- The Washington Times - Tuesday, February 15, 2000

President Clinton agreed yesterday to legislation pushed by Republicans that would repeal a Social Security earnings limit for hundreds of thousands of Americans aged 65-70, reversing opposition reaffirmed by the White House just a week ago.

"It's the right thing to do. Let's just do it," Mr. Clinton said in an interview with CNN.

If the provision is repealed, the federal government would pay out $8 billion more in Social Security benefits to workers over 65 in 2002.

"This is a very, very good step forward," said Rep. E. Clay Shaw Jr., Florida Republican. "I compliment the president for indicating he is willing to work with Congress on this."

More than 800,000 Americans over 65 lose $1 of their Social Security benefits for every $3 in outside income they earn above $17,000. Because of changes made in 1996, that limit is set to increase to $30,000 by 2002.

Also, there is no earnings limit for those age 70 and over; and, benefits foregone because of the limit can be repaid later through increased benefits.

The combination of these two provisions mean repealing the limit will cost $8 billion in its first year, but only $22.7 billion over 10 years and will actually be "revenue neutral" over the next 75 years, according to the Social Security Administration.

Mr. Clinton also suggested lengthening the life of the Social Security Trust Fund and doing "something about the poverty rate among women who are retired."

The earnings limit is a relic of the Depression era. Mr. Shaw said it was intended to push older laborers out of the job market and make room for younger workers. The congressional Joint Committee on Taxation said lawmakers did not want to pay benefits before a person had "retired from gainful employment."

Regardless, the provision "may have made sense then, but it makes no sense now," Mr. Shaw said.

Republicans made easing the earnings limit part of their 1994 Contract With America and in 1996 pushed the limit from $9,120 to $30,000 as part of legislation also increasing the minimum wage and increasing the federal debt limit.

Mr. Clinton said when he released his budget Feb. 7 that the earnings limit should be repealed, but did not actually include the proposal in his budget.

Just last Wednesday, White House spokesman Joe Lockhart said the president wanted to eliminate the earnings limit but only as part of a debate to extend the long-term solvency of Social Security.

"That is where this debate starts and that's where this debate ends," Mr. Lockhart said. "We're not going to go down this road … piecemeal."

House Republicans had planned a hearing today and a markup tomorrow of the bill in the House Ways and Means Committee but were pleased to be pre-empted by the White House.

"We bring with us some good news," Mr. Shaw told reporters shortly after Mr. Clinton's announcement.

Rep. Sam Johnson, Texas Republican, joined Mr. Shaw adding "I fought in two wars for freedom; that includes the freedom to work."

Some have worried that passing this reform to Social Security, just as adding a prescription drug benefit to Medicare, will take the wind out efforts to push much needed broader changes to the entitlement programs.

Mr. Shaw said "sweeteners" always help pass any bill but the repeal "shouldn't be postponed just so political games can be played up here… . We don't want to hold this back and continue punishing seniors."

Dan Maffei said Democrats on the Ways and Means Committee, for whom he is a spokesman, back the repeal and the goal of finding a long-term solution to Social Security's solvency.

Mr. Maffei also drew a distinction between repealing the Social Security earnings limits and adding a prescription drug benefit to Medicare. The latter would cost $180 billion over 10 years and should be attached to an overall agreement on the budget, he said.

Mr. Clinton said his only caveat for signing a bill to repeal the Social Security earnings cap is that it not be littered with "a lot of unrelated … other things."

After that, he said, "I'd like to urge them to think about my proposal to dedicate the interest savings that we get from paying down the debt … to the Social Security Trust Fund."

In his past two budgets, Mr. Clinton has proposed "crediting" the trust fund with these interest savings. Critics say it only extends Social Security's life on paper. The administration argues that it formally gives the federal retirement safety net first draw over other priorities.

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