EDITORIAL: Banks win, 401(k) investors could lose under Trump

Under President Donald Trump, ordinary Americans keep losing.

Earlier this week, Senate Republicans voted to kill a rule that would allow Americans to sue banks through class-action lawsuits. Vice President Mike Pence cast the deciding vote. The House voted in July to repeal the rule, so the bill now heads to the president’s desk. He is expected to sign it, effectively delivering a huge win to Wall Street.

The hits will keep coming for Americans living on Main Street. As the GOP moves to hand rich Americans an enormous tax cut, some influential Republican lawmakers want to greatly reduce a tax break for people who wisely save money in employer-sponsored 401(k) retirement plans. Trump said Monday on Twitter he doesn’t want 401(k) tax breaks to be touched, but some lawmakers haven’t given up. Republicans see a president with little understanding of policy who will do just about anything for a big legislative win.

Republican congressmen from Illinois bear as much blame as Trump for the financial blows to the middle and working classes. In July, U.S. Reps. Peter Roskam of Wheaton and Randy Hultgren of Plano voted to overturn the rule to allow Americans to sue financial institutions.

Reps. Adam Kinzinger of Channahon; Mike Bost of Murphysboro; Rodney Davis of Taylorville; John Shimkus of Collinsville, and Darin LaHood of Peoria also voted to quash the rule put in place by the Consumer Financial Protection Bureau.

The bureau had wanted to give consumers a fighting chance against rip-offs like Wells Fargo opening some 3.5 million unauthorized accounts in customers’ names. The bank was able to block lawsuits because of arbitration clauses.

GOP lawmakers say class-action claims would harm banks, and steep costs to fight suits would result in higher fees for customers.

By blocking the rule, though, Republicans will take away a vital incentive for banks to operate more honestly. They continue to stack the deck against the rest of us.

They also are all too willing to sacrifice tax breaks for millions of Americans to give bigger breaks to Wall Street and wealthy people. The current tax benefit for 401(k) investments motivates people to save for retirement. People can save up to $18,000 a year in tax-deferred plans. If you’re older than 50, the amount goes up to $24,000. Some GOP lawmakers want to cap before-tax contributions at a measly $2,400.

After tweeting earlier in the week that “there will be NO change to your 401(k),” Trump, ever the sellout, sounded Wednesday like he could come around to scaling back tax breaks for retirement accounts.

“Maybe we’ll use it as negotiating, but trust me … there are certain kinds of deals you don’t want to negotiate with,” Trump said.

He wants a legislative win, no matter the cost to millions of Americans who will pay dearly.

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