House passes final version of Social Security earnings limit repeal
WASHINGTON (CNN) -- The House gave final passage Tuesday night to a bill that would eliminate the Social Security earnings limit on seniors, clearing the way for President Bill Clinton to sign the popular measure.
The president has said he would sign the legislation, known as the Social Security Earnings Test Elimination Act, if it came to his desk without major amendments. Both the House and Senate made only slight changes to the bill.
The House originally passed the measure 422-0. Tuesday's 419-0 vote reconciled the House bill with the Senate bill that was passed unanimously last week. The Senate version was amended to free seniors from the penalty at the beginning of the year in which they will turn 65, and make some technical changes -- such as replacing the phrase "age 70" with "retirement age" throughout the bill.
Currently, workers between age 65 and 69 lose $1 in Social Security benefits for every $3 they earn above $17,000 a year. While they get that money back gradually after turning 70, the penalty has discouraged many seniors from working. The Social Security earnings limit currently affects about 800,000 program recipients aged 65 to 69.
The bill's changes would be made retroactive to December 31, 1999.
The legislation's estimated cost is approximately $22.7 billion over 10 years, but the program is not expected to be adversely affected because of the growth of the work force, which will provide more payroll deductions for the fund.
The law creating the penalty was passed during the Depression as a means to prod Social Security-eligible workers into retirement, freeing up scarce jobs for younger workers. In the current economy, with a very low unemployment rate, many employers are actively courting older workers.
Eliminating the earnings limit was included in the 1994 Republicans' Contract with America. Because of that, Democrats had initially preferred the change in earning limits be included in broader Social Security reform, but eventually backed down in the face popular pressure.
And in an election year, Republicans are hoping the bill will protect them from Democratic charges that they are not doing enough to protect Social Security.
But in last week's Senate debate, retiring New York Sen. Daniel Patrick Moynihan, a Democrat, cautioned his colleagues to look beyond election-year politics and to ensure Social Security solvency past 2017.
"Let us hope one day we do it before it becomes too late, and that time will come sooner than you think," Moynihan said.
CNN's Ted Barrett contributed to this report.