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‘Real People’ Testify on GOP Contract

January 11, 1995

WASHINGTON (AP) _ Along with reams of testimony from politicians and experts, the House Ways and Means Committee heard the views of four ``real people″ Wednesday on the Republicans’ ``Contract With America.″

All four _ two senior citizens from Kentucky, a Maryland social worker and a Utah accountant _ were chosen by the Republican staff of the committee. They applauded the contract, with few reservations.

Philip and Barbara Semler of Richmond, Ky., testified in favor of a provision to reduce the penalty on Social Security recipients who continue to work past 65.

Under current law, Social Security recipients aged 65 to 69 lose $1 in benefits for every $3 they earn above $11,280. Republicans want to raise the earnings figure to $30,000 by 2000.

The Semlers, who had written to Rep. Jim Bunning, R-Ky., the chairman of the Social Security Subcommittee, said the limit should be lifted altogether.

Otherwise working seniors, in effect, have to pay higher taxes than anyone else and are thus discouraged from working and contributing their skills and talents to society, they said.

``We don’t want to just sit on the porch in a rocking chair,″ said Philip Semler, a 68-year-old salesman.

On another part of the ``contract,″ Virginia Kellogg, a social worker who runs a business in Mitchellville, Md., specializing in helping people get off welfare, expressed approval for work requirements and for eliminating benefits that allow teen-age mothers to establish their own households

``It will take some tough love to teach people to be independent and self-sufficient and to fend for themselves,″ she said.

She also called on Congress to turn responsibility for welfare back to state and local governments ``because these governments are closer to the people who are in need and can better solve their problems.″

Rep. Philip M. Crane, R-Ill., who is white, said he was glad to hear the opinions voiced by Kellogg, who is black. He said that when he expressed similar views they were labeled as having a racist overtone.

However, Democrats challenged her, including Rep. Charles B. Rangel, D-N.Y., who pointed out that her own business has worked extensively with government agencies.

``Your institute is dependent on government for survival,″ he said.

Craig Willett, a tax consultant in Provo, Utah, said cutting the capital gains tax _ another Republican proposal _ would help small businesses attract investors. And he said increasing the estate tax exemption from $600,000 to $750,000 would make it easier for small business owners to pass on their firms to their children.

However, he said two business-oriented tax provisions of the contract, while well-intentioned, would make the tax code more complex.

One would index the capital gains tax so investors aren’t taxed on gains resulting from inflation. The other, called neutral cost recovery, would allow businesses to more quickly write off their investment in computers and other equipment.

Willett, whose name was given to the committee by the National Federation of Independent Business, said neutral cost recovery favors large capital intensive businesses over small, service-oriented, labor-intensive firms.

The committee also heard from think-tank economists and representatives of tax policy organizations. It plans to listen to more ``real people″ on Thursday, along with three governors and two big-city mayors.

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