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Chairman Neal Opening Statement at House Rules Committee Hearing on the SECURE Act

May 20, 2019
Press Release

(As prepared for delivery)

Thank you for considering today H.R. 1994, the Setting Every Community Up for Retirement Enhancement Act – or the SECURE Act.  This bill passed out of the Ways & Means Committee unanimously and is the product of bipartisan collaboration with the Ranking Member, Mr. Brady, as well as Representatives Kelly and Kind.  The SECURE Act includes common sense proposals that will enhance our retirement system and represents the most comprehensive reforms to our retirement system in about 15 years. 

 

Too many American workers reach retirement age without the savings they need.  The retirement crisis is real and will only worsen unless we make saving easier and do more to encourage workers to begin planning for retirement earlier.

 

One reason Americans reach retirement age with such little savings is that too few workers are offered an opportunity to save for retirement through their employers. According to AARP, workers are 20 times more likely to save if they have access to use automatic payroll deduction plans, yet 55 million Americans aren’t able to save for retirement out of their paychecks.

 

The SECURE Act will go a long way towards addressing the retirement crisis by helping American workers save for retirement.  The bill  makes it easier for small businesses to offer retirement plans to their employees by eliminating outdated barriers to the use of multiple employer plans.  As a result of this provision, it is estimated that 600,000 to 700,000 new retirement accounts will be formed.

 

Automatic enrollment is shown to increase employee participation and make it easier for workers to participate in 401(k) plans. The SECURE Act creates a new tax credit of up to $500 per year to small employers to defray startup costs for new 401(k) plans that include automatic enrollment. 

 

The SECURE Act also increases the age for required minimum distributions from retirement plans from 70 ½ to 72.  This age hasn’t been adjusted since the 1960s, and with Americans working longer today, this proposal will give families additional time to save.

 

This is a good, common sense bill and I’m proud that I was able to collaborate with Ranking Member Brady and our Republican colleagues in drafting it.  Both Republicans and Democrats have wins in this bill and  I’d like to thank Ranking Member Brady for all of his hard work in writing this bill with me.

 

It’s also important to note that this bipartisan bill  has the support of both consumer groups and industry.   From AARP, SEIU and the Church Alliance to the Girl Scouts and Boy Scouts of America to the National Association of Women Business Owners and National Council of Farmer Cooperatives.  Supporters also include TIAA, the Air Line Pilots  Association, the Women’s Institute for a Secure Retirement, AALU and ACLI.  I’m very proud to have such a diverse group of organizations who recognize that this common sense legislation will be good for business and workers alike.

 

Before concluding, I also want to highlight an additional provision that is proposed to be added as part of the manager’s amendment.  The provision affects the financial security of children of our fallen troops, children of first responders who gave their lives in the call of duty, children who receive payments from tribal governments, college scholarship recipients, and potentially many more sympathetic cases that we haven’t even discovered yet.  Due to changes included in the Tax Cuts and Jobs Act, the amount of tax imposed on payments received by these children increased significantly.  This bill eliminates that tax increase by repealing the provision outright. 

 

I’ve spoken before of the dangerous consequences of passing a massive piece of tax legislation in just 51 days, with no hearings or meaningful opportunity to examine the bill and its impacts.  And this is a perfect example of the kind of results you get under that process.  Under the manager’s amendment, the rules for the so-called “kiddie tax” will now return to their pre-Tax Cuts and Jobs Act parameters.

 

Thank you for your consideration of this bill.  I’m happy to take any questions.

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