Chuck Grassley

United States Senator from Iowa





Grassley Statement on Repealing the Social Security Earnings Limit

Mar 20, 2000

Grassley Statement on Repealing the Social Security Earnings Limit

because it sends the wrong message ? that productivity among our older citizens should be discouraged!

Let me give you some examples of the people who are hurt by the earnings limit. Delaine Jones works in Glenwood, Iowa. He is 65 years old. He understands that he may live for another couple of decades and may not always be able to work. He would like to earn as much as he can while he is able so he is financially prepared later in life.

Sherman and Nancy Sorem of Marshalltown, Iowa, were affected by the earnings limit last year. Sherman worked for 35 years for Fisher Controls. When they downsized, he retired from his position as office manager of the accounting department. However, because of his expertise he was called back each year to help out and advise the department.

Last year Fisher Controls needed his expertise for a longer period of time than previous years. Unfortunately, Mr. Sorem couldn't continue working and helping out because he would have worked long enough to earn above the earnings limit. He and Nancy were frustrated, but couldn't justify losing his Social Security benefits by his continued work.

Ron Ballinger works for a financial processing company in Cedar Rapids, Iowa. He worked full-time last year and was interested in working part-time this year. However, he will have to officially retire in April because he will have earned up to the cap on earnings.

According to the Social Security Administration almost 800,000 older Americans nationwide have their benefits cut because of the earnings limit.

Keep in mind, that statistic doesn't reveal anything about how many of our older citizens don't remain in or go back to the workforce at all because they cannot afford a cut in their benefits.

I have received letters and phone calls from all over Iowa -- and all over the country -- because of my position as Chairman of the Senate Aging Committee. These letters and phone calls are from older people discouraged by the earnings limit. Their hard- earned Social Security benefits are cut by one dollar for every three dollars they earn. They see it as a tax on their continued productivity. I see it as unfair and un-American.

This country needs skilled labor. What happens if we do not fill the skilled-labor void? We lose productivity, and then we lose our global competitive edge. Where can we look for skilled labor? We have qualified people who want to work -- our older citizens -- and we cannot afford to lose their expertise and skills.

A letter I received from the U.S. Chamber of Commerce states, "American business is facing a severe worker shortage in many sectors and areas of the country. Jobs are going unfilled, especially those positions that require skilled workers. By removing the disincentive to work, this legislation allows seniors to apply their lifetime of valuable knowledge and experience to the business world and fill some of these positions."

Recognizing the need to encourage seniors to remain in the workforce is not a new idea. In fact, a report on future directions for aging policy was published in May of 1980 by the House of Representatives Select Committee on Aging, Subcommittee on Human Services.

At that time, I served as the ranking Republican on that subcommittee. In the last paragraph on the third page of that report is written: "Tomorrow's seniors will want to work ... ,will be capable of working, and will need to work. Inflation's effect on fixed incomes will see to that. Public policy will have to create opportunities to work, both by removing barriers of age discrimination and by stimulating private sector employment for seniors."

We recognized then the need to repeal the earnings limit. The earnings limit was enacted as part of the original Social Security Act passed in 1935.

Sixty years ago, our country was in the midst of a depression. One in five people eligible to work was unemployed. The original law meant to discourage older Americans who were eligible to collect benefits from taking jobs younger people could fill. But that situation has changed, and public policy needs to change with it.

Because of my position as Chairman of the Aging Committee, more acutely than others I recognize the changing role of senior citizens in our society. This generation of older Americans have different responsibilities than past generations. We've seen a sharp rise in the number of grandparents who are raising their grandchildren.

Furthermore, it is far more common for people to live into their eighties and nineties. Some of these very old Americans depend on their children ? who are often in their sixties ? to help care for them and pay for their at-home care, medical bills, groceries and a host of other expenses. Eliminating the Social Security earnings limit will help raise the standard of living for these families.

While fixing this inequity in the retirement system will give fair treatment to those ages 65 to 69 who have paid into the program during their entire working years, it won't address Social Security's long-term demographic challenges.

When the baby boom generation comes on board, the revenue and benefit structure will not be able to sustain the obligations under current law. That's why I have worked with six of my Senate colleagues, Senators Judd Gregg, Bob Kerrey, John Breaux, Fred Thompson, Craig Thomas and Chuck Robb to craft bipartisan Senate reform legislation.

Our bill, "The Bipartisan Social Security Reform Act," S. 1383, is the only reform legislation which has been put forth in the Senate which would make the Social Security trust fund permanently solvent. I will continue to press ahead and work to build a consensus among our colleagues to save Social Security and achieve long-term solvency for generations to come.

We as a Congress must recognize that even in this era of surpluses, there are serious long-term financial problems facing Social Security. Those problems do not go away because we have a surplus and a good economy. The longer we wait to address Social Security reform, the more difficult the problems will be to address, and the less time the baby boom generation will have to prepare.

As a nation, we have an evolving definition of what it means to be old. Americans are living longer and in better health. The traditional retirement age comes too soon for older people who want to or need to work past age 65. Some people want to retire and leave the workforce, but if you want to contribute and remain productive, then by golly, we'd love to have you.