Insurance groups are “making significant progress” at persuading members of Congress that the deferred compensation plan changes included in the Senate minimum wage bill are inappropriate, one leader says.
But, even if Congress keeps the Senate provisions concerning “non-qualified” deferred compensation programs out of the minimum wage bill, the issue “is likely to come up again as legislators seek to find ‘revenue raisers’ for tax policy priorities in subsequent tax bills in this Congress, according to David Stertzer, chief executive of the Association for Advanced Life Underwriting, Falls Church, Va.
The Senate passed a bill in early February that contains the defined compensation provisions, but companion legislation that passed the House in February did not include the provisions.
Congressional staffers and legislators already have begun preparing for a conference to reconcile the differing bills, and “the size of the tax package is currently the central issue in this debate,” Stertzer says.
Democrats are trying to return to the old “pay as you go,” or “PAYGO,” system, which requires members of Congress to offset any increases in program spending with increases in taxes or cuts in other programs.
The Senate included tax cuts and increases in its minimum wage bill in an effort to meet the PAYGO requirements.
“In light of the PAYGO environment, even if the deferred compensation provision is dropped from this legislation, it is likely to come up again as legislators seek to find ‘revenue raisers’ for tax policy priorities,” Stertzer says.
The insurance industry “will continue its efforts on Capitol Hill to educate legislators and their staffs about the harmful nature and broad impact of the deferred compensation proposal,” Stertzer says.
The groups involved in the effort include the AALU and a coalition of business, financial, and pension-oriented organizations, Stertzer reports.
The groups are meeting “with key legislators and communicating our strong opposition to inclusion of the deferred compensation provision in the minimum wage bill conference report,” Stertzer says.