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The 2027 White House budget proposal has
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proposed a 7% pay raise for members of
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the military, but no pay raise for
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civilian federal employees. If that
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ultimately comes to pass, that would be
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a stark departure from traditional pay
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parody between those two groups. Let's
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talk about the details.
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Hello everyone, I'm Ian Smith with
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fedsmith.com and I wanted to bring an
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update to you today about the White
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House's 2027 budget proposal that was
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just released at the end of last week.
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I'm recording this on Saturday, April
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4th. Happy Easter weekend to you. Um,
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and the the budget proposal came out and
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as I said, it proposed a 7% pay raise in
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2027 for members of the military, but it
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was silent on the matter of a pay raise
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for civilian federal employees. That
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doesn't mean that's ultimately for sure
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what's going to come to pass, but it it
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certainly looks like that's what the
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White House is proposing. So what this
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um lack of a pay raise signals is three
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things primarily. Fiscal restraint and
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that is that the administration is
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prioritizing cost cutting or shifting
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funds elsewhere namely the military in
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this case. Um it's also not a high
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priority. Civilian pay is is not a
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near-term policy focus for the Trump
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administration. And also it would be the
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default. So unless Congress steps in to
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authorize a pay raise on their own, then
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what will happen as part of the annual
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pay raise process is it will default to
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whatever the president has proposed or
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not proposed in this case. Now, if you
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take a look at this table, this is the
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pay raise for the military and federal
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employees for the last few years. And it
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shows how the the pay gap between
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military and current federal employees
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is widening. In 2024, you can see the
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pay raises were equal, but in 2025, a
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clear gap begins to emerge between the
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two. Um, and in 2026, it widened even
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further, as you can see, 3.8 versus 1%.
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And then again, if the 2027 proposal
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were to come to pass, then that would be
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the largest gap yet. And the impact of
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course of this is it it leads to pay
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compression and can hurt morale among
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the federal workforce. Congress so far
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is not silent on the matter of a pay
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raise. The Fair Act was introduced again
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this year. That's a bill that has been
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proposed every year for about a decade
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now. Historically was proposed by
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Senator Brian Shatz, a Democrat from
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Hawaii, and Congressman Jerry Connelly,
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a Democrat from Virginia. And
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Congressman Connelly, of course, passed
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away not that long ago, but another
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congressman has taken up introducing the
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since that time. And it wasn't
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introduced again this year. And the
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proposal was for an average 4.1% pay
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raise. It would be a 3.1% acrosstheboard
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raise plus 1% average locality pay
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increase. So it's at least a starting
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point for a negotiation. I did another
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video on the Fair Act. I'll leave a link
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to that in the description if you'd like
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more details. I've also got an article
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about it on the fedsmith.com website.
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Like I said, it's a starting point. The
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Fair Act has never become law and the
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raise is usually lower than what's
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proposed in the Fair Act. It shows some
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interest on the part of Congress and
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it's possible Congress might step in
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sometime during the year and enact
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legislation for a pay raise for federal
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employees. Certainly with a gap as big
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as 7% versus 0% that's an argument in
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favor of pay par. That's an argument
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you'll hear. Well, if the military is
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getting this amount, then federal
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employees should get a higher amount for
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equality sake. So, what are the likely
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2027 scenarios as a result of this?
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Well, one possibility is um if Congress
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happens to defer to the president's
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budget, namely that they don't take any
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action and there is that becomes the
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default raise. Another possibility
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that's probably most likely is some kind
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of compromise. And um also, President
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Trump as part of that, he could offer us
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a surprise. Last year, for instance, the
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same thing happened. When the White
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House's budget proposal came out in the
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spring, it was silent on the matter of a
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pay raise. But then in August, when
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President Trump issued his annual pay
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plan letter, there was a surprise in it,
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and he proposed a 1% pay raise for most
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federal employees. And that's what ended
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up happening. And some federal employees
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did end up getting a higher pay raise in
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federal employees in law enforcement.
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But um that could happen again. There
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could be a surprise or um Congress could
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step in, negotiate it, pass some kind of
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legislation. And another possibility is
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that um there's enough political
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pressure or a major shift in economic
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conditions and you end up with like a 3
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to 4% raise. Um, that's unlikely, but
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it's it's certainly a possibility. And I
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I forgot to mention in the the second
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a 1 to 2% raise would probably be the
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most likely in that scenario. And again,
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that's what happened last year. One
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other point I'd like to make on this.
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This is not a COLA. We're talking about
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the pay raise here for current federal
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employees. COLA stands for cost of
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living adjustment, and that only applies
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to retired federal employees. When this
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topic comes up, a question we often will
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get is,"Well, what about retired federal
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employees? Will we get this raise also?"
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The answer is no. This is only
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applicable to current federal employees.
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And even for current federal employees,
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as I said, this process plays out during
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the year. It's a political process. But
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if you're a retired federal employee,
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you get a a cost of living adjustment, a
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COLA. It's determined by an automatic
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formula every year, but we'll find out
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what the COLA will be in October. So,
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that's a general overview of the
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situation. As I said, the budget
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proposal was silent on the matter of a
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raise for federal employees, but it did
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propose a 7% pay raise for the military.
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How that will ultimately play out for
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both groups is yet to be determined, but
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this is a starting point in the process
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and we'll of course continue to keep you
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updated on this as more information
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becomes available. So, stay tuned here
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to our YouTube channel and also visit
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the fedsmith.com website because we have
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articles on this and other topics. And
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we have written an article on this
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particular topic and I'll be sure to
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leave a link in the description to that
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if you'd like more information. So,
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thank you for watching and have a happy
