What's Happening?
President Trump has proposed a 1% pay increase for federal employees, with a larger raise for certain law enforcement officers. This proposal is part of an alternative pay plan submitted to Congress, which aims to freeze locality pay for 2026. The plan directs the Office of Personnel Management to determine which federal law enforcement categories will receive a 3.8% base pay increase, aligning with expected military raises. The National Treasury Employees Union has criticized the proposal as inadequate, advocating for a broader pay raise for all federal employees. Historically, Trump has proposed pay freezes during his first term, which Congress overruled, providing raises between 1.4% and 2.6%. The Federal Salary Council reported that federal employees earned 24.72% less than their private sector counterparts in 2024.
Why It's Important?
The proposed pay raise is significant as it impacts over a million federal workers, affecting their financial well-being and morale. The disparity between federal and private sector pay could influence the government's ability to attract and retain skilled workers. The criticism from employee unions highlights the ongoing debate over fair compensation for federal employees, which could lead to legislative action. The decision also reflects broader fiscal policies aimed at reducing federal spending, which may have implications for public services and government efficiency.
What's Next?
President Trump is expected to issue an executive order in December to formally implement the alternative pay plan. Congressional appropriators have yet to include employee pay language in their funding bills for fiscal 2026, leaving room for potential legislative changes. The National Treasury Employees Union plans to continue advocating for a higher pay raise, urging Congress to override the president's proposal. The outcome of these efforts could affect federal employee compensation and influence future budgetary decisions.
