How did the 2026 federal pay raise compare to previous years and to COLA/inflation rates in 2025-2026?
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Executive summary
The 2026 federal pay picture is fragmented: OPM’s FEPCA-based recommendation would have produced a 3.3% across‑the‑board base raise plus very large locality adjustments averaging 18.88% (producing >20% total in some metros), while multiple policy proposals and budget documents ranged from a 0% freeze to a 1% White House alternative and legislative proposals pushing ~4.3% [1] [2] [3] [4]. Meanwhile, retirement COLAs for 2026 are projected in reporting at roughly 2.0% for FERS retirees and 2.8% for CSRS retirees — below many of the pay‑increase proposals and generally near or below recent inflation measures referenced in current coverage [5] [6] [7].
1. A split reality: recommendation, budget, and competing plans
Federal pay-setting in 2026 produced three very different numbers in play: the FEPCA/OPM comparability formula would have yielded a 3.3% base increase with large locality adjustments (average locality 18.88%), but the White House budget at points proposed no general raise (0%) while a presidential alternative offered 1% across‑the‑board and higher targeted increases for law enforcement (1% general, 3.8% for some roles) — and Congress/advocacy groups are pushing bills for an average 4.3% raise [2] [8] [3] [4] [9]. Each of those figures reflects different priorities: statutory comparability, fiscal constraint, targeted recruitment, or parity with private wages [2] [3] [4].
2. Locality pay makes headline comparisons misleading
Several outlets highlight that the FEPCA formula’s large locality adjustments could, in some metropolitan areas, push total compensation increases above 20% — a number that dwarfs single‑digit across‑the‑board proposals but is not the same as a universal pay raise and depends on locality calculations tied to private‑sector wages [1] [2]. That means a headline “>20%” figure describes area‑specific locality changes layered on a 3.3% base recommendation, not a uniform pay bump for every federal employee [1] [2].
3. How 2026 compares to recent annual raises
By contrast to the mixed 2026 proposals, recent years show multi‑year variability: reporting cites raises of roughly 2.7% in 2022, 4.6% in 2023, 5.2% in 2024, and 2% in 2025 — so 2026 proposals range from a possible freeze to modest single‑digit increases or a mid‑single‑digit Congress‑driven raise, interrupting the up‑and‑down trend [1] [9]. The policy debate in 2025 made 2026 unusually contentious because the administration’s budget stance (including a zero or minimal raise) collided with union and congressional pushback for larger increases [8] [4].
4. COLA vs. pay raises: different targets, different mechanics
COLAs affect annuitants and Social Security and are calculated from inflation indices; pay raises affect active employees and are driven by law, administration proposals, and comparability metrics. Sources report a 2026 COLA of about 2.8% for CSRS retirees and roughly 2.0% for FERS annuitants — figures that are separate from the active‑employee pay negotiations and small compared with some locality‑weighted proposals [5] [6]. Reporting also notes that FERS COLAs have statutory caps that can leave their effective COLA lower than inflation [6].
5. Inflation and private‑sector benchmarks matter, but reporting is uneven
Coverage emphasizes that pay adjustments stem from several different benchmarks: OPM/FEPCA relies on employment cost/wage comparability (ECI), military raises tie to private‑sector wage growth, and COLAs tie to CPI measures [2] [10] [5]. Sources note inflation was “above 2%” in the period cited and that ECI rose 3.8% (Sept 2024), which under FEPCA logic translated into a 3.3% base recommendation for 2026 — making the FEPCA recommendation more closely linked to wage trends than headline CPI numbers [2] [10] [6].
6. Political and fiscal agendas shaped the final debate
Reporting makes clear the numbers reflect political choices: the administration’s budget documents emphasized fiscal discipline and proposed freezes; an alternative presidential plan and congressional bills prioritized targeted recruitment or broader raises; and unions pressed for parity and higher COLAs [8] [3] [4] [11]. These competing agendas explain why sources present a range of outcomes rather than a single definitive pay‑increase figure for 2026 [3] [4] [11].
7. Practical takeaway for workers and retirees
Active employees faced uncertainty — potential outcomes ranged from 0% to 4.3% (or larger locality gains in some areas) — while retirees could expect a 2026 COLA near 2.0–2.8% per current reporting, which many sources flag as insufficient relative to healthcare premium increases and local cost pressures [7] [5] [6]. For definitive personal budgeting, employees should track OPM/Pay Agent releases, congressional action on the FAIR/other bills, and official COLA announcements tied to inflation data [2] [11] [5].
Limitations and source note: This analysis uses only the provided reporting, which contains competing figures from OPM recommendations, the White House budget, presidential alternatives, union/legislative proposals, and COLA projections. Where sources disagree, those disagreements are reported rather than resolved [2] [3] [4] [5]. Available sources do not mention the final congressional enactment outcome for 2026 pay in this dataset.