[Congressional Record Volume 141, Number 65 (Friday, April 7, 1995)]
[Extensions of Remarks]
[Pages E835-E836]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]


              CONTRACT WITH AMERICA TAX RELIEF ACT OF 1995

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                               speech of

                         HON. J. DENNIS HASTERT

                              of illinois

                    in the house of representatives

                        Wednesday, April 5, 1995

       The House in Committee of the Whole House on the State of 
     the Union had under consideration the bill (H.R. 1215) to 
     amend the Internal Revenue Code of 1986 to strengthen the 
     American family and create jobs:

  Mr. HASTERT. Mr. Chairman, I am very pleased that the House voted to 
pass provisions to lift the Social Security earning penalty on older 
Americans of retirement age from the current level of $11,280 to 
$30,000 by the year 2000. In part, we have seven very special senior 
citizens to thank for this action. These people came out to Washington 
to tell their stories this week because America needs to know how the 
earnings penalty affects its citizens. Therefore, I would like to share 
these stories with the Nation.


                    Gloria Davis, Marina Del Rey, CA

  Gloria has worked since she was 16 years old. Two years ago, when she 
discovered she owed the Social Security Administration $4,000 for 
benefits she received after exceeding the earnings limit, she became 
active in the effort to change the law. The Social Security 
Administration gave her 30 days to pay. She has told her story on 
television and through print media and has heard from seniors across 
the Nation who wrote her after seeing her on television.
  Gloria and her husband owned their own business, but went bankrupt in 
the 1980's. They lost everything and were saddled with debt. So, Gloria 
doesn't have a retirement income and must work. Gloria, like many older 
women, worked at jobs which paid little, and sometimes for employers 
who did not pay into the Social Security System. Her monthly benefit 
averages $467.
  Gloria has a background in public relations, sales, advertising, and 
television production. At one time she was State director of the Miss 
U.S.A./Universe Pageants, Miss America pageant and several other 
pageants. She has served as an event planner and trade show organizer 
for many years. Gloria currently works a full time job at Car Barn 
Airport Parking.


                       Betty bourgeau, taylor, MI

  Betty entered the workforce 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 Head Start Program, went back to school and became 
qualified to be a Head Start lead teacher. However, Betty quit teaching 
Head Start, 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 
[[Page E836]] 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 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.
                 Mary Lou Livingstone, Springfield, IL

  Mary Lou was divorced 19 years ago and 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.


          mr. and mrs. robert and shirley hickey, unadilla, ny

  Robert and Shirley have both worked most of their lives. Shirley 
suffered a brain aneurism several years ago and is no longer able to 
work. However, Robert still works at a calendar factory as a kensole 
operator imprinting the lettering on the calendars. This is just to 
make ends meet. They have a 401(k) plan, but no other outside income.
  Last year, Robert earned more than the earnings limit allows and was 
recently fined $1,650 by the Social Security Administration. As a 
result, he and Shirley took out a personal loan against their 401(k) 
plan at a rate of 10 percent in order to pay their bill to Social 
Security. They can not afford the alternative, under which the Social 
Security Administration would cease payment of monthly Social Security 
benefits until the payment was complete. At the same time, Robert pays 
over $3,000 a years in Federal income taxes for the privilege of 
working.


                      Mary Lou Hagan, Groville, CA

  Mary Lou is a widow and is currently looking for part time work. She 
has been in the banking business for years, serving as a bank manager, 
loan officer and operations manager. She was earning a comfortable 
salary when the bank went under, with her retirement benefits with it. 
All of her retirement plan was in bank stock. After the bankruptcy, she 
recovered only $1,000 from her retirement plan. In addition, much of 
her savings was invested in this stock, so she suffered further loss.
  Mary Lou is an avid volunteer and serves on the hospital board, the 
Chamber of Commerce, Friends of the Park, and Soroptimists 
International.
  Nevertheless, Mary Lou wants and needs to get back to work, but the 
earnings penalty poses obstacles to gainful employment. A job she has 
recently applied for would require her to work all year at a salary 
that would exceed the limit by about $3,000. She could not take the job 
without agreeing to this work load, but she would not receive the 
benefits of the extra work.
                joseph o'brien, rancho palos verdes, ca

  Joe is an electrical engineer with 40 years of experience. He holds 
three patents for high speed counters. He has deliberately stopped 
working because he reached the earning limit after the first few months 
of the year. Society is being deprived of his considerable expertise 
because he is unable to keep his earnings if he works over the limit. 
He pays taxes to the Federal Government, which he feels are not 
adequately considered when the cost of the lifting the Social Security 
earnings penalty is calculated.
  Joe feels that the optimum strategy is for a senior to work until 
hitting the limit, then quit for the rest of the calendar year. This 
makes it difficult for him to find a job fully utilizing his talents. 
His prospective employers know there must be limits on his commitments, 
so he ends up working on a contract basis, which means there are no 
benefits. In 1993, after reaching the limit, he made only 17 cents on 
the dollar after marginal tax rates were applied to his income. Joe 
realized he could have earned more on California unemployment.
  Joe's father was also affected by the Social Security earning limit 
when he was alive. After raising three children alone--this wife died 
at age 42--and sending them through college, he was forced to work in 
his retirement years. Joe's father ended up taking money under the 
table through jobs that did not report his income to Social Security to 
avoid the law. While Joe does not advocate this, he knows it is a 
reality for many seniors.


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