A House panel on Tuesday advanced bipartisan bills aimed at modernizing the IRS and boosting retirement savings, with lawmakers and outside groups hopeful legislation on these topics finally gets enacted this year.
The House Ways and Means Committee approved the IRS and retirement bills by voice vote. The panel also approved a third bill by voice vote, which focused on extending reemployment services to all workers receiving unemployment benefits.
{mosads}Lawmakers in both parties and in both chambers have been working on IRS and retirement legislation for years, and the bills approved by the Ways and Means Committee reflect a growing consensus.
Ways and Means Committee Chairman Richard Neal (D-Mass.) told reporters after the committee markup that he thinks the odds of enactment this year are “excellent.”
“I think that this was very much a problem-solving markup today,” he said.
The top Republican on the committee, Rep. Kevin Brady (Texas), was also positive about the bills’ chances.
“I’m optimistic we will send this legislation to the president’s desk this year,” he said of the retirement bill.
The IRS bill — which received a committee vote less than two weeks before the April 15 tax season filing deadline — includes provisions to make targeted reforms to the agency in a host of areas, including services to low-income taxpayers, taxpayer rights during the enforcement process, identity theft protection, information technology and electronic systems.
For example, the bill would codify a program in which the IRS partners with organizations to provide free tax-filing assistance for low-income taxpayers, create an independent IRS appeals office, exempt low-income taxpayers from being subject to the IRS’s private-debt collection program and create a single point of contact within the IRS for taxpayers who are victims of tax-related identity theft.
The retirement bill includes a number of provisions to encourage small businesses to participate in retirement plans and to encourage people to save for retirement and other purposes.
It would increase a credit for small employer pension plan startup costs, make it easier for graduate students to use individual retirement accounts (IRAs), allow long-term, part-time workers to participate in companies’ 401(k) plans, and repeal the age limit for contributing to IRAs. It also would expand 529 education savings plans to cover costs relating to apprenticeships, homeschooling and student-loan repayments.
During the markup, an amendment was added to the package that would make it easier for small businesses to band together and create a retirement plan for their workers.
Congress has considered versions of the IRS and retirement bills before. Versions of the IRS bill easily passed the House last year. And many of the provisions in the retirement bill were also included in pieces of legislation that have passed the House in the past, as well as the Senate Finance Committee.
Lawmakers and stakeholders see growing momentum on IRS and retirement legislation this year and are upbeat that this may be the year legislation finally gets across the finish line.
“It’s all paid for, so we deal with pay-go budget rules on our side. There’s no controversy on the Senate side. So we’re hoping we’ll be able to get it done soon,” said Rep. Ron Kind (D-Wis.), a member of the Ways and Means Committee.
One sign of increased momentum is that there is a growing coordination between House and Senate tax-writers.
In past years, the House and Senate tax committees have produced IRS reform bills with some similarities and some differences. But this year, the same legislation was offered on Thursday by the top tax-writers in both chambers.
Senate Finance Committee Chairman Chuck Grassley (R-Iowa) and ranking member Ron Wyden (D-Ore.) also introduced a retirement bill on Monday that has many similarities to the bill the Ways and Means Committee approved.
Stakeholders also say it’s notable that Neal, who became chairman in January, has prioritized the IRS and retirement bills. Tuesday was the first time that the committee met to vote on legislation since Neal became chairman, and retirement security was the subject of the committee’s second hearing of the year.
“One of my priorities as chairman of this committee is helping American workers of all ages prepare for a financially secure retirement,” Neal said at the start of the markup.
Chris Spence, senior director of federal government relations for TIAA, said that Neal has “done a lot of work to make [the retirement bill] even more bipartisan than it has been in the past.”
Neal said that he and Brady are also working on a second retirement bill, which he hopes will get a committee vote before the August recess.
Despite the momentum, there are still some obstacles that remain to getting legislation signed into law.
The House and Senate tax-writers still need to resolve differences between their retirement bills.
During the Ways and Means Committee’s markup, several Republicans voiced concerns about a provision in the House bill that would provide pension funding relief for community newspapers, arguing that it may only help a small number of wealthy newspaper owners. That provision, which has had bipartisan support in the past, is not in the Senate tax-writers’ bill.
Congressional leaders also have to set aside time on the House and Senate floors for the legislation to be considered.
Neal said he was planning to bring the bills’ attention to House Majority Leader Steny Hoyer (D-Md.) during Tuesday’s House votes.
Getting Senate floor time for the legislation may be particularly challenging. Senate Majority Leader Mitch McConnell (R-Ky.) may have reservations about bringing a package to the floor without restrictions on amendments.
“McConnell is not going to take a tax bill to the Senate floor without some rules governing the terms of the debate,” said Rohit Kumar, a former McConnell aide who now works at PricewaterhouseCoopers.
A spokesman for McConnell said he did not have any announcements about floor time for the legislation.
Stakeholders are hoping that the legislation will receive floor time. Proponents of the retirement bill said they think that lawmakers understand that retirement security is an important issue for middle-class Americans.
“I think this is just a priority,” said Kathleen Coulombe, a vice president in the federal relations department of the American Council of Life Insurers who focuses on retirement security issues. “This is a kitchen table issue.”
National Taxpayers Union President Pete Sepp predicted the bills have a “better than 2 in 3 chance” of enactment — particularly the IRS bill, with lawmakers eager to complete unfinished business from last year.
“There are all kinds of opportunities to make progress for taxpayers,” he said. “Ways and Means has gotten off to a great start.”
Updated at 3:01 p.m.