The Senate Finance Committee is recommending a major improvement in benefits for the most affluent 10 percent of Social Security recipients who continue to work after retirement.
The panel, which is writing a bill designed chiefly to reduce the budget deficit, has agreed informally to raise by about $5,600 the maximum amount a person between the ages of 65 and 69 may earn without having to give up a portion of Social Security benefits.That would boost the earnings limitation to about $14,500 a year, committee Chairman Lloyd Bentsen, D-Texas, told reporters Monday.
Bentsen said the committee, which was scheduled to begin work Tuesday afternoon, had not resolved the two thorniest issues: whether to reduce the tax on capital gains and whether Medicare catastrophic insurance protection for retirees should be repealed or only cut back.
"The (capital-gains) measure as passed by the House and supported by the administration will not in my opinion pass the Senate or the committee," Bentsen said.
Several members of the committee have suggested alternative capital-gains taxes. Bentsen said he was "making no assumptions" as to whether any of those will be approved.
The committee, Bentsen said, is firmly behind allowing people between the ages of 65 and 69 to earn more without losing a part of their Social Security check.
Present law permits a person between 65 and 69 to earn up to $8,880 in 1989 without losing benefits. The pensioner loses $1 in benefits for each $2 earned above that level.