This report provides an update on issues affecting federal managers. As always, I encourage you to visit www.fedmanagers.org on a regular basis for more information on these and other matters.

Also, be sure to look for the monthly FMA Grassroots Update where we offer links to action letters and FMA-PAC matters we do not address in the Washington Report. The grassroots newsletter is sent exclusively to non-governmental email addresses to avoid any Hatch Act violations. If you are not receiving it, contact the national office to provide your non-governmental email address.

Please feel free to provide feedback any time by emailing Greg Stanford at gstanford@fedmanagers.org, or by calling the National Office at (703) 683-8700. Thank you for your membership in FMA. It’s an honor to represent your interests before Congress and the administration.

After weeks of significant activity in the Senate, both chambers passed a modified version of the landmark “One Big Beautiful Act” (H.R. 1), meeting the GOP’s self-imposed deadline of July 4. President Trump signed the bill into law on the holiday.

The bill, considered the centerpiece of President Trump’s legislative agenda, narrowly passed with only Republican votes in both chambers, with Vice President J.D. Vance casting the deciding vote in the Senate. The bill creates or extends significant tax cuts and provides hundreds of billions of dollars of increased spending on defense, border security and energy dominance, among many other provisions which are still coming to light.

The final score from the non-partisan Congressional Budget Office estimates the bill will add $3.3 trillion to the national debt over the next ten years.

In a major development and good news for federal managers, the overwhelming bulk of cuts to federal workforce retirement benefits were removed prior to the bill’s final passage.

With passage of the reconciliation bill complete, Congress is turning in earnest to the Fiscal Year 2026 appropriations process. Five of the twelve appropriations bills (Agriculture, Defense, Homeland Security, Legislative Branch, and Military Construction-Veterans Affairs) have advanced out of the House Appropriations Committee, and one, the Mil-Con funding bill, has passed the full House. The House is also preparing to consider the Defense appropriations bill (H.R. 4016) as soon as next week.

In the upper chamber, on July 10 the Senate Appropriations Committee advanced two spending bills – Agriculture and Legislative Branch.

Senate Armed Services Subcommittees are wrapping up consideration of their portions of the Fiscal Year 2026 National Defense Authorization Act (NDAA) this week, with the full committee meeting in a closed markup not available to the public.

The House of Representatives is scheduled to mark up its version of the bill on July 15. Click here to access information about the House version of the bill on the House Armed Services Committee website. This link takes you directly to the full text of the Chairman’s Mark of the bill.

Much was also discussed about defense provisions in the recently passed One Big Beautiful Bill, which includes $150 billion in new funding “to strengthen our national defense and implement President Trump’s visionary Peace through Strength agenda.”

Federal employees will see a pay freeze in 2026 based on President Trump’s initial budget request for Fiscal Year 2026, released in early May, and additional details included in a technical supplement released in June.

This is a blow for federal employees, who already earn nearly 25 percent less than their counterparts in the private sector, but it is not yet the end of the process. Next month, President Trump will send his annual alternative pay plan letter to Congress, which could include a pay boost.

The uniformed military is slated to receive a 3.8 percent pay boost in 2026.

On July 7, President Trump further extended the hiring freeze he originally implemented on January 20. The hiring freeze for all civilian positions is now effective through October 15, 2025. The freeze prohibits filling any vacant federal civilian positions or creating new ones. The original freeze was good through April 20; however, it has now been extended twice.

The most recent extension maintains exemptions for positions involving immigration enforcement, national security, or public safety. It also does not apply to the Executive Office of the President or any of its components. The order continues a prohibition on contracting work to get around the hiring freeze.

When the freeze is eventually ended, agencies will be allowed to hire one new hire for every four employees who leave federal service.

Federal agencies may resume mass reductions in force (RIFs) directed by President Trump following a July 8 Supreme Court order and opinion reversing a lower court order. Many agencies are expected to quickly cut their staffs with this development, as several dozen agency RIF plans were on hold pending the legal challenge and injunction.

The plaintiffs who had previously won the injunction argued the administration needed congressional approval for its reorganization plans – including mass RIFs – announced by President Trump in February. The administration successfully argued President Trump is acting within his powers as the chief executive.

Office of Personnel Management (OPM) Acting Director Charles Ezell issued a memo on June 17 titled “Performance Management for Federal Employees,” aimed at driving a “high-performance, high-accountability” culture in the federal workforce. The memo outlines new standards across the government for performance management, awards programs, and resolving poor performance.

“For many decades now, performance management across the federal workforce has fallen short of what the American people should expect,” Ezell wrote. “Too often, this has resulted in a lack of accountability and inflated performance ratings. Federal employee performance ratings should be normalized and reflect individual contributions to organizational results and outcomes.”

To view the full memo, click here.

President Trump issued a “Return to In-Person Work” executive order eliminating telework for most federal employees on day one of his second term. Nevertheless, on June 17 the Government Accountability Office (GAO) published a report and recommendations urging the Office of Personnel Management (OPM) to issue new guidance for agencies offering remote work.

As of June 2024, approximately 200,000 feds – around nine percent of the federal workforce – worked remotely across the country. GAO notes OPM canceled its August 2024 guidance that agencies assess remote work’s “effects on their mission, recruitment and retention, making it less likely agencies will understand its effects on outcomes and operations.”

On July 9 the Senate confirmed Scott Kupor as Director of the Office of Personnel Management (OPM). The chamber voted 49-46 to confirm him on a largely party-line vote. Sen. Lisa Murkowski (R-AK) voted no on his nomination. Kupor will take the reins at OPM from Acting Director Charles Ezell.

Kupor previously worked as a management partner at venture capital firm Andreessen Horowitz. At his confirmation hearing in April, he testified that federal government layoffs and other “tough choices” are necessary, but said, “I think the process is one that requires transparency and communication, and we need to recognize and respect the humanity of the workforce.”

The Senate confirmed former Missouri Congressman Billy Long as the Internal Revenue Service (IRS) Commissioner by a vote of 53-44. As a Congressman, Long cosponsored legislation to abolish the embattled agency he will now run.

Long was confirmed by the Senate on June 12 and sworn in as the 51st Commissioner of the IRS on June 16. He Long served as a U.S. Representative for Missouri’s 7th district from 2011 to 2023. He worked as a real estate broker for 32 years prior to this service. He also worked as a radio host and an auctioneer, with the distinction of being inducted into the National Auctioneers’ Association Hall of Fame. He notably went viral demonstrating his auctioneer skills at an Energy & Commerce Committee hearing to quiet a protester who was causing a disturbance.

The Merit Systems Protection Board (MSPB), the panel created to adjudicate federal employee appeals to firings and other disciplinary actions against feds, is facing an unprecedented spike in cases and still has no quorum to resolve cases.

The three-person board has only one board member, after President Trump fired Cathy Harris – whose term was supposed to run through March 2028 – and Raymond Limon’s retirement. That leaves Henry Kerner the lone Senate-confirmed board member. The agency’s administrative judges can hear cases and issue initial decisions, however the board cannot finalize any cases without a quorum. The body did not have a quorum from 2017 to 2022, resulting in a backlog of nearly 3,800 cases.

As we have previously reported, the Social Security Administration (SSA) is continuing to process payments as part of the implementation of the Social Security Fairness Act, legislation FMA helped pass to repeal both the Government Pension Offset (GPO) and the Windfall Elimination Provision (WEP).

As a result of the law, signed by former President Joe Biden in January 2025, the GPO-WEP repeal gives larger Social Security payments to more than three million civil servants, retirees, and spouses.

An SSA official noted providing these benefits restored by the Social Security Fairness Act is a “priority workload,” via exclusive reporting by Federal News Network. To date, the agency has provided more than $15 billion to more than 2.3 million people impacted by the provisions the bill eliminated. SSA expects to finish updating all records for more than 3.2 million people impacted by the Social Security Fairness Act by early November 2025.