Taxpayers get sanctioned for arguing frivolous positions in Tax Court. Apparently there are no penalties for Senators proposing frivolous amendment to the Internal Revenue Code. If there were I’m think that Senator Barbara Milkulski might merit one. While the Senate, the House and the President are letting us hurtle to the fiscal cliff and we are held in suspense as to what the tax law will be, she is introducing legislation to change the name of a type of IRA. You know how the IRAs that allow you to accumulate income that is never taxed are called Roth IRAs. That name honors the late Senator William Roth. They also named a bridge after him. Then there are Spousal IRAs. They aren’t named after anybody. Senator Mikulski wants to fix that. Here is what she had to say:
I rise to introduce legislation to rename the section of the tax code that is currently known as the “Spousal IRA” so that it carries the name of its champion—my friend and colleague from Texas—Senator Kay Bailey Hutchison.
Senator Hutchison has been an excellent partner to work with on the Commerce, Justice, and Science subcommittee watching over the nation’s checkbook for investments in research, discovery, innovation, and law enforcement. We have sought to find the sensible center in addressing issues like cancer research, building a balanced space program at NASA, and most recently—on legislation to stop inmates from using cell phones in prison.
Senator Hutchison must be recognized for her long-standing advocacy for women. Her advocacy has been steadfast. We have worked together on the women’s health agenda. We have mammogram standards in this country because of the Hutchison-Mikulski amendment. We have helped with breast cancer research funding because we have worked together, and I could give example after example.
But what I rise to discuss today is the very first issue that Senator Hutchison and I took on together—expanding the availability of Individual Retirement Accounts, IRAs, for spouses who work at home. Along with Senator Kay Bailey Hutchison, I am the author of the Spousal IRA bill.
I have always said that one of my principles is to listen to the people and the stories of their lives. My best ideas come from the people. The Spousal IRA bill was one of those kinds of ideas. This bill was a product of Senator Hutchison’s personal experience before joining the Senate. After putting aside money for her retirement as a single working woman, Senator Hutchison found that she could only put aside $250 in an IRA once she married her husband.
This kind of policy, that discouraged women from saving for retirement, was completely backwards. Women tend to live longer than men. Women are more likely to take years off of work outside of the home because of family responsibilities. And women are more likely to work in jobs that don’t have a pension.
When Senator Hutchison joined the Senate in 1993, she came to me to sign on as the lead Democratic sponsor for her idea to help women save for retirement. Together we worked to build support for this bill and after 3 years and 62 cosponsors, the Spousal IRA bill became the law of the land.
Suddenly, women weren’t limited to $250, they could put away $2,000. All women—single, married, working outside the home, or working at home—could set aside the same amount for retirement. Over time, that amount has grown, and so it is not $2,000, but it can be $2,500 or $3,000 or $5,000, depending on a woman’s age.
This law is important because it reflects the values of our nation, it rewards good parenting and families, and it recognizes that not all work is done in the marketplace. American families feel the pressure from all sides, paying for their children’s education, their homes, taking care of elderly parents, and being prepared for unforeseen emergency medical care costs. What the Spousal IRA law finally said was, “Moms and dads are struggling to do the right thing for their family, and they should not be penalized for staying at home.”
Earlier this year, an interviewer on PBS asked Senator Hutchison what she’s most proud of in her Senate career, and she said the Spousal IRA. Senator Hutchison has a lot to be proud of, but we must recognize her work in fixing federal policy to help women save for retirement. We should amend the tax code so that women in America know that they’re benefitting from the Kay Bailey Hutchison Spousal IRA.
I don’t know. Maybe it is not such a bad thing to do in the middle of a fiscal crisis. Senator Mikulski is a Democratic and Senator Hutchison is a Republican. Maybe the “idiots in Congress”, as my blogging buddy Robert Flach refers to them, will think about Senator Mikulski’s speech and be inspired to reach across the aisle and find some common ground. Who knows ? Maybe if half of them were women, it would happen.
You can follow me on twitter @peterreillycpa.
Originally published on Forbes.com Dec 15th, 2012