The FED Weekly: June 15–21, 2025 report highlights significant developments impacting federal employees and retirees. A major focus is the Senate’s draft of a budget reconciliation bill that preserves controversial measures requiring new federal employees to either pay a higher retirement contribution or forfeit civil service protections. While some proposed retirement cuts were removed—like the switch to a “high-5” pension calculation and elimination of the FERS annuity supplement—provisions granting the President expansive authority to reorganize agencies remain. Federal employee unions have sharply criticized the bill, calling it a threat to merit-based service.

In a legal victory, a federal court blocked OPM from sharing personnel data with the new Department of Government Efficiency, citing privacy concerns. Meanwhile, OPM has rolled back telework policies and implemented stricter performance standards across federal agencies.

The Department of Veterans Affairs and the Department of Defense are both undergoing large-scale workforce reductions, despite union warnings of negative impacts. At the same time, a Supreme Court ruling expanded differential pay rights for federal reservists, potentially triggering new back pay claims.

For retirees, the Social Security Fairness Act's repeal of the WEP and GPO is being implemented, increasing benefits for millions. The Senate’s decision not to include further retirement cuts offers temporary relief to retirees, although advocacy groups remain cautious about future legislative risks.