Letter to Barack Obama, President of the United States - Economic Stimulus Package

Letter

Letter to Barack Obama, President of the United States of America

The Honorable Barack Obama

President of the United States of America

The White House

1600 Pennsylvania Avenue, N.W.

Washington, DC 20500-0001

Dear Mr. President,

When you visited with the House Republican Caucus on January 27, 2009, you assured House Republicans that you were willing to consider and include other ideas as part of an economic stimulus package. With that in mind, please consider including a retroactive suspension of the required minimum distribution rules for IRA and 401(k) accounts for the 2008 tax year. This bipartisan proposal will help protect seniors while also providing much needed capital to help stimulate the economy.

For many older Americans, retirement investments such as IRAs and 401(k)s provide a substantial portion of their retirement income. Like all Americans, seniors have seen significant decreases in the value of their retirement accounts due to the current financial downturn.

This situation is exacerbated by the onerous regulations requiring retirees over the age of 70 and ½ to make required minimum distributions (RMDs) from their IRA and 401(k) accounts by the end of each year. The negative consequences of these regulations are twofold: seniors are forced to lock-in investment losses while also taking their savings out of the capital-starved markets for stocks and bonds. According to the most recent data available, these distributions resulted in almost $78 billion in investment capital being withdrawn, two-thirds of which comes directly out of the stock market. Recognizing the harsh effect of these rules, Congress took an important first step at the end of the 110th Congress and suspended the distribution requirement for the 2009 tax year. But more must be done.

Though 2009 has already begun, it is not too late to assist seniors who were forced to take RMDs at the end of last year. Today we introduced the IRA Equity for Seniors Act, which will allow seniors who took their 2008 RMDs to recontribute them into their annuity accounts without suffering a tax penalty. This legislation will allow for much needed funds to reenter our markets and assist in getting our economy back on track. Please consider supporting the inclusion of this bipartisan proposal as part of the stimulus legislation. With immediate action, we can provide much-needed relief to seniors across the country while also stimulating the economy through the reinvestment of those savings.

Respectfully,

Spencer Bachus
Member of Congress

Rodney Frelinghuysen
Member of Congress

Source