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For a minute, Sean Spicer threw the future of America's retirement plans into some doubt
(President Donald Trump.Kevin Dietsch/Getty)
An exchange between White House press secretary Sean Spicer and a CNBC reporter on Thursday led to a moment of confusion over whether the Trump administration's new tax plan would mean retirement accounts would lose their tax-exempt status.
That move could throw the retirement-savings industry — with about $7 trillion parked in 401(k) accounts and a similar amount in IRAs — into chaos.
The White House subsequently clarified that 401(k) plans would not be affected if the tax proposal became law.
But the misunderstanding was another product of the vagueness of the tax plan, which says only that it would "eliminate targeted tax breaks that mainly benefit the wealthiest taxpayers."
Here's the exchange between Eamon Javers of CNBC and Spicer:
Javers: "Can you lay out what the president's vision is for 401(k)s, and specifically tax deductions surrounding those? Does the president imagine removing those deductions entirely, or is he going to protect them?"
Spicer: "So the secretary of the Treasury and Director Cohn yesterday both talked about that. The current plan both protects charitable givings and mortgage interest, and that's it."
It was immediately apparent that Spicer may have misspoken. In rolling out the plan on Wednesday, Trump administration officials spoke about the elimination of deductions like state taxes. The administration said that only charitable contributions and mortgage interest deductions would be spared.
But retirement plan contributions are tax-exempt, meaning taxpayers don't have to report them as income.
Still, it took a clarification after the fact from the White House to sort it all out.
"Retirement saving is an exemption, not a deduction, and Sean was referring to deductions," a White House official told Business Insider. "The president's tax-reform plan protects homeownership and charitable-giving deductions as well as retirement saving."
That's not the only aspect of the plan that's unclear. Earlier on Thursday, Treasury Secretary Steven Mnuchin said he couldn't guarantee whether the middle class would see a tax cut under the plan, because the proposal presented Wednesday is still short on specifics.
Here's the video of the press briefing. You can watch the exchange between Javers and Spicer at the 1:08 mark.
Brett LoGiurato contributed reporting.
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