Fair Minimum Wage Act of 2007

FAIR MINIMUM WAGE ACT OF 2007--Continued -- (Senate - January 23, 2007)

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Mr. BUNNING. Madam President, this is an important amendment for many of our seniors because it deals with the taxes on Social Security benefits. I have brought this issue before this Chamber before, so it should be familiar to many of my colleagues.

When the Social Security program was created, benefits were not taxed. However, in 1983, Congress changed the rules of the game by passing legislation to begin taxing up to 50 percent of a senior's Social Security benefit if their income was over $25,000 for a single individual or $32,000 for a couple.

Many seniors across the country were hit with a tax they never anticipated and were forced to send a portion of their Social Security benefits back to the IRS.

In 1993, Congress felt taxing 50 percent of benefits wasn't good enough. That year, Congress passed and President Clinton signed a bill that allows 85 percent of a senior's Social Security benefits to be taxed if their income is above $34,000 for a single and $44,000 for a couple. This was known as the ``Clinton senior citizens tax.'

The additional money this tax raises doesn't even go into helping Social Security solvency; instead, it goes into a Medicare Part A program.

I was a Member of the House of Representatives in 1993, and I opposed this tax then and I oppose this tax today, 14 years later.

Some people think this tax only affects ``rich' seniors, but that is not the case. In fact, the income thresholds both for the 50-percent tax and the 85-percent tax haven't changed since they were first enacted back in 1983 and 1993. This means more and more seniors are paying these taxes every year.

In fact, it is estimated that of the 40 million Social Security beneficiaries, about 15 million--or 39 percent--of seniors pay taxes on their Social Security benefits. Of these, it is estimated that over 9.5 million pay taxes on up to 85 percent of their Social Security benefit.

On one hand, we tell seniors to plan and save for retirement and, on the other hand, we tax them for doing that.

In the past, there have been efforts by Members of Congress, including myself, to remove this unfair tax. During debate on the Senate 2006 budget resolution, I offered an amendment that provided Congress with the budget resources to remove this unfair tax on benefits. My amendment passed 55 to 45. Unfortunately, the tax reconciliation instructions were scaled back during conference.

Today, I am offering another amendment to finally repeal the 1993 tax on Social Security benefits. This means the 85-percent tax tier would be eliminated and the maximum amount of Social Security benefits that could be taxed would be 50 percent. Millions of seniors would be able to keep more of their Social Security benefits, and Congress gets an opportunity to end this unfair tax on seniors.

It is also important to point out that the Medicare Program is not harmed by my amendment. As I already said, this tax funds the Medicare program. Therefore, my amendment transfers to Medicare any amount it would have received due to this tax from the general fund.

This was an unfair tax on our seniors, and it is time we repeal it. I urge my colleagues to support this amendment. I thank the Chair for the time. We will look for a time later to bring up the amendment again.

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