P+PV Government Relations

House Majority Leader Kevin McCarthy (R-CA-23) credits NAIFA in helping to overturn harmful retirement regulations and praises the ability of NAIFA members to educate legislators, personalize issues, and translate how policy will impact constituents.

NAIFA Senior Vice President of Government Relations Diane Boyle discusses the history of NAIFA’s advocacy success, the importance of educating Congress no matter what the political climate, and how NAIFA’s advocacy adds up for the benefit of advisors and your clients.

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President Wants Congress to Gear Up for Tax Reform in September

President Trump is encouraging Congress to enact a tax reform plan in September or at least by year-end. Tax writers want to oblige, but may have trouble with the timeline.
The President has made two campaign-style stump speeches in support of a tax initiative. And reports suggest that key Congressional and Administration negotiators have made basic decisions about what to include in a tax reform plan. Further, the President said he sided with Democrats on a short-term bill to extend government funding and suspend the debt limit for three months in order to free up time for Congress to enact a tax reform bill. However, significant hurdles must be overcome.
Tax writers promise a new document outlining key elements of a tax reform plan prior to the end of September. That document will inform observers and lawmakers about whether the plan will be revenue-neutral (and if so, the extent to which offsets will be needed and at least some indication of what those offsets will be), how low corporate and individual tax rates will be cut, and other policy decisions. In other words, it will identify the tax reform “winners and losers,” and will without doubt spark intense debate and lobbying by those whose businesses and livelihoods will be impacted (pro and con) by the suggested changes.
Prospects: Most Washington observers believe the tax reform debate will begin in earnest—on a detailed plan—by the end of September.
Doubts center on the task of reforming the tax code, and from the lack of consensus about such issues as whether the plan will be permitted to add to the federal deficit. And of course without knowing the tax reform details it is difficult to assess where the inevitable opposition to (and support of) the plan will emerge. For NAIFA members and their clients, there is current, active concern about whether the plan will negatively change the rules incentivizing retirement savings. There is also worry that the plan could propose tax rules as offsets that would hurt life insurance, annuity, pension, retirement savings and/or employer-provided benefits.
Another source of skepticism is whether the bill will be an all-GOP effort, or if instead it will be bipartisan. Lawmakers and insiders alike are still assessing the significance of the three-month government funding/debt limit/Hurricane relief bill that was the product of an agreement between Democrats and President Trump. Some believe that was a “one-off,” but others see it as a shift towards the Administration—for which tax reform is the highest priority—negotiating with any lawmakers (including Democrats) who may vote for the bill.
And of course, there is the workload. To be sure, there was a three-month extension of the need to fund the government and extend the debt limit, but the work to resolve these thorny issues for the entire fiscal year remains to be done. And, by January 1 or sooner, Congress must also deal with enacting a fiscal year (FY) 2018 budget, a long-term National Flood Insurance Program (NFIP) reauthorization, extension of the Children’s Health Insurance Program (CHIP)—which may be the vehicle for addressing Affordable Care Act (ACA) issues, reauthorization of the Federal Aviation Administration, and the high likelihood of more emergency relief for Hurricane Irma victims. None of these issues can wait, and so arguably the deck is not at all clear for tackling a tax reform bill over the next three months. Add to that the six-month deadline the Administration set for immigration reform. It is a daunting workload even without tax reform.
NAIFA will keep a close watch on this effort. Ongoing lawmaker education (in Washington and at home) continues. Constituent input will likely be needed, possibly multiple times. September and October look like they will be very active months on the tax reform front.