Sponsors (20)
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Pauses many civil collection and enforcement actions against Federal workers during a government shutdown when the shutdown materially prevents them from paying. The bill lets impacted workers delay income tax collection, student loan payments, insurance premium lapses, evictions, foreclosures, lien enforcement, and other civil financial obligations for the covered shutdown period and up to 30 days after, forbids interest or penalties during that pause in many cases, and gives courts authority to stay, modify, or waive adverse actions; repeated or knowing violations may carry civil or criminal penalties. The law defines who counts as a covered Federal worker and what counts as a covered period, requires employers and agencies to give written notice about the protections, and creates rules limiting how creditors, insurers, credit reporters, and other private parties may treat use of these protections. It also authorizes the Attorney General and affected private parties to seek relief in federal court and to recover costs and fees when appropriate.
If a Federal worker's ability to pay income tax is materially affected by a shutdown, the collection of Federal income tax due during the shutdown may be deferred for up to 90 days after the date the shutdown ends, upon notice to the Internal Revenue Service.
No interest or penalty shall accrue during the deferment period on any tax amount deferred under this section by reason of nonpayment.
The running of any statute of limitations against collection of tax deferred under this section (including collection by seizure or other means) is suspended for the covered period of the shutdown to which the collection applies.
This section does not apply to the tax imposed on employees under the Internal Revenue Code of 1986, section 3101 (payroll/FICA tax).
Defines the term “covered insurance policy” to mean a policy that (1) is for one of these types of insurance — health, life, disability, or motor vehicle — and (2) is a policy a Federal worker enters into before the date a shutdown begins and that is in effect during the shutdown.
Who is affected and how
Federal workers (directly affected): Primary beneficiaries; they can request temporary stays or suspensions of many civil financial obligations that come due during a shutdown and avoid interest/penalties (in defined cases) for the covered period. Protections reduce immediate financial harms—eviction, foreclosure, insurance loss, loan default—and give time to resolve cash-flow interruptions caused by unpaid furlough or unpaid work.
Families and dependents of Federal workers: May receive protections when courts extend relief to dependents, preventing secondary harms such as loss of housing or insurance coverage.
Renters and rental property owners (landlords): Renters who are Federal workers gain eviction protections; landlords face limits on initiating or completing evictions during the covered period and risk criminal penalties for knowingly violating the statute; landlords may experience delayed rental income and may need to pursue relief through courts.
Mortgage lenders, servicers, and lienholders: Foreclosures, sales, and lien enforcement against covered workers’ assets are restricted during the covered period absent a court order; servicers must navigate court processes and could see delayed remedies and increased administrative burden.
Insurance companies and policyholders: Insurers cannot let certain policies lapse for unpaid premiums due during the covered period; insurers must either maintain coverage or seek court-ordered relief, potentially increasing short-term insurer exposure until premiums are collected or resolved.
Student loan holders and borrowers: Covered borrowers can defer payments without interest during the covered period; loan servicers face limits on declaring defaults, accelerating loans, or collecting during that time.
Credit reporting agencies and lenders: The Act restricts treating use of these protections as negative credit events; reporting and underwriting practices may need adjustment, and lenders may face limits on remedial actions without court orders.
Courts and the Justice Department: Federal and state courts will see new petitions for stays or adjustments and must apply the Act’s standards; the Attorney General gains enforcement authority for repeat or significant violations, increasing federal enforcement activity in civil consumer/credit matters during shutdowns.
State and local governments/agencies: The law applies nationwide in civil proceedings; state and local courts must implement the Act’s protections in applicable cases. However, criminal prosecutions and child support enforcement remain outside the law.
Potential benefits and trade-offs
Benefits: Reduces immediate economic harm to Federal workers and their families during shutdowns; limits cascading harms (eviction, loss of insurance, loan default); creates clear legal mechanism for relief and enforcement.
Trade-offs and burdens: Private parties (landlords, lenders, insurers) face delayed remedies, increased litigation risk, and potential administrative costs; courts will have discretion to weigh when a shutdown "materially affected" ability to pay, which could create litigation over factual determinations. There is a potential for gaming or disputes about eligibility and timing, and for tension between creditor/property rights and worker protections.
Overall effect
Read twice and referred to the Committee on Finance.
Introduced October 7, 2025 by Brian Emanuel Schatz · Last progress October 7, 2025
Expand sections to see detailed analysis
Read twice and referred to the Committee on Finance.
Introduced in Senate