WASHINGTON, D.C. — U.S. Senator Ron Wyden of Oregon is among a group of Democrats introducing a new bill aimed at helping federal contractors in the event of another government shutdown.
“Federal employees who missed paychecks during the Trump shutdown will eventually get their back pay, but nobody should forget about the millions of contractors and their families left uncovered after a senseless five-week shutdown,” said Wyden, Ranking Member of the Senate Finance Committee.
The Emergency Relief for Federal Contractors Act would waive an existing 10 percent penalty for federal contractors taking a hardship withdrawal from their retirement account. It would also allow those contractors to recontribute those distributions up to $30,000 within a three-year period.
For contractors who don't recontribute their qualified shutdown distribution, this bill would allow them to include the amount of their qualified shutdown distributions ratably over a three-taxable-year period.
“When the government shuts down and contractors miss paychecks through no fault of their own, they should not be penalized for dipping temporarily into their retirement savings to make ends meet,” Wyden said. “This is a commonsense way to relieve some of the financial pressure that government shutdowns inflict on contractors, many of whom are already living paycheck to paycheck in the best of circumstances.”
Wyden was joined by U.S. Senators Catherine Cortez Masto and Patty Murray in introducing the bill, and found co-sponsors in a number of other leading Democratic Senators.