IRA Withdrawal

IRA WITHDRAWAL

Mr. PRYOR. Madam President, in the year 2000, there were 38 million families in this country who owned an individual retirement account or participated in an employer-sponsored retirement savings plan. Since then, unemployment has climbed to 8.3 million people, with more than 1.9 million individuals unemployed more than 6 months.

Six months without work is a long time, and it is enough time for people to lose their homes, give up their health care, run through their savings, and ruin their credit for many years to come. I know this because I hear from people in Arkansas who have gone from living the family dream, to living off of their families, and eventually living off of Government help.

To add salt to the wound for many unemployed Americans, those individuals who are fortunate enough to have an individual retirement account are penalized a minimum of 10 percent if they withdraw funds from their account.

Recognizing that some significant events might require people to withdraw money from their retirement accounts earlier than expected, Congress has on previous occasions provided exceptions to the 10-percent early withdrawal penalty; for example, buying their first home or maybe even sending their children to college.

I am offering a commonsense amendment that could make a real difference for individuals who have invested in their IRA but have exhausted all of their unemployment benefits while searching for a job.

I am asking Congress to make another exception because our job creation figures continue to disappoint, economic growth continues to linger, and our manufacturing jobs continue to leave the country. I think these are significant events as well.

My amendment is a sense of the Senate and allows individuals who have exhausted their unemployment benefits a one-time withdrawal of up to $15,000 from their IRAs, tax free and without penalty, within 1 year after their unemployment benefits end.

In many cases, my amendment would free up enough money for a few months of rent or mortgage payments, child care
expenses, groceries, and other living expenses.

Regardless of what you believe, regardless of your party affiliation, we cannot dismiss these new numbers by the Bureau of Labor Statistics that indicate the average length of unemployment in this country is at a 20-year high.

We cannot expect Americans to be patient as they watch their bills pile up, and we cannot tell these families to keep their fingers crossed any longer while we do nothing to help them. After all, this money in their IRA accounts is their money. Imagine a family whose breadwinner is now on the unemployment rolls, and he or she has this retirement nest egg sitting there and they have some real needs in the family but they cannot touch their own money without penalty or paying taxes on accessing that money.

Madam President, I ask my colleagues to express their support tomorrow for the individuals who are in a tough position because of tough times and allow them to use funds from their own IRAs without penalty.

I yield the floor.