House GOP goes after Social Security earnings penalty, on heels of marriage penalty bill's success

In exclusive CNN online interview, Clinton welcomes proposal

By Ted Barrett/CNN

February 14, 2000
Web posted at: 4:32 p.m. EST (2132 GMT)

WASHINGTON (CNN) -- On the heels of passing a bill aimed at eliminating the so-called marriage penalty on income taxes, House Republicans were set Monday to introduce legislation that would allow older workers to earn paychecks without suffering a reduction in their Social Security benefits.

In an online interview with CNN and CNN.com on Monday afternoon, President Bill Clinton welcomed the move with open arms, saying, "I am thrilled by this. I hope this is the beginning of a signal that they are willing to work on Social Security today."

The bill, which would repeal the Social Security earnings limit, is the second in a series of tax-cut measures Republicans hope to pass this year.

The bill will be introduced by Rep. Clay Shaw, (R-Florida), the chairman of the House Ways and Means Subcommittee on Social Security, and Rep. Sam Johnson, (R-Texas). It will allow seniors, aged 65-69, who now lose $1 in their Social Security checks for every $3 they earn over $17,000 yearly to avoid that reduction.

About 800,000 working seniors are affected by the bill, according to the Ways and Means Committee. Earners over 70 do not face the reduction, and investment income is not counted.

In the CNN.com interview, Clinton said elimination to the earnings limit made perfect sense.

"If you are 65 today, your life expectancy is 83," he said. "As baby boomers retire, it will be important to have a high percentage of older people working."

The earnings limit was created during the Great Depression as a way to discourage older workers from holding on to their jobs while younger workers remained unemployed.

The White House has indicated it would rather deal with the Social Security problems as a whole -- including the issue of solvency -- rather than passing reform measures piecemeal.

Nonetheless, Clinton said Monday that if Congress sent him a "clean" bill, he would sign it. Then, he would urge them to consider channeling interest savings from paying down the national debt into the Social Security Trust Fund, and implementing measures that would shield single women from poverty."

"It's the right thing to do, so let's just do it," he said.

Republicans estimate the cost of the reduction to the federal government could be $22.7 billion over 10 years, but that the costs will be offset entirely over 75 years because more income taxes will be paid by increasing numbers of older workers.

Congressional GOP leaders are expected to seek additional tax cuts by year's end. These include measures involving community renewal, education savings accounts, health coverage for the uninsured, prescription drug coverage for medicare recipients, and tax breaks for small businesses impacted by pending minimum wage legislation.