Section I What was actually proposed
The President transmitted an alternative pay plan to Congress in August 2026. For most civilian employees it holds both base and locality rates at their 2026 levels — the letter says the rates will not change from the 2026 rates. The stated justification is maintaining fiscal responsibility.
It is not uniform across the federal workforce:
| Who | 2027 under the plan |
|---|---|
| Most civilian employees | Frozen — base and locality at 2026 rates |
| Selected federal law enforcement | 3.8% from January; OPM decides which positions |
| Active duty military | 5–7%, scaled by experience |
| Other uniformed services | 3.6% |
The mechanism is the one FEPCA built in. A president who submits an alternative pay plan by 1 September displaces the statutory formula, and every president since 1994 has done so every year. What is unusual here is not the override but its depth.
The plan sets the intent. The rates become final only when the President signs an executive order, which customarily happens in December.
Section II What it costs you
A skipped adjustment is usually discussed as one year of forgone money. That understates it, because the raise you do not get is also missing from the base that every later raise multiplies.
Year one, at the 3.8 per cent the law enforcement figure implies:
| Grade and step | Rest of U.S. | Washington-Baltimore |
|---|---|---|
| GS-9 step 5 | $2,658 | $3,042 |
| GS-12 step 5 | $3,855 | $4,411 |
| GS-13 step 5 | $4,584 | $5,245 |
| GS-14 step 5 | $5,417 | $6,198 |
Now carry it forward. Assume ordinary 2 per cent adjustments in later years on both paths — so the only difference is the one missing raise:
Ten years on
GS-13 step 5, Washington-Baltimore — $57,430.
And in year ten alone, that GS-13 is still $6,268 behind, every year, permanently.
The gap widens rather than closes, because both paths grow by the same percentage from different bases.
The FERS annuity runs on your high-3 — the highest three consecutive years of basic pay. Within about three years of retiring, a frozen year sits inside that window and lowers the average permanently, because the annuity is set at retirement and thereafter adjusted by COLA rather than recomputed.
Section III Three things that could change it
In descending order of ambition.
The FAIR Act — 4.1 per cent
Introduced earlier in 2026 as HR-7480 and S-3823, the Federal Adjustment of Income Rates Act sets a 4.1 per cent adjustment. It has not been actively considered in the budget process, and it is being pushed by the Federal Workforce Caucus rather than carried by leadership.
A 3.8 per cent floor
More than a hundred House and Senate members have written to leadership asking for a minimum matching what law enforcement is slated to receive. The argument is one of internal consistency: if 3.8 per cent was affordable for some federal employees, the case against it for the rest is harder to make on cost alone.
Retroactive, after January
A raise agreed after the year begins can be applied retroactively, as happened with the 2019 adjustment. The catch is that it needs the same political agreement that was unavailable in December — and by then the executive order has already set the rates.
All three run through appropriations, not standalone legislation. The realistic question is not whether the FAIR Act passes as a bill, but whether a pay figure survives into a funding package.
Section IV The calendar
| When | What happens |
|---|---|
| 11 December 2026 | Continuing resolution expires — the replacement is the likeliest vehicle |
| December | Executive order customarily signed, fixing the rates |
| January 2027 | Rates take effect with the first pay period |
Congress returns from the elections with roughly six weeks before the funding deadline. That is the practical width of the window, and it is narrow for something that is not leadership's priority.
Section V The honest odds
Poor, on the current evidence. Reporting through late September found no sign of movement toward a raise, Republican appropriators have given no indication of departing from the freeze, and the FAIR Act has not been taken up in the budget process.
Representative James Walkinshaw, among those pressing for an increase, put it without varnish: this is going to be a fight, and there is not a guaranteed outcome.
Budget on the freeze holding. Treat any raise as recovered ground rather than expected income. The asymmetry matters: planning for a raise that does not arrive costs you real money, while planning for a freeze that is lifted costs you nothing.
Why one missed year keeps costing
GS-13 step 5, Washington-Baltimore, with 2% adjustments in every later year.
What to do between now and January
- Build your 2027 budget on 2026 rates, including locality.
- Check whether your position falls in the law enforcement category OPM is defining.
- If you retire within three years, model the high-3 effect of a frozen year.
- Revisit your TSP contribution in percentage terms — a frozen salary freezes the dollar amount too.
- Remember a step increase is separate from the annual adjustment and still arrives on schedule.
- So is a promotion; the freeze does not touch either.
- Watch the December funding package rather than the FAIR Act itself.
- If an executive order issues in December, the question becomes retroactivity, not prevention.
Section VI Questions
Not yet, though it is the default outcome. The President transmitted an alternative pay plan in August 2026 stating that base and locality rates for most civilian employees will not change from the 2026 rates. Under the Federal Employees Pay Comparability Act that plan displaces the statutory formula unless Congress legislates otherwise, and the rates are not formally fixed until an executive order is signed, which customarily happens in December. So there is a window, but it closes, and nothing in the process requires Congress to use it.
Selected federal law enforcement positions, which the plan sets at a 3.8 per cent increase from January 2027, with OPM determining which positions qualify. The letter cites critical law enforcement roles and recruitment and retention as the reason. Separately, active duty military members are slated for 5 to 7 per cent depending on experience, and other uniformed service members for 3.6 per cent. The exemptions are what make the civilian freeze politically awkward, because they establish that a raise was affordable for some parts of the workforce.
More than one year of the adjustment, because a skipped increase permanently lowers the base from which every later raise compounds. A GS-13 step 5 in the Washington-Baltimore area earns about 138,000 dollars in 2026, so forgoing a 3.8 per cent adjustment costs roughly 5,245 dollars in 2027 alone. Carry that forward with modest raises in later years and the cumulative shortfall over a decade is on the order of 57,000 dollars for that employee. The same arithmetic at GS-12 in the Rest of U.S. area runs to roughly 42,000 dollars over ten years.
It can, through the high-3. The FERS annuity is computed on the highest three consecutive years of basic pay, so for anyone within roughly three years of retiring, a year at frozen rates sits inside that window and lowers the average on which the annuity is calculated. The effect is permanent, because the annuity is set at retirement and thereafter adjusted by cost-of-living increases rather than recomputed. For employees further from retirement the high-3 effect washes out, but the compounding effect on salary does not.
Three things, in descending order of ambition. Congress could enact the Federal Adjustment of Income Rates Act, introduced earlier in 2026 as HR-7480 and S-3823, which sets a 4.1 per cent adjustment. Failing that, more than a hundred House and Senate members have asked leadership for a floor of at least 3.8 per cent, matching what law enforcement is slated to receive. Or a raise could be agreed after January and made retroactive, which has precedent. Each route runs through the appropriations process rather than standalone legislation.
Because it is when the current continuing resolution expires, and the spending measure that replaces it is the most plausible vehicle for a pay provision. A raise would ride as a policy rider rather than move on its own, so the realistic question is not whether the FAIR Act passes as a bill but whether a pay figure survives into a funding package. Congress returns from the elections with roughly six weeks before that date, which is the practical width of the window.
Yes, and it has happened before, most recently when a 2019 adjustment was agreed after the year had begun and applied retroactively to the start of the pay year. So a deal reached in January or later is not necessarily worthless. The practical difficulty is that payroll systems have to be reprogrammed and back pay computed, which takes time, and that a retroactive fix requires the same political agreement that was unavailable in December, by which point the executive order has already set the rates.
Poor, on the current evidence. Reporting through late September found no sign of movement toward a raise, Republican appropriators have given no indication of departing from the freeze, and the FAIR Act has not been actively considered in the budget process. Representative James Walkinshaw, among those pressing for an increase, put it plainly: this is going to be a fight, and there is not a guaranteed outcome. Plan your own finances on the freeze holding, and treat anything better as recovered ground rather than expected income.