Clinton signs Social Security earnings limit repeal

President also unveils new Internet service

April 7, 2000
Web posted at: 12:02 p.m. EDT (1602 GMT)

WASHINGTON (CNN) -- President Bill Clinton on Friday signed into law a bill that eliminates the Social Security retirement earnings limit, allowing hundreds of thousands of older Americans to work without losing any of their Social Security benefits.

The new law means that Social Security recipients ages 65 to 69 will no longer lose $1 of their benefits for every $3 they earn above the imposed earnings limit. The earnings limit in 2000 is $17,000.

President Clinton signed into law a bill allowing hundreds of thousands of older Americans to work without losing any of their Social Security benefits.

Previously, seniors in the 65 to 69 age bracket were penalized if they earned more than the limit set by the federal Social Security program. Removing the limit is expected to cost the federal government approximately $24 billion over 10 years, but those costs are expected to be offset by the revenue from the increased workforce.

Clinton said the Depression-era law "has long seemed senseless to me."

Florence Mallonee, a Pennsylvania woman who recently turned 65 and continues to work, said at the bill signing ceremony that the change will allow older Americans to enjoy a "lifestyle that is not one of just existing, but one of living."

The repeal is retroactive to January 1, and directly affects 800,000 Social Security recipients who are working this year and another 100,000 who haven't sought benefits because they have jobs. With the earnings test eliminated, each of these people could receive an additional $6,700 in Social Security this year.

Because the repeal is retroactive to January 1, about 415,000 working seniors or dependents will get refunds for the money already deducted this year from their Social Security checks -- a total of $1.4 billion, or an average of $3,500 per person.

Social Security Administrator Kenneth S. Apfel has said those checks should be sent by early May, and monthly benefits adjusted by June.

The bill appeals to the elderly -- a key voting block -- and was unanimously passed by Congress last month, an occurrence Clinton described as "truly astonishing." The bill was hailed by Republicans and Democrats alike as long overdue.

The earnings penalty is a remnant of an era of high unemployment in which older Americans were encouraged to retire to open up jobs for younger workers.

But with low unemployment today, employers are turning to older workers to meet the demands of a tight labor market.

Clinton said that the earnings test made sense when unemployment was 25 percent. But he noted that now one in four Americans between the ages of 65 and 69 has at least a part-time job, and 80 percent of the baby boom generation say they plan to work past age 65.

"Older Americans have the skills and the experience that businesses need," he said.

The president also unveiled a new Internet service offered by the Social Security Administration for younger Americans who want to get an online estimate of future retirement benefits.

"Our new Internet service ... will accomplish step one of retirement planning, helping workers to understand the amount of Social Security benefits they can expect in retirement," Apfel said.

For younger Americans interested in planning for retirement, the Social Security Administration's new Internet service offers three levels of benefit estimates that require an increasing level of detail.

The "quick calculator" is the simplest, asking only for a person's age and current-year earnings. The most sophisticated requires the user to download software that would allow him or her to try out various retirement scenarios.

The new online retirement calculators rely on users to provide their relevant information and will not tap into private records that the Social Security Administration keeps about individuals' employment and earnings histories.

The Social Security Administration in 1997 abandoned a service that gave people the opportunity to check their Social Security records online after privacy concerns were raised by Congress.

Starting this year, the agency is providing that information the old-fashioned way: All Americans over 25 will get the information -- including official earnings records and benefit estimates based on those earning -- in annual mailings, via the post office.

CNN's Kelly Wallace and The Associated Press contributed to this report.