DEBORAH MARCHINI, CNN ANCHOR: Well, by an overwhelming margin, the House has approved a measure raising the amount people can put away in retirement accounts and 401(k)s. The last time the IRA limit was raised was 20 years ago. Bob Beard has more.</s>BOB BEARD, CNN CORRESPONDENT (voice-over): Sponsors of this bill say, the whole idea is to encourage people to save more money. The measure would increase yearly tax-free contributions to individual retirement accounts from $2000 to $5000 by 2003, and it would boost pre-tax contributions limits to 401(k) retirement plans from $10,500 now to $15,000 within five years. The bill would also help workers over 50 contribute extra money to IRAs and 401(k)s. It makes the plans easier to move from job to job and shortens the vesting period from five to three years.</s>REP. BILL ARCHER (R-TX), CHAIRMAN, WAYS AND MEANS CMTE.: One could on our economic horizon is the lack of personal savings, private savings in the private sector in this country, which is at an all-time low -- in fact, negative. We, as a people, borrow more than we save.</s>BEARD: A Democratic alternative called retirement savings accounts favored by the president was rejected. Some Democrats argued the GOP bill just benefits the wealthy.</s>REP. RICHARD GEPHARDT (D-MO), MINORITY LEADER: The greatest feeling of this bill is that it does little to encourage retirement savings by lower- and middle-income workers, those Americans who simply are not saving enough because they don't have enough to save.</s>BEARD (on camera): The bill now heads to the Senate, where its fate is uncertain. The White House strongly opposes it, arguing that just 5 percent of 401(k) participants make a maximum contributions and just 4 percent of taxpayers contribute the max to an IRA. Bob Beard, CNN Financial News, Washington.
House Approves Retirement Savings Bill