Federal Newscast

Federal employees retirement savings grew at a healthy rate last month. New data from the Thrift Savings Plan shows all 15 funds saw higher rates of return in June as compared to May. Investors in the C and S funds were among biggest winners, seeing over a 5% rate of return for June. All the Lifecycle funds also posted a higher returns last month with the L 2055, L 2060 and L 2065 all seeing returns over 4.6%. Year to date, the big winner is the I Fund with a return rate of over 18%.

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Senate Republicans want to limit the size of the Office of the Director of National Intelligence. A new bill led by Senate Intelligence Committee Chairman Tom Cotton would cap ODNI at 650 full-time staff. ODNI started out the year with roughly 1,800 employees. Director of National Intelligence Tulsi Gabbard says she has already reduced ODNI’s staff by roughly 25% since then. Cotton’s legislation would deepen the cuts by eliminating several ODNI organizations including the National Counterintelligence and Security Center and the National Intelligence University. 

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The Small Business Administration is launching an investigation into the 8(a) business development program seeking to root out possible fraud. SBA Administrator Kelly Loeffler ordered the full-scale audit after a Department of Justice (DOJ) investigation uncovered a years-long fraud and bribery scheme involving a former federal contracting officer and two 8(a) contractors. SBA's Office of General Contracting and Business Development will lead the audit, starting with reviewing high-dollar ad limited competition contracts. The review will go back 15 years and work with other agencies, which awarded 8(a) contracts. The Justice Department found recently $550 million in contracts were fraudulently steered through bribery and abuse of a U.S. Agency for International Development (USAID) contracting officer, including to one 8(a) contractor who was officially flagged by USAID as lacking “honesty or integrity."

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The Senate is moving closer to finalizing the GOP’s reconciliation bill. And a few provisions affecting federal employees remain on the table. One proposal that was partially struck down would have made new federal hires choose between at-will employment and a 10% increase in retirement contributions. But even after a decision from the Senate parliamentarian, the provision could still include a 5% across-the-board retirement contribution increase. The National Active and Retired Federal Employees Association is urging lawmakers to remove the remaining federal workforce proposals, which it says will negatively impact employees. 

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A bipartisan bill to revise the rules for federal workers’ compensation cases unanimously advanced out of a House committee this week. The legislation would revise the Federal Employees’ Compensation Act to allow physician assistants and nurse practitioners to treat feds in workers’ compensation cases. A previous version of the bill passed the House in 2022, but did not clear the Senate. Co-sponsors of the bill say they’re hopeful it will pass both chambers this Congress. 

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The Army is turning to the private sector to bolster its tech talent. The service has launched a new website to recruit “top-tier, uniquely skilled” technology professionals into the Army Reserve. The effort follows the creation of Detachment 201, a new program where four senior executives from tech giants like Palantir, Meta and OpenAI were commissioned into the Reserve to help the service integrate and scale commercial technology. According to the website, these Detachment 201 officers will “contribute to accelerating Army modernization, evaluating technology adoption and advising on scalable solutions to enhance tactical innovation and lethality.” The website includes a form that tech professionals can fill out to express interest in Army Detachment 201. 

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The Justice Department has arrested a Defense Department employee for removing classified documents from a Missile Defense Agency office in Huntsville, Alabama. Ewa Ciszak made her initial appearance in federal court Monday. Beginning in February, the FBI says Ciszack began taking classified documents from MDA facilities without authorization. A June 18 search warrant turned up multiple secret-level documents at her personal residence and in her vehicle and backpack. Ciszak had been employed at MDA since January 2023. 

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A top lawmaker is pressing Defense Secretary Pete Hegseth to immediately reverse his decision to gut the Pentagon’s independent weapons testing office. In a letter to Hegseth, Democratic Senator Elizabeth Warren is demanding documentation justifying the cuts, the office’s current oversight list, and how DoD is adhering to the statutory requirement for the office to be independent and whether the office will continue its cyber assessment program, In May, Hegseth instructed the director of operational test and evaluation office to “immediately eliminate any non-statutory” functions of the office, slashing the office’s staff by 74% and its budget by nearly 80%. Warren said cutting this deep into the office can violate the law. 

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Democratic committee leaders are disputing the Trump administration’s plans to shuffle components of the Education Department into the Labor Department. A group of four senators say moving career and technical education programs between agencies is not within the President’s authority. The lawmakers reiterated that it’s up to Congress to decide whether federal agencies should be rearranged or dismantled. They’re demanding that the administration leave Education’s programs as-is, since Congress has not approved the transition.

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Both House and Senate lawmakers are looking to eliminate the IRS’ free online tax filing platform. The Senate Finance Committee is proposing to axe Direct File as part of its contribution to the budget reconciliation bill. The House passed its version of the so-called Big Beautiful Bill last month which would also eliminate the Direct File program. Direct File had nearly 300,000 users during this year’s tax filing season and saw higher favorability scores compared to last year’s pilot. 

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