Chuck Darwin<p>Five months before Congress faced a near-catastrophic 2022 standoff over the debt ceiling, <br>with Republicans demanding restrictions to food and Medicaid programs to rein in spending, <br>a bill that raised the cost of private retirement savings accounts to $282 billion per year was quietly signed into law.</p><p>In this era of deeply divided politics, the 2022 bill known as "<a href="https://c.im/tags/Secure" class="mention hashtag" rel="nofollow noopener noreferrer" target="_blank">#<span>Secure</span></a> 2.0" was hailed as a bipartisan success — a victory for average Americans. <br>It had sailed through the House by a whopping 414-5 vote. <br>It followed four other major bills passed between 1996 and 2019 that 🔸dramatically expanded taxpayer savings 🔸– all equally lauded as bipartisan victories.</p><p>But that rare issue that brought a divided Washington together also 💥increased wealth disparities and the federal deficit. 💥</p><p>And the victory was most strongly applauded by the burgeoning <a href="https://c.im/tags/financial" class="mention hashtag" rel="nofollow noopener noreferrer" target="_blank">#<span>financial</span></a> <a href="https://c.im/tags/services" class="mention hashtag" rel="nofollow noopener noreferrer" target="_blank">#<span>services</span></a> <a href="https://c.im/tags/industry" class="mention hashtag" rel="nofollow noopener noreferrer" target="_blank">#<span>industry</span></a>, for whom <a href="https://c.im/tags/tax" class="mention hashtag" rel="nofollow noopener noreferrer" target="_blank">#<span>tax</span></a>-<a href="https://c.im/tags/advantaged" class="mention hashtag" rel="nofollow noopener noreferrer" target="_blank">#<span>advantaged</span></a> <a href="https://c.im/tags/retirement" class="mention hashtag" rel="nofollow noopener noreferrer" target="_blank">#<span>retirement</span></a> <a href="https://c.im/tags/savings" class="mention hashtag" rel="nofollow noopener noreferrer" target="_blank">#<span>savings</span></a> has transformed a $7 trillion retirement market in 1995 to a $38.4 trillion behemoth in 2023.</p><p>👉Tax-advantaged savings has become a staple of the American retirement system, with 60 million savers squirreling away $6.6 trillion in their 401(k)s, alone. </p><p>But a yearlong POLITICO investigation found that Secure 2.0 and its predecessor bills have expanded the system well beyond its goal of helping the middle class. </p><p>Today, ⭐️wealthy taxpayers can protect up to $452,500 per year ⭐️in tax-advantaged accounts in a single year, 👉saving up to $203,600 on their <a href="https://c.im/tags/taxes" class="mention hashtag" rel="nofollow noopener noreferrer" target="_blank">#<span>taxes</span></a>. </p><p>And they can keep their money in tax-advantaged accounts far longer.</p><p>More striking is how these victories were achieved: <br>A quarter-century partnership between two senators <br>— Democrat Ben <a href="https://c.im/tags/Cardin" class="mention hashtag" rel="nofollow noopener noreferrer" target="_blank">#<span>Cardin</span></a> of Maryland and Republican Rob <a href="https://c.im/tags/Portman" class="mention hashtag" rel="nofollow noopener noreferrer" target="_blank">#<span>Portman</span></a> of Ohio <br>— joined more recently by the former House Ways and Means Committee Chair Richard <a href="https://c.im/tags/Neal" class="mention hashtag" rel="nofollow noopener noreferrer" target="_blank">#<span>Neal</span></a> (D-Mass.). </p><p>Backed by one of the most highly skilled and lavishly funded industry <a href="https://c.im/tags/lobbying" class="mention hashtag" rel="nofollow noopener noreferrer" target="_blank">#<span>lobbying</span></a> teams, and greased by campaign contributions, Portman, Cardin and Neal turned what could have been a deeply controversial giveback to higher-income taxpayers into a staple of the American Dream.</p><p>They appealed to core beliefs in both parties <br>— free enterprise for Republicans, economic security for Democrats <br>– to enact what is arguably the most costly series of non-Defense bills in recent decades.</p><p>Indeed, that success now vexes many retirement experts, alarmed by how easily Congress acquiesces to tax breaks for retirement savings that 🔹disproportionately help the wealthy 🔹while treating the benefits relied upon by most retirees <br>— Social Security and Medicare <br>— as "budget-busters ripe for reform".</p><p>🔥“The 401(k) industry owns Congress,” 🔥said Daniel Hemel, a professor and tax law scholar based at NYU School of Law. <br>“Either lawmakers were trying to pull a fast one on the American people or lobbyists were trying to pull a fast one on Congress. <br>I don’t know which story is better. I don’t know which one I should want to believe.”</p><p><a href="https://www.politico.com/news/2024/04/13/how-your-401k-ate-the-federal-budget-00150319" rel="nofollow noopener noreferrer" translate="no" target="_blank"><span class="invisible">https://www.</span><span class="ellipsis">politico.com/news/2024/04/13/h</span><span class="invisible">ow-your-401k-ate-the-federal-budget-00150319</span></a></p>