The White House has told Congress it plans to freeze base and locality pay for roughly 2 million civilian federal employees in 2027, canceling an automatic raise that would otherwise have topped 20 percent in some regions. The alternative pay plan, transmitted by President Donald Trump in a letter dated August 26, sets the adjustment at zero for most General Schedule workers while carving out a 3.8 percent bump for federal law enforcement. Active-duty troops fare far better: the same letter authorizes raises of up to 7 percent, with the exact figure depending on rank.
Trump’s Alternative Pay Plan Cancels a 20.6% Locality Pay Jump
Federal pay adjustments run on a kind of autopilot unless a president intervenes. Under the Federal Employees Pay Comparability Act of 1990, locality pay is supposed to rise each year toward full comparability with equivalent private-sector salaries in a given metro area, calculated separately for cities such as Washington, San Francisco and New York. Left alone, the formula would have pushed locality pay up by an average of 20.6 percent starting in January 2027, on top of a separate 3.1 percent across-the-board increase to base General Schedule salaries, a combined jump no administration has allowed to take effect since the law took hold in the 1990s.
Trump’s letter to House Speaker Mike Johnson put a dollar figure on that math: allowing the full statutory formula to kick in would have cost an estimated $26 billion in the first year alone. Citing what he called lingering inflation from the prior administration, Trump invoked his authority under federal pay law to set the 2027 adjustment at zero instead, freezing both base and locality pay at 2026 levels for the bulk of the civilian workforce covered by the General Schedule and related pay systems.
The freeze applies to employees under the General Schedule pay system, the framework that sets salaries for most white-collar civilian jobs across federal agencies, from entry-level clerks to senior policy analysts. Locality pay, layered on top of base GS rates, already varies by tens of thousands of dollars depending on where an employee is stationed, and a frozen locality table means that gap will not narrow in 2027 even as private-sector wages in high-cost metro areas keep climbing.
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Law Enforcement Gets a Carve-Out, Military Pay Climbs Up to 7%
Not every civilian employee is covered by the freeze. The letter separately directs the Office of Personnel Management to use its special-rate authority to raise 2027 pay for federal law enforcement personnel by 3.8 percent, mirroring the carve-out Trump ordered for the same workforce a year earlier. OPM, not the alternative pay plan itself, will decide which job categories qualify, a process that in 2026 covered officers, agents and other positions the administration classified as critical to recruitment and retention.
The sharpest contrast is with the armed forces. Citing his statutory authority over military pay, Trump set 2027 basic pay increases at 7 percent for troops ranked E-1 through E-5, 6 percent for E-6 through O-3, and 5 percent for O-4 and above, with the increases taking effect January 1, a structure confirmed in the letter’s text. Uniformed service members outside the Armed Forces, such as Public Health Service and NOAA Corps officers, are set to receive a smaller 3.6 percent increase under the same letter.
The gap is deliberate rhetoric as much as policy. Trump wrote that he “strongly supports” rebuilding military readiness and retention, language that appears nowhere in the portion of the letter addressing civilian pay, where the emphasis instead falls on fiscal restraint. The result is a 2027 pay structure in which a mid-career enlisted service member could see a raise several times larger, in percentage terms, than a General Schedule employee doing comparable logistics, IT or administrative work at the same department.
Congress Has Until December to Change the Numbers
An alternative pay plan is not the final word. FEPCA requires a president to transmit the plan to Congress before September 1 of the preceding year, and the actual 2027 rates are not locked in until Trump signs an executive order, typically in December. Congress retains the power to legislate a different number instead, though it has not overridden a presidential alternative pay plan since the law took effect in the 1990s.
Democrats have pushed back through the FAIR Act, reintroduced earlier this year, which calls for a 4.1 percent raise for civilian federal employees instead of a freeze. The bill has been introduced in prior sessions without passing, and lawmakers have given no indication they plan to bring it to a vote before the December deadline for setting final 2027 rates. Absent congressional action, the president’s zero-percent civilian number is what employees should expect to see on their first paycheck of 2027.
That history cuts both ways for federal workers weighing the freeze. A year earlier, Trump’s own alternative pay plan for 2026 also proposed no civilian raise, then reversed course and signed off on a 1 percent increase weeks later, a reminder that the December executive order, not the August letter, is what ultimately lands in employees’ paychecks. For now, roughly 2 million civilian workers are budgeting for a zero, while service members and law enforcement personnel already know their raises are locked in for January.
This article was produced with the assistance of AI and reviewed by The Money Overview editorial team before publication.
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