[Congressional Record Volume 142, Number 6 (Wednesday, January 10, 1996)]
[Senate]
[Pages S129-S130]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




                             EXPANDED IRA'S

  Mr. LOTT. Mr. President, as we continue to debate the budget, I think 
it's interesting to note that the United States now has the lowest 
savings rate of any industrialized nation in the world.
  If the situation does not change quickly, many Americans may have no 
choice but to live below the poverty level during their retirement 
years.
  Retirees can no longer depend solely on their Social Security and 
pensions to support them in retirement. I believe it is our 
responsibility to give the American people, not only an alternative, 
but in reality, a life preserver for their retirement years.
  We must encourage people to save for their own retirement. For that 
reason, I believe it is critical that we expand the current IRA's, 
allowing more people to use them for savings and investment. We should 
do this as a part of any budget package which is agreed upon or as 
stand-alone legislation.
  With that in mind, I ask unanimous consent to have printed in the 
Record a wonderful example of how the private sector is trying to deal 
with this growing threat to our Nation's future well-being. This is an 
open letter from Mr. Charles R. Schwab to the President and Members of 
Congress.
  There being no objection, the letter was ordered to be printed in the 
Record, as follows:

[[Page S130]]


           [From the Washington Times, Friday, Jan. 5, 1996]

              An Open Letter to the President and Congress


                                               Charles Schwab,

                                                     January 1996.
       Dear Mr. President and Members of Congress: I want to take 
     this opportunity to thank you for your hard work and vision 
     with regard to the budget process, and in particular, 
     Individual Retirement Account reform.
       Today, the average American household, with family members 
     who are between the ages of 51 and 60, has less than $18,000 
     in personal savings, excluding their home. With Social 
     Security teetering on the brink of disaster, this is simply 
     not enough of a resource to survive on for the next 20 or 30 
     years of their retirement. Unless this problem is forcefully 
     addressed, the vast majority of Americans will not have the 
     money necessary to fund their own retirement expenses and may 
     become a burden on their children, grandchildren, and the 
     federal government for generations to come.
       One of the only responsible solutions is to expand the IRA 
     now in the current budget process:
       When the IRA deductibility was eliminated in 1986, IRA 
     contributions dropped from almost $40 billion in 1985--to a 
     low of $7 billion last year for deductible contributions.
       Currently, over 25 million families are excluded from 
     investing in deductible IRA's, and they are relying on 
     Congress to abolish the income limit so they can save for 
     their futures. If we can't abolish the income limit, then why 
     not shorten the time frame for expansion and include indexing 
     for inflation?
       The time has come to stop discriminating against non-
     working spouses by letting them have an equal opportunity to 
     invest in an IRA.
       The United States now has the lowest savings rate of any 
     industrialized nation in the world. If we increase savings we 
     will create new jobs and build new industries.
       I urge you to act now for the sake of our country.
           Sincerely,
                                                Charles R. Schwab,
                                                         Chairman.

  Mr. LOTT addressed the Chair.
  The PRESIDING OFFICER. The Senator from Mississippi.

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