"Many seniors have complained that it is unfair to punish those who keep working by not allowing them to collect Social Security benefits when they have paid into the system all of their working lives," the "Contract with America," p. 117 -- 1994

"Now the earnings penalty is history," Congressman Zach Wamp, April 7, 2000

Congressman Zach Wamp said Friday that with the signing of a bill passed by Congress to eliminate the Social Security earnings penalty on working seniors many of those who paid it will get refunds.

"This is a win-win-win situation. It's good for seniors, good for the economy and good for employers who are looking for skilled, experienced workers. I am glad we passed it," Wamp said. President Clinton signed the bill Friday.

"Congress made repeal of the unfair earnings penalty on working seniors one of its top priorities this year," Wamp said. "Because the law is retroactive to Jan. 1, many seniors who have paid the earnings penalty will be getting refunds of the Social Security payments they have lost this year."

The Social Security earnings penalty hits seniors between 65 and 69 who choose to continue working and draw Social Security. Until Friday, seniors lost a dollar in Social Security benefits for every three dollars they made above $17,000.

Some 800,000 senior citizens and 15,000 Tennesseans were hit by the earnings penalty.

"Getting rid of this outmoded, unfair provision has been a major goal of the Republican Congress," Wamp said. "But, until we took control in 1995, little was done about it. The Contract with America, on which Republicans including me campaigned in 1994, actually cited the earnings penalty as an area for reform. We proposed to gradually raise the amount folks could earn without losing Social Security to $30,000. We did pass a law to do that. But when more money became available because or our success in eliminating the deficit, we set a new goal of eliminating the earnings penalty completely. We finished the job on Friday, and now the earnings penalty is history.

"The earnings penalty was put into effect when Social Security was enacted in 1935 in the middle of the Great Depression when jobs were scarce. The idea was to encourage folks to retire to free up jobs for younger people. But it's crazy to have it now when jobs are going begging in many parts of the country. Keeping the earnings penalty today makes about as much sense as driving the kids to school in a Model T Ford.

 "Getting rid of the penalty will let seniors who want to work do so without losing Social Security benefits they have worked hard for all their lives," Wamp said. "It will also provide a new source of qualified, good and experienced workers in areas where there is a shortage."