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President Donald Trump has shot down a possible approach for raising revenue to finance tax cuts in politically must-do legislation for the Republicans, promising the popular 401(k) retirement program will be untouched.
Still, the head of the House's tax-writing committee indicates that changes to the 401(k) structure may still be on the table. Ways and Means Committee Chair Rep. Kevin Brady says: "That will all be part of the tax reform bill."
Republicans are scrambling to find new revenue sources to pay for anticipated tax cuts exceeding $1 trillion. A proposal to eliminate the widely-used federal deduction for state and local taxes has run into heavy opposition from GOP House members from high-tax states.
President Donald Trump says there will be "NO change" to tax incentives for 401(k) contributions.
Trump says on Twitter Monday: "There will be NO change to your 401(k). This has always been a great and popular middle class tax break that works, and it stays!"
The president appeared to be responding to a recent report in The New York Times that Republican lawmakers were considering limiting the amount workers could save in 401(k) retirement accounts. Those savings are not taxed until retirement.
About 55 million U.S. workers hold some $5 trillion in their 401(k) accounts.
House Republicans leaders are hoping to pass a budget bill this week so they can turn their attention to tax reform. In a conference call, President Donald Trump personally urged House GOP members to pass the tax package or face political failure in 2018.
He said it is crucial for Congress to pass what he described as historic tax cuts.
The Senate last week passed a budget that includes rules that will allow Republicans to get tax legislation through the Senate without Democratic votes. House Republican leaders are emphasizing the need for the House to pass the Senate budget to avoid negotiations between the two chambers that could slow the process
Republicans are anxious to rack up a legislative win after a series of embarrassing failures.