[Congressional Record Volume 143, Number 155 (Friday, November 7, 1997)]
[House]
[Pages H10319-H10320]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




                      INDIVIDUAL REINVESTMENT ACT

  The SPEAKER pro tempore. Under a previous order of the House, the 
gentleman from New Jersey [Mr. Saxton] is recognized for 5 minutes.
  Mr. SAXTON. Mr. Speaker, I listened carefully to my friend from 
Oregon talk very articulately about the needs of middle-class 
Americans, and I agree. The middle-class American family has many 
needs; the need to, of course, provide for current-day living expenses, 
the need to provide for the futures of their kids and save money for 
that, the need to provide for safe retirement programs for themselves, 
the need to provide housing, et cetera.
  We did something good for middle-class America this year, because we 
put in place an Individual Retirement Account Program extension to help 
them save for those things, because, you see, today, under the Tax 
Code, the norm is that when we earn money, we are taxed on that income, 
and then when we put that money away for some future use and we earn 
income in the form of interest or dividends or capital gains, we are 
taxed again. So on a lot of America's income, we are not taxed just 
once, we are taxed twice, once when we earn it and once when it earns 
some income for us.
  So, wisely enough, on a bipartisan basis for middle-class American 
families, we decided this year to expand the IRA program, and, as far 
as it went, it was good, and it is good.
  This year, the eligibility level or the income total amount that a 
family can earn is not any longer $40,000; it is twice that, it is 
$80,000. It used to be, last year, that if a spouse was a homemaker, 
that spouse could not take the

[[Page H10320]]

full $2,000 provision in the way of a deduction and put that money away 
tax-free. Henceforth, he or she will be able to do that.
  We also permitted withdrawal without penalty for first-time home 
buyers, and that was certainly a great expansion. We also put in place 
a little provision to help save for our children's higher education, 
and that was good. So we did some pretty neat expansions.
  But let me say it seems to me that that only goes partway to where we 
need to be. The IRA program is good, it has been proven good for 
middle-class American families, and has been proven to help people 
save. It has encouraged savings throughout our society, and it seems to 
me that in all the talk that is going on around here about tax reform, 
that we ought to look at how we can help even more.
  Now, the $2,000 limit we are still living with today was established 
decades ago, and decades ago $2,000 was a lot of money. It is still a 
lot of money, but it was multiple times as much money in real terms 
back when it was established.
  Some time ago, I introduced a bill to increase that $2,000 amount by 
$500 a year for 10 years, so that 10 years from the time my program 
would be adopted, the amount that we could save, put away each year in 
our IRA and have as a deduction, would be $7,000. Built on top of the 
$2,000 that we have now, $500 a year for 10 years, 2 plus 5 is 7. I 
think that is real progress.
  We also proposed that middle-class America, yes, middle-class America 
fits within $80,000, but when you have got a couple of folks working, 
say they are both schoolteachers, and say the combined income is 
$100,000; today they do not even qualify under the expanded program 
that we put in place this year.
  So I suggest we increase that not to $80,000, as we already have, but 
to $100,000, so hard-working families whose mom and dad go out and make 
$50,000 apiece working hard can also qualify.
  In addition, we might want to consider there are some other 
worthwhile needs we need to save for and can withdraw from the program 
without penalty. Retirement is one currently, higher education is one 
currently, and first-time home buyer is one currently, with different 
little ramifications along the way.
  Unemployment is a need we have traditionally saved for, and we might 
want to consider adding unemployment as a provision we could withdraw 
for without penalty.
  Adoption is another one, obviously, that folks on both sides of the 
aisle talk about as being a very worthwhile activity. So we might want 
to look and talk among ourselves about some other things that we could 
withdraw from the fund for penalty-free.
  So, the individual retirement account bill I think is a very 
worthwhile bill to consider in terms of expansion. I call the new bill 
that I introduced the Individual Reinvestment Act, or IRA. The 
Individual Reinvestment Act.
  Let me also say, Mr. Speaker, that as chairman of the Joint Economic 
Committee, I know that throughout our society not only would 
individuals who save under this program benefit, but our entire economy 
and our entire society would also benefit under the program, because 
one of the things that is absolutely necessary for economic growth 
across the board is the ability to have access to capital.
  When people in small businesses or people in medium-sized businesses 
or people in large businesses want to expand their business, they have 
to borrow, and having those funds available in institutions to be 
borrowed is very important. This bill will help expand the pool of 
money available to us as well.
  So, Mr. Speaker, thank you very much for this time. I urge everybody 
to give this matter very serious consideration.

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