Retirees Now Likely to Be Spared a Punishing 'Tax' ; A Bill Hurtling toward Approval Would End the Earnings Cap for the Social Security Set

By David R. Francis , writer of The Christian Science Monitor | The Christian Science Monitor, February 22, 2000 | Go to article overview

Retirees Now Likely to Be Spared a Punishing 'Tax' ; A Bill Hurtling toward Approval Would End the Earnings Cap for the Social Security Set


David R. Francis , writer of The Christian Science Monitor, The Christian Science Monitor


On one issue, Congress, President Clinton, Democrats, and Republicans sang together like a barbershop quartet last week,

Their tune: End Social Security's retirement-earnings limit.

The unusual nonpartisan harmony in Washington makes it most likely that 65- to 69-year-olds will be able to earn as much as they like this year without losing any Social Security benefits.

Prospects for a bill eliminating the limit are "golden," says Trent Duffy, a House Ways and Means Committee spokesman. It sailed through a subcommittee markup unanimously in 47 seconds last Wednesday.

"It was like the Kentucky Derby," recalls Mr. Duffy. A bang of the gavel by the chairman of the Social Security subcommittee, E. Clay Shaw Jr. of Florida, and it was approved.

The Republican legislator turned to the ranking Democrat, Robert Matsui of California, and said: "You are a much better friend than you are an enemy."

Under present law, Social Security benefits are reduced by $1 for every $3 earned above $17,000. That rule cost about 800,000 recipients all or some of their benefits last year, Social Security Commissioner Kenneth Apfel told House lawmakers last week.

To some of these seniors, the benefit loss feels like a 33 percent tax on top of the income and payroll taxes they already pay on their wages. The total burden could reach 65 percent for higher- paid seniors.

Yet, in the long run, the earnings limit provides Uncle Sam with virtually no added revenue. That's because those who lose some benefits get them back as an increased Social Security retirement benefit if and when they reach 70.

Ending the limit means seniors won't have to play "the life- expectancy lottery," says Duffy.

The restriction is a "perverse policy," says Leora Friedberg, an economist at the University of California, San Diego. They distort the retirement/work choice of seniors. Many older people decide to work only until they reach the $17,000 earnings level, or not work at all.

If the bill passes, the Social Security Administration will pay an additional $22.7 billion in benefits over the next 10 years. Ultimately, that amount will be offset by lower benefits thereafter since those getting more benefits now won't be entitled to delayed- retirement credits later.

It means part of the Social Security revenue surplus will be used to pay extra benefits - and not cover federal deficits caused by spending on highways or other federal programs, as has been the case for years. …

The rest of this article is only available to active members of Questia

Already a member? Log in now.

Notes for this article

Add a new note
If you are trying to select text to create highlights or citations, remember that you must now click or tap on the first word, and then click or tap on the last word.
One moment ...
Default project is now your active project.
Project items

Items saved from this article

This article has been saved
Highlights (0)
Some of your highlights are legacy items.

Highlights saved before July 30, 2012 will not be displayed on their respective source pages.

You can easily re-create the highlights by opening the book page or article, selecting the text, and clicking “Highlight.”

Citations (0)
Some of your citations are legacy items.

Any citation created before July 30, 2012 will labeled as a “Cited page.” New citations will be saved as cited passages, pages or articles.

We also added the ability to view new citations from your projects or the book or article where you created them.

Notes (0)
Bookmarks (0)

You have no saved items from this article

Project items include:
  • Saved book/article
  • Highlights
  • Quotes/citations
  • Notes
  • Bookmarks
Notes
Cite this article

Cited article

Style
Citations are available only to our active members.
Buy instant access to cite pages or passages in MLA, APA and Chicago citation styles.

(Einhorn, 1992, p. 25)

(Einhorn 25)

1. Lois J. Einhorn, Abraham Lincoln, the Orator: Penetrating the Lincoln Legend (Westport, CT: Greenwood Press, 1992), 25, http://www.questia.com/read/27419298.

Cited article

Retirees Now Likely to Be Spared a Punishing 'Tax' ; A Bill Hurtling toward Approval Would End the Earnings Cap for the Social Security Set
Settings

Settings

Typeface
Text size Smaller Larger Reset View mode
Search within

Search within this article

Look up

Look up a word

  • Dictionary
  • Thesaurus
Please submit a word or phrase above.
Print this page

Print this page

Why can't I print more than one page at a time?

Help
Full screen

matching results for page

    Questia reader help

    How to highlight and cite specific passages

    1. Click or tap the first word you want to select.
    2. Click or tap the last word you want to select, and you’ll see everything in between get selected.
    3. You’ll then get a menu of options like creating a highlight or a citation from that passage of text.

    OK, got it!

    Cited passage

    Style
    Citations are available only to our active members.
    Buy instant access to cite pages or passages in MLA, APA and Chicago citation styles.

    "Portraying himself as an honest, ordinary person helped Lincoln identify with his audiences." (Einhorn, 1992, p. 25).

    "Portraying himself as an honest, ordinary person helped Lincoln identify with his audiences." (Einhorn 25)

    "Portraying himself as an honest, ordinary person helped Lincoln identify with his audiences."1

    1. Lois J. Einhorn, Abraham Lincoln, the Orator: Penetrating the Lincoln Legend (Westport, CT: Greenwood Press, 1992), 25, http://www.questia.com/read/27419298.

    Cited passage

    Thanks for trying Questia!

    Please continue trying out our research tools, but please note, full functionality is available only to our active members.

    Your work will be lost once you leave this Web page.

    Buy instant access to save your work.

    Already a member? Log in now.

    Oops!

    An unknown error has occurred. Please click the button below to reload the page. If the problem persists, please try again in a little while.