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Trump rejects caps on 401(k) plans as part of GOP tax plan

Trump rejects caps on 401(k) plans as part of GOP tax plan”

President Donald Trump is warning House Republicans that 2018 would be a political failure for the GOP and a disappointment for the nation if they fail on tax overhaul.

The GOP on Thursday narrowly backed the budget plan, a prerequisite to major tax legislation. Passage of the budget resolution is vital if Republicans want to eventually pass a tax-cut package without support from Democrats. The final vote was 51-49 with deficit hawk Sen. Rand Paul, who hails from McConnell's state of Kentucky and voted against the bill because he said it did not cut spending enough.

Meanwhile, Republican leaders, who can afford to lose only 22 members of their caucus, are scrambling to find a solution that would get enough Republicans on board to move forward with the budget, which is considered the first step in tax reform.

Republicans are now trying to push tax reform after their failed 9-month long attempt to repeal, replace and replace and even fundamentally tweak Obamacare.

It's unclear if this is the precise plan that House Republicans will try to advance.

"It would be a complete disaster", Sen.

"That language shouldn't have been added to the Senate budget", said Rep.

The $4 trillion budget proposal includes Senate budget reconciliation rules, which allow leadership to pass legislation with a simple majority, bypassing filibusters from Democrats altogether.

But the Republicans are split. It would also give states some new flexibility to offer cheaper, less generous health plans. Taxpayers are now allowed to deduct these taxes in a way that lowers their taxable income, but GOP leaders want to prohibit the practice going forward, in part to raise more revenue.

Their vocal opposition has led Republican leaders in Congress like House Speaker Paul Ryan and Rep. Kevin Brady, R-Texas, who heads the tax-writing Ways and Means Committee, to hear out the fractious GOP members and seek a compromise with them. Most heavily courted have been Sens.

"There are plenty of Democrats who would probably benefit from helping President Trump on tax cuts if they help working people", said Graham. "Saving, planning and frugality should be rewarded", Grassley said in a statement.

But Manchin said after Thursday's vote, "I fear that passage of this budget today will make it hard to pass bipartisan tax reform in the coming weeks".

Congressional Republicans, as part of a plan to offset an expected drop in tax revenue from the White House's ambitious tax overhaul framework, had been reportedly discussing lowering the cap on tax-deferred payments to $2,400 from the current $18,000 level for most workers.

Senate Majority Leader Mitch McConnell stood by his previously stated goal of passing tax reform without reducing revenue just days after the Senate passed a budget to pave the way for tax cuts that could add an estimated 1.5 trillion to the deficit over the next decade.

The money would be used for the tax plan's cut in the corporate tax rate from 36 percent to 20 percent, reduced taxes for most individuals, and the repeal of inheritance taxes on multimillion-dollar estates. For workers over 50 years of age, that number is $24,000.

The bare-bones plan is still evolving with lawmakers left to fill in the details. It's been in place since the birth of the federal income tax in 1913.

The Republican margin-for-error on the budget resolution is razor thin. This year's measure calls for $473 billion in cuts from Medicare over 10 years and more than $1 trillion from Medicaid.



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