FROM THE OFFICE OF PUBLIC AFFAIRS

 The Chairman's proposal will accelerate, starting next year, the previously scheduled increase in the IRA contribution limit to $5,000 and will accelerate the catch-up contribution amount for individuals aged 50 and over from $500 to $1,000. The previously scheduled increases on the limits on contributions to employer provided savings plans will also be accelerated starting next year to $15,000 from the current $11,000. Both these provisions will give Americans a greater opportunity to save for their retirement. Finally, the older Americans will not be required to start taking distributions from their retirement plans or IRA when they reach age 70 1/2; the required beginning date for distributions will be extended over time to age 75.  This will allow seniors to build up their retirement assets on a tax free basis for a longer period of time. 
 
Rep. Lofgren's bill, HR 1619, increases the capital loss deduction limitation from $3,000 to $8,250 and indexes the increased deduction limitation for inflation.  The current limitation has not been increased since 1978 and is not now indexed for inflation.  As a result, the real value of the limitation has declined by nearly two-thirds.  The change before the Committee would fully offset inflation since 1978.
 
Both these provisions would, if enacted, help investors – not only those currently invested in the financial markets, but also encourage others to return to the financial markets.  In short, they would help to bolster investor confidence and this in turn would boost job creation.
 
 America's economic long-term fundamentals remain strong – even in the aftermath of the unprecedented impact of terrorist attacks at home and the war on terrorism abroad, which occurred during a period of economic downturn that began in the summer of 2000.  This is in large part due to the quick and prescient action by Congress in passing the President's tax cuts during the spring of last year and in the passage of a worker assistance and job creation bill earlier this year.  Without these two actions, the economic downturn would have been much more severe and prolonged.
 
The President continues to look at investor relief proposals such as those offered by the Chairman today.  I look forward to continued work with the Committee in consideration of these ideas, as well as others which can address investor relief and economic growth.