Oct 8, 2002 3 min read

WASHINGTON (AP) – House Republicans began pushing campaign-season legislation Monday designed to ease the sting of investor losses, but Democrats decried the move as political with only four weeks to go before midterm elections. One measure would boost the tax deduction for investment capital losses from $3,000 to $8,250, providing a modest way for investors to recoup stock market losses.

A second bill would raise the age at which retirees must begin withdrawals from 401(k)s and individual retirement accounts from 701/2 to 75, adding a few years to rebuild lost value. It would also increase in 2003 the contribution limits for these plans to $5,000 for IRAs and $15,000 for 401(k)s. Current law gradually raises the contribution limits from $3,000 for IRAs and $11,000 for 401(k)s.

The legislation will “help build the confidence and restore the losses of America’s investors,” said House Ways and Means Committee Chairman Bill Thomas, R-Calif.,

The GOP-controlled Ways and Means Committee planned to consider the legislation Monday night. Republican leaders hope to bring the bills to the House floor next week.

There is little chance the bills will become law this year. The congressional session is in its final weeks, and a Democratic-run Senate probably will not follow the House. Passage of the legislation, however, would provide Republicans with a fresh economic message as the GOP tries to keep its slim House majority in the Nov. 5 elections.

Democrats said politics is driving the legislation.

“This isn’t real relief for pension holders or investors; it’s Politics 101,” said Rep. Charles Rangel of New York, ranking Democrat on the Ways and Means Committee. “They are running for political cover as fast as they can.”

Democrats charge that President Bush and the Republicans have focused too little attention on economic problems, preferring to talk almost exclusively about the war on terror and possible military action against Iraq. Democratic leaders in recent weeks repeatedly have alleged economic inaction by the Republican Bush administration, hoping that voters will blame the GOP.

Recent polls suggest that voters are seriously worried about the nation’s economic future, as unemployment rises, stocks and 401(k) plans plummet in value – coming quarterly statements will remind voters of that – and the government faces a fresh round of budget deficits.

“This is an absolute disaster in terms of the economy, and no one on the Republican side seems to care or want to do anything about it,” said House Minority Leader Dick Gephardt, D-Mo.

Republicans, however, say Democrats have no compelling plan to fix the economy. GOP leaders say their new package would provide relief now and could improve investors’ willingness to invest, and they point to accomplishments such as the 2001 tax cut, a stimulus bill passed this year and new presidential trade negotiating authority as long-term economic tonics.

“Republicans have a good story to tell of trying to make the economy better,” said a recent memo from John Feehery, spokesman for House Speaker Dennis Hastert, R-Ill. “They offer ideas, they can point to votes and they have a track record.”

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On the Net:

Congress: http://thomas.loc.gov