Wisconsin U.S. Sen. Ron Johnson is showing a willingness to break with his party on potential changes to 401(k) retirement accounts.
Last week, The New York Times reported congressional Republicans were considering lowering the amount of money workers could place in their 401(k) accounts without paying taxes on that money up front. Under current law, workers can defer taxes on up to $18,000 in a 401(k) account — the Republican proposal would have lowered that amount to $2,400. Taxes are paid on funds in the accounts when an individual retires and begins to draw income from them.
On CNN Thursday, Johnson — a Republican — said he would not vote for the proposal.
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“We need to encourage Americans to save more for retirement because over the next 30 years, Social Security will have an $18 trillion deficit in terms of the number of benefits it pays out versus what it gets in the payroll tax,” Johnson said. “This would be the worst time to disincentivize people from saving for their retirement.”
The measure was being floated as part of a way to pay for a $1.5 trillion tax cut Republicans are working to get through Congress.
Republicans are seeking to pass the tax measure under a process known as budget reconciliation, which would allow them to pass the measure without Democratic support. Budget reconciliation also stipulates that legislation cannot add to budget deficits after 10 years.
Johnson’s comments come after President Donald Trump tweeted Monday “There will be NO change to your 401(k). This has always been a great and popular middle class tax break that works, and it stays!”
There will be NO change to your 401(k). This has always been a great and popular middle class tax break that works, and it stays!
— Donald J. Trump (@realDonaldTrump) October 23, 2017
Elsewhere in the interview, Johnson commented on recent criticisms of Trump from his Republican colleagues, Sens. Bob Corker, R-Tennessee, and Jeff Flake, R-Arizona, saying it was “their choice to do that.”
“From my standpoint — I come from the business world — I tenaciously try and find areas of agreement,” he said.
Johnson pushed aside concerns about disunity in the Republican party, saying it was probably no surprise to hear there was a “broad spectrum of opinion” in the party.
On Tuesday, Flake announced he would not seek re-election in 2018 following a highly critical speech of Trump. Corker, who is also retiring from the Senate this year, has been in a public tit-for-tat with the president since early October when he called the White House an “adult day care center.”
On Thursday, Johnson attempted to draw attention back to areas of consensus for the party.
“I think the good thing about the Republican party right now is that we’re very unified in trying to come up with a tax proposal that’ll grow our economy so that every American will prosper,” Johnson said.
