[Congressional Record Volume 142, Number 50 (Thursday, April 18, 1996)]
[Senate]
[Pages S3577-S3578]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




                  BALANCED BUDGETS AND SOCIAL SECURITY

  Mr. SIMPSON. Mr. President, I just want to speak for a few moments on 
this issue of Social Security and balanced budgets. I have the greatest 
respect for Senator Fritz Hollings and my colleague Senator Kent 
Conrad, who sits there, and his friend and mine Byron Dorgan. They are 
a very remarkable duo from North Dakota, and they have been working 
hard on this issue a good long while, and so has my old friend Senator 
Hollings.
  If we are going to debate this issue of Social Security, we are going 
to have to deal with reality. The reality has come to me and should 
come to everyone in this Chamber simply by studying the work of the 
entitlements commission, the Bipartisan Entitlements Commission, where 
Senator Bob Kerrey and Senator John Danforth of Missouri sat for a year 
and presented to 32 Americans, including many of us in this Chamber, 
what is going to happen to Social Security.
  There is no way to duck it. There is no way to finesse it. There is 
no way to demagog it. That is no way to go. Because if you are going to 
talk about something that is worth $360 billion and leave it ``off the 
table'' in a fashion that no one in this body is supposed to touch it 
or say a word about Social Security while the senior citizens groups 
beat your head in and my head in and not allow us to even touch a 
system and keep telling us, and warning us, ``Oh yes, it will need to 
be corrected'' and, ``Oh yes, we have a way to tell you how to do 
that''--and their solutions always have to do with raising the payroll 
tax, ladies and gentlemen, and guess who pays the payroll tax? Not the 
senior citizens.
  Now, if we are going to deal with this issue, then I am going to 
begin to come to the floor each and every time we come to this issue of 
Social Security and balanced budgets concepts and begin to get one 
singular thing across. Hear it. There is no Social Security trust fund, 
ladies and gentlemen. There is no Social Security trust fund. None. And 
the reason there is none is because, when Franklin Delano Roosevelt and 
the Congress put this package together, they said that if there is any 
surplus in the Social Security system it will be invested in the 
securities of the United States Government, secured by the full faith 
and credit of the United States. And every shred of this surplus--and 
it is big and it is going to get a lot bigger--every shred of it is 
invested in the securities of the United States Government in a series 
of IOU's.

  You know that and I know that. But, better yet, the trustees know 
that. And who is this group of people telling us about this? They are 
called the trustees of the Social Security system, three of whom are in 
the President's Cabinet: Robert Rubin, Donna Shalala, and Robert Reich; 
one Republican, one Democrat, and the Commissioner of Social Security. 
And they are the stewards of Social Security. There are no other 
designated stewards of it.
  In the trustees little booklet of their annual review which is about 
that thick, and I hope you will read it, it says that in the year 2029, 
without doing something for Social Security, it will go broke. It will 
be out of business. But, more important, in the year 2012, when the 
payments coming in will not cover the payments going out, you are going 
to start cashing in the bonds. And then you begin to use up the 
interest. And between the year 2012 and the year 2029, it is history.
  So, every time we hear this old saw, I want to be right here too and 
tell the American people, just as the trustees would if they were 
here--I will speak for them--that there is no Social Security trust 
fund. It is a floating pile of IOU's. You know it and I know it. So, 
when we come here to this Chamber to talk about cooperation, 
coordination, subjugating our own obsessions or our own agenda's to the 
body work of this then let us talk about that fact every time.
  I have been through this plenty of times in this Chamber. I do not 
keep score of how many times I may have come to the floor on any issue. 
But I can tell my colleagues I do know how many times some people have 
come to the floor on this singular issue--time after time after time; 
and fully knowing that there is no trust fund.
  We were just involved in a bill, talking about a rather interesting 
issue called illegal immigration reform. Several years ago--and I have 
done this too long, remember for 17 years--my dearest friend, Senator 
John Heinz, proposed an amendment on--guess what? Social Security. What 
was it that time? Listen to this one. I said to John Heinz, my old 
friend--and remember, we put together a package that said that the COLA 
would always be paid out, but if the inflation was ever 3 percent or 
less that we would not increase the COLA. If it was less than 3 percent 
we would not give a COLA on Social Security.''
  It was that year at 1.5 percent or something, or perhaps 2. And we 
came to the floor and Senator Heinz, who really was spectacular--in 
fact--if he were here today we would not be in the health care 
conundrum we are in. He was that good. He could have led us out of 
that.

  I said, ``John, you know it will pass. All you have to do is mention 
Social Security or a COLA and you know it will pass--or if you mention 
veterans, you know it will pass.'' We have all been there. We are all 
bright people. We know this.
  So, there it was. An impasse. And finally he removed it from the 
immigration bill, placed it on another one, and so it is much like this 
one. We all know what this is. There is not a soul in this building, a 
soul in this city, a soul who follows this, like Bob Kerrey and Jack 
Danforth did, who does not know that there is no Social Security trust 
fund--zero--zip--nothing. To hear it continued to be bandied about is 
an extraordinary adventure in fantasy.
  Mr. HOLLINGS. Will the distinguished Senator yield?
  Mr. SIMPSON. I will yield for a question.
  Mr. HOLLINGS. With respect to Senator Kerrey and Senator Danforth's 
recommendations, fine--I support their particular report. It is not a 
question of fixing Social Security. It is a question of not using the 
surpluses to obscure the size of the deficit and using them for Social 
Security.
  I am sure the Senator was with me, on October 18, 1990. And I am sure 
he supports that law.
  You and I act like there is some difference. There is no difference 
in our belief that changes will have to be made to protect the 
integrity of social security. But the law says thou shalt not use the 
Social Security moneys to obscure the size of the deficit? That is the 
law, 13301. The chairman of the Budget Committee is here, he is totally 
familiar with it. Isn't that correct?
  Mr. SIMPSON. Mr. President, I do not think anybody would try to 
obscure anything--at least this Senator is not. The obfuscation and the 
obscuring is to tell the American people that there is a trust fund 
that we are using moneys from. There is not any trust fund there to be 
using. It is not there. It is a series of IOU's. So, when we say, ``Oh, 
you are doing a terrible thing. You are hiding something or you are 
using the money that should have been there for us,'' that is simply 
not the case.

[[Page S3578]]

  Let me just review just for the body in 4 more minutes eight rather 
recent votes on this issue. I can only find eight in the last 30 
minutes, since I knew that this would come up on the floor. The 
amendments are not always offered up by the same Senator. They are 
offered by different people each time. It is kind of like we do with a 
``rolling hold.'' You kind of fire the one barrel and then you fire 
another barrel. So here it all is, of recent vintage.
  On January 26, 1995, Senator Harkin offered an amendment. Senator 
Kempthorne made a second-degree amendment on it. The Kempthorne 
amendment said that implementing legislation should not cut Social 
Security. We all agree with that. You cannot miss on that one. If you 
simply, each time, want to talk about the balanced budget and add to it 
that we will never ``cut'' Social Security, that is a snapper in here--
except for a few of us who will cast that opposite vote and know very 
well that it just does not fit.

  Then Senator Reid tried to table that. That failed. Senator 
Kempthorne's amendment then passed. Then Senator Harkin tried a 
perfecting amendment to add his language back, saying that the balanced 
budget itself should exempt Social Security. That was tabled.
  On February 10, 1995, Senator Dole offered the amendment to ask the 
Budget Committee to report instructions not affecting Social Security. 
That passed 87 to 10, like we all knew it would. Then it was done.
  Then Senator Reid presented an amendment, February 14 of 1995, saying 
Social Security is now counted in the balanced budget amendment. And 
Senator Dole tabled that, 57 to 41.
  On February 28, 1995 Senator Feinstein offered a substitute for the 
balanced budget amendment with the exclusion of Social Security. That 
was tabled 56 to 39.
  On February 28, 1995, Senator Graham put forward an amendment to 
eliminate ``held by the public'' from the debt limit, so as to get the 
balanced budget to exclude Social Security. That was tabled 59 to 40.
  Another Graham amendment was tabled 57 to 43.
  This issue has been voted on time and time and time again. I think it 
is time that it not be voted on again, especially for this issue, on 
either illegal immigration or health care. Find a new line of work.
  Several Senators addressed the chair.
  Mr. DORGAN. Will the Senator yield for one brief question? I wonder 
if the Senator will yield for a brief question?
  The PRESIDING OFFICER. The Senator from Wyoming has the floor.
  Mr. SIMPSON. I yield for a question.
  Mr. DORGAN. I appreciate that. I guess it is the Senator's contention 
that there is no Social Security trust fund. I just ask this question.
  We were told early on that the Social Security trust fund was not 
being used for any other purpose. Then we were told by those who wanted 
an affirmative vote on the constitutional amendment to balance the 
budget that the Senator supported that, even though they had argued 
that it was not being used to balance the budget, they would stop using 
it to balance the budget by the year 2008.
  How does one reconcile that if there is not a trust fund? If there is 
not a trust fund, how can you stop using it in the year 2008?
  Mr. SIMPSON. Mr. President, I say to my friend from North Dakota that 
the travesty is that it is not being used. It is a series of IOU's. 
There is no Social Security trust fund. And the money is being 
invested.
  You can say we will cut it back. You cannot. It is in T-bills. Some 
people here own T-bills. Banks own T-bills. There is no Social Security 
trust fund. I have never gone to my people and said we are stealing 
from the Social Security trust fund because I just stepped up to the 
plate and said there is none. So, when you bring that up, you are 
bringing up a fiction.
  Mr. HOLLINGS. Mr. President, how would it be if we had IOU's for the 
same time, I ask the Senator?
  The PRESIDING OFFICER. The Senator from Wyoming has the floor.
  Mr. HOLLINGS. How can it be invested and become an IOU? If it is 
invested, it is presumably going to be paid back? That is our problem, 
it is being spent on the deficit. That is my point.
  Mr. SIMPSON. Mr. President, not only the fiction of it, but since 
1938, by law, the trust fund buys T bills which are IOU's that the 
Government must pay back. FDR did that, and that is what it is. There 
is no mystery to it. It is a series of IOU's, and when those are 
outstanding and then the revenue from Social Security will not cover--
it is a pay-as-you-go, do not forget, Social Security is pay-as-you-go, 
and if it does not cover, you have to cash in the IOU's and you have to 
get more money through the payroll tax, or reducing benefits or issuing 
some new kinds of securities.
  Mr. HATCH. Will the Senator yield for a unanimous consent request?
  Mr. SIMPSON. Yes.

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