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U.S. SEN. SPECTER'S AMENDMENT TO STIMULATE THE ECONOMY IS ACCEPTED INTO THE TAX BILL

 U.S. SEN. SPECTER'S AMENDMENT TO STIMULATE
 THE ECONOMY IS ACCEPTED INTO THE TAX BILL
 WASHINGTON, March 13 /PRNewswire/ -- The Senate last night accepted an amendment to the Tax Bill, proposed by U.S. Sen. Arlen Specter (R-Pa.) that is designed to stimulate the economy by allowing consumers to withdraw from their individual pension funds without penalty for certain purchases.
 In arguing for his amendment, Specter said such spending could pump anywhere between $40 billion -- the estimate of the Federal Reserve System -- and $120 billion -- based on the results of a consumer survey -- into the nation's recession-afflicted economy.
 "This could well be just the amount of stimulus needed to take us out of the recession," he said.
 The items for which these retirement funds may be spent include home purchases and automobiles.
 Individuals with incomes under $75,000 and married couples with incomes under $100,000 could withdraw up to $10,000 from their IRA, 401(k) or Keogh plan provided that the funds are spent within six months of the date of withdrawal. If paid back within four years, they would be subject to no tax. Specter said he firmly believes that it is in the national interest to encourage savings. But, he said, the current recession has created extraordinarily difficult times that require an extraordinary solution.
 "These savings have been set aside for a rainy day," said Specter, "and we really have a cloudburst out there now in terms of a depressed economy. We have to stimulate that economy and get people back to work. A good way to do this is by making a limited amount of these individual pension funds available now."
 He said he believes that only a small portion of the available $800 billion in these funds would be used by consumers.
 "But even a small portion would make a tremendous impact on our stagnant economy," he said.
 Specter and Sen. Pete Domenici (R-N.M.) conceived the idea of using penalty-free individual pension fund withdrawals last year and introduced S. 1984 to permit this.
 /delval/
 -0- 3/13/92
 /CONTACT: Dan McKenna of Sen. Arlen Specter's office, 202-224-9020/ CO: ST: Pennsylvania IN: SU:


JS-MP -- PH006 -- 7686 03/13/92 09:26 EST
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Publication:PR Newswire
Date:Mar 13, 1992
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