[Congressional Record Volume 140, Number 45 (Thursday, April 21, 1994)]
[House]
[Page H]
From the Congressional Record Online through the Government Printing Office [www.gpo.gov]


[Congressional Record: April 21, 1994]
From the Congressional Record Online via GPO Access [wais.access.gpo.gov]

 
INTRODUCTION OF H.R. 4275, A BILL TO RESTORE THE LONG-TERM SOLVENCY OF 
            THE OLD AGE, SURVIVOR AND DISABILITY TRUST FUNDS

  The SPEAKER pro tempore. Under a previous order of the House the 
gentleman from Texas [Mr. Pickle] is recognized for 5 minutes.
  Mr. PICKLE. Madam Speaker, on April 11, 1994, the Board of Trustees 
of the Federal Old-Age and Survivors Insurance and Disability Insurance 
Trust Funds released their 1994 Annual Report. This report should be 
required reading for all Members because it details the financial 
condition of the largest single part of our country's domestic spending 
program. Most importantly, it documents that Social Security, our 
largest entitlement program, faces a large and growing long-term 
deficit. We should not be alarmed but we must be concerned, and should 
act promptly.
  According to the trustees report, the program's deficit has now risen 
to 2.13 percent of our Nation's total taxable payroll over the next 75 
years. This means that projected expenditures now exceed expected 
revenues by an amount equal to 2.13 percent of the total payroll which 
is subject to the OASDI payroll tax. The program has not been in close 
actuarial balance for several years, and it is now obvious to all that 
significant changes must be made to address the program's growing 
deficit.
  It is for this reason that I introduced legislation today, H.R. 4275, 
which would make several fundamental, long-term changes to the program. 
The major provisions of the legislation would:
  First, gradually raise the age of normal retirement from 67 to 70, 
while continuing to allow for early retirement at age 62;
  Second, award cost-of-living-adjustments on a biennial basis except 
in years of high inflation, with COLA's to be made in July, rather than 
in January;
  Third, extend Social Security coverage to newly hired State and local 
employees; and,
  Fourth, reduce the spousal benefit from 50 percent to 33 percent of 
the covered worker's benefit.
  These provisions would be gradually phased in beginning in the year 
2000 and would not be fully effective until after 2021. None of these 
changes would significantly affect current retirees or those workers 
who are now near retirement. The bill would reduce total Social 
Security expenditures by 2.12 percent of taxable payroll, an amount 
almost exactly equal to the currently projected deficit in the OASDI 
trust funds.
  In proposing these changes, I deliberately chose not to include any 
tax increase, or any change which would have an immediate impact. I did 
this to avoid any impression that these proposals were being made for 
budget reasons. I took this approach so that the bill would focus 
exclusively on the long-term problems we face in our entitlement 
programs, most notably with Social Security. We must make decisions now 
on how to responsibly finance a benefit structure which meets the 
retirement income security needs of workers in our society. I think 
this is important, because there is currently a great deal of public 
discussion about potential changes to all these programs.
  For example, there are those who believe that older, wealthier 
Americans ought to be called on to bear a greater part of the burden in 
reducing the Federal deficit. To accomplish this end they would means-
test and cut Social Security and Medicare benefits in order to help 
balance the Federal budget. While it may well be that additional 
sacrifices by today's older Americans may be necessary as part of a 
well-balanced plan to solve our Federal budget problems, in my judgment 
making immediate reductions in their benefits is not the best way to 
accomplish this goal. It is important to note that with regard to 
Social Security, the trust funds are currently running large surpluses 
and are not contributing to the Federal deficit. Therefore, there is no 
reason to frighten the elderly with the prospect of reducing their 
COLA's or means-testing their benefits. Likewise, there is no reason to 
impose the enormous administrative burden of means-testing on the 
already strained Social Security Administration that would inevitably 
result if means testing were imposed. Nor should we allow inflation to 
erode the benefits of the oldest and poorest Social Security 
beneficiaries in our efforts to balance the budget. If we wish to tax 
older, wealthier Americans there are far more efficient and direct ways 
to accomplish this purpose.
  In addition, others believe that our entitlement programs are growing 
too rapidly and that we must cut them back. Personally, I agree that we 
must control the growth of entitlement programs or we will leave our 
children and grandchildren with an impossible financial burden. That is 
why H.R. 4275 contains no tax increases. This bill would reduce the 
size of the Social Security entitlement program. I think this is 
important, because we will never be able to cut back on all the other 
entitlement programs if we do not take some action with respect to 
Social Security.
  Finally, if we take action now to gradually raise the age of normal 
retirement, young workers will have the opportunity to make their own 
retirement plans based on their own work and savings. They will not be 
as dependent on Social Security and the Federal Government when they 
retire. In the meantime, their savings will be invested primarily in 
publicly traded securities, which will help to provide the capital our 
economy needs in order to grow.
  While each one of these changes will certainly generate considerable 
discussion and perhaps even opposition, they are based on sound Social 
Security policy. In each case they are a response to the changing 
nature of our society and economy. If adopted in the near future, and 
phased in gradually, our economy and society will absorb them with 
little or no disruption. If the reforms contained in H.R. 4275 are 
adopted soon, they will: First, put an end to the fears of the elderly 
that their benefits will be cut at a time when they can no longer 
increase their retirement savings; second, put an end to the growing 
cynicism younger workers have with respect to the long-term viability 
of the Social Security system; and third, avoid the need to make more 
sudden and drastic changes in the future. For all these reasons I would 
urge Members to begin to give this legislation and this issue serious 
consideration.

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