Speaker of the House Mike Johnson (C) speaks to journalists as he walks from the House floor to his office in the US Capitol in Washington, DC, USA, 19 May 2025. The House Budget Committee approved President Trump's "big, beautiful bill" on 18 May, with Speaker Johnson swaying Republican opponents by promising changes yet to be publicly disclosed. Johnson has said he'd like to pass the bill on the House floor by Labor Day. Image: SHAWN THEW/EPA-EFE/Shutterstock
By: FEDweek StaffUPDATED: The House has passed a sweeping tax and spending bill on a 215 – 214 vote that sends it to the Senate where similar divisions within the GOP regarding deficit spending and Medicaid are being played out.
As the bill was being readied for the House floor vote, Republican leaders deleted from the bill a provision to require that annuities of federal employees retiring in calendar year 2028 or later be based on the employee’s highest five consecutive salary years rather than the currently used highest three.
Those leaders earlier had deleted a plan to require about half of federal employees to begin paying more toward their future retirement benefits. That would have required all FERS employees to pay 4.4 percent of salary toward their annuity, phased in over two years starting in January for those who were hired before 2014.
Those moves were designed to attract the votes of several more moderate Republicans who had objected to what they had termed as changing the rules of in mid-game. The leadership earlier had delayed original language to make the high-5 provision effective with retirements in calendar year 2027 or later, but last-minute revisions ahead of the floor vote dropped it entirely.
However, the bill still contains language, although also softened, to generally end the FERS “special retirement supplement.” That is an additional benefit beyond the civil service annuity for FERS employees who retire before age 62 that duplicates the value of Social Security benefits they earned through federal employment until they reach that age and can begin drawing Social Security.
The bill in its original form would have ended that benefit for all employees who retire as of the date of enactment except for mandatory retirees. That had been amended several days before the vote to state that all employees under special retirement provisions that include mandatory retirement—primarily law enforcement officers, firefighters and air traffic controllers—are to retain that benefit regardless of whether they had reached mandatory retirement age when retiring.
For those not exempt from the repeal, the effective date further was changed to affect new retirements in 2028 and after, rather than after enactment.
The measure also would require most of those newly hired after enactment to choose either to serve as at will employees or to contribute an additional five percent of their salary toward their retirement, now also specifically exempting positions under the special retirement provisions.
The bill also contains two other workforce-related provisions, which have not been changed since the original: to impose a fee for filing challenges to personnel actions before the MSPB; and to order tighter scrutiny of ineligible persons being carried as family members in FEHB enrollments.
House passage sends it to the Senate, where the course and timing are uncertain. Although the bill is designed so that only a simple majority is needed there for passage, Senate Republicans have similar internal differences to those in the House.
One additional complication is that the bill is the vehicle for raising the debt ceiling, which must be increased by about early July to stave off a default. The ceiling technically has been breached since early in the year but the government has been using various financial maneuvers–whose value is nearly exhausted.
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