Even with significant uncertainty about the legislative outlook in Washington, retirement reform should remain an area of potential ongoing bipartisan agreement in the years ahead, following on the success of both the Secure Act and its Secure 2.0 Act sequel.
Another point of relatively certainty among Washington watchers is that any big retirement policy reforms are not likely to happen before the elections for president and Congress in November.
This is according to Jennifer Flitton, head of U.S. government affairs at Invesco. Flitton, in an interview with ThinkAdvisor, said she was eagerly watching the budget debate play out, suggesting that there has been more uncertainty with respect to federal government funding and tax policy in the current Congress than she has seen since arriving in Washington in 1999.
One thing Flitton said she is confident about, though, is that retirement reform legislation should remain an area of meaningful bipartisan discussions, especially when it comes to common-ground policies meant to allow more Americans to save and invest effectively to meet their spending needs during life after work.
Whether Congress can act sooner than later to shore up the financial position of Social Security and Medicare is a different matter, she warned, but there are many other areas where relatively easy legislative changes could help address the looming retirement income crisis.
Slowdown Is Coming
"On one hand it's not looking good for retirement legislation in the immediate future, given the more pressing priorities about funding the government," Flitton said. "What can get done with respect to funding and other immediate policy needs should get done in the next three months, and then I think things will slow down significantly, as tends to happen ahead of presidential elections."
The good news for retirement reform advocates, she noted, is that the "traditional sausage-making" will very likely continue behind the scenes — as is often the case with policy topics that don't sharply divide the two parties.
"Big bipartisan agreements tend to start in previous congresses and percolate behind the scenes, and that may be unfolding this year while the election plays out," Flitton opined. "For example, recall that the first Secure Act was drafted over almost six years, though the second one took less time. Generally, though, it takes a while for these things to come to fruition."
On Social Security Funding
It is hard to predict whether the financial status of Social Security becomes part of the 2024 campaign, Flitton said, but conventional wisdom would suggest that presidential nominees will stick more to traditional talking points rather than offering up genuine policy solutions that would put Social Security on a sounder footing.
