[Congressional Record Volume 150, Number 126 (Thursday, October 7, 2004)]
[Extensions of Remarks]
[Pages E1819-E1820]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




      INTRODUCTION OF THE BETTER FUTURE FOR AMERICAN FAMILIES ACT

                                 ______
                                 

                          HON. JOHN B. LARSON

                             of connecticut

                    in the house of representatives

                       Wednesday, October 6, 2004

  Mr. LARSON of Connecticut. Mr. Speaker, I rise today to introduce the 
Better Future for American Families Act. This legislation will help 
increase access for low- and moderate-income American families to 
private retirement investments. Families are struggling to make ends 
meet and this tax credit will give them an extra incentive to invest in 
their future.
  Since Social Security was created in 1934, the model for retirement 
savings has been a three-legged stool. The three legs of that stool 
are: Social Security benefits, private pensions, and personal savings 
and investment. Without one of those legs, the stool wobbles. As 
Reinhard A. Hohaus, an early private-sector authority on Social 
Security, explained, ``Each (leg) has its own function to perform and 
need not, and should not, be competitive with the others. When soundly 
conceived, each class of insurance can perform its role better because 
of the other two classes.'' Unfortunately, some are advocating for a 
significant weakening of Social Security by taking funds away from this 
leg of the stool by allowing workers to invest some of their Social 
Security taxes in personal accounts. Instead of weakening Social 
Security, I propose that we strengthen incentives for all Americans to 
invest in their retirement.
  For years, Americans worked their entire careers with one company and 
could rely on a generous pension coupled with Social Security benefits 
to provide for a comfortable retirement. This is no longer the case. 
Workers change jobs more often, pensions have become less reliable in 
this world of Enron accounting, and the Social Security trust fund will 
be strained by the retirement of the baby boomers. In this environment, 
workers should be investing in individual retirement accounts, but due 
to rising costs in housing, health care, and other necessities, many 
families are no longer able to save for the future. While Congress has 
passed laws to create IRAs and 401(k) plans to encourage investment, 
more than 90 percent of the tax benefits the federal government offers 
to help families save go to households earning more than $50,000. We 
need to broaden these incentives to include all Americans, especially 
those whose struggle to cope with the costs of living here and now are 
causing them to ignore their future financial security.
  One of the most sensible tax credits enacted by the Economic Growth 
and Tax Relief Reconciliation Act of 2001 was the Saver's Credit, which 
offered low- and moderate-income workers up to a dollar-for-dollar 
credit for contributions to an individual retirement account or a 
qualified employer-sponsored plan. The credit phases out rapidly as 
income rises, so this is truly a tax break for middle class Americans. 
Unfortunately, this tax credit is scheduled to expire in 2006. Even 
worse, as the Republican majority tries to extend every other tax cut 
from 2001, to the benefit of the wealthiest, this expiring tax credit 
for middle class Americans is being ignored.
  My legislation would make the Saver's Credit permanent and would 
significantly expand the program to give help to millions by increasing 
benefits for families earning less than $50,000. Additionally, although 
57 million taxpayers are eligible for the maximum credit on paper, 80 
percent of them cannot actually benefit because they do not have income 
tax liability. These families need as much help as anyone and my 
legislation would make them eligible for the Saver's Credit by making 
it a refundable tax credit.
  Mr. Speaker, I believe that this tax credit is the most fiscally 
responsible avenue for Congress to encourage personal savings and 
ensure that American families have financial security during their 
retirement years. Stripping money from Social Security only shifts the 
wobbling leg of the stool. This legislation would strengthen all legs 
and provide a solid foundation for retirement for all Americans. I 
encourage all of my colleagues to join me in supporting this 
legislation.

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