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 June 3, President Trump signed an executive order formally converting approximately 8,000 career federal workers into his Schedule Policy/Career (Schedule P/C) classification. Schedule P/C is a federal job classification for positions deemed “confidential, policy-determining, policy-making, or policy-advocating character that are not normally subject to change as a result of a Presidential transition.” These employees can no longer challenge adverse actions to the Merit Systems Protection board and are now at-will employees. The rulemaking creating Schedule P/C was finalized in February 2026 and officially took effect on March 8.

While 8,000 employees were included in this initial order, it is expected to be followed by additional tranches of employees as implementation of Schedule P/C continues. Current estimates are approximately 50,000 feds will ultimately be converted into Schedule P/C.

FMA has criticized the creation of this new classification since its initial creation as “Schedule F” in October 2020, and has consistently supported ongoing legislative attempts to block its return. Most recently, FMA submitted comments in opposition to the final rulemaking during the comment period. A full 94 percent of the more than 40,000 comments submitted to the rulemaking were in opposition.

The House of Representatives passed its version of the Fiscal Year 2027 Agriculture funding bill on Thursday, June 4, by a vote of 213-210. This follows its passage of the Military Construction/VA appropriations bill last month, making it the second of the 12 appropriations bills to be approved by either chamber of Congress, needed to fund the coming fiscal year. Including today, June 5, there are 36 legislative days scheduled before the start of Fiscal Year 2027.

In addition to the full House action on Agriculture and MilCon/VA, the House Appropriations Committee has passed FY27 funding bills for Commerce-Justice-Science, Energy-Water, Financial Services and General Workforce, the Legislative Branch, and National Security-State. Interior-Environment and Transportation-HUD appropriations have advanced from their respective subcommittees.

As we’ve reported previously, President Trump did not include a pay raise for federal employees in 2027 as part of his budget request, although he proposed a 5%-7% raise for the uniformed military. The Financial Services funding bill, typically where a pay raise or pay freeze would be included, stayed silent on a pay raise and the House Appropriations Committee rejected an amendment to include a 3.6 percent pay raise offered by Rep. Steny Hoyer (D-MD) by a party-line vote, with 28 Democrats supporting and 32 Republicans in opposition. Subcommittee Chairman David Joyce (R-OH) referenced President Trump’s ability to use an alternative pay plan, calling the committee’s rejection of a pay raise, “the reality of politics, and exactly why we have elections every four years.”

On June 4, the House Armed Services Committee (HASC) passed its version of the Fiscal Year 2027 National Defense Authorization Act (NDAA), H.R. 8800, by a vote of 44-12, clearing the bill for consideration by the full House. The vote followed a marathon mark-up of the Chairman’s Mark, including nearly 900 amendments over 14 hours of consideration. The measure authorizes $1.15 trillion in defense spending for 2027.

H.R. 8800 authorizes a 7 percent pay raise for all military personnel ranked E-5 and below, a 6 percent boost for E-6 to O-3, and a 5 percent raise for O-4 and above, pursuant to President Trump’s budget request.

The initial version of the bill does not include many provisions directly related to civilian personnel. However, it establishes a pilot program to “expedite recruitment of talent in critical technology areas such as artificial intelligence, cybersecurity, business process innovation, biotechnology, materials and manufacturing.” It would also establish a Financial Management Skills Assessment Integrated Product Team in an effort to improve audit readiness at the Department of Defense.

On May 27, the Office of Personnel Management (OPM) proposed new rules requiring all federal employees to sign a nondisclosure agreement (NDA). The new NDA form seeks to “safeguard non-public, confidential, or proprietary information,” feds may obtain through their official duties.

OPM cites a number of recent unauthorized disclosures of sensitive information as the rationale for the new rule, including “leaks related to planned immigration enforcement operations, disclosures of confidential operational details prior to a U.S. action overseas, and the release of personal information belonging to approximately 4,500 ICE employees.”

“The proposed NDA does not create new substantive restrictions on employee speech or disclosure rights,” according to the rule. “Rather, it is designed to provide agencies with a standardized mechanism for employees to acknowledge and agree to comply with obligations that already exist under law and regulation, while expressly preserving rights to make disclosures authorized by law, including protected whistleblower disclosures. The NDA also does not replace or nullify any other nondisclosure agreements an individual may be required to sign in connection with his or her position.”

On May 27, the Office of Personnel Management (OPM) proposed new rulemaking to eliminate the current time-in-grade requirement. Current regulations dating back to 1950 require General Schedule feds to work 52 weeks before they are eligible for a promotion. OPM referred to the current rule as “outdated,” in the proposed rulemaking, which is open for comments through July 27.

OPM argues the proposed rule would “shift federal advancement away from time served and toward merit, performance, skills, and demonstrated readiness for higher-level work.” If adopted, all feds would still be required to meet qualification standards set by OPM and other job-related requirements.

In May 2026, the Government Accountability Office (GAO) released “Opportunities to Reduce Duplication, Overlap and Fragmentation and Achieve an Additional One Hundred Billion Dollars or More in Future Financial Benefits,” its annual report on federal programs, agencies, offices, and initiatives that have duplicative goals or activities. The 2026 report identifies 97 new matters for Congress and agencies to consider for improving efficiency and effectiveness and estimates savings between $132 billion and $251 billion if Congress enacts its proposals.

To view the full 100-page report, click here.

The annual report flags potential savings and makes recommendations related to federal government work on similar or different parts of the same goal (fragmentation), agencies and programs that have similar goals or provide similar services (overlap), and areas where work on the same activities or provide the same services (duplication). Since 2011, congressional implementation of its recommendations has directly resulted in more than $774 billion in financial benefits, as well as improved coordination and reducing mismanagement.

FMA National President Linda Lentjes expressed support for Office of Personnel Management (OPM) oversight efforts while urging strict limits on the collection of individually identifiable health information, citing cybersecurity risks and fears of a chilling effect on workers seeking care. She wrote OPM Director Scott Kupor to outline the concerns related to the collection of sensitive health data and offered recommendations to ensure privacy.

In the letter, Lentjes commended OPM's push to improve carrier accountability, reduce improper payments, and modernize claims processing. She wrote FMA supports enhanced audit capabilities, fraud detection, and stronger carrier performance standards as consistent with OPM's statutory mission.

"Effective government requires both accountability and the protection of individual rights. These goals are not incompatible."