- The Washington Times - Thursday, July 20, 2000

The House yesterday ignored White House opposition and overwhelmingly approved a bill increasing the amount workers may contribute to tax-free retirement accounts and making it easier for small businesses to set up pension programs.
"If there is a cloud on the horizon, it is the lack of personal savings, retirement savings… . We as a people borrow more than we save," said House Ways and Means Committee Chairman Bill Archer, Texas Republican. "We should encourage people to save more."
The bill makes some dramatic changes in the laws on retirement savings. Most importantly, it:
Simplifies rules for small businesses that want to offer pension programs.
Makes it easier for workers to move money between 401(k) savings accounts and similar retirement accounts.
Raises the contribution limits for 401(k) plans and individual retirement accounts.
The bill passed 401-25, with 182 Democrats joining 218 Republicans and one independent in support. The bill enjoys backing from both business groups and labor unions, including the powerful AFL-CIO.
But the White House has threatened to veto the legislation if it passes the Senate because it does not include a measure to give poor workers a tax rebate of up to $1,000 per year to encourage them to save. That proposal failed in the House yesterday and in the Ways and Means Committee last week in party-line votes.
The Democratic proposal, on the other hand, "reaches out to the poorest of the poor," said Rep. Sam Gejdenson, Connecticut Democrat. "It makes sure those that have least in this society have a little bit of retirement security."
"I think this reform bill is flawed for not including enough features," said House Minority Leader Richard A. Gephardt, Missouri Democrat.
Democrats acknowledged that the program would be expensive, but they were unable to provide a cost estimate. At a committee hearing last week, they said it would cost $38 billion over 10 years, but admitted that was a flawed estimate and the program could cost much more.
Republicans argued that the program would be an invitation to fraud and abuse since it would be difficult to monitor how much workers put into savings or to prevent them from removing the money after receiving the federal rebate check.
They also argued that the program creates another federal entitlement program.
Democrats "are saying you are Americans, you exist, therefore you are entitled… . It's not enough for personal responsibility, the government has to step in," said Rep. J.D. Hayworth, Arizona Republican.
Democrats responded by saying Republicans were intent on giving tax breaks to workers wealthy enough to be able to save even under current law.
"They come in here every time carrying the water for the rich," said Rep. Sherrod Brown, Ohio Democrat.
Only one Republican voted against the bill Rep. Gil Gutknecht of Minnesota. He argued that it should have included a measure to prevent companies from unilaterally changing pension plans for workers already heavily invested and nearing retirement.
Labor unions, an important Democratic constituency, support the bill because it eases the complicated laws that limit pension benefits for workers under certain circumstances. The bill also could mean that more union members would be eligible for pensions since more businesses would be encouraged to start such programs.
"I am surprised the Clinton administration continues to oppose this, despite broad bipartisan support," said Rep. Rob Portman, Ohio Republican. "They bring out the tired class-warfare arguments that letting American workers save more retirement is somehow a tax cut for the rich."
Even though most Democrats voted for the administration's tax rebate proposal, many were clearly uncomfortable with the White House opposition.
"I am still somewhat disappointed by criticism that this bill is aimed at wealthy or high income workers it is not," said Rep. Benjamin L. Cardin of Maryland, the leading Democratic sponsor. "It helps all workers."

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