House passes bill lifting Social Security earnings limit

March 1, 2000
Web posted at: 2:49 p.m. EST (1949 GMT)

WASHINGTON -- In a rare show of bipartisan unity, the U.S. House of Representatives unanimously passed legislation on Wednesday lifting the earnings limit for Social Security recipients age 65 through 69. President Bill Clinton endorsed the bill.

By a 422-0 vote, the House sent the bill to the Senate, where it has equally strong support among Republicans and Democrats eager to accomplish something in this election year for the important older Americans' votes -- especially since longer-term Social Security and Medicare reforms are unlikely.

"Why in the world would we want to discourage any American, whether they're 17 or 67, from working?" said Rep. Bill Archer, R-Texas, chairman of the House Ways and Means Committee. "Americans are living longer now, and older Americans can work, they want to work, and they shouldn't be punished by an outdated law."

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Under the current law, Social Security recipients between the ages of 65 and 69 lose $1 for every $3 they earn over the limit, which is $17,000 in 2000.

Last year, the earnings limit rule affected nearly 800,000 older Americans. The bill would allow thousands of them to work without having to worry about lost benefits.

The lost benefits are really postponed. They are paid back through higher benefits that begin at age 70.

The bill would eliminate the limit once people reach the retirement age of 65.

In a letter to congressional leaders, President Bill Clinton promised to sign a "straightforward" bill into law if it reaches his desk without too many changes.

"As the baby boomers begin to retire, it is more important than ever that older Americans who are willing and able to work should not have their Social Security benefits deferred when they do," Clinton said.

The cost to the Social Security account is estimated at $22.7 billion over 10 years, but over the long term the program would not be adversely affected, in part because the more people who work, the more payroll taxes go into the fund.

Some Social Security recipients say the rule forced them into retirement. Retired engineer Jack Galuardi, 73, said: "I would like to have continued to work after I retired, at age 67, doing the kind of things I was doing but I felt because of the limit I couldn't afford to do it."

Many older Americans don't plan to retire, but say they would still rather have the money now.

Self-employed John Stock, 60, says, "I could use the money and I paid a lot into it."

The earnings limit was a Depression-era device to open up jobs for younger workers.

Rep. Jim Kolbe, an Arizona Republican, called the earnings limit a "remnant of a Depression era" that has no place in the 21st century.

"Seniors provide us with a background of knowledge and experience that in this booming economy, where you can't find workers, they can fill the gaps and make companies whole again." says Rep. Sam Johnson, R-Texas.

The idea has wide support in the administration but one Democrat dubbed it "the eat-dessert-first approach to Social Security reform."

Rep. Lloyd Doggett, D-Texas, says "It takes the one easy reform, offers that in an election year, to the people who are in the best position on Social Security. It does not tackle or grapple with any of the tough issues."

In his letter, Clinton called the legislation a "first step" in broader Social Security reforms and said Congress this year could also shore up the program's financial health through 2050.