[Congressional Record Volume 141, Number 1 (Wednesday, January 4, 1995)]
[Extensions of Remarks]
[Pages E10-E11]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]


                      INTRODUCTION OF IRA PROPOSAL

                                 ______


                          HON. RICHARD E. NEAL

                            of massachusetts

                    in the house of representatives

                       Wednesday, January 4, 1995
  Mr. NEAL of Massachusetts. Mr. Speaker, today I am introducing the 
Individual Retirement Options Improvement Act of 1995. This legislation 
makes changes to the Internal Revenue Code to improve Individual 
Retirement Accounts [IRA's].
  The purpose of this legislation is to increase our national savings 
rate. The legislation consists of two major components which are to 
encourage savings by increasing the amount of deductible contributions 
which may be made to an individual retirement account and to allow 
homemakers to be eligible for the full IRA deduction. First, the 
legislation allows an individual who is an active participant to deduct 
the allowable amount and to deduct 50 percent of the excess amount for 
that taxable year. This provision increases the deductible amount which 
individual taxpayers are currently allowed for IRA's. The legislation 
does not increase the $2,000 limit. Second, the legislation addresses 
the spousal IRA issue. The legislation allows homemakers to make the 
[[Page E11]] same deductible IRA contribution as their working spouses.
  The purpose of this legislation is to increase our national savings 
rate. IRA's are a proven tool to boost our savings rate. This 
legislation increases the amount that can be deductible in an IRA. 
Taxes are just deferred. The focus of this proposal is savings for 
retirement. A new analysis commissioned by Merrill Lynch on the 
financial wealth of American families shows that half of American 
families currently have below $1,000 in net financial assets. Action 
needs to be taken to improve this statistic.
  Allowing homemakers to contribute the full amount to an IRA corrects 
an inequity and creates an incentive for savings. Increased retirement 
savings will result in economic growth and help retirees become 
financially independent. We have to encourage individuals to save for 
their retirement. This legislation is a step in the right direction. I 
urge you to support this legislation.


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