Federal employees are facing growing uncertainty regarding the 2026 General Schedule (GS) pay raise due to various political and economic factors.
While the official decision is still months away, recent signals from the Executive Branch (Trump administration) and ongoing economic discussions point to a heightened likelihood of a significant pay freeze, or at best, a very minimal increase.
Here’s what we know:
- Presidential Budget Proposal: The President’s initial Fiscal Year 2026 budget proposal, released in May, reportedly calls for a freeze in federal employee pay. This sets a somber tone for the upcoming year’s compensation. See this article for what the 2026 GS pay tables could look like.
- Focus on Budgetary Restraint: The current administration’s budget priorities emphasize significant cuts to non-defense discretionary spending, aiming to achieve trillions in savings over the next decade. This austere fiscal approach often directly impacts federal employee compensation.
- Economic Forecasts: Some economic projections indicate a potential slowdown or even a mild recession in late 2025 extending into 2026, which could further tighten federal spending and reduce the appetite for substantial pay raises.
- Congressional Debate: While federal employee unions like NTEU have advocated for an average 4.3% pay increase via the FAIR Act (Federal Adjustment of Income Rates Act) introduced in January 2025, the reality of the legislative process in a climate of proposed budget cuts means such proposals face an uphill battle. Although some congressional committees have pushed back on deep cuts in specific areas, the overall sentiment regarding federal workforce costs remains a key part of the budget debate.
- Military vs. Civilian Pay: Notably, the President’s budget proposal includes a 3.8% pay boost for uniformed military members in 2026, which could create a disparity if civilian pay is frozen, a point federal employee associations are actively highlighting in their advocacy.
What this means for you: While the final decision rests with Congress and will be solidified closer to the start of the new fiscal year on October 1st, or via an Executive Order by the end of the year, the current indicators suggest a very challenging environment for a substantial GS pay raise in 2026.
Stay tuned for further developments as budget negotiations continue on Capitol Hill.