[Congressional Record Volume 144, Number 65 (Wednesday, May 20, 1998)]
[Extensions of Remarks]
[Pages E915-E916]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




               THE SENIOR CITIZENS' FREEDOM TO WORK BILL

                                 ______
                                 

                            HON. SAM JOHNSON

                                of texas

                    in the house of representatives

                        Wednesday, May 20, 1998

  Mr. SAM JOHNSON of Texas. Mr. Speaker, I rise today to introduce 
legislation that will eliminate the so-called ``Social Security 
Earnings Test.'' Under current law, our senior citizens aged 65-69 can 
earn only $14,500 before they lose $1 in Social Security benefits for 
each additional $3 of earnings. This test is unfair, discriminatory, 
and adversely affects our country's economy. The Social Security 
Earnings Test must be eliminated.
  The Social Security Earnings Test is unfair and inappropriate because 
it imposes a form of a ``means'' test for a retirement benefit. As we 
all know, Social Security benefits have been earned by a lifetime of 
contributions to the program. American workers have been led to regard 
Social Security as a government-run savings plan. Indeed, their 
acceptance of the 12.4 percent Social Security payroll tax has been 
predicated on the belief that they will get their money back at 
retirement age. Thus, most Americans do not accept the rationale that 
the return of their money should be decreased just because they 
continue to work.
  Additionally, the Social Security Earnings Test discriminates against 
senior citizens who must work in order to supplement their benefits. 
Currently, income from investments does not affect the amount of Social 
Security benefits that a senior citizen receives. It simply does not 
make any sense to treat less favorably income from work than income 
from investments. Clearly, the Social Security Earnings Test is 
inequitable to our nation's senior citizens who are in the greatest 
need of additional income.
  The Social Security Earnings Test also negatively affects work 
incentives. The disincentive effect is magnified when viewed on an 
after-tax basis. Senior citizens who work lose a large percentage of 
their Social Security benefits due to the Social Security Earnings 
Test, but they must also continue to pay Social Security taxes, and 
probably federal and state income taxes as well. The Social Security 
Earnings Test forces senior citizens to avoid work, to seek lower 
paying or part-time work or to seek payment ``under the table.''
  In addition to being complicated and difficult for the individual 
senior citizen to understand, the Social Security Earnings Test is 
complex and costly for the Government to administer. For example, the 
test is responsible for more than one-half of retirement and survivor 
program overpayments. Elimination of the Earnings Test would help 
minimize administration expenses, and recipients would be less confused 
and less tempted to cheat on reporting their earnings.
  Finally, repealing the Social Security Earnings Test would greatly 
aid our country's economy. Our senior citizens would be likely to work 
more and the American economy would benefit from their experience and 
skills. The combined increase in the amounts that they would pay in 
Social Security and other taxes, as well as the additional contribution 
to our Gross National Product, would largely offset the increase in 
benefit payments. For decades, our senior citizens worked and dutifully 
paid their Social Security taxes, it is only fair that they fully 
receive their Social Security benefits when they are at the retirement 
age.

                                 H.R.--

       Be it enacted by the Senate and House of Representatives of 
     the United States of America in Congress assembled,

     SECTION 1. SHORT TITLE.

       This Act may be cited as the ``Senior Citizens' Freedom to 
     Work Act of 1998''.

     SEC. 2. ELIMINATION OF EARNINGS TEST FOR INDIVIDUALS WHO HAVE 
                   ATTAINED RETIREMENT AGE.

       Section 203 of the Social Security Act (42 U.S.C. 403) is 
     amended--
       (1) in subsection (c)(1), by striking ``the age of 
     seventy'' and inserting ``retirement age (as defined in 
     section 216(l))'';
       (2) in paragraphs (1)(A) and (2) of subsection (d), by 
     striking ``the age of seventy'' each place it appears and 
     inserting ``retirement age (as defined in section 216(l))'';
       (3) in subsection (f)(1)(B), by striking ``was age seventy 
     or over'' and inserting ``was at or above retirement age (as 
     defined in section 216(l))'';
       (4) in subsection (f)(3)--
       (A) by striking ``33\1/3\ percent'' and all that follows 
     through ``any other individual,'' and inserting ``50 percent 
     of such individual's earnings for such year in excess of the 
     product of the exempt amount as determined under paragraph 
     (8),''; and
       (B) by striking ``age 70'' and inserting ``retirement age 
     (as defined in section 216(l))'';
       (5) in subsection (h)(1)(A), by striking ``age 70'' each 
     place it appears and inserting ``retirement age (as defined 
     in section 216(l))''; and
       (6) in subsection (j)--
       (A) in the heading, by striking ``Age Seventy'' and 
     inserting ``Retirement Age''; and
       (B) by striking ``seventy years of age'' and inserting 
     ``having attained retirement age (as defined in section 
     216(l))''.

     SEC. 3. CONFORMING AMENDMENTS ELIMINATING THE SPECIAL EXEMPT 
                   AMOUNT FOR INDIVIDUALS WHO HAVE ATTAINED 
                   RETIREMENT AGE.

       (a) Uniform Exempt Amount.--Section 203(f)(8)(A) of the 
     Social Security Act (42 U.S.C. 403(f)(8)(A)) is amended by 
     striking ``the new exempt amounts (separately stated for 
     individuals described in subparagraph (D) and for other 
     individuals) which are to be applicable'' and inserting ``a 
     new exempt amount which shall be applicable''.
       (b) Conforming Amendments.--Section 203(f)(8)(B) of the 
     Social Security Act (42 U.S.C. 403(f)(8)(B)) is amended--
       (1) in the matter preceding clause (i), by striking 
     ``Except'' and all that follows through ``whichever'' and 
     inserting ``The exempt amount which is applicable for each 
     month of a particular taxable year shall be whichever'';
       (2) in clauses (i) and (ii), by striking ``corresponding'' 
     each place it appears; and
       (3) in the last sentence, by striking ``an exempt amount'' 
     and inserting ``the exempt amount''.
       (c) Repeal of Basis for Computation of Special Exempt 
     Amount.--Section 203(f)(8)(D) of the Social Security Act (42 
     U.S.C. (f)(8)(D)) is repealed.

     SEC. 4. ADDITIONAL CONFORMING AMENDMENTS.

       (a) Elimination of Redundant References to Retirement 
     Age.--Section 203 of the Social Security Act (42 U.S.C. 403) 
     is amended--
       (1) in subsection (c), in the last sentence, by striking 
     ``nor shall any deduction'' and

[[Page E916]]

     all that follows and inserting ``nor shall any deduction be 
     made under this subsection from any widow's or widower's 
     insurance benefit if the widow, surviving divorced wife, 
     widower, or surviving divorced husband involved became 
     entitled to such benefit prior to attaining age 60.''; and
       (2) in subsection (f)(1), by striking clause (D) and 
     inserting the following: ``(D) for which such individual is 
     entitled to widow's or widower's insurance benefits if such 
     individual became so entitled prior to attaining age 60,''.
       (b) Conforming Amendment to Provisions for Determining 
     Amount of Increase on Account of Delayed Retirement.--Section 
     202(w)(2)(B)(ii) of the Social Security Act (42 U.S.C. 
     402(w)(2)(B)(ii)) is amended--
       (1) by striking ``either''; and
       (2) by striking ``or suffered deductions under section 
     203(b) or 203(c) in amounts equal to the amount of such 
     benefit''.
       (c) Provisions Relating to Earnings Taken Into Account in 
     Determining Substantial Gainful Activity of Blind 
     Individuals.--The second sentence of section 223(d)(4) of 
     such Act (42 U.S.C. 423(d)(4)) is amended by striking ``if 
     section 102 of the Senior Citizens' Right to Work Act of 1996 
     had not been enacted'' and inserting the following: ``if the 
     amendments to section 203 made by section 102 of the Senior 
     Citizens' Right to Work Act of 1996 and by the Senior 
     Citizens' Freedom to Work Act of 1998 had not been enacted''.

     SEC. 5. EFFECTIVE DATE.

       The amendments and repeals made by this Act shall apply 
     with respect to taxable years ending after December 31, 1997.

     

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