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Camp: Passage of Savings Recovery Act Will Help Americans Rebuild Their Retirement, College and Personal Savings

April 22, 2009

Washington, D.C. – Ways & Means Ranking Member Dave Camp (R-MI), a founding member of the Savings Solutions Group, encourages quick passage of the Savings Recovery Act, introduced today on Capitol Hill as a result of that group’s efforts to help Americans rebuild their retirement, college, and personal savings.

“What savings many Americans had have been dramatically reduced, leaving many wondering what to do next,” Camp said. “The Savings Recovery Act will give Americans the flexibility and new tools to rebuild these accounts and regain control over their retirement security.”

Loss of retirement, college, and personal savings ranks as the American people’s top concern during this recession, according to a recent NPR poll. This bill uniquely addresses this.

What the bill will do:

Rebuild Americans’ Retirement Savings
This bill will raise the amount Americans can put into their retirement savings and the amount of “catch-up” contributions they can make, which will help Americans restore their retirement savings.

Rebuild College Savings
Extends the SAVERs Credit to contributions made to 529 college savings accounts as well, effectively reducing by up to half the cost of a family’s contribution to the plan.

Increase Retirement Income by Reducing the Social Security Earnings Penalty
The Savings Recovery Act would double the Social Security earnings limit from $14,160 to $28,320 and allow more Americans to increase their income without being hit by the earnings penalty.

Tax Relief for Investors and Seniors
To help stem the loss of investment value for investors and seniors, The Savings Recovery Act would immediately suspend the capital gains tax on newly acquired assets for the next two years and would raise and index to inflation the amount of capital losses allowed against ordinary income to $10,000. Finally, the bill would suspend taxes on dividend income through 2011.

Stabilize Worker Pensions and Help Employers Invest in the Future 
Stabilize worker pensions and help employers invest in the future by temporarily providing an increased glide path for recognizing losses and two additional years to resolve pension funding shortfalls. The bill would also require employers to continue making interest payments to their pension plans to prevent shortfalls from growing larger.

Preserve Employee-Controlled 401(k)s
Preserve employee-controlled 401(k)s by blocking efforts to wipe out 401(k)s entirely and replace them with government-run accounts.