Comprehensive Bill To Aid Retirement Security Likely To Pass House This Year Says Ways & Means Chair
The Democrat chair of the House Ways & Means Committee, Connecticut’s Richard Neal, said today he is putting together a comprehensive bill with Republican ideas to boost retirement security that is likely to pass the House this year.
He refused to make a prediction if the legislation would pass the Senate and become law.
“The retirement crisis is real and will only worsen unless we strengthen Social Security, make saving easier, and do more to encourage employers to offer retirement plans,” said the powerful Congressman.
Alluding to the increasing financial struggles many people are facing in their later years, Neal pointed out Americans are increasingly forced to work past retirement age.
He noted between 1977 and 2007, the number of workers over the age of retirement increased by 101 percent, and the number of workers age 75 and older increased by 172 percent.
Neal’s comments came on a day when Ways and Means and the Senate Aging Committee held separate hearings on the ills and possible cures for the nation’s retirement system.
The Democrat agreed with Republican Senate Aging Committee Chair, Maine’s Susan Collins, that retirement security is a significant public policy problem requiring bipartisan solutions.
At the House hearing, Republican Texas lawmaker Kevin Brady, who left the Ways & Means chairmanship when the chamber switched to a Democratic majority following the November elections, offered an olive branch to his Democratic successor:
“If we work together, we can make Social Security solvent.”
The Social Security trust fund is projected to become insolvent in 2034.
With that financial cushion eliminated and payroll taxes still flowing into the system, beneficiaries would see their monthly payments reduced by about 20 percent.
There is a bill already in the hopper with good chances of passage that could bolster Social Security, Social Security Works President Nancy Altman in her appearance before Ways & Means.
The Social Security 2100 Act, sponsored by Ways & Means Social Security Subcommittee Chair Rep. John Larson (D-Conn), provides for across-the-board benefit increases, more accurate cost of living adjustments (COLAs) and a minimum benefit large enough seniors wouldn’t have to live in poverty.
Altman said she is optimistic because the legislation has 200 cosponsors and needs only 218 votes in the House to pass.
While acknowledging Social Security needs a fix, Brady painted a brighter picture than most experts of the state of retirement readiness in the United States.
He said economic expansion, job growth, and increased wages – the highest wage gains in nearly 11 years – have improved retirement security.
“We almost romanticize retirement in this country, and for good reason,” the former chair of the House’s tax law writing committee said.
The fellow Republican who chairs Senate Aging saw a cloudier outlook.
“For those living paycheck to paycheck, it can be difficult to cover the heating bill or to afford much-needed medications, much less save for the future. For many, saving for retirement seems out of the question,” cautioned Collins of Maine.
Pessimism was also voiced in the Ways & Means testimony of National Institute on Retirement Security Executive Director Diane Oakley:
“With the disappearance of pensions and declining workplace retirement plan coverage, most Americans have a dim retirement outlook.”
She called for two legislative fixes that could “meaningfully” improve the retirement income of workers who have saved little or nothing.
One bold stroke, Oakley said, would be for Congress to promote universal access to a retirement saving vehicle through employer payroll so all Americans could take a first important step to pay themselves first with a retirement contribution.
The other bold stroke, she urged, would be the expansion and transformation of the current tax credit for low- and moderate-income taxpayers who save for retirement.
“This Savers’ Credit is complex and burdensome for taxpayers and only a fraction of those eligible for the credit claim it,” Oakley said.
In addition, she said the tax credit into an “Uncle Sam” matching contribution.