MAN BEHIND THE IRA NEVER-SAY-DIEBATTLER: ROTH LEADS A QUIET CRUSADE TO GET AMERICA SAVING

His name is attached to the new individual retirement account that had millions of Americans rushing to take advantage of a one-time chance to spread capital gains taxes over four years before a yearend deadline, but Sen. William Roth — as in Roth IRA — is hardly a regular on “Meet the Press.”

That’s probably because the Delaware Republican who heads the Senate Finance Committee has said little on the hot-button issue of the day — the Clinton impeachment proceedings. Perhaps because the 77-year-old senior senator from the tiny, business-friendly state is one of the remaining handful who grew up during the Great Depression, he has made personal savings a personal crusade for his 33 years in Congress.

The enactment of the Roth IRA as part of the Taxpayer Relief Act in 1997 was the result of a five-year effort that has been a virtual gift to help taxpayers during retirement years. Legislation including similar provisions passed Congress in 1992 and 1995, but each time was vetoed for reasons unrelated to the IRA provision.

Now, as millions of Americans convert traditional IRA’s to Roths, he’s proposing an equivalent option for 401(k) plans and their non-profit counterparts, 403(b)s. He wants to increase the amount of money that can be invested in those plans to give workers the option of making their contributions on an after-tax basis. In return for giving up the pre-tax contributions they now make, they would be able to withdraw principal and earnings tax-free at retirement.

Sen. Roth last gained national recognition in 1981 with passage of the Economic Recovery Act, the 30% across-the-board tax cut known as the “Kemp-Roth” law (unless of course you’re from Delaware; then it’s called the Roth-Kemp law) that became the centerpiece of President Reagan’s economic plan.

The response to that legislation was hardly as overwhelmingly positive as that garnered by his changes in the IRA. Critics have charged that President Reagan failed to reduce the deficit, which his tax cuts were supposed to accomplish, and instead served only the rich at the expense of the poor by cutting out needed services.

“In the whole Reagan era it (Kemp-Roth) created massive debts for the country,” says Charles Oberly, a former Delaware attorney general who made an unsuccessful bid for Sen. Roth’s seat in 1994.

The IRA became the senator’s pet project in the 1990s. He disputed the 1986 Tax Reform Act, which limited the amount of IRA contributions that could be deducted based on income, resulting in a drop-off in contributions, and has been campaigning ever since to have the limits removed.

While he heads what is arguably the most powerful committee in Congress after the House Ways and Means Committee, Mr. Roth is often described as low-key and shy, the opposite of the gregarious back-slapping pols who are normally thought to wield power on Capitol Hill. Even Mr. Oberly declines to criticize him, which says a lot for a United States senator.

“He’s a consensus builder,” says William DeReuter, vice president of government relations at Merrill Lynch & Co. Inc. and a press aide to the senator in the 1970s.

“Where other chairmen (achieve their goals) through muscle, Roth does it because he’s extremely well-liked,” says another financial industry lobbyist who worked with him on the Finance Committee.

political bug bit early

The senator himself offers few clues as to why he takes such a keen interest in retirement savings issues, other than to say it’s always been his personal interest. “When you stop and recognize that the typical American family, in the ages of, say, 40 to 50 or even to 60, roughly have $10,000 in savings, that’s not going to be adequate for retirement,” he says.

“I think we’ve got to do something to encourage them to save, to ensure that they do have security as they reach the time of retirement.”

Sen. Roth sticks to his ideas doggedly. Donald Kirtley, a long-time friend who worked for him when he was first elected to the House of Representatives in 1966, recalls how tenaciously the freshman congressman pursued a pet project of cataloging all the new Great Society programs enacted under President Lyndon Johnson.

“Bill went to Congress and decided that he was going to single-handedly catalog all of the federal programs available to Americans,” says Mr. Kirtley, now retired from Hercules Inc. in Wilmington, Del. The Johnson administration was not willing to cooperate, he says.

“Bill was just determined that we were going to get that done even though he was just a freshman from Delaware.” The congressman hired two interns, and “between the two of them and myself and Bill, we devoted a lot of our time in the summer of ’67 and on through that fall, and at some point we got it all done.”

The document required a special printing of the Congressional Record. “Bill Roth just put his head down and did it,” says Mr. Kirtley. “He is a very determined legislator on things he feels strongly about.”

Sen. Roth got the bug for politics early in life. A native of Helena, Mont., and the son of a traveling salesman, he was unathletic as a youth. So instead of passing his time in sports, he would hike to the state Legislature and watch the proceedings.

He followed up his early love of politics by heading the Young Republicans before serving in the Army on General Douglas MacArthur’s staff in Japan at the end of World War II, after which he earned his law degree from Harvard and joined Hercules as a government contracts lawyer for its defense business.

As a friend of the financial services industry, he has a long list of industry contributors from 1993 to 1998, including $144,000 from Wilmington-based credit card giant MBNA America Bank, $33,000 from Merrill Lynch & Co., $25,000 from Citigroup and $16,000 from Morgan Stanley Dean Witter & Co.

And the senator does his own bit to reduce estate taxes. His latest financial disclosure statement, filed last July, shows he and his wife have been making gifts to their children from a family limited partnership containing a piece of land in Montana worth between $100,000 and $250,000. Another property in Montana is valued at between $1 million and $5 million, mortgaged for 15 years for $500,000 to $1 million at 7.875% interest with the Wilmington Trust Co.

The senator’s retirement accounts, on the other hand, are relatively paltry for someone making $136,700 a year: He lists five Keogh accounts, and five IRAs with Legg Mason — three of which are valued at between $15,000 and $50,000 and the other two at between $1,000 and $15,000. A Metropolitan Life Insurance Co. policy is valued at $1,000 to $15,000, and his Senate Federal Credit Union account has $1,000 to $15,000 in it.

A $78,500 timber sale from his Montana land added to his income in 1997.

He also owns a rental home in Washington valued at between $500,000 and $1 million, as well as a house in Rehoboth Beach, Del., worth $100,000 to $250,000.

But he doesn’t need to worry about retirement income; under the congressional pension plan, he will receive $103,000 a year whenever he chooses to retire.

wealthy in his own right

But the real wealth in the family comes from wife Jane, a federal appeals judge in Philadelphia, who has an annual salary of $136,700, and between $1.85 million and $3.375 million worth of stocks, bonds, mutual funds and money market and bank accounts.

A middle-of-the-road fiscal conservative, Sen. Roth generally tries to avoid controversy. But he has been bold in backing a reduction in the consumer price index, which would reduce cost-of-living and other adjustments to Social Security. Reducing the Cola would free money for the tax decreases he cherishes.

In addition to creating the new 401(k) and 403(b) retirement plans with tax-free withdrawals, Sen. Roth’s latest legislation has other features long called for by financial planners: eliminating income caps for contributing to IRAs, increasing maximum contributions to 401(k) and 403(b) plans to $15,000 from $10,000 and to $10,000 from $6,000 for simplified defined contribution plans used by small businesses, increasing contribution limits on all IRAs to $5,000 from $2,000, allowing catch-up contributions for workers returning to the workplace and increasing pension options for small businesses.

Sen. Roth’s personal savings account bill would provide workers earning at least $3,000 a year with a minimum of $250 over each of the next five years plus an amount based on payroll tax payments. The average wage earner making $29,000 would receive $2,589, equivalent to a 22% payroll tax rebate.

The bill is close to President Clinton’s proposal to use the surplus to give middle- and low-income workers money for their own retirement accounts, but the proposal to expand 401(k) plans may face more resistance from the administration. Yet the senator is unfazed.

“I can remember the days when nobody supported Roth-Kemp,” he says.