All Win as Earnings Penalty Ends

The 535 members of Congress seldom agree fully about anything, but there was no dissent when it came to ending the anachronistic Social Security benefits penalty levied on people who work beyond the age of 65. Soon to go to President Clinton for his promised signature is legislation to let workers 65 through 69 years earn as much as they can without losing any of their retirement benefits. That is a long-overdue replacement of the current law that reduces benefits for workers in this age bracket if their earnings exceed a certain amount, which this year is $17,000. There are no earnings limits for workers 70 and older.

More than 2 million people age 65 through 69 hold jobs. The estimated 800,000 of them who lose some or all of their benefits because they exceed the earnings limit will be shed of that penalty, retroactive to Jan. 1.

Lifting the earnings ceiling is also likely to encourage many who are not yet 65 to continue working beyond that age. For many, staying employed isn’t a choice but a necessity. Being able to collect full benefits will mean a rise in their standard of living.

The earnings penalty dates from the Depression, when unemployment reached 25% and government policy was to push older workers to retire so that younger ones could replace them. The economy was also vastly different, with most jobs involving physical labor. Sen. Daniel Patrick Moynihan (D-N.Y.) put it well: “Coal mines were no place for 70-year-olds. Computer terminals are.” The new law will be good for millions of Americans and for the economy.