federal hires to choose between giving up merit-based civil service protections or paying substantially higher FERS retirement

contributions Under this plan, future employees who wish to keep their appeal rights and job protections would contribute 14.4% of salary toward their pension (versus 9.4% if they forfeit those rights), dramatically increasing their cost for retirement benefits The bill also mandates a $350 fee for Merit Systems Protection Board appeals (refunded if the employee prevails) and orders audits of Federal Employees Health Benefits (FEHB) family enrollments to remove ineligible participants Notably,

the Senate draft removed several House-passed retirement cuts: it dropped provisions to calculate pensions on a “high-5” salary average instead of high-3, to hike FERS contributions for current employees, and to eliminate the FERS annuity supplement for early retirees, thereby sparing earned benefits that had been at risk The Senate text still includes a far-reaching section granting the President broad authority to reorganize or shutter federal agencies with minimal oversight a move NARFE

warned could let the executive “dismantle… the entire federal government” with limited congressional input Federal employee advocates are sounding alarms: NARFE President William Shackelford criticized the new hire provisions as “converting the civil service into a haven for political cronies,” undermining merit-based hiring AFGE National President Everett Kelley likewise blasted the package as a “big retaliation bill” aimed at civil servants and their unions While pleased that the

Senate rejected cuts to vested retirement benefits, employee groups are urging the Senate to strip out the remaining anti-civil service measures before any final bill is enacted Legal Block on Data Sharing (Privacy Victory): In a win for federal employees’ privacy, a federal court intervened to limit the new Department of Government Efficiency (DOGE).

On June 9, a U.S. district judge granted a preliminary injunction blocking OPM from sharing federal personnel data with DOGE agents The judge found potential privacy and cybersecurity violations in how DOGE was accessing sensitive employee information This order temporarily halts DOGE’s data mining of federal HR systems pending further review.

The DOGE, a White House-created office tasked with cutting government costs, had been aggregating federal employee data to identify “inefficiencies.” Now, thanks to the court’s ruling, personal data of federal workers and retirees held by OPM is off-limits to DOGE unless stronger safeguards are in place. Employee advocates, including NARFE, welcomed the injunction as protecting civil servants from unwarranted intrusions.

The case underscores the ongoing tension between aggressive cost-cutting initiatives and the rights of federal personnel with courts signaling that accountability and privacy cannot be ignored even amid government reorganization efforts Issues That Affect Current Federal Workers A sign marks the headquarters of the Department of Veterans Affairs in Washington, D.C. (February 20, 2025) VA and DoD Workforce Reduction Plans: Federal agencies are grappling with steep staffing cuts under

administration and congressional directives.

At the Department of Veterans Affairs (VA), leadership is moving forward with a plan to reduce its workforce by 15% (approximately 80,000 jobs) to return to 2019 staffing levels VA Secretary Doug Collins held a June 20 town hall acknowledging that “change is always uncomfortable” and bluntly urged unmotivated employees to consider leaving Collins emphasized that front-line health care workers and benefits staff are largely exempt from the cuts, which will instead focus on administrative

overhead and vacant positions.

The VA has already implemented an in-person work mandate (ending pandemic-era telework) and is hiring for critical roles even as it plans for reductions Unions warn, however, that slashing tens of thousands of VA jobs will harm veterans’ services AFGE’s Everett Kelley condemned the cuts as a “no-holds-barred assault on veterans” that will make veterans and their families “suffer unnecessarily” Meanwhile, the Pentagon is facing its own downsizing: the Department of Defense aims to cut

about 5–8% of civilian positions (~50,000 jobs) as part of a “Workforce Acceleration” cost-saving initiative A House appropriations bill for FY 2026 not only funds a 3.8% pay raise for military personnel, but also endorses these civilian cuts trimming $3.6 billion and ~45,000 DoD civilian FTEs in line with DOGE’s recommendations.

To avoid disruptive layoffs, DoD has leaned on a “deferred resignation” buyout program that incentivized 22,000 employees to voluntarily leave in exchange for continued pay through October. However, House Democrats raised concerns about morale and readiness, unsuccessfully proposing an amendment on June 10 to pause the VA’s mass firing plan.

With Congress signaling support, both VA and DoD are pressing ahead making it clear that many federal workers face uncertain job security as agencies “right-size” their payrolls in 2025. OPM Orders Accountability and Ends Telework Flexibilities: The Office of Personnel Management is implementing sweeping workforce policy changes to create a “high-performance” culture across the government.

In a June 17 directive, Acting OPM Director Chuck Ezell announced new performance management standards that apply to all non-SES employees. Agencies must align performance ratings with measurable results and swiftly address poor performers including via reassignment or removal rather than tolerate “failing up” in the system.

Supervisors will receive enhanced training, and by FY 2027 all agencies will use a unified performance appraisal timeline to ensure consistency “Federal employees should be held to the highest standards of performance and accountability,” Ezell stated, underscoring that the administration seeks to reward excellence while rooting out inefficiency. Alongside this push for accountability, OPM has reversed many pandemic-era telework policies.

An Inspector General report released June 20 revealed “rampant” telework abuse under the previous administration’s lax policies at OPM. The IG found that over half of sampled OPM staff failed to meet in-office attendance requirements, and many had missing or expired telework agreements on file In response, OPM’s leadership acting on President Trump’s direction has reinstituted strict in-office requirements.

As of March 3, all OPM employees are required to report to their official work site full-time, effectively ending expanded telework and remote arrangements. “That era of telework abuse is over,” said Ezell, noting that in-person operations have been restored “to ensure federal employees are working for the taxpayers”. OPM has also tightened internal controls to monitor compliance.

These moves at OPM signal a broader government-wide shift back to traditional in-office work norms and a tougher stance on performance—changes that current federal workers nationwide are now experiencing as agency policies quickly come into line with the new administration’s expectations. Supreme Court Expands Pay Rights for Reservist Employees: A recent Supreme Court ruling is poised to benefit federal employees who serve in the Reserve or National Guard.

In Feliciano v. Department of Transportation (decided April 30, 2025), the Court held 5–4 that federal reservists called to active duty during a national emergency are entitled to “differential pay” i.e. the government must make up any shortfall between their federal civilian salary and their military pay regardless of whether their military service was directly related to the emergency.

This clarified that reservists need not prove a “substantial connection” between their service and the national emergency, overturning a previous Federal Circuit interpretation. The case was brought by Nick Feliciano, a Coast Guard reservist and FAA air traffic controller, who had been denied such pay for long-term active duty he performed (unrelated to the 9/11 and Iraq War emergencies).

Thanks to the Supreme Court’s decision, many federal employees who served on active duty orders since 2001 may now file claims to receive back pay for salary differences during their service. Law firms report a surge of inquiries from reservist federal workers who were previously unaware they could be eligible for these payments. The Merit Systems Protection Board, which handles federal pay claims, could see a wave of new cases as a result.

While MSPB lacks a quorum at the moment, its regional offices continue to process initial claims Bottom line: the high court’s ruling reaffirms that federal agencies must fully support employees who perform military duties, and affected feds (past and present) should check if they are owed compensation. OPM and agency HR offices are advising employees of their rights in light of the decision.

Postal Service Labor Developments: In postal workforce news, another major union contract has been secured even as leadership changes loom at USPS. On June 17, the National Rural Letter Carriers’ Association (NRLCA) announced that its members ratified a new three-year collective bargaining agreement running through May 2027.

Two-thirds of rural carriers voted in favor of the deal, which provides annual wage increases, semiannual COLAs, and measures to improve retention of rural carrier associates. “This agreement is economically responsible, fair to our employees and serves the best interest of our customers,” said Acting Postmaster General Doug Tulino, praising the balance of rewarding workers while upholding USPS’s service mission.

Meanwhile, the American Postal Workers Union (APWU) which represents clerks, maintenance staff and others has a tentative contract on the table and began mailing out ballots to its 200,000+ members this week. APWU President Mark Dimondstein urged a yes vote, highlighting that the tentative 36-month agreement locks in yearly pay raises, six COLA adjustments, no-layoff protections for newer employees, limits on outsourcing, and other gains with “no givebacks or concessions.”.

Voting will conclude by July 10. (By contrast, the National Association of Letter Carriers had rejected a proposed contract earlier this year, requiring arbitration to settle terms including wage hikes and COLAs.). In the midst of these negotiations, the Postal Service is preparing for a change at the top.

The USPS Board of Governors, with President Trump’s backing, has selected David Steiner a former Waste Management CEO and FedEx board member as the next Postmaster General, succeeding Louis DeJoy. Steiner is expected to take office in July and has pledged to maintain USPS’s public service mandate and independence.

Postal employees, both unionized and management, will be watching closely as the new PMG inherits the challenges of improving delivery performance, managing costs, and potentially fending off renewed discussions of postal privatization. Overall, this week’s postal news brings reassurance of labor stability (via new contracts covering hundreds of thousands of workers) even as the agency undergoes leadership transition at the highest level.

Issues That Affect Retired Federal Workers Retirement Benefits Protected from Cuts: Federal retirees and employees nearing retirement gained a measure of relief this week as congressional efforts to curtail certain earned benefits were put on hold. As noted above, the Senate’s reconciliation bill omitted several provisions that would have eroded federal retirement benefits for current workers and future retirees.

Proposals passed by the House in May which sought to require all current employees to pay higher contributions toward their pensions, switch the pension calculation from the highest-3 salary years to highest-5 (reducing payouts), and end the FERS annuity supplement for those who retire before 62 did not make it into the Senate’s draft legislation.

The annual COLA for 2025 (paid this past January) was 2.5% for CSRS pensions and 2.0% for FERSand early indicators suggest a modest COLA in 2026 if inflation remains under control (year-to-date CPI-W figures are up about 1.9% through May). Retiree advocacy groups remain vigilant, however.

They note that the budget resolution Congress adopted earlier this year still assumes significant long-term savings from federal retirement programs, which means ideas like raising the FERS contribution rates or altering benefit formulas could resurface in future negotiations.

For the week of June 15–21, retirees can be encouraged that no new cuts have advanced in fact, due to advocacy and Senate pushback, the most harmful proposals were set aside, preserving the stability of federal annuitants’ pensions and bridging supplements. Retired federal employees and those close to retirement will continue to watch legislative developments closely, but this week’s outcomes suggest bipartisan resistance to cutting earned retirement benefits.

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.