Some have been following the proposal to raise the limit that a blind
person on Social Security Disability benefits can earn and still receive
benefits. The article below says that the proposal died in the House Ways
and means Committee and Rep. Klezka of Wisconsin says that the bill is
dead for the rest of this year.
kelly
[The Wall Street Journal Interactive Edition]
March 1, 2000
Dow Jones Newswires
U.S. House To Act On Earnings Test Repeal Wednesday
(This item was originally published Tuesday)
By Fowler W. Martin
WASHINGTON -- The House Ways and Means Committee, on a unanimous voice
vote, cleared a measure that would partially repeal limits on the
amount of money U.S. seniors can earn without losing Social Security
benefits.
In an unusual development, Republicans and Democrats then immediately
agreed to subject the politically compelling measure to a vote by the
full House Wednesday where it may well again receive unanimous
approval.
President Clinton has promised to sign the bill as long as it remains
devoid of unrelated provisions.
The initiative, introduced in its current form by Rep. Sam Johnson,
R-Texas, eliminates the so-called earnings test for seniors who have
reached Social Security's normal retirement age, or 65 at present.
Under current law, the normal retirement age is scheduled to gradually
increase in two-month increments until it eventually reaches 67 for
those born after 1959.
Seniors who elect to start collecting Social Security payments before
they reach the normal retirement age will continue to lose one dollar
in benefits for every two dollars they earn in excess of $9,270 this
year under the House bill. The limit rises slightly in future years.
That's significant because nearly 80% of those eligible chose to start
collecting payments between the ages of 62 to 64 even though the
amounts they receive are permanently lower than what they would get if
they waited until age 65 or older.
The Clinton administration and many legislators oppose repealing the
penalty that applies to the 62-64 age group on the grounds that it
would likely cause an increase in poverty among elderly widows.
That's because even more seniors would presumably claim benefits early
if the penalty were removed. The reduced benefit passes on to
surviving spouses, most of whom tend to be women because women
generally outlive men.
Repealing the initial penalty would also reduce the solvency of the
Social Security trust fund by about one year on a 75-year basis of
measurement whereas repeal of the penalty applying to those between
the ages of 65 and 69 has a negligible impact on the long-term
solvency of the fund.
On a shorter basis of measurement, however, repeal of the penalty that
affects those who have reached normal retirement age will put about
$22 billion into the pockets of relatively wealthy Social Security
beneficiaries over the next 10 years.
Most of the funds will go to males in the top 20% income bracket,
Social Security Commissioner Kenneth Apfel told the Ways and Means
committee earlier this month.
Before the final committee vote, Rep. Gerald Kleczka, D-Wisc.,
attempted to amend the measure to permit blind individuals to earn
more money from work without losing Social Security disability
benefits.
But panel chairman Rep. Bill Archer, R-Texas, shot the attempt down on
a point of order, ruling the amendment wasn't germane to the purpose
of the bill.
"The bill is clearly not designed to act on the disability trust
fund," he said.
Social Security subcommittee chairman Rep. Clay Shaw, R-Fla., who
launched the procedural move against Kleczka, promised, as an
alternative, to hold hearings on the matter late next month.
"That is buzz words around here for 'sorry pal, you're out of luck',"
said Kleczka. What Shaw's promise to hold hearings means is that there
isn't going to be an initiative to aid the blind this year, he
complained.
Archer and Shaw, seeking to preserve the "clean bill" demanded by
Clinton, also blocked on similar grounds an attempt by Rep. William
Jefferson, D-La., to use the bill as a vehicle to solve a pension-loss
problem facing spouses of retired federal workers.
The Ways and Means bill won't be subject to amendment on the House
floor under the expedited procedures Republicans and Democrats agreed
to. It isn't yet clear, however, whether the measure can clear the
Senate, which has different rules, without being amended.
During Ways and Means consideration of the measure, Shaw estimated
that about 800,000 seniors will benefit from repeal of the earnings
test for those between the ages of 65 and 69. Seniors 70 or over don't
face a penalty.
"If nothing is done, the average cut in benefits will be about $8,000
this year," Shaw said.
Seniors who lose benefits under the earnings test eventually get most
of them back over a period of years - assuming they live long enough -
but that aspect of Social Security is not well understood or
appreciated.
AARP, an organization that represents millions of retirees and those
reaching retirement, hailed the Ways and Means committee's action.
"At a time when labor shortages loom on the horizon and people are
living longer, we should encourage, not penalize, older workers,"
Horace Deets, the organization's executive director, said.
The bill, known as the Senior Citizens' Freedom to Work Act of 2000,
is compelling election year legislation because U.S. seniors have a
very high propensity to vote.
-By Fowler W. Martin; (202) 862-6616 E-mail [log in to unmask]
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