He said that if the president's plan becomes law, a small business owner has saved $3 million in his or her 401(k) account, won't be allowed to save any more—and will have to pull out and pay tax on any balance over that amount. Without any further incentive to keep the plan, many small business owners will now either shut down the plan or reduce contributions for workers. “This means that small business employees will now lose out not only on the opportunity to save at work, but also on contributions the owner would have made on the employee's behalf to pass nondiscrimination rules,” Graff said.

“The proposed retirement savings cap in the president's budget is not closing a loophole and is not correcting some perceived abuse of the rules,.” Graff added. “Rather small business owners have been playing by the rules all along. They saved each year within federally dictated contribution limits and they provided matching and other contributions to their employees to comply with federally mandated nondiscrimination rules. Now these small business owners are being punished for doing right by their workers and saving and investing successfully,” he said.

Robert Smith, president of the National Association of Insurance and Financial Advisors, added another concern.

“The current tax code already has contribution limits to retirement savings programs, including IRAs, and, therefore, limits on account balances is detrimental to conscientious taxpayers who have made current sacrifices for future security.”

The budget also contains chestnuts from past administration budgets that would impose de facto tax hikes on other industry products, but these are seen as having little likelihood of becoming law, according to officials at Washington Analysis, which advises institutional investors and hedge funds.

One proposal would subject the dividend received deduction for general account dividends to the same flat proration percentage that applies to non-life companies under current law (15%).

Another would base the DRD for separate account dividends on the proration of reserves to total assets of the account.

NAIFA's Smith warned that, “Planning for your future financial security is about managing risks and needs, and NAIFA members help their clients consider a range of factors when planning for retirement, including life's unexpected needs.

“There should be no limit on the need that life insurance and annuities will address, so how can you limit the vehicles you use (such as IRAs) to address those needs?” Smith asked.

Smith “encouraged” Congress to carefully consider the negative consequences of arbitrary caps. “What may seem to be too much protection for some, will inevitably be too little protection for others,” he said.

The potential impact of the retirement cap proposal was laid out in stark detail by EBRI.

The data implied that the proposal, if enacted, would snowball over time on growth of the U.S. retirement savings industry.

Specifically, EBRI said that based on an analysis of its database, that as of 2011, just 0.03% of the approximately 20.6 million accounts had more than $3 million in assets.

About 0.06% of the total account holders (some individuals own more than one account), and about 0.11% of account holders who are age 60 or older surpass the threshold, EBRI officials said.

However, based on inflation, 2.2% of those currently ages 26–35 will be affected by the $3 million cap (adjusted for inflation), compared with just 0.1% of those ages 56–65.

And, at the $2.2 million level cited above, 6.0 percent of younger retirement savers would be affected by age 65, compared with 0.3 percent of those ages 56–65, EBRI said.

Additionally, when age adjustments are factored into asset allocation, 4.2% of those aged 26–35 would be affected by a $2.2 million cap, EBRI said.

“Those closer to retirement would be less likely to exceed the threshold by the time they reach age 65,” EBRI officials said.

The proposal to expand pro rata interest expense disallowance for Corporate-Owned-Life Insurance would reduce the tax advantages for companies that buy insurance for their employees, and would likely reduce the demand for COLI, Schoen and others said. Last year this proposal was estimated to raise $7.3 billion over 10 years.

The proposal by the White House released Wednesday calls for a $3.77 trillion spending plan that proposes modest new investments in infrastructure and education, major new taxes for the wealthy and significant reforms aimed at reducing the cost of Social Security and Medicare.

The budget was released as Washington girds for another potential showdown over the federal debt limit later this summer.

Administration officials said in a background briefing that the blueprint lays down the president's “bottom-line offer for getting federal borrowing under control.”