[Congressional Record Volume 141, Number 62 (Tuesday, April 4, 1995)]
[House]
[Pages H4160-H4161]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]


                REPUBLICAN TAX BILL BENEFITS REAL PEOPLE

  The SPEAKER pro tempore. Under a previous order of the House, the 
gentleman from Illinois [Mr. Hastert] is recognized for 5 minutes.
  Mr. HASTERT. Mr. Speaker, it is interesting to hear my colleague from 
the other side of the aisle talk about immorality and how tax breaks go 
to the rich.
  But let me talk a few minutes about what this tax bill will do for 
people, real people, people who are 65 years of age. And because they 
have never been very wealthy all their lives or never had great jobs 
all their lives they do not have big pensions, and they do not have a 
lot of income coming in from other types of investments, investments in 
rents and other things. But, lo and behold, people who have to work, 
people who have to work to make ends meet, people who have to work to 
pay the taxes on their homes that they live in and, heaven forbid, 
maybe even buy a new car someday, real people like your mother and 
father and your grandparents, people in your lives that you know every 
day, day in and day out.
  What happened with the 1933 tax bill is something called the earnings 
test on Social Security. The earnings test on Social Security says once 
you earn $11,280, you have to pay $1 out of every $3 in penalty that 
you make on your Social Security.
  So when you add up all your taxes and all your tax liabilities, if 
you are a senior and you are 66 years of age and you have to work to 
keep your family together and maybe pay your taxes on your home and 
maybe groceries and things like that, all of a sudden you are paying a 
marginal tax of 56 percent, twice the amount that millionaires pay.
  But you know in the tax bill that our friends on the other side of 
the aisle talk so vehemently about, there is some real relief for 
seniors that have to work, that have to take care of their families, 
that want to live a life like everybody else, that want to be 
productive.
  Mr. Speaker, what happens there is that seniors get a break with this 
tax bill, that we raise over the next 5 years the earnings test to 
$4,000 a year, and so in 5 years you can earn $30,000, not a lot of 
money in our day and age but enough for sustenance to keep a family 
together and not pay that penalty on your Social Security.
                              {time}  1915

  Now we think this is a fair bill. The President thought it was 
certainly something fair because he included it in his campaign report. 
But let me talk to you a little bit about some real people, real people 
who live in my district and probably in your district and across this 
country:
  Betty Bourgeau: Betty entered the work force at age 50 when her 
husband left her and her children. She worked two part-time minimum 
wage jobs at a department store and for a security company. She then 
became a teacher's aide for a HeadStart program, went back to school 
and became qualified to be a HeadStart lead teacher. However, Betty 
quit teaching HeadStart, the job she loved, when she began taking 
Social Security. She would lose most of her benefits with both jobs. 
Her department store job included health care benefits she needed, so 
she remained employed there.
  Betty has received several ``Employee of the Year'' awards at the 
department store over the years, accompanied by pay raises. However, 
when she takes the raises, she must reduce her hours or lose more of 
her benefits to Social Security. This puts her in a particularly 
difficult situation because her health benefits are predicated on 
working a certain number of hours for the department store. Regulating 
her 
[[Page H4161]] hours is also difficult during the busy holiday season 
at the end of the year. The store needs her more during these times, 
but she loses most of her benefits if her work puts her further over 
the Social Security limit.
  Now that type of a situation happens time and time again. Why do we 
penalize? Why do our friends on the other side of the aisle want to 
penalize working seniors? Why do they want to vote no on this type of 
legislation?
  Let us look at Mary Lou Livingston from Springfield, IL: Mary Lou was 
divorced 19 years ago and has worked ever since. She has no pension or 
retirement plan to draw from. She had to pay the Social Security 
Administration back $549 in 1991, $281 in 1992, $935 in 1993 and $730 
in 1994 for earnings exceeding the Social Security earnings limit. 
During those years, her average Social Security check was $288 per 
month. In 1994, Mary Lou cut back her hours to try to avoid the 
penalty, but still had to pay some money back. Mary Lou supplements her 
grocery bill each month through the Share Program sponsored by Catholic 
Charities. This program allows her to pay $14 per month and receive $35 
worth of groceries.
  Mary Lou works as an information receptionist at the Visitors Center 
of the Lincoln Home National Historic Site in Springfield, IL. She has 
worked there for nearly 12 years and has received numerous 
complimentary letters for her job performance. She was also featured as 
a staff star of the Springfield Bureau of Tourism.
  Here is a person who needs to work, needs to have the tax relief that 
the tax bill that we will vote on the rule tomorrow will give her, but 
yet there are some who want to demagogue the issue and talk about how 
all these benefits go to the rich when, in fact, they go to real 
people, real people who really need them.
  Mr. BILIRAKIS. Mr. Speaker, I want to take this opportunity to 
express my strong support for increasing the Social Security earnings 
test and eliminating taxes on Social Security recipients.
  With regard to the Social Security earnings test, currently, older 
Americans between the ages of 65 and 69 lose, $1 in Social Security 
benefits for every $3 they earn above $11,160.
  I have consistently cosponsored legislation to repeal the limitation 
placed on the outside earnings of Social Security benefit recipients. 
Current law, in my opinion, punishes seniors who choose to remain 
productive beyond age 64.
  The Senior Citizen's Equity Act, which I strongly support, raises to 
$30,000 the amount which seniors can earn before losing Social Security 
benefits. I believe this is a necessary step--we should be encouraging 
rather than penalizing productive, experienced people who want to work.
  I also strongly support repealing President Clinton's Social Security 
benefits tax--in fact, one of the primary reasons I voted against 
President Clinton's 1993 tax package was due to the additional tax 
burden it placed on Social Security beneficiaries.
  I am pleased that the Contract With American includes provisions to 
repeal this unfair benefits tax.
  Since I was first elected to Congress, I have always fought to 
protect the social contract represented by Federal retirement programs, 
including Social Security. As a Member of Congress who represents one 
of the largest concentrations of older Americans in the Nation, I am 
committed to continue this battle to protect the benefits of our 
seniors.
  Therefore, I will be supporting the Tax Fairness and Deficit 
Reduction Act of 1995 when it is voted upon by the House of 
Representatives this week.
  Mr. GOSS. Mr. Speaker, tomorrow the House will take up the last item 
in our Contract With America.'' The passage of H.R. 1215 will reverse 
the tax-and-spend mentality of recent Congresses, and finally give the 
American taxpayer some long-overdue relief from the highest Federal tax 
burden in our country's history. Not only does our bill provide much-
needed tax relief for working families, it includes several badly 
needed, and long-overdue relief measures for our Nation's seniors. I'm 
especially
 proud of the fact that our bill provides several carefully crafted 
provisions to help seniors with the ever-looming, and potentially 
devastating cost of long-term health care. Our bill will allow seniors 
to deduct the cost of long-term care insurance premiums and the cost of 
any substantial long-term care expenses. Adopting these changes will 
end the tax codes' current discrimination against seniors, and make the 
tax treatment of long-term care costs similar to that currently 
provided for employer-provided health insurance and out-of-pocket 
medical expenses. Not only is this fair--but it is a good idea. These 
provisions will help seniors provide for their own future health needs 
while enabling them to maintain their independence and dignity in the 
event they are saddled with a costly, long-term care episode. Rather 
than compel millions of seniors to spend down their life savings to 
qualify for medicaid benefits, as our current laws do, these provisions 
help seniors preserve their savings while helping themselves. We've 
also provided a tax credit for families who care for a loved one at 
home. This will help families stay together, and again, help prevent 
older Americans from having to suffer, unnecessarily, from the cost and 
isolation of institutional care. H.R. 1215 also includes several other 
provisions to provide seniors immediate economic help. First, we've 
committed to repealing the ill-conceived new tax on social security 
benefits--imposed by the 1993 Clinton tax bill. This tax is really a 
double tax on retirees' past earnings. While proponents of this tax 
like to label it a tax on the wealthy, in reality it applies to any 
recipient earning over $34,000 a year or to any couple with a combined 
income
 over $44,000. This is hardly what most people would consider wealth. 
And I would contend this is hardly a lavish amount of income for 
seniors facing today's health care costs. Worst of all, these income 
thresholds are not indexed for inflation, so over time, as people's 
earnings rise, more and more seniors will find that they are wealthy as 
defined by the Clinton tax bill, and be subject to this confiscatory 
tax. Given all these facts, I think the case for repealing this tax is 
clear. Finally, H.R. 1215 would provide immediate relief to thousands 
of Social Security recipients who are currently penalized by the un-
American application of the Social Security earnings test limit. Today 
when a senior between the ages of 65 and 69 earns more than $11,280 a 
year in wages, we start confiscating a third of that person's Social 
Security benefits. This puts seniors living on fixed incomes in a 
terrible dilemma--if they find their benefits are inadequate to live 
on, and they try to supplement their incomes by returning to work, they 
face marginal tax penalties of nearly 50 percent. Worst of all, because 
the limit doesn't apply to dividend income, capital gains, or other 
nonwage earnings, it disproportionately impacts those seniors who need 
the additional income from working. Not only does this discourage 
people from trying to be responsible and take care of their own needs, 
it deprives our entire economy of the accumulated knowledge of an 
entire generation of older workers. By raising the earnings limit to 
$30,000 per year, our bill takes an important step toward ending this 
nonsense of the vast majority of seniors who need or want to return to 
work, and return us to a policy which again respects our traditional 
American ethics of hard work and self-reliance. Mr. Speaker, these 
reforms constitute the bulk of our Contract With America's seniors. 
They deserve the full support of this House tomorrow when we take up 
H.R. 1215.


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