Legislation to let homemakers invest as much in IRAs as income-earning spouses would be a "boon to commercial banks," Sen. Kay Bailey Hutchison said Friday.
The provision has bipartisan support from Sen. Dianne Feinstein, D- Calif., and Rep. Jennifer Dunn, R-Wash., a House Ways and Means Committee member.
The lawmakers urged Congress to attach the measure to the minimum-wage legislation expected to be approved this fall.
Sen. Hutchison, R-Texas, and Sen. Barbara A. Mikulski, D-Md., said families likely would invest the individual retirement accounts with banks, which see IRAs as an inexpensive and reliable source of core deposits.
The proposal would allow both spouses in a single-income family to contribute $2,000 to IRAs. That's the same tax-deductible contribution available to two-income families.
According to estimates from Sen. Hutchison's office, there are 16 to 20 million single-income families in the United States, and 10% contribute $2,250 a year to IRAs. That's the maximum allowed for a family with a single working adult.
The lawmaker estimated that adoption of the provision would cost the federal government $810 million from 1997 through 2001.
- Stephen Coplan, Medill News Service