The FED Weekly 22-28 June (Episode 4)

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.