[Congressional Record Volume 140, Number 68 (Thursday, May 26, 1994)]
[Extensions of Remarks]
[Page E]
From the Congressional Record Online through the Government Printing Office [www.gpo.gov]


[Congressional Record: May 26, 1994]
From the Congressional Record Online via GPO Access [wais.access.gpo.gov]

 
     ADMINISTRATION RENEGES ON SOCIAL SECURITY EARNINGS TEST REPEAL

                                 ______


                         HON. J. DENNIS HASTERT

                              of illinois

                    in the house of representatives

                         Thursday, May 26, 1994

  Mr. HASTERT. Mr. Speaker, in testimony on Tuesday, May 24, 1994, 
before the Senate Finance Committee, Social Security Administrator 
Shirley Chater told Senators the administration could only support a 
$1,000 increase in the Social Security earnings limitation. The current 
limit is $11,160. Because of the limit, senior workers between age 65 
and 69 are penalized $1 for every $3 they earn over the earnings limit.
  President Clinton in his campaign blueprint, ``Putting People 
First,'' promised seniors he would repeal the earnings limit, but 
instead he delivers almost nothing. The earnings limit, which has an 
annual escalator, would likely rise next year by $500 without 
congressional action. Thus, President Clinton's $1,000 plan as 
mentioned by Chater may only amount to $500 a year of new relief. In 
fact, it is probably not accurate to call it a plan, because in follow 
up conversations with SSA staff after the hearing the Social Security 
Administration indicated no timetable for seeking a change, but only 
that the Administrator was answering a hypothetical question.
  Assuming the proposal is forthcoming, allowing seniors to earn $500 
more a year without penalty cuts their unfair burden by $166, or about 
$3 per week. With seniors facing higher taxes and health care costs, $3 
a week will barely buy them lunch on Monday. What happened to the 
Clinton administration that promised seniors bold reform and fairness 
during the Presidential campaign?
  When coupled with other Federal taxes, seniors who earn above the 
modest earnings limit are faced with a 56-percent marginal tax rate--
nearly twice the rate millionaires pay. This is unfair and 
discriminates between differing demographic groups that make the same 
amount of money.
  For instance, take the example of two seniors and one middle-aged 
person, each making $25,000 per year. The senior whose income comes 
from unearned sources is subject to income taxes. The middle-aged 
person's income is subject to income and FICA taxes. However, the 
senior whose income is earned because he or she receives a salary is 
subject to income, FICA and a 33-percent penalty for any salary over 
the $11,160 limit. This ludicrous. The working senor pays more in taxes 
than any other group in his or her income bracket.
  I would like to point out the story of Jean Austin, an Illinois woman 
who must work to make ends meet. Her annual earnings are only $15,000 
but she pays a $1,600 penalty. This woman is a perfect example of why 
the earnings limit should be repealed. She's not wealthy by anyone's 
standards, but because of the 1930's vintage earnings limitation she's 
penalized through her Social Security. It's time we stopped penalizing 
our senior citizens for remaining active in the workplace.
  Critics of repeal argue that if seniors get to keep their earnings 
the Federal Treasury will suffer, but a study conducted by former 
Treasury economists found that net Federal revenues would actually 
increase if the limit were raised as high as $39,000. Common sense 
tells you that seniors will go back into the work force or stay on in 
their current positions throughout the year if they won't be working 
for pennies on the dollar. Other seniors engaged in the underground 
economy will report their incomes. If you stop confiscating senior's 
wages they will keep working and they will pay their fair share of 
taxes.
  I urge my colleagues to cosponsor my bill, the Older Americans' 
Freedom to Work Act--H.R. 300. The bill currently has 222 cosponsors. 
At the very least, this issue should be debated on the House floor. 
Because the committee with jurisdiction will not consider the bill, and 
has not scheduled hearings, even though I introduced this legislation 
he first day of the 103d Congress, I have introduced Discharge Petition 
No. 18 for a rule to consider H.R. 300.
  In the last Congress, the Senate passed complete repeal and the house 
passed a 5-year liberalization of the earnings limit to $20,000. But no 
satisfactory agreement could be reached between the Houses of Congress. 
Let's make 1994 the year to end this discrimination against seniors.

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