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Committee on Ways and Means

For Immediate Release
Contact: Press Office 202-225-8933
October 8, 2002

Committee Passes Bills to Help Build Investor Confidence

WASHINGTON - Today, lawmakers reported favorable passage of two bills intended to bring relief to investors. H.R. 1619, to increase the limit on capital losses passed with a vote of 24-11, while H.R. 5558, the Retirement Savings and Security Act of 2002, was reported favorably with a vote of 24-10.

“While the fundamentals of our economy are solid, there is more we can do to help build the confidence and restore the losses of America’s investors,” said Ways and Means Chairman Bill Thomas (R-CA). “Today we passed two bills that will help achieve that goal.”

Since 1978, the amount of capital losses that individual taxpayers can deduct from their net capital losses has not changed from $3,000. H.R. 1619 increases this limit to $8,250, which approximates $3,000 indexed for inflation since 1978.

According to Equity Ownership in America 2002 by the Investment Company Institute and the Securities Industry Association, 49.5 percent of all families own stock. H.R. 1619 is a measure to help these families recoup some of their losses from the market when tax returns are filed next year.

H.R. 5558 increases the age at which Americans are required to begin withdrawing money out of their IRAs and 401(k) plans from 70 ½ to 75, in order to give seniors more flexibility and control over their retirement savings.

In addition, this bill accelerates the IRA, 401(k) plan, and catch-up contribution limits by allowing:

• Individuals to make the full $5,000 IRA contribution beginning in 2003 rather than 2008;
• Workers to make the full $15,000 contribution to 401(k) plans and other workplace retirement plans beginning in 2003 rather than 2006; and
• Individuals age 50 and older to make the full $1,000 catch-up contribution to an IRA and the full $5,000 catch-up contribution to a 401(k) plan in 2003, rather than in 2006.

“The Ways and Means Committee has already undertaken many significant policy initiatives that have prevented a deeper recession, such as the Bush tax relief plan, economic stimulus bills, and a comprehensive trade package - but where we can do more, we should try. These bills are a continuation of our efforts to help America’s seniors have a safe and secure retirement,” said Thomas.