[Extensions of Remarks]
[Page E92]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




[[Page E92]]



    INTRODUCTION OF INDIVIDUAL RETIREMENT ACCOUNT (IRA) LEGISLATION

                                 ______
                                 

                          HON. RICHARD E. NEAL

                            of massachusetts

                    in the house of representatives

                       Thursday, January 9, 1997

  Mr. NEAL of Massachusetts. Mr. Speaker, today Mr. Thomas and I are 
introducing the Super IRA bill. This bill is comprehensive individual 
retirement account [IRA] legislation. The main purpose of this 
legislation is to make it easier for individuals to save for 
retirement.
  Saving for retirement is an issue which we must address. The Super 
IRA legislation will help with retirement and we can do this in a 
bipartisan manner. The phase ``economic security'' has become part of 
our vocabulary. During this session of Congress, we should do as much 
as possible to make individuals more secure in their retirement.
  Statistics about retirement and our savings are not promising. 
Chairman Alan Greenspan of the Federal Reserve once stated that our low 
national savings rate is our No. 1 economic problem. Our national 
savings rate is only 1 percent of GDP.
  We are beginning to face what has been commonly referred to as the 
``graying of America.'' Within 30 years 1 out of every 5 Americans will 
be over 65. In 15 years, the baby boomers will begin turning 65. The 
baby boomers generation consists of 76 million people and this will 
result in Social Security beneficiaries doubling by the year 2040. Less 
than half of American workers are covered by private sector pensions.
  The Super IRA legislation provides incentives for individuals to save 
for their own retirement. This legislation makes it easier for 
individuals to become personally responsible for their retirement. It 
will make all Americans eligible for fully deductible IRA's by the year 
2001. Current law only allows those taxpayers who are not covered by 
any other pension arrangement and whose income does not exceed $40,000 
to be eligible for a fully deductible IRA.
  The 10-percent penalty on early withdrawals would be waived if the 
funds are used to buy a first home, to pay educational expenses, or to 
cover any expense during periods of unemployment. These are necessary 
legitimate purposes. Otherwise these savings should just be used for 
retirement.
  The legislation creates a new type of IRA called the IRA plus 
Account. Contributions would not be tax deductible, but earnings can be 
withdrawn tax-free if the account is open for at least 5 years and the 
IRA holder is at least age 59\1/2\. These accounts provide another 
savings vehicle for individuals.
  Super IRA legislation is not a panacea for the social insecurity that 
we will inevitably face, but is a reasonable, concrete solution to make 
retirement savings easier. I urge you to become a cosponsor of this 
legislation. I look forward to working on the passage of the Super IRA 
legislation during this session of Congress.

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