Ron Wyden

As tens of thousands of firefighters battled dozens of wildfires across Oregon, the state’s senior U.S. senator found himself fighting a different battle on Capitol Hill late last week.

Sen. Ron Wyden urged his fellow senators to permanently eliminate income tax on relief payments for people impacted by natural disasters, arguing that Oregon residents were in desperate need of the tax deduction as more than a dozen homes had burned across the state. A provision of a 2017 tax law subjected certain wildfire relief payments received by homeowners to federal income tax.

Congress temporarily exempted those payments from federal income tax in 2024, but Wyden argued the relief needed to be made permanent.

To fast track the legislation before the Senate left Washington for its five-week August recess, Wyden last Thursday sought unanimous consent from his colleagues. Sen. Ted Cruz of Texas objected, temporarily blocking the bill.

There was no immediate explanation for Cruz’s objection, which threatened to send senators into recess without passing the relief as wildfires scorched the West and peak hurricane season approached.

But Friday, in the waning hours of the Senate session, Cruz dropped his objection, allowing the bill to pass. The legislation, which passed the House of Representatives in July, will now head to President Donald Trump’s desk for final approval.

Wyden had unsuccessfully pushed to pass the bill in 2025 but said his win Friday was a case of the Senate making an obvious call.

“Common sense prevailed today, and that’s great news for Oregonians who shouldn’t have to worry about getting slammed with a huge tax hit on top of losing their home to wildfire,” Wyden said.

If signed by the president, the bill would prevent wildfire survivors from having to pay federal income tax on relief payments they receive for losses or damages from a wildfire. The law is intended to ensure money meant to help victims rebuild and recover isn’t treated as taxable income by the federal government. It would also allow disaster survivors to deduct qualifying uninsured or uncovered property losses from their federal income taxes.

Wyden returned to Oregon from Washington, D.C., for the Senate’s August recess over the weekend, promptly visiting central Oregon and the Warm Springs Indian Reservation, which was devastated in July by the 67,000-acre Bench fire and the 27,000-acre Akawa Butte fire near Sisters. The two fires destroyed at least 10 homes. He also visited communities hit by the massive, more than 373,000-acre Rowe Creek Complex.

The senator met with firefighters, tribal officials and community members across the state this week, using the visits to blast the Trump administration, which he said failed to adequately prepare the state for its historic wildfire season.

“The message on the ground is that the Trump administration has left our state without the help it needs this fire season,” Wyden said.

He said more federal resources are needed to get the state through the remaining two months of the wildfire season.

Wyden and fellow Oregon U.S. Sen. Jeff Merkley still have outstanding wildfire priorities they will look to advance during the Senate’s brief return to Washington before the November midterm election.

The two joined other senators earlier this month in calling on federal regulators to prohibit wildfire prediction markets that allow bettors to wager on the size, destruction and deadliness of wildfires.

The lawmakers expressed concern that, in addition to what they described as the unethical nature of betting on people losing their homes, the markets could incentivize arsonists who hope to cash in on their wagers.

Merkley, meanwhile, is also looking to pass the Wildfire Insurance Affordability Act, which would provide insurance assistance for low-income residents and grants for people in wildfire-prone areas who take steps to harden their homes and reduce their wildfire risk.