For now, at least, negotiations in Congress over the tax and budget package still include one major provision for life insurance and estate planners.
The big packages posted on the websites of the House Ways and Means Committee, the House Energy and Commerce Committee and the House Agriculture Committee don't seem to include any provisions with a direct effect on annuities or defined contribution retirement plans.
But there are still chances for retirement income provisions to show up in the House, in the Senate or when congressional negotiators gather to hammer out one measure that can get through both chambers and be signed into law by President Donald Trump.
What it means: Annuity professionals still need to pay attention to what their favorite trade groups and sources of legislative affairs information are saying about Congress.
The process: House Republican leaders want to send the Senate a tax and budget package by May 26. They have given committees spending and revenue guidelines and asked the committees to come up with legislation proposals that fit within those limits.
The House Budget Committee is supposed to take the other committees' work and create a "budget reconciliation package" — a measure able to use special budget legislation rules to pass in the Senate with just 51 votes, rather than the 60 votes an ordinary bill needs to reach the Senate floor without facing the threat of a filibuster, or endless round of debate.
The House Energy and Commerce Committee has marked up legislation that would tighten eligibility rules for the Affordable Care Act health insurance exchange and premium tax credit programs but leave the programs largely intact.
The House Agriculture Committee marked up legislation that would affect federal food programs.
The House Ways and Means Committee gave financial professionals many provisions to think about in "The One, Big, Beautiful Bill."
The package includes one major provision for life insurance and estate planners: a section that would make the 2017 estate and gift tax exemption increase permanent.
Part of the House Ways and Means Committee's bill would set the exemption amount at $15 million for single filers and $30 million for married filers filing jointly and index the amounts to inflation, according to the official package summary.
That bill also includes other provisions that could leave affluent and high-net-worth clients with more after-tax income that the clients can save for retirement.
The current version of the Ways and Means package does not appear to include any provisions with a direct impact on income planning.
Reactions: David Chavern, the CEO of the American Council of Life Insurers, has praised House Ways and Means Chairman Jason Smith, R-Mo., for his work on the package and the estate tax provision.
The bill will "prevent a tax increase on families and small businesses and strengthen the hand of working Americans," Chavern said.
Kevin Mayeux, CEO of the National Association of Insurance and Financial Advisors, also put out a statement praising the Ways and Means package and the lack of any provisions that would make changes in the rules for life insurance or related arrangements.
"A stable tax system that continues to encourage Americans to plan and save for their future is more important than ever," Mayeux said. "Families are able to protect themselves through the current tax treatment of cash value life insurance, incentives to participate in individual and employer-sponsored retirement plans, savings vehicles for education and emergencies, paid leave, long-term care insurance, and disability insurance, and employer-provided health insurance."
Diane Boyle, the senior vice president of government relations at NAIFA, said in an email that she's not expecting to see major new provisions related to life insurance products or retirement savings in the final reconciliation bill.
"Relevant committee staffers are gathering ideas for the next-generation retirement savings bill for later this year or next year," Boyle said.
The wish list: If Boyle could make a retirement income provision appear in the reconciliation package, it would be a safe harbor provision for small businesses selecting annuity contracts.
A safe harbor provision would create a standard, careful process owners of small businesses could use to pick annuity contracts for their retirement benefits programs without having to worry about being sued if the contract selected performed more poorly, or turned out to be worse in other ways, than some other annuity contracts.
Entry points: In the past, major works of legislation, such as the two laws that make up the Affordable Care Act of 2010 and the 116-page bill that President Joe Biden signed in December 2024 to keep the federal government operating, have gone through many drafts.
The ACA, for example, ended up imposing a tax on tanning salons but exempting products such as hospital indemnity insurance from the benefits rules and underwriting rules that the ACA applies to major medical insurance.
Negotiators for Trump's team forced congressional leaders to scrap a 1,547-page short-term funding package in December 2024 and replace it with the 116-page version that former President Joe Biden ultimately signed.
Supporters of the tax and budget package may feel pressure to add provisions because Republicans have only narrow majorities in both the House and the Senate. That means a handful of Republicans who are unenthusiastic about the package could have the ability to squeeze sections in at the last minute.
Last-minute additions could show up:
◆ When the House Budget Committee assembles the version of the package that it posts on its website.
◆ When the House Budget Committee is "marking up" the package, or debating the package and voting on amendments.
◆ When the House Rules Committee — a body that prepares legislation for action on the House floor — is reviewing the package and holding another round of votes on amendments.
◆ When Senate committees are debating their own proposals, and the Senate is considering tax and budget legislation on the Senate floor.
◆ When House and Senate negotiators get together to hammer out differences between the House and Senate versions of the reconciliation legislation.
Credit: James Steidl/iStock
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