ORANGE COUNTY VOICES SOCIAL SECURITY : Antiquated Earnings Test an Injustice to Senior Citizens : The Depression-era law punishes older Americans who choose to remain in the work force. It has outlived its usefulness and should be eliminated.

For two centuries Americans have believed that they can achieve any goal if they are willing to work for it. They savor the fact that their government will allow them to fulfill their dreams and live a life unburdened by an oppressive “big brother.” But something has gone dreadfully wrong in America, and its older citizens are paying the price.

The American dream has been tarnished by what is known as the Social Security Earnings Test. It is a law that should be eliminated.

I have introduced a corrective bill in the Congress (HR 311) and am an original supporter of Rep. J. Dennis Hastert’s (R-Ill.) bill, the Older Americans Freedom to Work Act (H.R. 2460). Both measures will end this discriminatory practice. The Social Security Earnings Test has outlived its usefulness. It is counterproductive and often dulls what should be the “golden years” for senior citizens.

Thousands of senior citizens, many Orange County residents among them, are being taxed into poverty by the Social Security Earnings Test, which reduces Social Security benefits by $1 for every $3 a senior citizen earns above $9,360 annually. Combined with regular federal income and Social Security taxes, thousands of older Americans are being taxed at a rate that exceeds 56%--higher than the rate for millionaires.

So how did this regressive and unproductive test become policy? It was born out of Depression-era reforms in 1935 to create jobs during the most grim economic period in U.S. history. Millions of older Americans were discouraged from staying employed. The earnings test reduced their overall income, making it unproductive for them to work beyond retirement age. This meant younger workers with families could have jobs.

Today, as we face great challenges to the economic health of our country, it is clear that this policy is senseless and harmful.

The U.S. Department of Labor now warns that as we enter the 1990s, there will be serious labor shortages. The nation’s retirement rate has increased more than 40% in the past 20 years. Today more than 80% of all men and 92% of all women over the age of 65 are retired. In the next 10 years, 5 million Americans will retire, while there will be a 1.5-million decline in the number of younger people entering the work force.

As labor shortages spread across the country, we cannot afford disincentives to work. Seniors represent an obvious source of labor that will be needed well into the 21st Century. They have invaluable experience and know-how; and yet, the earnings test is driving them away at an alarming rate. If seniors are physically capable and want to continue to work, they should be able to do so without being penalized.

Older Americans are staying out of the work force because of the punishing nature of the earnings test. An estimated 1 million people opt not to work because of this cap on their earnings.

Why work when you are denied the full value of your labor? Another 1 million seniors work knowing that their Social Security benefits are cut because of the stringent earnings test.

The great irony here is that, in trying to limit the cost of Social Security benefits, the federal government is denying itself as much as $3.2 billion in income tax revenue that could be generated by eliminating the earnings test. It makes no sense to perpetuate such an oppressive policy and its detrimental effect on our nation’s economic health.

While the economic cost is great, the human cost is even greater. The earnings test is relegating thousands of seniors who want or need to work to unproductive, unfulfilling lives. Meddling with the right to work goes against the very grain of the beliefs and values on which our nation was founded.

Moreover, we are singling out one group for undue hardship. Eliminating the earnings test would bring much-deserved liberty to the lives of seniors who have the right to choose how they wish to live their lives. In addition, permitting older Americans to work allows them to be independent and free of the government dole. It will allow them to have a happier and higher quality of life. A self-supportive citizen is not a burden on the government.

We all should work to rid our system of this injurious practice. The Social Security Earnings Test must be replaced. It has outlived its usefulness, and now only serves only to hinder our country in its challenge to remain a world economic power.