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.