[Congressional Record Volume 141, Number 45 (Friday, March 10, 1995)]
[Senate]
[Pages S3769-S3770]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




                       SOCIAL SECURITY TRUST FUND

  Mr. DORGAN. Mr. President, I would like to speak this morning about 
one other issue. In this morning's newspaper, a columnist named 
Krauthammer wrote a column. It was entitled ``Social 
Security `Trust Fund' Whopper.'' His column was one of the most 
Byzantine pieces of journalism that I have seen in some long while, and 
I have seen a few in my public career.
  It demonstrates to me that you can be an awfully good writer without 
knowing anything about math or accounting. In fact, when I read this 
column this morning by Mr. Krauthammer, it occurred to me 
this is a candidate for O.J. Simpson's defense team. Facts and evidence 
seem irrelevant.
  Let me go through just a bit of this column and talk about some of 
the conclusions.
  Mr. Krauthammer's contention is that the Social Security trust fund 
is a ``fiction.'' He says, it is a pay-as-you-go system and he says 
there, incorrectly, by the way, we are accumulating surpluses in the 
trust fund today so that ``with so many boomers working today'' that 
``produces a cash surplus.''
  Mr. Krauthammer, I think, pulled away from the research table a 
little too soon; at least his research comes up a little short. The 
surplus this year in the Social Security trust fund is not because we 
have so many boomers working and they produce a cash surplus, it is for 
a very specific reason. Mr. Krauthammer would know it had he researched 
it or remembered it.
  In 1983, we passed a Social Security reform bill and in that bill 
made a specific, conscious decision to increase the FICA tax, in order 
to produce revenues that exceeded expenditures during this period and 
leading up through about the year 2019. We did that deliberately 
because we knew we were going to need those revenues later.
  This is not a surplus that is an accident as a result of more people 
working. That is not what it is about. This is a deliberate strategy, 
and he could determine that by simply going back and reading the 1983 
Social Security Reform Act. I, incidentally, helped write that. I was 
on the Ways and Means Committee at the time, so I would know something 
about that.
  I would tell him, in future columns, he might want to remember, it is 
not an accident. It is not how many people are working versus how many 
retired. This was a deliberate strategy embarked on in 1983 to 
accumulate a deliberate pool of national savings in order to meet a 
need after the baby boomers retire.
  Mr. Krauthammer says the Social Security trust fund is a fiction. 
Well, the money that is collected from the pay-checks of workers and 
from those who employ them in this country is deposited in a trust fund 
that invests them in Government securities. The trust fund is in the 
same position as a young boy who just received as a birthday gift a 
$100 U.S. savings bond. Both possess assets, redeemable by the Federal 
Government. So the proposition that the trust fund is a ``fiction,'' as 
Mr. Krauthammer suggests, demonstrates, in my judgment, a profound lack 
of knowledge.
  Perhaps the best way to demonstrate the bankruptcy of this argument 
by Mr. Krauthammer would be to use the year 2002, just focus on one 
year, 2002, when my friends who proposed the balanced budget amendment 
say the budget would be in balance.
  Let us take a look at that year only. According to the Congressional 
Budget Office, in the year 2002, we will in that one year alone raise 
$111 billion more in Social Security receipts than we need in spending. 
That surplus, as I have said before, is part of a long-term plan to 
save for the period when we are going to need the extra money.
  Now, under the constitutional amendment that was offered, in the year 
2002, the operating budget of the United States would show a zero 
balance. But, of course, in order to show the zero balance the $111 
billion surplus in the Social Security trust fund account would have to 
be used to get there. Without using the Social Security surplus for 
that year, the operating budget deficit would not be zero, would not be 
in balance, but would in fact show a deficit of $111 billion.
  The legislative promise that was made in 1983 was that that $111 
billion would be saved in a trust fund to be used later. But, of 
course, if it is used to reduce the operating budget deficit, there is 
then no forced pool of national savings with which to fund the baby 
boomers' retirement later.
  Now, I would say if Mr. Krauthammer's view, and for other proponents 
I would say, if their view of double-entry bookkeeping is that you can 
use the same money twice, then I understand the rationale for his 
column this morning, and I understand the rationale for their argument. 
It is, of course, a fraud, but it is still a column or it is still an 
argument. If, however, he, like most people, understands you can only 
use money once, it is either here or it is there. It is not both here 
and there. Then the balanced budget achieved by the constitutional 
amendment in the year 2002 was not in balance at all. It was $111 
billion in deficit.
  To me at least that looks like Washington as usual. It looks like 
Washington the way it always works, I guess an environment which Mr. 
Krauthammer is part of and comfortable with. But it is still, 
nonetheless, not honest budgeting.
  Let me use an example probably closer to home. Let us assume a 
columnist makes speeches and gets speaking fees, big speaking fees, and 
uses a portion of those speaking fees to put them in a 401(k) to save 
for later in life.
  Now, let us assume that after putting money away in a 401(k) from 
speaking fees, that person goes on a spending binge and spends more 
than their current income, and simply takes the money out of the 401(k) 
to cover the extra spending that occurred. And I suppose that person 
could say, well, I spent no more than I had; I spent all my income plus 
all my savings.
  It is true they spent no more than they had, but it is also true they 
depleted their savings; they have no 401(k); it is gone. And that is 
the point.
  That is the point about the year 2002. And that demonstrates it is 
not honest budgeting if you promise to save in a trust fund and use it 
to balance the rest of the budget. That is the point Mr. Krauthammer 
misses, and it is the point others miss.
  I feel a bit strongly about this, as my colleagues understand, 
because I helped write the 1983 Social Security Reform Act when I was a 
member of the Ways and Means Committee. I would not have ever supported 
or cast a vote for that kind of proposition if someone had said to me, 
``let us increase payroll taxes, let us tell the American workers that 
those moneys will go into a trust fund, let us use that 
[[Page S3770]] trust fund--which comes from a regressive tax--and 
instead balance the Federal budget deficit.'' I guarantee you that 
would not have gotten two votes in the Senate or the House. No one, I 
mean no one, here would have had the bad judgment to decide to 
substantially increase a payroll tax, promise it will be put in a trust 
fund, and then claim later that it is used to reduce the Federal budget 
deficit. But that is exactly what has happened in the past. It is 
exactly what would have been enshrined in a requirement in the 
constitutional amendment in the future.
  I regret that people like Mr. Krauthammer write articles with such a 
profound lack of understanding about the facts. They have every right 
to do that. But the fact is we have every right to challenge those who 
write as carelessly as he did.
  Mr. President, we have a challenge, all of us, to start doing instead 
of talking. We offered yesterday a proposal for a new budget process. 
It said let us do this. If we believe, and I do, that we can balance 
the budget by the year 2002 without using Social Security trust funds, 
and we should, then let us decide on a budget procedure that brings a 
point of order, a 60-vote majority to overcome, against any budget that 
comes to this floor without a 7-year plan to get to a balanced budget 
by the year 2002. Let us see if people are willing to bite into this 
problem with real teeth. Let us decide soon whether this is a lot of 
talk or whether this is honest concern by people involved who are 
willing to do some heavy lifting.
  At least in the last 24 hours, the news that the same people who were 
trumpeting the constitutional amendment for the balanced budget are now 
off deciding that what they want to do is have a very big tax cut, much 
of the benefits to go to the wealthiest Americans, does not seem to me 
that they are very serious about reaching a balanced budget in this 
country's future. I for one think a tax cut proposal in the midst of 
the kind of deficits and debt we have makes no sense at all. It is the 
ultimate in political posturing and the ultimate, in my judgment, 
failure to be willing to come to grips honestly with the serious 
problem this country faces.
  At least speaking for myself, and I hope for others, we should not 
have a debate anymore about who wants balanced budgets. I do. I am 
willing to join in any group, in any way, on any day, in a bipartisan 
way to take tough medicine, to cut Federal spending in the right way, 
and to move this country toward a balanced budget. That ought to be the 
obligation of all of us working together in the months ahead.
  Mr. President, I yield the floor.
  The PRESIDING OFFICER. The Senator from Illinois.
  Mr. SIMON. Mr. President, I ask unanimous consent to proceed as if in 
morning business.
  The PRESIDING OFFICER. The Senate is in morning business.
  Mr. SIMON. I thank the Chair. Parliamentary inquiry. When are we 
scheduled to return to--I believe the pending amendment is the 
Kassebaum amendment on the emergency supplemental?
  The PRESIDING OFFICER. At 11:30.
  Mr. SIMON. At 11:30.

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