A federal employee earning $100,000 who gets a freeze while a law enforcement colleague at the same salary gets 3.8% falls $3,800 behind in year one. The gap doesn't close. It carries into every later raise, shaves $190 a year off agency TSP contributions and, if it sits in the High-3 of a 30-year FERS career, costs about $1,140 a year in pension. That's roughly $34,000 over a 30-year retirement, before cost-of-living adjustments.
That's what's at stake in President Trump's letter to House Speaker Mike Johnson. It proposes no across-the-board raise for most federal employees and a 3.8% increase for federal law enforcement. The White House argues a freeze won't significantly hurt recruitment and retention, according to GovExec. Congress hasn't acted. It can approve a different raise, and the split treatment of employee groups is likely to draw scrutiny.
By the Numbers
- 0%: the proposed across-the-board increase for most federal employees
- 3.8%: the proposed increase for federal law enforcement
- $1,000: what each 1% of raise is worth per year on a $100,000 salary
- $3,800: first-year pay gap between a frozen $100,000 salary and a 3.8% raise on the same base
- $190: annual agency TSP contributions lost on that gap (the 5% FERS maximum, 1% automatic plus 4% match)
- About $34,000: pension at stake over 30 years of retirement for a 30-year FERS employee, if the gap persists in the High-3 (before COLAs)
How it works
Two statutes drive the annual civilian raise. The Federal Employees Pay Comparability Act of 1990 (FEPCA) set up a formula under 5 U.S.C. 5303 that ties the base adjustment to the Employment Cost Index. Locality pay goes on top under 5 U.S.C. 5304. The President's Pay Agent, made up of the Labor Secretary, the OMB director and the OPM director, works with the Federal Salary Council to measure pay gaps between federal and private-sector jobs.
The formula is a default, not a guarantee. If the president decides national emergency or serious economic conditions affecting the general welfare justify it, he can submit an alternative pay plan to Congress by August 31. Presidents of both parties have done this in most years since FEPCA. That's why the raise you actually get rarely matches the formula number.
Here's the part that matters for this fight. If Congress does nothing, the president's plan takes effect, usually in the first pay period of January. Congress can override it with legislation setting a different raise, and it often does so through appropriations bills. A freeze is the easy outcome by inertia. A bigger raise takes votes.
Three other mechanics to know:
Within-grade increases are separate. Step increases come from 5 U.S.C. 5335, not the annual adjustment. During the 2011 to 2013 freeze on the General Schedule, eligible employees still moved up steps on their normal waiting periods. A freeze hits the pay table, not your step schedule.
The details matter. Reporting describes a freeze on across-the-board pay for the General Schedule workforce. Watch whether the letter also touches locality pay, and which job series count as "law enforcement." Those definitions decide who gets 3.8% and who doesn't.
Military pay runs on a different track. Service member raises go through 37 U.S.C. 1009, which links the adjustment to the ECI unless Congress acts. This proposal covers civilian employees.
A worked example
Take Dana, a GS-12 whose total pay with locality is $100,000. She's FERS, 30 years from her start date, and plans to retire then. Her colleague Marcus is in a job series that would count as law enforcement, at the same $100,000. (The salary figures are round hypotheticals, not table lookups.)
Step 1: Year-one pay. Dana stays at $100,000. Marcus goes to $103,800. The gap is $3,800 a year, or about $146 per biweekly paycheck before taxes.
Step 2: TSP. Agency contributions at the 5% maximum are $5,000 for Dana and $5,190 for Marcus. Dana's account is $190 lighter each year, before growth.
Step 3: Later raises. Say both later get 2%. Dana's raise is $2,000. Marcus's is $2,076. The gap widens to $3,876, because percentages apply to a bigger base.
Step 4: Pension. FERS pays 1% of High-3 average salary per year of service for most employees. It's 1.1% for those retiring at 62 or later with at least 20 years. At 30 years and 1%, that's 30% of High-3. If Dana's High-3 runs $3,800 below Marcus's, her annuity is $1,140 lower a year ($3,800 × 30%).
Step 5: Retirement total. $1,140 a year over 30 years is $34,200. COLAs would raise it a bit, and the real value of a pension dollar erodes over time. Either way, a freeze has a long tail.
One caution on step 4. The pension math assumes the gap stays in base salary all the way to retirement. If Congress later adjusts, or Dana gets promoted along the way, the lasting damage is smaller. But a frozen base is a smaller base for everything computed from it.
Who is affected, and by how much
General Schedule employees (most of the civilian workforce). Under the proposal, zero across-the-board. Each 1% of raise foregone costs $1,000 a year per $100,000 of pay. At the median federal salary range, a typical 2% to 3% raise is worth a few thousand dollars a year, and it's gone. Step increases would continue, which cushions employees still climbing within their grade. Employees at step 10 get nothing from either mechanism.
Law enforcement. A 3.8% raise is worth $3,800 on $100,000. Law enforcement officers under FERS also earn a richer pension accrual, 1.7% per year for the first 20 years and 1% after. Each dollar of raise feeds a bigger annuity multiplier. At 20 years, that's 34% of High-3, so a $3,800 raise adds $1,292 a year to the annuity.
Near-retirees. The High-3 averages three years. A freeze in one year hits a retiree's average only as hard as the other two years allow, so a one-year freeze costs a retiring employee roughly a third of what it costs someone who stays a decade. Employees five or more years out feel all of it.
Employees outside the General Schedule. Pay systems differ. Some agencies tie their adjustments to GS rules, and others don't. If you're in a separate pay system, check how it links to the annual adjustment before assuming you're covered.
Military members. Not directly covered by this letter. Their raise follows the 37 U.S.C. 1009 formula unless Congress changes it in the NDAA.
How to estimate your own
Start with your current total pay, base plus locality, from your latest SF-50 or pay stub. Multiply by each scenario: 0% for the freeze, then whatever percentage Congress might pass. Each 1% is simply 1% of that figure.
For the full picture, run the numbers through the federal pay raise calculator. Compare the freeze against a range of raises. Then take the difference and multiply by 5% for the TSP effect, and by your expected service years times 1% for the pension effect. That's the same math as the worked example above, with your numbers.
FAQ
Can Congress override the president's proposal? Yes. If Congress passes legislation setting a different raise, that law governs. If it doesn't, the president's alternative plan takes effect. Historically, the final number often comes through an appropriations bill.
Does a freeze stop my step increase? No. Within-grade increases come from 5 U.S.C. 5335 and run on their own schedule. During the 2011 to 2013 freeze, eligible employees still got them.
Has the federal government frozen pay before? Yes. The General Schedule was frozen for three straight years, 2011 through 2013. The first increase after that was 1% in 2014.
Is the freeze permanent? No. A freeze applies to one year's adjustment. But the lost raise isn't made up later, so the effect on your pay level, TSP match and pension base persists unless future raises exceed the usual amount.
Bottom line
A freeze costs every $100,000 of pay $1,000 for each point of raise Congress might otherwise have approved, and that money doesn't come back. Against the 3.8% proposed for law enforcement, the gap for a same-salary colleague is $3,800 in year one. If it stays in the High-3, it's about $34,000 in pension over a 30-year retirement. The proposal isn't law. Congress can change it, and what it does in the next few months will settle whether this letter stays a proposal or becomes your January paycheck.