A double whammy is on its way: a major tax bill and another big retirement bill — Secure 3.0, a former Labor Department official says.
The tax legislation — which will be part of the budget bill — will be fast-tracked in 2025 via reconciliation because the Republicans control the White House, Senate and House, Rutledge, a former head of Labor’s Employee Benefits Security Administration, said on a recent webcast.
Reconciliation limits amendments and eliminates the filibuster, allowing a bill to pass the Senate with a simple majority vote. It is allowed when legislation affects only the budget.
This type of bill has several qualifiers, Rutledge explained: The bill raises or cuts taxes or it increases or decreases federal spending.
Next year, there will be “an even more intense need for pay-fors because in order to extend the individual tax rates that are expiring at the end of 2025, and keep them the way they’ve been since 2017, the scorers in Congress have said that will cost $4.5 trillion,” said Rutledge, who now leads a government affairs consultancy.
By contrast, the 2017 tax law passed without pay-fors and cost $1.5 trillion.
The estimated $4.5 trillion doesn’t account for the tax cuts — including eliminating taxes on tips and overtime pay — that President-elect Donald Trump spoke about on the campaign trail, Rutledge said during the webcast, which was hosted by the Worldwide Employee Benefits Network.
“Rough estimates are at least another $3 or $4 trillion,” he added.
Congress "will be ravenous for revenue," agreed Mark Iwry, the former head of national retirement policy during the Obama-Biden administration, who's now a nonresident senior fellow at the Brookings Institution in Washington.
