The American people were treated today to another example of the congressional Republicans' contortionist act. This time it was over 401(k) plans. But the real story is how much the GOP congressional leaders will twist and turn and basically make themselves into a pretzel all to avoid one thing: Cutting the spending.
First, let's look at the most recent details. A report surfaced late Friday that the Republican tax-reform bill may include a provision that would limit tax-free contributions to 401(k) plans to $2,400 per year. An understandable howl went up over that one, as 401(k)s have become a major staple of retirement savings for millions of Americans, a key benefit employers offer via matching contributions, and a big money maker for Wall Street firms.
The good news for everyone worrying about this came early Monday, with a tweet from President Donald Trump promising no changes:
That could be the happy ending to a scary story if it weren't for the fact that there's no indication the Republicans in Congress won't try to come up with another cockamamie idea to raise tax revenue.
Just to review, they've already tried the Border Adjustment Tax that would have taxed imports and gutted major retailers' profits. That idea lived for much of the spring and summer before it was scrapped in late July.
They're still holding on to the plan to eliminate state and local tax deductions and even kept that plan alive with a 52-47 vote in the Senate Friday. Senator Chris Van Hollen, a Democrat from Maryland, is predicting that the national outrage over this plan will only get louder as the weeks go by.
There are more not-so-brilliant ideas, too, like reducing the deductions allowed for mortgage interest. But the bottom line is that the GOP wants to support tax cuts without giving up some level of the moral high ground it believes it owns when it comes to opposing the exploding national debt. That debt has basically doubled to $20 trillion since President Obama took office in 2009, and deficits are still growing under President Trump.
The stakes are being raised even higher as the GOP tax plan as we know it now will only grow deficits more. The Congressional Budget Office is projecting it would add $1.5 trillion to the debt over the next 10 years. The Trump administration is calling those projections inaccurate and also insisting that the added economic growth coming from tax cuts would boost revenues much more than the CBO estimates.