Statements on Introduced bills and Resolutions

STATEMENTS ON INTRODUCED BILLS AND JOINT RESOLUTIONS

By Ms. MURKOWSKI (for herself and Ms. LANDRIEU):

S. 2316. A bill to amend the Internal Revenue Code of 1986 to allow penalty-free withdrawals from individual retirement plans for adoption expenses; to the Committee on Finance.

Ms. MURKOWSKI. Mr. President, today I am pleased to introduce legislation along with Senator LANDRIEU to help bring adoption within reach for more Americans. Today in the United States there are literally thousands of children waiting to be adopted. The average child has been waiting in foster care for about four years.

One of the major barriers to adoption for many Americans is cost. I'm not sure that people understand that adopting a child can sometimes cost more than $50,000. That's just the adoption process itself!

The $10,000 per child adoption tax credit does help some, but it helps after the fact when you have the receipts. The problem is that many times the money for adoption has to be given beforehand-it requires up-front money. The tax credit doesn't help out there.

The legislation we are introducing today is one way the Federal Government can help with the initial costs of adoption. Many Americans place money for their retirement in IRA accounts, but you generally can't touch this money until you're 59½ years old, and if you do, you'll pay not only your marginal tax rate on the withdrawal, you'll also be forced to pay an additional 10 percent penalty to the IRS.

There are exceptions to this, however. Under current law, you can make penalty-free early withdrawals from your IRA to help you buy your first home, pay for excessive medical costs, or for qualifying education expenses. The idea is certainly to encourage savings for retirement, but also to allow you to use your own money-penalty free-if there's a compelling need.

I would make the case on behalf of the thousands of children who desperately want a loving family, and on behalf of the thousands of parents who dream of becoming parents, that adoption is a compelling need. And, the majority of Americans agree. Fully 78 percent of Americans said in a poll that they believe the government should be doing more to promote adoption.

Our bill would prohibit the IRS from penalizing Americans who want to use a portion of their retirement savings to adopt a child. It would allow Americans to withdraw up to $10,000 penalty-free from their IRA to help with adoption expenses. This is money that can be used up-front to pay for travel, court costs, attorney fees and all of the little surprises that add up to make adoption unaffordable for many.

We need to continue to promote adoption in America to the extent that we can. We owe it to these children and to families across our country to break down the barriers that keep kids from becoming a part of a permanent loving family. I urge my colleagues' support.