(WASHINGTON, DC) -- Congressman Dennis Moore (Third District-KS) is reintroducing bipartisan legislation to increase the annual limit on deductible contributions to individual retirement accounts (IRAs) from $2,000 to $5,000.

The bill is similar to one Moore introduced with bipartisan support in the 106th Congress, and which was amended into the Portman-Cardin pension reform legislation (H.R. 802). That bill passed the House and died for lack of action in the Senate. Moore’s version for the 107th Congress will be introduced tomorrow with 24 bipartisan cosponsors and with important new innovations.

“The benefits of this legislation to both individual Americans and the economy are clear,” said Moore. “Individuals will be able to save more for retirement on a tax-preferred basis, reducing their dependence on Social Security. Additionally, mainstream economists believe increasing national savings is one of the best economic stimulants because it means more capital at favorable interest rates for investment in the stock market, real estate, bonds, and other sectors.”

The bill raises limits for both Roth and traditional IRAs, and indexes future IRA contribution limits to inflation, allowing them to increase without acts of Congress. Moore’s bill also provides two other important innovations to help those near retirement, as well as low-income Americans.

For those age 50 and over, Moore’s bill contains a “catch-up” provision that allows these individuals to contribute $7,500 per year, helping them to benefit from the savings opportunities which younger workers will have more time to utilize. Moore’s bill also creates a non-refundable tax credit, allowing qualified individuals to reduce their taxable income. The credit would be equal to a percentage of the retirement contribution made. Eligible individuals include couples filing jointly making less than $50,000 per year; head-of-household filers making less than $37,500 per year; and individuals and other filers making less than $25,000 per year.

“Had IRA contributions been indexed to inflation when they were created in 1974, Americans could now contribute $5,227 a year in 1998 dollars,” said Moore. “This bill is the right thing to do for the economy and for all Americans, no matter what their economic status might be. As I’ve said before, this isn’t a Democratic or Republican idea. It’s a good idea, and should be the law.”