June 21, 2002
The Administration strongly supports House passage of H.R. 4931. The Administration is pleased that the House is acting now to make permanent the important retirement savings incentives passed into law as part of the Economic Growth and Tax Relief Reconciliation Act of 2001 ("EGTRRA").
EGTRRA included a number of key retirement savings incentives for the American people, including increased contribution and benefit limits, shortened vesting periods, improved disclosure requirements for cash balance plan conversions and easier rollovers between retirement plans. However, those incentives expire December 31, 2010.
Retirement savings are inhibited by uncertainty about whether these reforms will be permanent. This uncertainty adversely affects the pension coverage and benefits of millions of workers. These incentives must be made permanent now to promote the expansion of private pension coverage.
law that would reduce receipts or increase direct spending is subject
to the Pay-As-You-Go (PAYGO) requirements of the Balanced Budget
and Emergency Deficit Control Act (BEA) and could cause a sequester
of mandatory programs in any fiscal year through 2006. The requirement
to score PAYGO costs expires on September 30, 2002, and there are
no discretionary caps beyond 2002. The Administration will work
with Congress to ensure fiscal discipline consistent with the President's
budget and a quick return to a balanced budget. The Administration
will also work with Congress to ensure that any unintended sequester
of spending does not occur.