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.

On August 26, 2026, President Donald Trump formalized an alternative compensation plan calling for a pay freeze for most civilian federal employees for 2027. The alternative compensation plan also prevents locality pay increases for feds in the upcoming year. Federal employees received a 1 percent raise in 2026.

FMA National President Linda Lentjes expressed disappointment in the decision, noting the raise federal law enforcement and the uniformed military are slated to receive.

"To be clear, we fully support the raise for the military and the 3.8 percent raise for federal law enforcement, but strongly argue federal employees deserve parity," Lentjes said. "Federal managers swear the same oath to the Constitution and dutifully spend every day maintaining and operating the military enterprise that protects our national security, processing tax returns and Social Security payments, caring for our veterans, protecting our environment and food supply, and countless other services on behalf of all Americans. They deserve to be recognized and compensated fairly."

The Federal Managers Association (FMA) is excited to collaborate with We the Doers on a survey to elicit FMA members’ experiences with employee accountability processes. We the Doers is a nonpartisan project started by two former federal managers to leverage the real-life experiences of non-political current and former managers to improve the federal government's effectiveness, efficiency, transparency, and ability to deliver results for the American people.

This survey seeks to determine why federal managers choose to take action – or not take action – when performance or conduct issues surface. It seeks to understand how often FMLA, RA, EEO, or grievance processes interact with employee accountability processes; the burden on managers’ time; and managers’ preferences for various reforms suggested by We the Doers, OPM, and other entities.

The survey is 100 percent confidential. The survey does not collect any personally identifiable information, and survey responses will only be reported at the aggregate, summary level for the purposes of informing the debate on the appropriate balance between speed and due process in the employee discipline/performance improvement/removal process.

In September, FMA National President Linda Lentjes sent two letters – to Department of the Navy Acting Secretary Hung Cao and Secretary of War Pete Hegseth – expressing our ongoing concerns with salary inversion at the Department of the Navy and potentially elsewhere across the Department of Defense. Lentjes collaborated with FMA members at the four public shipyards and other naval installations on this effort.

This problem is significant, worsening, and increasingly affecting the Navy’s ability to retain and support its management workforce. In recent years, Federal Wage System (FWS) and Wage Grade (WG) employees have received major boosts in pay. We recognize that these increases are an important and well-deserved gain for FWS employees, and we support their receiving fair compensation for their work.

However, it is troubling when managers and supervisors earn less than the very employees they are charged to lead. Morale is understandably suffering among managers who recently accepted promotions and now regret their decisions because they would have earned more at their prior level had they not been “promoted.” This is harming the government's ability to recruit and retain strong leaders. Why would anyone want the extra responsibility and liability of managing people if it means a pay cut?

Democrats won control of the House and the Senate in the November 3 midterm elections and will hold both chambers when the 120th Congress convenes in January 2027, ending unified Republican control of Washington for the final two years of President Donald Trump's term in office.

The outcome shifts the balance of power on Capitol Hill but not the balance of power over the executive branch. For federal managers, the practical effect will be felt in three places: the budget process, congressional oversight, and the debate over the administration's workforce policies. Most existing personnel rules remain in force unless courts or new laws change them.

Democrats will chair the committees that write spending bills, oversee agencies, and confirm nominees. Rep. Robert Garcia (D-CA), the top Democrat on the House Oversight Committee, is widely expected to become its chair.

President Donald Trump signed a continuing resolution (CR) into law on September 2, a measure that funds the federal government at Fiscal Year 2026 levels through December 11. The House of Representatives approved the bill the day before by a vote of 370-48, and the Senate passed it by a vote of 90-6 prior to its August recess.

FMA will closely watch negotiations as Congress returns from the November 3 elections. The election results changes the negotiating posture. Current Republican leadership may try to finish bills before Democrats take over, while Democrats may prefer to push the decisions into 2027. Lawmakers will have only a few weeks to act on full-year appropriations or another continuing resolution before the December 11 deadline. Fiscal Year 2027 began on October 1.

None of the twelve traditional full-year appropriations bills have been signed into law. The stopgap kept federal agencies and departments funded and allowed lawmakers to remain in their states and districts to campaign. With the elections over, that cover is gone, and Congress must now decide how to fund the government for the rest of the fiscal year.

On September 30 the U.S. Senate approved the Taxpayer Assistance and Service (TAS) Act by unanimous consent. The package of 65 reforms aims to modernize the Internal Revenue Service (IRS), strengthen taxpayer rights and improve how the agency administers the tax code. The House of Representatives must act on the bill in the lame duck session of the 119^th Congress or the legislation will effectively die at the end of the current session. The bill could be reintroduced in the 120^th Congress, which will be seated in early January 2027.

Senate Finance Committee Chairman Mike Crapo (R-Idaho) and Ranking Member Ron Wyden (D-Oregon) wrote the bill together. “The process of filing your tax return and receiving your refund should be simple and fast,” Sen. Crapo said in a statement. “These reforms will improve the taxpayer experience and help the IRS better serve Idahoans and all Americans.”

Among the unfinished business Congress needs to address is completion of the Fiscal Year 2027 National Defense Authorization Act (NDAA). While the House passed its version in July by a vote of 216-212, the Senate must pass its version before the two bills can then be reconciled.

“Our national security depends on a ready, capable, and well-equipped fighting force backed by a robust and innovative defense industrial base. The FY27 NDAA delivers that,” House Armed Services Committee Chairman Mike Rogers (R-AL) said in a statement. "Peace Through Strength begins long before the battlefield – it is forged in America’s factories, depots, and shipyards. After years of underinvestment, the FY27 NDAA revitalizes America’s defense industrial base and gives our military the capacity to deter our adversaries and carry out President Trump’s Peace Through Strength Agenda."

On September 30 the Office of Personnel Management (OPM) announced the 2027 Federal Employees Health Benefits (FEHB) Program rates. The open season for health benefits, dental and vision insurance, and flexible spending accounts will be November 9 through December 14, 2026.

The average enrollee share increase for 2027 will be 10.9 percent. This is a 1.4 percent decrease from last year’s increase in the enrollee share (12.3 percent in 2026). The overall average FEHB premium increase will be 9.3 percent. The new health premiums go into effect in January 2027.

Federal retirees and Social Security beneficiaries will see a 3.6 percent cost-of-living adjustment (COLA) in 2027. Retirees under the Federal Employees Retirement System (FERS) will get a 2.6 percent increase. The COLA takes effect December 1, 2026, and will appear in January 2027 payments.

The Social Security Administration (SSA) announced the figure on October 14, following the release of September inflation data. The adjustment is based on the Consumer Price Index for Urban Wage Earners and Clerical Workers (CPI-W). The third-quarter 2026 average was 3.6 percent higher than the third-quarter average a year earlier.

As federal agencies wrap up the first performance cycle under a governmentwide limit on top ratings, the Internal Revenue Service (IRS) has told employees it still needs high performers, even if not all of them receive the rating their work might otherwise earn. The message, sent by an IRS internal consulting office, has drawn sharp reactions from employees, a union and a former IRS human capital chief, and it offers an early look at how the new system is landing with the workforce and the managers who administer it.

An email sent on Friday, October 23, by IRS Chief of Internal Consulting Joseph Ziegler and his deputy, Elizabeth Vonhof, acknowledged that the changes to performance ratings have generated concern, frustration and, for some employees, disappointment. According to reporting by Government Executive, which obtained the message, the officials addressed a question they said had surfaced in employee feedback: if an Outstanding rating may be out of reach, why keep performing at that level?

The email's answer was that a rating label should not determine the quality of work employees choose to do. It said the IRS needs talented people who care about doing their jobs well, stated that a "fully successful" score does not mean mediocre, and cautioned against "deliberately choosing mediocrity" because a particular rating is not guaranteed.

Following final regulations published Thursday, Oct. 29, the Office of Personnel Management (OPM) has formally moved forward with ending its distribution of the Federal Employee Viewpoint Survey (FEVS), which it had overseen for more than 20 years. The final rule makes official a change OPM proposed in July.

Starting with the 2026 survey cycle, agencies are responsible for administering their own employee surveys to assess engagement and organizational climate. The rule requires agencies to submit their survey results to OPM and the Office of Management and Budget. An OPM memo gives agencies 90 days after finishing a survey to provide those results. Agencies may add their own items on engagement, satisfaction, workload and morale, and may run additional “pulse” surveys during the year.

The rule also changes the required content, prescribing ten government-wide questions for annual employee surveys. The previous regulation set a core group of 16 required questions. OPM made no revisions to the 10 questions it first proposed in July.

The Office of Personnel Management (OPM) announced October 19 that it is finalizing a rule to eliminate the 52-week time-in-grade requirement for certain federal employees. The rule takes effect Jan. 14, 2027.

The final rule removes the one-year waiting period for covered competitive-service General Schedule positions at GS-6 and above. It adopts the proposal OPM issued in May substantially unchanged.

Several elements of the existing promotion framework stay in place:

• Qualification standards: Specialized experience and education requirements still apply, and only employees who meet them may be considered.
• No automatic promotions: Employees are not entitled to advance after a year, and agencies are not required to speed up career-ladder promotions.
• Agency discretion: Agencies may still set job-related prerequisites, including a minimum period in grade, through written merit promotion plans, provided they apply them consistently.
• OPM oversight: OPM says it will continue reviewing agency promotion actions as part of its normal oversight.

The Office of Personnel Management (OPM) has revised the essay questions federal job applicants are invited to answer. The change follows a federal judge’s finding that one of the original prompts likely violated applicants’ First Amendment rights.

On September 11, U.S. District Judge George O’Toole issued a stay order directing agencies to remove the question from all hiring announcements, after finding that its inclusion likely violated job applicants’ First Amendment rights. The question, known as “Question Three,” asked candidates which of the president’s executive orders are most “significant” to them. Critics called it a “loyalty question.”

The judge wrote that the question calls for the applicant’s personal views on a political topic and links that view directly to the duties of the desired job. He cited testimony from a Department of Veterans Affairs employee who said she felt compelled to give an answer contrary to her own views for fear that an honest one would hurt her application.