Idaho Congressman Mike Simpson joined U.S. House Republicans by cosponsoring H.R. 2021, the Savings Recovery Act. The legislation will help Americans protect and rebuild their hard-earned savings as quickly as possible while making sure the federal government does not hinder the process. 

“Savings and investment loss is the number-one economic issue on the minds of American families, which is not surprising--we’ve all watched our 401(k)s and other savings plans diminish in recent months,” said Simpson. “House Republicans are proposing a plan that will allow individuals to make timely decisions on their investments without the current law’s severe penalties.”

Americans should be afforded every opportunity to help rebuild the savings. Therefore, the Savings Recovery Act will raise the contribution and catch-up limits on retirement plans. The bill will also suspend the minimum withdrawals requirements for retirees over 70 ½ so they are not forced to take money out of their retirement accounts at a time when the value is low.

The Savings Recovery Act also addresses the need of families to rebuild college savings. Not only will this legislation extend the existing SAVERs Credit to contributions made to 529 college savings accounts, but it will also allow families to change the investment direction of the plan twice a year, instead of only once as current law dictates.  As a result, families will have the flexibility they need to ensure that their children will have access to a college education.

In addition, seniors and investors need tax relief on capital gains tax, and H.R. 2021 addresses this need as well by immediately suspending the capital gains tax on newly acquired assets for the next two years and raising the index inflation of capital losses.

“One of the most important items this bill addresses is preserving employee-controlled 401 (k)s,” said Simpson. “There are those in Washington who would like to wipe out 401 (k)s entirely and replace them with government-run accounts, similar to the Social Security program.  Like many Idahoans, I am concerned about any such proposal.  We all know how instable the Social Security is, and we can not afford to allow this to happen.”

H.R. 2021 is now being considered by the House Ways and Means Committee.