Following House passage of the bipartisan SECURE Act last month, it looked like the legislation was headed for quick enactment. Since then, however, the realities of the Senate’s legislative process appear to have taken over.
A quick recap from where we last left off: On May 23, the House passed the Setting Every Community Up for Retirement Enhancement (SECURE) Act (H.R. 1994) by a 417-3 margin. The wide-ranging legislation would build upon the success of the private employer-based retirement system by seeking to make it easier for businesses to offer retirement plans and for individuals to save for retirement.
Prior to breaking for the Memorial Day recess, Senate leaders tried to “hotline” the legislation to approve it by unanimous consent (UC). Under the Senate rules, a bill can pass by UC without a formal vote – but only if no senator objects to the UC request for a particular piece of legislation. And that's what happened to the SECURE Act.
Sen. Ted Cruz (R-TX) objected to the legislation being approved by UC, due to the removal of a provision that would have expanded the tax preference for Section 529 educational accounts to include expenses for homeschooling and supplies for students in grades K-12. These Section 529 provisions were removed from the House bill just prior to its passage, raising the ire of Republican lawmakers in both chambers of Congress.
In addition to Cruz’s Section 529 objection, it’s been reported that nearly half a dozen other senators have placed so-called “holds” on the legislation because they have concerns over various provisions, including one to provide pension funding relief for certain community newspaper plans.
Sen. Charles Grassley (R-IA), Chairman of the Senate Finance Committee, is working to overcome the objections, but unless he can appease those senators, the legislation may have to go through regular order instead of being passed immediately by UC.
If that were to happen, the legislation would first have to go through the Senate Finance Committee. Chairman Grassley could start with the House-approved H.R. 1994, or he could substitute that bill for the Retirement Enhancement and Savings Act (RESA), which he and Sen. Ron Wyden (D-OR) reintroduced in April. The two bills contain similar provisions.
Even if the legislation is cleared through the Finance Committee, however, Senate Majority Leader Mitch McConnell (R-KY) may not allow for the legislation to come to the Senate floor unless it has been cleared by all members of his caucus first.
All in all, it still seems likely that the underlying retirement security legislation, including components of both RESA and the SECURE Act, will still be approved, but it may undergo a few changes – and may be slowed by several weeks, if not months, if it must go through the regular order process.