Potential 2026 funding bills may instigate alterations within the federal workforce.
The 2026 appropriations cycle is set to become a pivotal moment in shaping the future of the federal workforce, as it marks the next window for the Trump Administration to institutionalize agency reorganization efforts that were initiated by the DOGE. This cycle is expected to significantly influence the relationship between Congress, the courts, and the executive branch, both in the short and long term.
The federal workforce provisions originally included in the One Big Beautiful Bill Act were removed from its final version prior to enactment, meaning they are not advancing in 2025. As a result, any changes or new measures affecting the federal workforce are expected to be addressed through the FY 2026 appropriations process or other legislative vehicles.
In the wake of a recent Supreme Court decision, the Trump Administration is anticipated to pursue agency reorganizations and workforce reductions, particularly in environmental and energy agencies, with increased momentum. This anticipation has led to uncertainty and anxiety among federal workers in these sectors.
The House is expected to put forward appropriations bills similar to the president's budget, potentially with slightly higher defense spending. However, the Senate's approach to appropriations bills is still unclear, and they will provide a sign before starting markups. The Senate is starting first markups for the 2026 appropriations bills, but they have not agreed on top-line defense and nondefense numbers yet.
A new rule from the Office of Personnel Management (OPM) about suitability and fitness determinations for federal employees has been proposed, which could greatly expand the ability to take adverse actions on employees with limited appeal rights. The comment period for this rule has been extended, and a final rule is expected to be issued after the comments are assessed.
The President has used reconciliation to bypass the normal appropriations process and plus up funding for defense and homeland security functions. However, a rescissions request for fiscal year 2025, currently under consideration by the Senate, could affect bipartisan negotiations in the Senate. The deadline for this request is July 18.
The proposed OPM rule could potentially limit potential appeals rights and politicize the civil service by providing a way to get around termination requirements. Removed provisions from the One Big Beautiful Bill Act included cuts to earned federal benefits, policies to encourage dropping civil service protections, increases in retirement contributions, fees for Merit Systems Protection Board appeals, and choices between at-will employment or further pay cuts for new hires.
It is important to note that the proposals that did not have enough political support to pass are less likely to be reintroduced in the short term. The dynamics surrounding federal reorganizations and reductions in force, discussed by John Hatton, further underscore the ongoing uncertainty in this area.
In conclusion, the 2026 appropriations cycle is set to play a crucial role in shaping the federal workforce landscape. The Trump Administration's agency reorganization efforts, the OPM rule on suitability and fitness determinations, and the budget proposals are all factors that will contribute to this shaping process. The Senate's approach to appropriations bills and the potential impact of the rescissions request are aspects to watch closely in the coming months.
- In light of the forthcoming 2026 appropriations cycle and the Trump Administration's expected pursuit of agency reorganizations, there is a need for the federal workforce to undergo workforce reimagined, focusing on education-and-self-development to adapt to the changes in civil service.
- The proposed OPM rule about suitability and fitness determinations for federal employees, if implemented, could impact the civil service protections of the federal workforce, potentially creating uncertainty and anxiety among its members.
