A retirement bill many financial advisers have been eyeing with interest is being held up by impeachment proceedings in Washington, as President Donald J. Trump confronts allegations he abused the power of his office in his dealings with Ukrainian officials.
The legislation, the SECURE Act, contains several provisions that would greatly affect financial advisers and their clients, including items that would make it easier for companies to use annuities in their 401(k) plans and for small businesses to band together to offer a common workplace retirement plan. The bill would also eliminate a widely used financial planning strategy called the "stretch" IRA.
"The SECURE Act, just like everything right now, is frozen by impeachment," Greg Valliere, chief U.S. policy strategist at AGF Investments, said in a keynote address Wednesday at the Schwab Impact conference in San Diego. "Impeachment will suck all the oxygen out of the room on Capitol Hill."
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Financial industry trade groups have been working feverishly to push legislators to pass the SECURE Act.
Executives from more than 90 trade groups and companies sent a letter to Senate Majority Leader Mitch McConnell, R-Kentucky, and Minority Leader Chuck Schumer, D-New York, Tuesday urging quick action on the bill, which passed the House of Representatives on a 417-3 vote. Companies including LPL Financial and Cetera Financial Group, and groups such as the Insured Retirement Institute and American Council of Life Insurers signed the letter.
The political climate in Washington will only grow more fraught in the near future, Mr. Valliere said.
"It's a wild year coming up," he said. "The next couple months will be exceptionally volatile, even by Washington standards."
Regarding impeachment, Mr. Valliere said he expects the House to impeach Mr. Trump by Christmas (he gives it an 80% chance), but doesn't think there will be enough votes in the Senate to convict the president. House Democrats are currently conducting an impeachment inquiry regarding Mr. Trump's request that the president of the Ukraine investigate Joe Biden, who is among the Democratic candidates likely to face him in the 2020 election.
The House Intelligence Committee will hold the first public hearings in the impeachment inquiry next week.
Mr. Valliere also challenged Wall Street's notion that Mr. Trump is the favorite to win the U.S. presidential election in 2020, even if he escapes the impeachment process with his office intact, pointing to Democratic gains in Virginia and Kentucky in Tuesday's local elections as signs of trouble.
In Virginia, Democrats won complete control of the state government for the first time in decades, and Kentucky state attorney general Andy Beshear, a Democrat, narrowly defeated Republican incumbent Matt Bevin for the governorship. (Mr. Bevin, who appears to have lost by 5,100 votes, hasn't yet conceded.)
"The belief on Wall Street that Trump will easily be elected is challenged after last night," Mr. Valliere said.
"I think the trend right now is not good for Trump," he added. "This last 48 hours shows he may be in more trouble than people thought."