The companies are urging Congress to remove a measure from a bill that would restrict defense contractors from issuing dividends or buying back their stock.

More than 40 business and industry groups have written a letter to the Senate urging action on Section 815 of the National Defense Authorization Act, a provision that would effectively prohibit companies that have contracts with the Department of Defense from buying back their own stock or paying dividends.

“If adopted, Section 815 would harm millions of American retirees and other investors by restricting legal returns of capital to shareholders, and would set a troubling precedent for federal interference in corporate governance and capital allocation decisions,” the letter said.

President Trump first discussed the idea of ​​banning defense contractors from stock buybacks in January. His initial statements caused a massive sell-off in defense stocks, affecting industry leaders such as General dynamics, Northrop Grumman and Lockheed Martin.

Months later, business groups and the Chamber of Commerce are urging the Senate to ensure that Section 815 is completely removed from the NDAA, making clear that they see serious consequences if it becomes law.

Signed by a list of pro-business organizations including the U.S. Chamber of Commerce, the American Bankers Association and the American Council on Capital Formation, the letter highlighted the troubling elements these companies and organizations see in Trump’s plan.

They framed their argument around the idea that the measure would hurt “principal investors” since Section 815 would limit two of the main ways a company can return money to shareholders. The letter’s authors said it could be a blow to retirement funds for many Americans, given the number of people who own stocks through their 401(k) and Roth IRA accounts.

“Stock buybacks are simply another common way to provide a financial return to investors,” the letter states. “Supporters of buyback restrictions argue that when companies choose to buy back their own shares, they are taking capital away from research and development, manufacturing or other investments. Such claims are demonstrably false.”

Trump’s January executive order was framed as a way to penalize contractors for poor performance.

“Every business in our economy has the right to benefit from prudent investments and hard work, but the American defense industrial base also has a responsibility to ensure that American warfighters have the best equipment and weapons possible,” the order said. In a Truth Social post, the president said, “MILITARY EQUIPMENT IS NOT BEING MANUFACTURED FAST ENOUGH!”

Share buybacks are sometimes criticized as a way for companies to artificially boost their stock prices regardless of actual performance, but business and trade groups that signed the letter say they are important for both individual investors and large institutions.

Citing a U.S. Chamber of Commerce study, the letter notes that retail investors have saved up to $4.2 billion over the past 17 years as a direct result of stock buybacks.

“Some of the newest investors in the market are beneficiaries of Trump Accounts, a program that depends on consistent returns in the stock market,” the letter adds. “Restrictions on the return of capital to shareholders could limit investment returns and threaten the long-term success of this program.”