Emergency Relief for Federal Workers Act of 2025
Summary
The Emergency Relief for Federal Workers Act of 2025 aims to provide financial relief to federal employees affected by government shutdowns. It waives certain penalties for early withdrawals from the Thrift Savings Plan (TSP) and provides flexibility for TSP loans during lapses in appropriations. The bill also allows for the recontribution of withdrawn funds to the TSP.
Expected Effects
This act will allow federal employees facing financial hardship during government shutdowns to access their retirement savings without penalty. It also ensures they can manage their TSP loans without incurring additional financial burdens due to missed payments. The Act aims to provide a safety net for federal workers during times of government instability.
Potential Benefits
- Allows penalty-free withdrawals from the TSP during government shutdowns, providing immediate access to funds.
- Provides flexibility in managing TSP loan repayments, preventing defaults and additional financial strain.
- Enables recontribution of withdrawn funds, allowing employees to restore their retirement savings.
- Reduces financial stress and uncertainty for federal employees during lapses in appropriations.
- Helps maintain the financial stability of federal employees and their families during government shutdowns.
Potential Disadvantages
- Could reduce long-term retirement savings for federal employees who withdraw funds.
- May encourage reliance on TSP withdrawals as a short-term solution during shutdowns.
- Potential for increased administrative burden on the Thrift Savings Plan.
- Possible moral hazard if employees expect similar relief in future shutdowns.
- The $30,000 limit on penalty-free withdrawals may not be sufficient for all employees.
Constitutional Alignment
The bill appears to align with the Constitution's general welfare clause, as it aims to provide relief to federal employees during times of economic hardship caused by government shutdowns. While there is no specific constitutional provision directly addressing federal employee benefits, Congress has broad authority to legislate on matters related to federal employment. The bill does not appear to infringe upon any specific constitutional rights or limitations.
Impact Assessment: Things You Care About ⓘ
This action has been evaluated across 19 key areas that matter to you. Scores range from 1 (highly disadvantageous) to 5 (highly beneficial).