Montanans are struggling financially. This is evident every time I travel throughout the state. The day-to-day living expenses are starting to add up as the instability of the U.S. economy continues.
While the bad news has been piling up, there are reasons to be confident. In fact, just days ago on so-called “Black Friday,” we watched as millions of Americans poured into their local shopping centers to purchase Christmas gifts, holiday decorations, and household items. This is a testament to the faith Americans have in our economy and although the country entered a recession last December, people across the country believe we will rebound from this crisis.
However, many questions still remain, not the least of which is what can Congress do to help those folks and small businesses that are struggling the most? In Washington, D.C., the discussions continue to focus mostly on corporate bailouts. I’ve continued to stress that we need to move forward with caution before providing billions of taxpayer dollars to large industries while ignoring the smaller but equally important pieces of the puzzle.
In particular, I’ve said we need to start looking at simple solutions that would give regular Montanans some reprieve from their daily struggles to purchase gas, put dinner on the table, or even pay for healthcare. I’ve emphasized to the President and congressional leaders that we need to look for innovative means of addressing the economic crisis. Last month, I decided to act.
Currently, the Internal Revenue Service (IRS) requires senior citizens to withdraw a portion of funds from their retirement savings account once they reach age 70 ½. The rule was originally designed to prevent wealthy investors from using retirement accounts as a tax shelter. Not a bad idea except the rule is now forcing seniors into a situation where they either have to withdraw their savings at a huge loss or face massive financial penalties.
In response, I’ve drafted a bill that would give our senior citizens some relief. My legislation would ease that burden by waiving any penalties for not taking the Required Minimum Distribution (RMD) for 2008 and 2009. Additionally, it would allow seniors that have already taken their RMD for 2008 to re-contribute those amounts to their savings accounts without penalty.
Suspending the mandatory withdrawal will allow retirees to keep the money in their account if they choose, and in the end, allow them to recover some of their losses. The last thing the government should be doing at a time like this is requiring seniors to raid their retirement accounts. Retirees need to have a stable source of income for their golden years, without worrying about the money running out.
Again, it’s easy for us to just want to throw money at the economic problems that are hurting our country. Every Montanan has been hit by our struggling economy in one way or another. And we all want solutions. However, there are cost-effective answers, like my bill, that will relieve the burden on Montanans without simply opening up the federal government’s checkbook again.
As your sole representative in the House, I will continue to look for additional ways to offer common sense solutions that can provide real relief to those that need it during these unstable times. It’s time we look beyond the bailouts and begin the process of getting the economy back on track.
Montana Congressman Denny Rehberg is a member of the House Appropriations Committee
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