As part of a package deal, in attempts to make that tax cuts that were passed through last year permanent, Republican Rep. Kevin Brady, chair of the House Ways and Means committee, will include in his proposal something that would dramatically change the way American’s save for retirement.

Brady’s proposal is believed to include a new revamped version of the Retirement Enhancement and Savings Act of 2018, that was proposed in March.  If passed, the bill could make it easier for small businesses to offer employees 401 (K) plans and provide some with annuity like vehicles, that would provide guaranteed income during retirement.

“In many ways this provision helps recreate traditional pension plans that used to promise workers that no matter how long they lived, they’d get a monthly check thanks to their former employer,”  Dirk Kempthorne, CEO of the American Council of Life Insurers wrote in an op ed.  (Source:  Yahoo Finance, “Republicans are looking to overhaul retirement plans in tax cut bill”)

If the bill is passed, it could mean very significant changes for retirement savings, which right now is especially significant as nearly half of working-age families have nothings saved in retirement accounts.  And at this point, no one knows how long social security will be around to fall back on.  An analysis from the Federal Reserve found a scary statistic that the median level working-age family had only $5,000 saved for retirement in 2013.

One of the main culprits behind the lack of retirement savings, is the ever dwindling pensions of most working Americans.  Right now, only 13% of US workers are covered by pensions or “defined benefit” retirement programs. And the news only get more grim, as most US pension funds are underfunded, as greedy and inept pension fund managers have cost the American taxpayers at least $600 billion up to possibly $1 trillion through their poor performance and high fees.  And who pays the price?  You do, as a taxpayer through the form of increased taxes and reduced public services, due to the fact that these pensions are guaranteed, the money has to come from someone.

The  Retirement Enhancement and Savings Act, that we expect to see in Brady’s tax reform proposal, may also provide employees of small businesses with access to multiple-employer plans, or MEPs.  MEPs allow small companies to join together, to enable the spread of plan administrative costs over more participants, lowering fees.

MEPs are a major par of the not-for-profit healthcare conglomerate being worked on by major corporations, like Amazon, Berkshire Hathaway and JPMorgan Chase.

“The need for this legislation is clear,” Kempthorne wrote.  “Every day 10,000 American’swill reach age 65,  and half will live to age 85 or older.  Without help, many people throughout the country and across the economic and political spectrum will be unprepared for retirements that could last 20, 30 years or more.”

Unfortunately, many analysts feel this bill will not be passed, even though it includes a bi-partisan retirement package.  The bill also could contain additional corporate tax cuts  and lower capital gains rates, possibly also helping those major corporations as much if not more then the struggling retirees.

“Republicans think they have a political winner in pushing for more tax cuts just before the election, but we don’t see evidence of public support-either in the polls or anecdotally; many voters say corporations and the wealthy have gotten too much already.   And estimates of the budget deficit continue to surge; red ink could exceed $1 trillion in fiscal 2019,”  Greg Valliere, chief global strategist at Horizon Investments, wrote in a note to clients.

“If there is a recession between now and 2025- a pretty safe bet-Brady can claim that his bill, expanding tax cuts and making them permanent, would be the perfect medicine,” he said.