Social Security benefits may rise House moving on bill to double earnings allowance.

April 09, 1992|By Los Angeles Times

WASHINGTON -- In an election-year bow to older Americans, Democratic and Republican leaders in the House have decided to act quickly today on legislation that would double the amount Social Security recipients between the ages of 65 and 69 may earn without losing benefits.

The politically popular bill would increase the Social Security earnings test from the present $10,200 a year to $20,000 in 1997, allowing beneficiaries to receive up to that amount in wages or salary without penalty.

It also would provide increased benefits to widows or widowers who are now over 80 but were under the normal retirement age of 65 when their spouses died.

Under current law, those between 65 and 69 who receive Social Security benefits may earn up to $10,200 a year without a reduction in their monthly payments. Above that income level, however, their benefit is reduced by $1 for every $3 of earnings over the limit.

Beneficiaries over 70 may earn as much as they can without affecting their benefits. There is a separate earnings test for individuals from 62 to 64 years of age who are receiving Social Security benefits, but they would not be affected by this legislation.

Rep. Dan Rostenkowski, D-Ill., chairman of the House Ways and Means Committee, announced the unexpected compromise yesterday with key Republicans, saying: "Our agreement today is good news for senior citizens who are having a difficult time scraping by on fixed incomes and for older widows who currently receive inadequate benefits."

While the legislation was expected to sail through the House under rules requiring it to win a two-thirds majority, outnumbered opponents said it would add $7.3 billion to the deficit and violate the pay-as-you-go requirements of the Budget Enforcement Act of 1990.

The chairman of the House Budget committee, Rep. Leon Panetta, D-Calif., spoke against the plan in testimony before the House Rules Committee.

"It sends a terrible signal," he said, noting that sponsors of other popular measures in the House also would seek to avoid the pay-as-you-go discipline if the bill was passed. "The benefits ought to be paid for."

Defenders of the fast-track procedure, however, said it was essential to stave off a Senate-approved bill that would abolish the earnings limitation entirely for Social Security recipients at a cost of $24 billion.

"It's a budget-buster," acknowledged one House staff aide. "The question is whether you want a small budget-buster or a giant budget-buster. It's the lesser of two evils."

President Bush has sent word that he would veto the bill repealing the earnings test, but his position on the latest compromise legislation was not known. The bill, however, could be veto-proof in view of the top-heavy majority by which it passed the Senate and the overwhelming support it has in the House, where 266 members already have co-sponsored similar legislation.

House Democratic leaders apparently decided at the 11th hour to rush the bill through before the Easter recess in order to give lawmakers something positive to talk about with constituents upset over the House bank and post office scandals.

Republicans, who also have been pushing the bill despite Mr. Bush's warning that he would veto such legislation, jumped on the bandwagon as it started to roll yesterday.

House Minority Leader Robert H. Michel, R-Ill., endorsed the move to suspend the rules so the measure could be passed quickly, without amendment, on a two-thirds vote and avoid any attempt to kill the plan by invoking a parliamentary point of order that it violates the budget accord.

Under the House bill's provisions, the income ceiling under the Social Security earnings test would rise to $12,000 in 1993, to

$14,000 in 1994, to $16,000 in 1995,to $18,000 in 1996 and finally to $20,000 in 1997.

In justifying the new provision for widows and widowers over 80, Mr. Rostenkowski said, "Such widows are disproportionately poor and both need and deserve the extra dollars this agreement will provide."

Those who had applied before age 65 had received reduced payments based on their spouse's earnings records.

The expanded widows' benefits would cost $3.2 billion, while the increase in the earnings test would add another $3.8 billion to the price tag for the legislation.

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