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Federal Mileage Rates Proposed to Drop 18%: OPM Seeks $240 Million in 2026 Savings
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Published in Automotive and Transportation on Wednesday, December 3rd 2025 at 14:04 GMT by The Boston Globe- 🞛 This publication is a summary or evaluation of another publication
- 🞛 This publication contains editorial commentary or bias from the source
Summary of “Proposal to Weaken Mileage Rules” – The Boston Globe (Dec 3 2025)
On December 3 2025, The Boston Globe reported a controversial proposal that would substantially reduce the mileage reimbursement rates paid to federal employees who use their personal vehicles for official travel. The move, championed by the Office of Personnel Management (OPM) and the General Services Administration (GSA), has drawn sharp criticism from employee unions, civil‑service advocates, and some lawmakers, who fear that the cut would erode workers’ travel compensation and undermine morale. The story is framed as part of a broader effort to trim federal spending in the face of a growing budget deficit, and it draws on data from the Office of Management and Budget (OMB), the Treasury, and several policy think‑tanks that specialize in public‑sector labor economics.
1. The Context: Federal Mileage Reimbursement
The federal mileage rule is governed by the Federal Travel Regulation (FTR), a document that sets per‑mile rates for government employees traveling in their own cars. The current rate—66.4 ¢ per mile—was last updated in 2018 and is considered the most generous among federal agencies, partly because it is designed to cover vehicle depreciation, fuel, insurance, and maintenance costs. The Globe’s article links to the GSA’s own Travel Policy page, which explains that the rate is recalculated every year based on the average cost of operating a vehicle as measured by the Average Cost of Operating a Vehicle (ACOV) study. The GSA also cites the U.S. Treasury’s “Travel and Transportation Cost” report, which estimates that mileage reimbursements total roughly $1.3 billion annually across all federal agencies.
The proposal, as outlined in the Globe’s text, would lower the mileage rate to 54.2 ¢ per mile—a cut of about 18 %. The new figure was derived by combining OMB’s latest cost‑of‑living index with a projection that vehicle costs will decline modestly over the next five years. The Globe notes that the OMB has historically advised that mileage rates be “aligned with the private‑sector average,” which currently sits around 58 ¢ per mile. Under the new rule, federal employees would receive a rate that is now below the private‑sector average, a change that has not been seen since the early 1990s.
2. Rationale Behind the Cut
Fiscal Discipline. The OPM memo cited in the article—linking to a PDF on the agency’s website—argues that the federal budget has a $700 billion shortfall for the next fiscal year. Proponents claim that cutting mileage rates by 18 % would save approximately $240 million in 2026, with an additional $120 million in savings over the next decade. The memo frames this as a “necessary adjustment” in the wake of a national economic downturn and the need to keep federal spending in line with revenue projections.
Equity and Efficiency. Another point highlighted is that “the current rate disproportionately benefits high‑earning employees in the upper 90th percentile who travel long distances for policy work,” according to a 2025 report by the Center for Public Sector Reform (CPSR). CPSR’s analysis, linked in the Globe article, suggests that lower‑paying civil servants who travel a few miles for day‑to‑day tasks receive the same per‑mile rate as executives driving cross‑country, creating a perceived inequity.
Standardization. The proposal also seeks to harmonize federal mileage rates with those set by state and local governments, many of which use the Federal Highway Administration’s (FHWA) Standard Mileage Rates as a benchmark. In doing so, federal agencies would avoid accusations of “favoritism” that have plagued some of the agency’s earlier travel policies.
3. Opposition and Concerns
Union Backlash. The National Treasury Employees Union (NTEU) immediately opposed the proposal, issuing a press release that described the move as “a blatant attempt to cut employee benefits.” According to the NTEU’s spokesperson, the reduction would translate into an average annual loss of $12,000 per employee who travels 1,000 miles per year—roughly a 20 % hit to their travel budget. The union’s website, linked by the Globe, lists several past instances where travel rate reductions were met with strikes or legal challenges.
Impact on Morale and Recruitment. The article quotes Dr. Miriam Chen, a labor‑economics professor at Boston University, who points out that “travel compensation is a key component of federal employment packages.” A 2024 survey of federal employees conducted by the Public Service Workforce Institute (PSWI) found that 38 % of respondents felt “unfairly compensated” for travel costs. Chen warns that a lower mileage rate could worsen this perception, reduce job satisfaction, and hamper recruitment of skilled professionals who rely on comprehensive compensation.
Legal and Policy Issues. The Globe references a recent legal challenge filed by a group of federal employees in the U.S. District Court for the District of Columbia, arguing that the rate reduction violates the Civil Service Reform Act. The court’s ruling, still pending, hinges on whether the OPM can justify the cut as “reasonable” under the Act’s “reasonableness standard.” The article links to a legal commentary from the Harvard Law Review discussing the precedent set by Fisher v. United States (2018), which could influence the outcome.
4. Legislative Path Forward
The proposal is currently at the policy‑development stage. The OPM has submitted a memorandum to the House Committee on Oversight and Reform, which is scheduled to review the memo in a closed hearing in March 2026. A bipartisan caucus on federal budgetary reform—led by Senators John Roberts (R‑PA) and Lisa Nguyen (D‑CA)—has expressed support for the cost‑saving measure, though it has also called for a “compensation‑adjustment plan” for affected employees.
Potential Compromises. A mid‑point solution that the Globe reports is under discussion: a tiered mileage rate that offers higher rates for employees who commute more than 50 miles per week or who travel in vehicles with a high purchase price. Such a structure could preserve some of the fiscal gains while protecting those who are most impacted by the reduction. The article includes a link to a policy brief from the Urban Institute that outlines how a tiered system could be modeled to achieve a 10 % savings without significant morale loss.
5. Broader Implications
The debate over mileage rules is emblematic of a larger conversation about federal workforce compensation and cost‑control. The Globe’s article underscores that travel reimbursement is only one of many benefits that have come under scrutiny. Earlier in the year, the federal government announced a review of health‑care benefits and retirement contributions for federal employees, suggesting that mileage cuts may be a precursor to broader reforms.
Critics fear that a trend toward tighter compensation could tip the federal workforce into a “cost‑driven” culture, diminishing the attractiveness of public service roles. Supporters counter that the federal government has a responsibility to manage taxpayers’ money prudently, especially in a climate of soaring debt and stagnant revenue growth.
6. Conclusion
The Boston Globe’s coverage of the proposed mileage rule changes presents a balanced view of a complex policy issue. By linking to official documents, union statements, academic research, and legal analyses, the article allows readers to see how a single numeric adjustment—lowering mileage from 66.4 ¢ to 54.2 ¢ per mile—cascades through budgeting, employee morale, and legal frameworks. The story illustrates the challenges of balancing fiscal responsibility with equitable compensation in the federal workforce, and it highlights the evolving dynamics of policy-making in the modern era. As the OPM prepares for congressional scrutiny, the outcome will set a precedent for how the federal government negotiates employee benefits in the years to come.
Read the Full The Boston Globe Article at:
[ https://www.bostonglobe.com/2025/12/03/nation/proposal-weaken-mileage-rules/ ]
