Following the recent partial government shutdown that caused financial problems for federal employees in the Department of Homeland Security (DHS), new legislation has been introduced to help ease the potential pain to impacted federal employees during inevitable future government shutdowns.
The Federal Worker Credit Protection Act of 2026 (S. 4478) was introduced by Senator Mark Kelly (D-AZ). It would enact the following protections for federal employees during partial government shutdowns:
- Prohibit consumer reporting agencies from reporting adverse information on the credit report of federal workers during a government shutdown and for 30 days after the end of a shutdown as workers’ pay is restored
- Require the Office of Management and Budget (OMB) to notify consumer reporting agencies when federal agencies enter and exit shutdown status
- Allow federal workers to correct adverse information already on their credit report
If the legislation were to become law as currently written, it would take effect on February 1, 2026, thereby presumably covering the most recent shutdown and also any future shutdowns that last at least 24 hours. It would remain in effect for 30 days after the date on which there is no longer a lapse in appropriations.
Kelly said in a statement about the bill:
Federal workers shouldn’t be punished by a government shutdown that isn’t their fault. Earlier this month, I met with Phoenix TSA officers working without pay. They shared how the financial strain they were dealing with—including missed payments—hurt their credit scores. That kind of damage can follow you for years. I’m taking action to make sure the people who keep our country running aren’t hurt by Washington’s dysfunction.
Similar Past Legislation
Similar types of bills have been introduced in the past but ultimately failed to advance.
The Protecting Innocent Consumers Affected by a Shutdown Act (H.R. 4328) was introduced by Congresswoman Maxine Waters (D-CA) in 2019 and mandated establishing a new database of federal employees impacted by government shutdowns that credit report users could consult, thereby effectively prohibiting taking any adverse actions against federal employees known to have been impacted financially by a shutdown.
Another 2019 bill introduced by Senator Chris Van Hollen (D-MD) would have required federal financial regulators to issue guidance after a partial government shutdown began to encourage financial institutions to work with impacted federal employees.
Known as the Shutdown Guidance for Financial Institutions Act, the legislation was designed to encourage financial institutions to “consider prudent efforts to modify terms on existing loans or extend new credit to help consumers and businesses affected by a shutdown, consistent with safe-and-sound lending practices.”
Who Invented Government Shutdowns?
The modern government shutdown that is now used as a political weapon by both parties is a relatively new concept that did not exist prior to 1980.
This isn’t because there were times when Congress didn’t allocate funds for the government to operate. That’s a common occurrence, and it still is.
However, when funds weren’t appropriated, government employees still went to work and were paid (usually a bit late until funds were approved), but the situation was resolved without the political drama that we now have surrounding a partial government shutdown.
Benjamin Civiletti, the attorney general for President Jimmy Carter, is the individual with the most direct responsibility for the government shutdown principle.
Civiletti clarified his “either exists or it doesn’t” rule in a legal opinion. He concluded that the president has the constitutional “leeway to perform essential functions and make the government ‘workable.’” This is apparently the rationale behind the distinction between essential and nonessential workers that causes pay disruptions for federal employees during modern partial shutdowns.
