WASHINGTON - Senate Finance Committee Chairman Charles E. Grassley said Monday that he hopes to move legislation this spring to encourage Americans to save more for retirement, but he cautioned that it will be an uphill battle.
"There's a possibility it can be part of the tax bill" being pushed by President Bush to reduce individual income tax rates, the Iowa Republican said in a speech to the U.S. Chamber of Commerce.
He went on to say, "I have some doubt it can be done" if Congress reduces the tax cut package from $1.6 trillion, which the White House has requested, to the $1.2 trillion that the Senate recently approved in its budget resolution. The retirement provision is not part of the Bush proposal.
Regardless, Sen. Grassley said, he will insert his own retirement savings plan, which he introduced in early April, when his panel votes on the President's tax package. He announced that he hopes the committee will take up the bill May 9. "We'd like to have floor action completed" and the overall tax bill, which is centered on individual rate cuts, "sent to the President for his signature by the Memorial Day recess," he said.
The House is scheduled to vote Wednesday on a bill similar to Sen. Grassley's that would raise the limit on annual contributions to individual retirement accounts from $2,000 to $5,000 by 2004 and to 401(k) plans from $10,500 to $15,000 by 2006. It would also index these ceilings annually in $500 increments, starting in 2005 for IRAs and in 2007 for 401(k) plans.
Separately, Sen. Grassley told reporters that repealing the estate tax, which President Bush has urged and the banking industry strongly backs, could be negotiated out of the overall tax cut package.
"You have to think of every provision being negotiable," Sen. Grassley said, specifically citing the President's recommended estate tax repeal and the so-called marriage penalty, as well as an increase in child tax credits. "The more you move down from the $1.6 trillion, the more that will be the case," he said.
If complete repeal of the estate tax is not achieved in the Bush package, Sen. Grassley said, he will recommend a separate bill to axe it.
Sen. Grassley also indicated that if legislation he sponsored to overhaul the nation's bankruptcy law remains stalled in a political dispute over how to reconcile the House and Senate versions of the bill, he might attach the measure to a spending bill that moves through his committee.