What Isn’t New in D.C.?
This might be an easier question to answer than “what is new in DC?” It feels a bit like drinking from a fire hose, so we thought it might be beneficial to zero in on some things that are important to the families we serve.
#1…Which, by the way, is my favorite! The on again, off again Corporate Transparency Act will not be enforced at this time. This means all of the alarming Beneficiary Ownership Reporting Requirements that would prove difficult to fulfill, resulting in fines up to the tune of $591 per day or prison were thrown out the window by Treasury Secretary Scott Bessent for the time being. FinCen is expected to release a new final rule and new deadline by March 21st…and both the House and Senate proposals also seek changes. This is a huge win for small businesses. Until the next update, you can read more about this here.
#2…This is a very close second in the way of ranking. Just before Biden left office, he signed the Social Security Fairness Act into law. This act looks to end the Windfall Elimination Provision and Government Pension Offset that reduces the Social Security benefits of people who receive a pension not covered by Social Security. The provisions, for years, have affected our teachers, firefighters, law enforcement, and other hugely contributory government employees. It is expected that 3.2 million people will benefit from this legislation. It is also important to note that this is retroactive for benefits dating back to January 2024, so I would suggest you brush up on the rules if you or your spouse were subject to these provisions. You can do this here.
#3…This isn’t really new, but it is newly effective for 2025. As a result of the Secure 2.0 Act of 2022, there are changes to retirement savings: Catch-up contributions go up 150% for those aged 60, 61, and 62. This takes the catch-up in a 401(k) from $7,500 to $11,250, so make sure you are maxing out your retirement.
#4…The executive orders coming out of the White House were best described in an I Love Lucy meme. If you remember the famous sitcom, you will remember the chocolate factory. Lucy can’t keep up with wrapping each chocolate on the conveyer belt, so she resorts to stuffing them in her mouth, her apron, and so on. There is certainly a parallel here. It is hard for anyone or any financial market to digest so much in such a short-period of time. Are we pro-business or not? Are we cutting the deficit or not? Every day is a new world of regulation cuts, spending cuts, energy expansion, tariffs, etc. The important thing to remember is to look for the opportunities. This quote by American Author, Jay Samit aptly covers this: Every threat to the status quo is an opportunity in disguise.
#5…The one thing that feels like it is moving at a snail’s pace is the extension of the Tax Cuts and Jobs Act of 2017, which is set to expire in December. This effects the 20% pass-through deduction for businesses, tax brackets, tax rates and estate and gift taxes—all in a major way. Although it would seem crazy to believe that - at the very least - an extension would not happen, there is a lot that Congress is trying to accomplish through the two reconciliation bills this year because these can be passed with a simple majority. Those items include balancing the budget, border security, increased defense spending, adding more tax cuts and the pipe dream of making the Tax Cuts and Jobs Act permanent. Senate had a plan to get this done in two bills. Trump had a different plan in which it appears he didn’t want to waste the extra simple majority bill for the year. Needless to say, this is working its way through Congress and we shall see…. If you are a research geek like me and want to understand more about what is at stake with the permanency of this act, this is a good place to start.
An excellent resource for keeping up with Trump’s executive orders is provided by the law firm Holland and Knight. They have put together a wonderful chart that outlines and summarizes these orders. You can find that here.
Whether you like it or not, change is here. One of my favorite authors, Jack Canfield, wisely stated, Change is inevitable. You can either resist it and potentially get run over by it, or you can choose to cooperate with it, adapt to it, and learn how to benefit from it. When you embrace change, you will begin to see it as an opportunity for growth.
I fully anticipate that we will continue to see a lot of change coming out of Washington. Some of it will be good. Some of it may not be good. Some of it may produce immediate benefits. Some of it may hurt. This is what we cannot control. The thing we can control is our readiness to respond proactively and be ready to embrace it.