House Ways and Means Committee Chair Kevin Brady (R-TX) said Wednesday that Republicans are still looking at possible changes in the tax rules for retirement accounts, suggesting he was open to altering even 401(k) plans. “We think in tax reform we can create incentives for people to save more and save sooner,” Brady said at a breakfast meeting.
Earlier this week, President Trump appeared to have squelched the idea of changing the rules on the popular saving accounts, tweeting “There will be NO change to your 401(k)” in response to reports that Republicans were eyeing sharp reductions in the annual limits on tax-free contributions to the plans. But Brady’s comments make it clear that the tax writers in Congress haven’t ruled anything out yet. Senate Finance Committee Chair Orrin Hatch (R-UT) agreed, telling reporters: “I’m open to look at anything. I don’t have any problem looking at everything.”
Asked about Brady's comments, the president on Wednesday reiterated his opposition to making such changes. “401(k)s, to me, are very important. And they're important because that's one of the great benefits to the middle class. I didn't want that to go too far. That's why I ended it very quickly,” Trump told reporters.
Still, the president hinted that he might consider changes to the 401(k), despite his reservations. Asked by a reporter if the 401(k) was on the table, as suggested by Brady, Trump said, “Well, maybe it is, and maybe we'll use it as negotiating.”