House Plan Would Double Social Security Wage Test

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

The politically popular bill would increase the Social Security earnings test in steps 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 increase payments to survivors of workers who are now over 80 but who sought benefits before the normal retirement age of 65 when their spouses died. These widows and widowers received reduced payments based on the earnings records of their spouses.

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

There is no earnings cap for beneficiaries over 70. There is a separate earnings test for persons 62 to 64 who receive 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 accord 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 is expected to sail through the House under rules requiring it to win a two-thirds majority, outnumbered opponents said that it would add $7.3 billion to the deficit and violate the pay-as-you-go requirements of the Budget Enforcement Act of 1990.

Rep. Leon E. Panetta (D-Carmel Valley), chairman of the House Budget Committee, 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 pay-as-you-go discipline if the bill is passed. “The benefits ought to be paid for.”

Defenders of the fast-track procedure, however, expressed the fear that a measure already approved by the Senate, which would abolish the earnings limit entirely for Social Security recipients, would cost even more--$24 billion--than the more limited House version.

“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 Senate bill but his position on the agreement reached Wednesday is not known. There appears to be strong support in both houses, however, for increasing the earnings limit. The Senate bill won overwhelming support and 266 members of the House already are co-sponsors of similar legislation.

House Democratic leaders apparently decided at the eleventh hour to rush the curtailed version of the earnings cap through before the Easter recess to give lawmakers something positive to talk about with constituents upset over the House bank and post office scandals.

Republicans jumped on the bandwagon Wednesday. House Minority Leader Robert H. Michel (R-Ill.) endorsed the move to suspend the rules so that the measure could be passed quickly with no amendments permitted.

Besides requiring a two-thirds vote, the fast-track approach provides that the legislation would not be subject to a parliamentary maneuver under which any member could cite the point of order that it violates last year’s budget agreement. Under that accord, legislation increasing government spending must provide financing to pay for that spending.

Rep. Bill Archer (R-Tex.), ranking Republican on the House Ways and Means Committee, objected to the unusual haste and take-it-or-leave-it procedure for consideration of the bill.

“This issue is too important to be rammed through,” Archer complained. “We’re now off to the races again to pay for new election-year benefits out of the (Social Security) fund.”

Rep. James H. Quillen (R-Tenn.) also objected to the procedure, saying that “$7 billion is not chicken feed but it’s being treated that way.”

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. This provision of the bill would take effect on Jan. 1.

After the expected House action today, the Senate would have to pass identical legislation or the two bills would have to be sent to a conference committee to be reconciled. Then a final version of the bill would be sent to Bush.

In justifying the new provision for widows and widowers over 80, Rostenkowski said that “such widows are disproportionately poor and both need and deserve the extra dollars this agreement will provide.”

The measure also would relax a rule that denies widow’s benefits to disabled women aged 50 to 59 if their disability began more than seven years after their spouse’s death or more than seven years after their entitlement to benefits for dependent children.

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.