As regular readers of the Washington Report know, this month will prove to be an important month for federal employees curious about a pay raise in 2027. President Trump did not include a pay raise for federal employees in 2027 as part of his budget request, and Congress has not included any language supporting a raise in current versions of the Financial Services funding bill, typically where a pay raise or pay freeze would be included.

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.”

Under the Federal Employees Pay Comparability Act (FEPCA), President Trump is required to submit an "alternative pay plan" letter to Congress by August 31 if he intends to override automatic, formulaic pay raises (which default to base and locality adjustments) for 2027. The August alternative pay plan acts as the definitive mechanism used to set federal civilian salaries, often averting much larger default increases dictated by the FEPCA formula.

Last year, President Trump originally proposed a pay freeze for feds, but issued a 1 percent raise for 2026 in his alternate pay plan.

From a legislative standpoint, FMA has endorsed the Federal Adjustment of Income Rates (FAIR) Act (H.R. 7480 / S. 3823), sponsored by Rep. James Walkinshaw (D-VA) and Sen. Brian Schatz (D-HI). This legislation would provide for an average boost of 4.1 percent pay raise in 2027.