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Kolbe, Stenholm Introduce Bipartisan Reform Bill
August 8, 2001
Representatives Jim Kolbe (R-AZ) and Charlie Stenholm (D-TX) have introduced
a bipartisan proposal to create individual
accounts as part of a broad Social Security reform package. The bill would:
- Allow workers under age 55 to divert two percentage points of
their payroll tax into individually owned, privately invested
accounts.
- Workers could save up to an additional $2,000 on a tax-preferred
basis.
- The government would provide a 50 percent matching
contribution for workers with incomes under $30,000 per year.
Low-income workers would also be allowed to divert a portion
of their EITC into their account.
- The Thrift Savings Program would serve as the model for
administering the individual accounts. Initially workers could
choose from a stock fund, a bond fund, a treasury securities
index fund.
- The minimum benefit under Social Security would be increased.
- The currently scheduled increase in the retirement age to 67
would be accelerated. Additional actuarial benefit adjustments
to reflect longevity would be built in.
- The number of working years used to calculate benefits would
be increased from 35 to 40.
- Call for an improved CPI formula used to determine COLAs.
- Eliminate the portion of the 1993 budget bill that redirected a
portion of the taxes on Social Security benefits to Medicare.
Those revenues would be directed back to Social Security.
- Contrary to some news reports, the bill does not include any tax
increases.
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