Supporters of a bill that would expand retirement benefits remain optimistic that the measure can overcome several remaining hurdles and become law by year-end.
Efforts by Senate leadership to pass the Setting Every Community Up for Retirement Enhancement (SECURE) Act of 2019 (H.R. 1994) by unanimous consent — a parliamentary procedure to fast-track legislation — have repeatedly failed as several senators attempt to submit changes to the popular measure. But that hasn’t dampened spirits among the bill’s proponents.
“I remain hopeful that the merits of the bill itself will ultimately outweigh any of the snags that it’s hit along the way and that this bill will get done by the end of the year,” Christopher S. Spence of TIAA-CREF told Tax Notes.
Lobbying efforts are in high gear to tack the SECURE Act onto an end-of-year package. “We have not talked about pivoting to a different approach for next year,” Kathleen Coulombe of the American Council of Life Insurers said. “We really feel that now is the time. We don’t have a plan B right now.”
The SECURE Act made its way out of the House Ways and Means Committee with little difficulty and was overwhelmingly approved by the full House 417 to 3 in May. But the bill has since languished in the Senate.
The SECURE Act is intended to expand access to retirement plans. It would allow part-time workers with 500 hours of employment in each of three consecutive years to participate in a 401(k) plan and let plans offer a yearly disclosure of a retiree’s estimated benefits. It also would raise the automatic plan contribution limit to 15 percent of employee pay and increase the age limit for IRA contributions from age 70-1/2 to 72.
The bill is good policy and would improve access to lifetime income in retirement plans, and it has widespread support among lawmakers, Spence said.
Coulombe agreed. “If there was an opportunity for floor time, then the bill will pass on the floor,” she said.
But with several Republican senators looking at the SECURE Act as a vehicle to attach legislation they support, the Senate could need up to a week to debate and consider the measure.
The 529 Proposal
Sen. Ted Cruz, R-Texas, has been one of the most vocal opponents of approving the House-passed version of the bill. Cruz has advocated expanding section 529 saving plans to allow for home-schooling and elementary and secondary school expenses. He complained that a provision providing for that expansion was removed from the bill before the House vote.
It’s not the first time Cruz’s efforts to get the provision passed have been foiled. He previously tried adding language to the Tax Cuts and Jobs Act to expand 529 plans, but it failed to make it into the final version of the law. Cruz has said the provision would help children with disabilities.
The proposed expansion of 529 accounts is also linked to Education Secretary Betsy DeVos’s push to enhance school choice programs, according to the National Education Association.
“We see this expansion of the 529 plans to basically help wealthy families pay for private school education or home-schooling,” said Marc Egan of the National Education Association. Egan confirmed that his organization didn’t like the bill that came out of the House Ways and Means Committee.
Egan said he doesn’t expect the Cruz amendment to be included if the measure makes it onto the Senate floor. “Even if it passes in the Senate, it would have no chance in the House,” Egan said, adding that House leadership has made it clear that they wouldn’t advance a private school voucher program as part of a retirement bill.
SECURE Act backers have made it a priority to persuade the Texas senator to drop his efforts and allow for speedy passage of the bill. “We’re trying to encourage Senator Cruz and others to see the forest for the trees,” Spence said.
Other Hurdles
While Cruz wants a provision added to the bill, Sen. Mike Lee, R-Utah, wants one stripped from it. The SECURE Act provides special rules for minimum funding standards for community newspaper plans that would give a handful of newspapers relief and prevent them from potentially undergoing bankruptcy.
In early November, when the bill was brought up on the Senate floor for unanimous consent, Lee offered an amendment that would have removed those provisions from the bill.
The SECURE Act’s protections would apply to about a dozen newspapers, among them The Seattle Times and the Tampa Bay Times. The provision was narrowly drafted to apply to independent, family-owned newspapers and has the support of Sen. Patty Murray, D-Wash.
Senate Finance Committee member Patrick J. Toomey, R-Pa., wants to use the retirement bill to advance his legislation, the Restoring Investment in Improvements Act (S. 803). Toomey has offered his bill as an amendment to the SECURE Act, confident that it would gain widespread bipartisan support.
However, neither Lee nor Toomey has been as vocal as Cruz in their efforts to push their policies.
No Déjà Vu
As 2019 draws to a close, the SECURE Act finds itself on a similar path as last year. The measure was close to becoming law before a quarrel between Democrats and Republicans over border wall funding shut down the government.
Coulombe, however, thinks it’s different this time because of the attention the bill has received from lawmakers, noting that there has been a groundswell of support from lawmakers and advocates, with letters sent to Senate Majority Leader Mitch McConnell, R-Ky., encouraging passage.
“This is really not just something that’s being discussed by staff; this is really at the member level, and it is a priority for a lot of members,” Coulombe said.
"As we head into the end of the year, we feel like this is the window for the SECURE Act to pass," Coulombe said.