[Congressional Record Volume 141, Number 164 (Monday, October 23, 1995)]
[Page S15463]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]

                      SOCIAL SECURITY TRUST FUNDS

  Mr. CONRAD. Mr. President, earlier today Senator Domenici inserted in 
the Record a column by Charles Krauthammer that displays a fundamental 
misunderstanding of the operation of the Social Security trust funds 
and attacks my position on this issue. I ask unanimous consent that the 
response written by Senator Dorgan and me, which ran in the Washington 
Post on March 16, 1995, to correct the many factual and logical errors 
in Mr. Krauthammer's argument, also be published at an appropriate 
place in the Record.
  There being no objection, the material was ordered to be printed in 
the Record, as follows:

               [From the Washington Post, Mar. 16, 1995]

                             Unfair Looting

                  (By Byron L. Dorgan and Kent Conrad)

       Charles Krauthammer's uninformed defense of an indefensible 
     practice [``Social Security Trust Fund Whopper,'' oped, March 
     10] demonstrates that it is possible to be a celebrated 
     pundit yet know nothing of the subject about which one is 
       In attacking us for our position on the balanced-budget 
     amendment, Krauthammer misses the mark by a country mile on 
     two very important points. First, he insists incorrectly that 
     ``Social Security is a pay-as-you-go system'' that ``produces 
     a cash surplus'' because ``so many boomers are working 
     today.'' Second, he ignores the fact that Social Security 
     revenues were never meant to pay for expenses incurred in the 
     federal operating budget. Missing both fundamental points 
     undermines the credibility of Krauthammer's conclusions.
       Here are the facts:
       First, Social Security is not a pay-as-you-go system. If it 
     were, Social Security benefits would exactly equal taxes, and 
     there would be no surpluses. But there are. This year alone 
     Social Security is running a $69 billion surplus.
       Apparently, Krauthammer completely missed the 1983 Social 
     Security Reform Act, which removed the system from a pay-as-
     you-go basis. In 1983 Congress recognized that in order to 
     prepare for the future retirement needs of the baby boom 
     generation, we should raise more money from payroll taxes now 
     than is needed for current Social Security benefits. We did 
     that because when the baby boomers retire, there will not be 
     enough working Americans to cover Social Security benefits on 
     a pay-as-you-go basis. We will need accumulated surpluses to 
     pay these benefits.
       Second, Social Security revenue is collected from the 
     paychecks of working men and women in the form of a dedicated 
     Social Security tax, deposited in a trust fund and invested 
     in government securities. This regressive, burdensome tax 
     (almost 73 percent of Americans who pay taxes pay more in 
     social insurance taxes than in income taxes) isn't like other 
     taxes. It has a specific use--retirement--as part of the 
     contract this nation made 60 years ago with working 
       Because this tax is dedicated solely for working Americans' 
     future retirement, it shouldn't be used either for balancing 
     the operating budget or masking the size of the budget 
     deficit. Krauthammer not only irresponsibly condones the use 
     of the Social Security surpluses to do these things, he 
     thinks we should enshrine this procedure in our Constitution.
       He apparently does so because he doesn't understand the 
     difference between balancing an operating budget and using 
     dishonest accounting gimmicks to hide operating losses. To 
     illustrate the difference and how it works to loot the Social 
     Security trust funds, let's use an example a little closer to 
     home for Krauthammer.
       Assume that Krauthammer is paid a lucrative salary by The 
     Washington Post, which puts part of the salary into a company 
     retirement plan. Then let's assume The Washington Post comes 
     upon hard times and starts losing money each year.
       Here's where honesty matters. The Post has two choices. It 
     could face up to its problems and move to balance its budget. 
     Or it could follow Krauthammer's prescription and disguise 
     its shortfall by raiding the employees' retirement fund to 
     make it appear that the operating budget is balanced. Of 
     course, the retirement fund would have nothing but IOUs in it 
     when it comes time for Krauthammer to retire. At that point, 
     even Krauthammer might recognize the fallacy of looting trust 
     funds to pay operating expenses.
       Absurd? Sure. But the flawed Republican balanced-budget 
     amendment plan would in the same way keep on looting Social 
     Security trust funds to balance the federal operating budget. 
     Instead, we should take the honest course and begin the work 
     now to bring our federal operating budget into balance 
     without raiding the Social Security trust funds.
       Contrary to Krauthammer's assertion, the only fraudulent 
     point about this issue was his uninformed column.