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.

In the wake of last weekend’s military attack on Iran, there is a renewed push for Congress to fully fund the Department of Homeland Security (DHS) for Fiscal Year 2026. The continuing resolution funding DHS expired on February 14, 2026.

Sen. James Lankford (R-OK) referenced the need for completing this work on ABC’s “This Week” program, saying, "We need to make sure we're defending the homeland by also funding what's happening here at home."

On February 10, Rep. James Walkinshaw (D-VA) and Sen. Brian Schatz (D-HI) introduced the Federal Adjustment of Income Rates (FAIR) Act (H.R. 7480 / S. 3823), legislation that would provide federal employees with a 4.1 percent pay increase in 2027. FMA swiftly endorsed the legislation, which is comprised of a 3.1 percent raise in base pay and a 1.0 percent boost in locality pay, and serves as a marker for negotiations this year.

Feds received a 1 percent pay raise in 2026, after receiving significantly higher raises in 2024 (5.2 percent) and 2025 (4.6 percent). FMA eagerly anticipates what President Trump will include in his Fiscal Year 2027 budget request. Although required by statute to be delivered by the first Monday in February (February 2 this year), the document has not yet been released.

The Internal Revenue Service (IRS) would receive a major overhaul if bipartisan legislation introduced late last month gets signed into law. On February 26, Senate Finance Committee Chairman Mike Crapo (R-ID) and Ranking Member Ron Wyden (D-OR) introduced the Taxpayer Assistance and Service Act (S. 3931), which would make significant changes to IRS administration and procedures. The legislators say the 162-page bill encompasses proposals recommended by the National Taxpayer Advocate, as well as stand-alone tax administration bills previously introduced by their colleagues. The Senate Finance Committee has primary jurisdiction over the IRS in the U.S. Senate. The goal of the bill is “to improve communication between the IRS and taxpayers, streamline processes for tax compliance and ensure taxpayers have access to timely expert assistance, among other much-needed reforms,” according to a joint press release from the Senators.

“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.”

The House Committee on Oversight and Government Reform unanimously passed the Federal Workforce Early Separation Incentives Act (H.R. 7256), legislation in February that would modernize the federal workforce volunteer buyout program and increase financial incentives. The bill, sponsored by Rep. Nick Langworthy (R-NY), passed by a vote of 43-0.

“Taxpayers deserve a federal government that is efficient, accountable, and appropriately sized,” said Rep. Langworthy in a statement upon introduction. “By ending the 30-year-old cap, and instead tying the retirement incentive to earned income, we will make the VSIP more fair and potentially appealing. This legislation brings a common-sense update to a program that has been frozen in time, giving agencies a better option to reduce costs while treating federal employees fairly.”

As we reported last month, the Office of Personnel Management (OPM) issued a final rule in February creating the excepted service “Schedule Policy/Career” (Schedule P/C) category. It was first introduced as Schedule F in October 2020. Schedule Policy/Career takes effect on March 8.

Feds put in Schedule P/C will lose their traditional civil service protections and ability to appeal performance-based and adverse actions to the Merit Systems Protection Board (MSPB). In addition, these career federal employees will be ineligible for loan repayment options and in most cases barred from receiving recruitment, retention, or relocation incentives, similar to Schedule C and political employees. Schedule P/C employees will remain eligible for performance awards, severance pay, and “critical position pay.”

OPM released guidance for managers and supervisors on managing feds who are reclassified into Schedule P/C. The linked quick reference guide includes more information about what changes for how to manage these positions, what does not change, and your role as a manager when a position you supervise is moved into Schedule P/C.

The Office of Personnel Management (OPM) is proposing to seize appeals process power from the Merit Systems Protections Board (MSPB), including suitability and RIF appeals in new rulemaking. Reaction is mixed, with some supportive of the goal to reduce the time required to handle these cases, while others express concern that consolidating and centralizing these processes limits independent checks.

The purpose of the proposed rule regarding suitability is “to streamline suitability action appeals procedures, thereby improving the efficiency, rigor and timeliness by which OPM and agencies resolve challenges to suitability actions and ensure the integrity and efficiency of the service.” Public comments to the proposed rule are due by March 9.

The end result of the rulemaking would consolidate decision making and give OPM more power over the federal employees’ appeals process.

Another Office of Personnel Management (OPM) proposed rule change would impact how federal managers rank their employees, capping the number of 4’s and 5’s (above average) that can be given to employees – a return to the “forced distribution” quota system that has been prohibited for decades. There is no cap on the number of 3’s or 1’s. The proposed rule also eliminates the ability to rank an employee with a 2 (minimally satisfactory).

The effort is part of the Trump administration’s effort to address inflated ratings and follows communications OPM has voiced since the summer of 2025.

“The ability to measure and assess employee performance enables agencies to reward excellence, address skill gaps, and strengthen accountability,” OPM said. “If relative performance is not accurately measured in an employee’s rating of record, then the entire performance management system across the government is compromised.”

FMA's 88^th National Convention & Management Training Seminar will be held March 22 - 25, 2026, at the Hilton Alexandria Old Town in Alexandria, Virginia. The theme this year is Managing Through Difficult Times. The hotel is conveniently located across the street from the King Street Metro Station and near the FMA National Office.

For the most up-to-date information, including the convention agenda, visit FMA's convention page regularly.

If you have any questions, or to register by phone, please contact Carol Green at cgreen@fedmanagers.org or 703-683-8705.

We look forward to seeing you!