What Happened?
If you have applied for a federal job or are waiting on a federal retirement claim, the agency that handles both just took on more work with fewer people. The Office of Personnel Management (OPM) has taken on certain federal employee appeals, even as its staff and budget have sharply declined. The Congressional Research Service (CRS) published a new report warning that cuts at OPM "could raise questions about the agency's capacity to perform its responsibilities effectively."
OPM's budget for salaries and day-to-day expenses fell 23.5 percent from fiscal 2025 to fiscal 2026, and its workforce dropped by 1,059 employees since Jan. 20, 2025. On Sept. 2, OPM took over from the Merit Systems Protection Board the job of deciding certain employee appeals (cases where workers contest layoffs or firings).
Why Does it Matter to Me?
About 140,000 federal employees separated through the Deferred Resignation Program in 2025, creating a backlog of retirement claims.
The compliance unit at OPM lost 41 percent of its full-time-equivalent staff between fiscal years 2024 and 2026. That means fewer people are checking whether agencies hire fairly, a protection that covers anyone who applies for a federal job.
Both Sides, Now
OPM argues that shifting appeals authority to the agency will streamline the process, while a CRS report says centralizing decisions inside OPM may promote consistency but also increase demands on the agency's resources.
The GAO documented the strain directly: the retirement-processing workforce shrank 16 percent even as retirements surged.
The administration drove a series of workforce changes, including a January 2025 executive order directing a government-wide hiring plan and an October 2025 order requiring each agency to submit annual staffing plans to OPM. The CRS report frames the central question for Congress as a trade-off between centralizing more work inside OPM and delegating it to individual agencies.
What Happens Next?
The president's fiscal 2027 budget request proposes cutting OPM's salaries and expenses account by a further $21,562,000, which would bring the total to $145,973,000.
OPM had not published a performance plan tied to its fiscal 2026–2030 strategic plan when the CRS report was published.
The CRS report says Congress may want to assess which workforce management functions OPM should centralize and which agencies should handle more effectively.
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