President Trump’s “One Big Beautiful Bill Act” has progressed to the House floor for a vote following a narrow approval by the House Budget Committee during a rare Sunday night session on May 18, 2025. The bill is poised for a full House vote by the end of the week, aligning with House Speaker Mike Johnson’s target to pass it before the Memorial Day holiday on May 26, 2025. Significant revisions have been made to the language concerning federal employee benefits cuts in response to bipartisan concerns.
FERS Contribution Rate
The latest bill draft, released Monday morning, removes the proposal to standardize the Federal Employee Retirement System (FERS) contribution rate at 4.4%. Employees hired before 2014 will continue to benefit from their existing lower contribution rates, avoiding the previously proposed increase.
Retiree Annuity Supplement (RAS)
Originally, the bill proposed eliminating the Retiree Annuity Supplement (RAS) upon enactment. The revised language delays this elimination to January 1, 2028, while maintaining exemptions for those under mandatory early retirement. This change provides relief for employees participating in the Voluntary Early Retirement Authority (VERA) or retiring on September 30 under the Deferred Resignation Program.
High-5 Annuity Calculation
The transition from the high-3 to a high-5 annuity calculation formula has been postponed from January 1, 2027, to January 1, 2028. This one-year delay allows federal employees an additional year to retire under the more favorable high-3 formula and retain the RAS, offering greater flexibility for retirement planning.
Unchanged Federal Benefits Provisions
Several proposed cuts remain in the latest draft, including an increased FERS contribution rate for new hires seeking to maintain civil service protections, a new fee for filing cases with the Merit Systems Protection Board, and audits of participation in the Federal Employees Health Benefits (FEHB) program.
Opposition and Fiscal Concerns
Democrats unanimously opposed the bill in committee, criticizing its significant cuts to Medicaid and SNAP, which they argue disproportionately affect low-income Americans. They also condemned the legislative process as rushed and opaque, with late-night votes designed to limit public scrutiny. The Committee for a Responsible Federal Budget estimates the bill could increase the national debt by $3.3 trillion over ten years, contradicting White House claims of fiscal neutrality. Some conservative Republicans, including House Freedom Caucus members, initially stalled the bill on May 16, 2025, demanding deeper spending reductions to address the $36.2 trillion national debt, though revisions secured their support for the committee vote.
