Kevin Brady: We’re Still Considering New Rules for Retirement Savings

Kevin Brady: We’re Still Considering New Rules for Retirement Savings


The top House tax writer on Wednesday signaled that Congress could still propose changes to a popular retirement savings plan in its tax bill, contradicting an assurance made by President Donald Trump.

At a Christian Science Monitor event, Rep. Kevin Brady said Republicans are "exploring a number of ideas" to "create incentives for Americans to save more and save sooner." The House is "continuing discussions with the president" in that area, the House Ways and Means Committee chairman said.

On Monday, Trump emphatically tweeted that "there will be NO change to your 401(k)." He called the 401(k) tax benefit a "great and popular middle class tax break that works."

Brady did not specify the possible changes the GOP is considering.

Under current law, taxpayers can put a specified amount in 401(k) retirement savings plans without paying taxes upfront. Lowering the amount could help to raise tax revenue as the GOP looks for ways to offset across-the-board individual and corporate tax cuts.

The amount workers can contribute to a 401(k) rises to $18,500 next year, up from $18,000 in 2017. People age 50 and older can tack on a so-called catch-up contribution of $6,000. 

The president prefers that changes not happen to 401(k) plans, but the White House cannot fully control the policy, a senior administration official told CNBC on Wednesday. The White House thinks the retirement tweak will fall out of favor but cannot guarantee that.

Aside from the 401(k) provisions, GOP leaders have also run into political resistance on a proposal to get rid of state and local tax deductions. Brady and House Speaker Paul Ryan both said Wednesday that they hope to find a way to ensure middle-class taxpayers in high-tax blue states who benefit from those deductions do not end up with a higher tax burden.

House Republicans aim to release a tax bill on Nov. 1, following the expected passage of a budget resolution Thursday.

On Wednesday, Brady did not answer whether Republicans would set a top tax rate for the wealthiest Americans, or the income brackets that will pay which rates, among other questions.

This article originally appeared on CNBC. Read more from CNBC:

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