Congressional Record, Volume 142 Issue 83 (Friday, June 7, 1996)

[Congressional Record Volume 142, Number 83 (Friday, June 7, 1996)]
[Senate]
[Pages S5972-S5977]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]

SOCIAL SECURITY

Mr. SIMPSON. Mr. President, I very much appreciate the presence of
Senator Dorgan of North Dakota. He and I have had spirited discussions
about Social Security, but we respect each other. I certainly do. I
told him that. I told him whenever I had a pain in my bosom with regard
to his activities, I shared it exactly and expressly with him, which I
have always done. It is good that maybe the two of us have a moment to
at least speak on an issue which surely cannot continue to go in this
fashion, where two thoughtful people, as the Senator from North Dakota
and I hope your loyal communicator here, are continually just totally
in opposition while many who deal with the Social Security Program are
telling us what is happening to the program and where the money goes.
So, if I may, in a series of questions, and then let us have the
debate which we never had, because I will come to the floor and do my
thing and leave and get on to the seven committees I go to, and the
Senator from North Dakota comes to the floor and gives his good and
able presentation and then leaves the floor.
Let us just, may I, go back to where you have been. You were on the
House Ways and Means Committee in 1983. In 1983, Senator Daniel Patrick
Moynihan and company, a bipartisan group --I believe Senator Dole was
part of that group; I do not recall all of the participants--they came
together knowing that Social Security was going to go broke, totally
broke, and that it would go broke within a very short time. So they met
in good faith, in a bipartisan way, and they put together a package, as
you described--and I address the Chair, as my friend addressed
yesterday--they put together a package which provided for increased
payroll taxes, it provided for some benefit restructure, it did
something with the ``notch babies.''

Remember, we had to deal with that one for about 12 years, and it was
an absolute phony argument. Talk about the froth that goes with Social
Security. We finally, when that vampire came out of the silk casket one
more time, drove the stake through it and through the lining,
hopefully, and that is the end of it. We do not hear any more about it
from the National Committee for the Preservation of Social Security and
Medicare or the AARP or any other group, because it is a dead issue,
staked through the heart.
Yet, it created tremendous concern around America in what was
happening. Because of the adjustment made in 1983, we found that the
people who were born before that certain cutoff date had received much,
much more than they ever should have received, far above the
replacement rate of Social Security. We corrected that, and then had 10
years of background clutter and flak and shelling from these various
groups. That is over.
But what we did do--and we must all use the same facts. We do not
have to share the same opinion, but we must use the same facts. If
anyone will remember, you need only go to the report where we were told
that when we did what we had to do in 1982 and 1983 with Social
Security, it would ``save the system and make it solvent until the year
2063.''
If there is anyone within the range of my voice who says that that
was not the final package--what we did, our stuff, tough political
stuff, that when we did that, we would ``save the Social Security
System till the year 2063.'' That is book, page and hymn number. Done.
OK.
What has happened in the next 13 years? It is now 1996, and each and
every year that the trustees issue their annual report, we are told
that Social Security is going broke faster than we ever would have
dreamed. And yesterday--just yesterday--we have the 1996 annual report.
This is a summary. The actual report is here. It is quite extensive. My
staff has been through it. I hope that all of us will enjoy this
weekend reading. It is just a joy.
But I tell you what it does. It tells the truth, and I will tell you
who is telling us the truth. The truth-tellers are Donna Shalala, a
woman I have the greatest respect for and admiration; the truth-givers
are Robert Rubin. He and I have not agreed on many things, but I admire
him. Robert Reich, my fellow thespian--our line of work takes us away
from this. We intend to ``trod the boards'' starting in Peoria. Robert

[[Page S5973]]

Reich, a very splendid man. And then a citizen member of the trustees,
Marilyn Moon; a citizen trustee, Stephen Kellison; and Shirley Chater,
Commissioner of Social Security.
What are they telling us? They are telling us that Social Security
will go broke, flat broke, in the year 2029, I say to my colleagues. So
in 13 years, we have moved the doomsday date of Social Security forward
from 2063 to 2029. Thirty-four years of this cushion has been eaten up
in 13 years, and everybody knows that. There is not a soul in this
Chamber who does not know that. There is not a soul downtown who does
not know that.
Are we saying then, all is well? Of course, it is not well. Next year
the trustees may come in and tell us that it will go broke in the year
2025. It has been happening in increments of 3, 4, 5 years a crack.
That is reality.
Yesterday, in a spirited little bit of dialogue, I presented a chart,
a most unique chart. Let me do it one more time. This is the Social
Security Act. I did not write this. This is section 201(d) of the act.
If we are going to say that somehow we are looting, raiding, and
pillaging, then please tell me, please, where is this taking place? If
we mean looting or raiding to put the Social Security surplus into T-
bills, which are then sold by the Federal Government, and the general
revenue goes into the General Treasury, and when the interest on the T-
bills comes out and is paid on the T-bills to those who own them, if
that is looting or raiding, we need a new definition.
If we defeat the balanced budget amendment--which is what has
occurred--is it not true that the Social Security surplus will still be
put into T-bills? The answer is, it does not matter one whit whether we
pass or defeat a Social Security amendment to exclude it. This will go
on like Old Man River, and no one can stop it unless they wish to
change this section.
So what does the section say? ``It shall''--shall--``be the duty of
the managing trustee to invest such portion of the trust funds as is
not, in his judgment, required to meet current withdrawals.''
Stop there.
There is a surplus in Social Security. Some say it is $29 billion,
some say it is $69 billion. Forget what they say. It easily could get
to $2 trillion by the year 2010. Then, in the year 2012, it starts its
tremendous swan song. We all know that. The trustees are telling us
that.
So it matters not whether the reserves get to $1 or $2 trillion.
There is nothing that is going to change whether you pass a balanced
budget amendment or not with regard to those funds.
I will go on quoting. ``Such investments may be made only'' --there
is no option, no election process--``in interest-bearing obligations of
the United States or in obligations guaranteed to as to both principal
and interest by the United States * * * Each obligation issued for
purchase by the trust funds under this subsection shall be evidenced by
a paper instrument in the form of a bond, note, or certificate of
indebtedness issued by the Secretary of the Treasury * * *''
I do not think that is too much mumbo-jumbo for all of us to deal
with the issue of Social Security. That is what it says. That is what
we do with it. That is what FDR and the Congress had in mind for us to
do with it.
But now one more subsection. The Social Security Act, section 201(f).
We must hear this. We must all follow the law. That is our duty. That
is really maybe the only duty we have here, to follow the law and try
to craft laws that are understandable to the American people.
``The interest on, and the proceeds from the sale or redemption of,
any obligations held in the Federal Old-Age and Survivors Insurance
Trust Fund and the Federal Disability Insurance Trust Fund shall''--
shall--``be credited to and form a part of the Federal Old-Age and
Survivors Insurance Trust Fund and the Disability Insurance Trust Fund,
respectively.''
And then this, if we can all hear this. We do not have to agree. We
do not have to fire up each other.

Payment from the general fund of the Treasury to either of
the trust funds of any such interest or proceeds shall be in
the form of paper checks drawn on such general fund to the
order of such trust fund.

That is what it says. And this section has been addressed in the
report which came to us yesterday.
Let me read from the summary. This is the summary of the Social
Security trustees. Here is a very precise, small paragraph that says
this, if I can share this with my friend from North Dakota.

In all trust funds assets that are not needed to pay
current benefits or administrative expenses (the only
purposes for which trust funds may be used) are invested in
special issue U.S. Government securities guaranteed as to
both principal and interest and backed by the full faith and
credit of the United States of America.

That section is not changed one whit whether we include or whether we
exclude Social Security from a balanced budget amendment.
Every penny, every single penny of the trust fund is left in exactly
the same condition, whether you pass a balanced budget amendment or
not.
It is most extraordinarily remarkable to suggest that we can ``save''
or ``protect'' Social Security from this by simply separating it from a
balanced budget amendment.
Here is the language--I hope this is not a surprise. I want to be
sure my colleague hears this language. If I could get the attention of
my friend from North Dakota. I think it is very important that I share
this language. I do not want it to be a surprise.
This is language from yesterday's report. I do not know if the
Senator's staff has read this. My staff went through it during the
night. I have to do this kind of work because they have made me the
chairman of the Subcommittee on Social Security and Family Policy. I
did not really seek that task, but like all of us who do good work--and
the Senator does with his subcommittees and my good friend from
Kentucky does with his--we try then to keep absolutely current. Here is
the language from the report of yesterday.
It is very important. This, yesterday, became open to the American
public. Here is what it says: ``As noted in section 2(b), the portion
of the OASI trust fund that is not needed to meet day-to-day
expenditures is used to purchase investments, generally in special
public debt obligations of the United States Government. The cash''--
this is a quote from yesterday's 1996 annual report, page 78 and 79--
``The cash used to make these purchases becomes part of the general
fund of the Treasury . . .,'' ladies and gentlemen.
We all know that. We have known it since Franklin Delano Roosevelt
wrote it and put it in section 201.
``The cash''--that is cash that is not needed. That means the
surplus. That means the excess. That means whatever you want to call
it. ``The cash used to make''--I am quoting-- ``The cash used to make
these purchases becomes part of the general fund of the Treasury and is
used to meet various Federal outlays.''
Does that mean that we have looted it or raided it or pillaged it? I
think not, not when we are looking at the specific language of the act
and the trustees' report.

I am continuing to quote.

Interest is paid to the trust fund on these securities. And
when the securities mature or are redeemed prior to maturity,
general fund . . .

If I may get the attention of my friend from North Dakota. We never
get to get this done. I am going to stay, too, because I think it is
very important that he and I do not leave the Chamber until the
American people know a little more than they do now about how we are
looting or pillaging or raiding the Social Security system, which is
not taking place under any scenario known to man or woman.
Quoting again.

Interest is paid to the trust fund on these securities. And
when the securities mature or are redeemed prior to maturity,
general fund revenues are used to repay the principal to the
trust fund. Thus, the investment operations of the trust fund
result in various cash flows between the trust fund and the
general fund of the Treasury. And currently the excess of tax
income to the OASI trust fund over the fund's expenditures
results in a substantial net cash flow from the trust fund to
the general fund.

Finally the quote:

Sometime after the turn of the century, as shown in the
following subsection, this cash flow will reverse.

It is detailed in horrendous, horrendous factual figures. ``This cash
flow will reverse as trust fund security''--let me show you how it will
reverse.

[[Page S5974]]

This is the annual operating balance of the Social Security trust
fund in billions of dollars. If that is not a reversal from today's $60
billion surplus. I think it is more today--my colleague may disagree--
and then it drops like a rocket through the basement. This is the
annual operating balance of the Social Security in billions of dollars.
In the year 2000 it is $1 trillion operating balance. This is the
figure. This is from the Social Security Administration, 1995.
Mr. FORD. Will the Senator yield?
Mr. SIMPSON. I am happy to yield to the Senator.
Mr. FORD. Mr. President, we will say that everything my friend has
said is accurate. I do not question his sincerity or his statements. We
will take it from that point on.
Under statutory provisions, we cannot use Social Security funds as it
relates to deficits, budgets--it is off budget. That is 13301. I am
sure you are familiar with that. Now, in the balanced budget amendment,
we are allowing, based on the statement of the senior Senator from
Oklahoma yesterday, that this is a tax and an expenditure and,
therefore, it ought to be part of the balanced budget amendment to the
Constitution.
What is the underlying fear, as I listen to the Senator from Wyoming,
and the underlying fear, I say to my friend, of this Senator is that if
we allow the money to be used to reduce the deficit, and when we have
the leadership on your side--not necessarily the majority leader but
other leaders in the budgetary category--tell us how much of the Social
Security trust funds will be used if the amendment to the Constitution
is passed to balance the budget, then we accelerate your fear here of
the reduction of the surplus in the Social Security.
If the Social Security continues on its merry way, as you have so
aptly described, going downhill, will we not accelerate that if we use,
as we were told in handwriting that we are going to use, $147 billion
from the trust fund, at least the last 2 years, would that not make it
depleted at a much earlier date?
Mr. SIMPSON. I always enjoy a spirited discussion.
Mr. FORD. This is not spirited.
Mr. SIMPSON. It will be before we finish.
Mr. FORD. I doubt it.
Mr. SIMPSON. I enjoy that because he and I, even as deputy assistant
leaders for 10 years or near that amount--there was not anybody that I
treated with more deference, or who dealt with me more fairly,
honestly, and directly.
Where I am, Mr. President, is this: We are being told in this debate
that these funds are being looted or raided. This may not be your
debate, but this has been part of a continual debate about the looting
or raiding or using this. I am saying, based upon the law of the United
States, that any surplus in these funds is ``used'' and goes directly
to the general fund, that there is no trust fund in that to be looted,
to be raided. It is a series of great stack of IOU's. That is what we
have here.
Mr. FORD. Mr. President, by ``IOU's'' you are talking about T-bills
that are paid to constituents like you and me. We might be down to the
E bonds or the smaller ones but the T-bills are the IOU's in there, and
we have by law sold them or loaned that money to the Federal Government
in return for T-bills plus interest to be paid at a definite period of
time and the trustees are required to have that flow of money.

Am I correct in that?
Mr. SIMPSON. That is correct.
Mr. FORD. So you refer to--you say we are looting.
Mr. SIMPSON. I did not say that.
Mr. FORD. No, you quoted others saying ``looting,'' and now the
Senator from Wyoming is using the words ``IOU's'' for T-bills. It is
just a matter of how you express yourself.
Mr. SIMPSON. I believe I have the floor, if you are asking an
inquiry.
Mr. FORD. I am trying to give you my reasoning for the question.
Mr. SIMPSON. If you could, I would like that.
Mr. FORD. I understand, and you are doing well in the balcony right
now. There are more giggles up there than on the floor.
Mr. SIMPSON. I am trying to do something for my grandchildren.
Mr. FORD. I have tried the grandchildren.
Mr. SIMPSON. If the Senator would pose the question, I would
appreciate it.
Mr. FORD. Where was I? What I am trying to say is that if the
constitutional amendment is passed and then ratified by the States, and
then we amend the Constitution on the balanced budget amendment, and
that would do away with statutory provisions as it relates to the trust
fund, and therefore as those who have the responsibility of budgeting
here in the Senate, to recommend to us as Senators, say they will use x
billions of dollars of the Social Security trust fund to balance the
budget. Do we do away with statutory law when we amend the
Constitution?
Mr. SIMPSON. Mr. President, I cannot see any format where a
constitutional amendment, which would take years to ratify--all we are
doing is sending this to the States, if we did do it, and let them
decide. I know of nothing in my background that would lead me to
believe that we would have done anything with section 201 of the Social
Security Act, either F or D or any provision therein.
Mr. FORD. But you would be able to use the funds held in trust, for
example, T-bills, to balance the budget according to the budgetary
professionals on your side.
Mr. SIMPSON. Mr. President, I will continue to direct my remarks to
the Chair. The issue is that you cannot hide something that is $360
billion a year and pretend that you are doing something to ``balance
the books.'' That does not mean that we are then going to ``raid'' or
``loot'' the Social Security System.
The constitutional amendment does not in any way injure Social
Security, because the trust fund goes into T-bills or notes or
obligations regardless. Regardless, the Social Security money still has
to be raised in the future out of general revenue. That is what the
trustees are telling us.
Somebody said, what about the interest? I heard that one. Mr.
President, 87 percent of the money that comes in comes from payroll
taxes. About 9 percent comes from interest. That is all there is. In
the year 2012, you will have to take the notes and go back to the
Government and say, ``There is not enough payroll money coming in this
month. So we are here to cash these in.'' That is when the double hit
comes that we described.
If you are trying to build a firewall to protect Social Security,
this does not affect a Social Security firewall, which seems to be a
very important thing to many, does not affect the long-term unfunded
liability of the Social Security system. It does not alter the
situation which requires a Social Security surplus to be put in
Treasury bills.

May I just finish the trustees' quote? It is two more sentences. Then
we can get on with the action here and see if we can stick with the
trustees' report. Do not bother with what I am saying or Senator Dorgan
or any of us. I am reading from the annual report of the trustees. Let
me just finish it. ``The cash flow will reverse as the trust fund
securities are redeemed. To meet benefit payments and other
expenditures, revenue from the general fund of the Treasury will be
drawn upon to provide the necessary cash.''
That is pages 78 and 79. The balanced budget amendment in no way
changes this. In no way at all does the balanced budget amendment
firewall for Social Security change that.
This is the way it is. And that is what we ought to be debating. I
would be glad to stand here and do that.
(Mr. GRAMS assumed the chair.)
Mr. FORD. Mr. President, will the Senator yield for a little
colloquy?
Mr. SIMPSON. Yes, sure.
Mr. FORD. I believe the Senator would agree that once a
constitutional amendment is passed--and it will not take years to pass
the balanced budget amendment--once a balanced budget amendment is
passed and it amends the Constitution, then it is this body's
responsibility to draft the legislation implementing that amendment, is
that not correct?
Mr. SIMPSON. I am sorry. Repeat the last part, please, if you would.
Mr. FORD. Well, once an amendment to the Constitution has been
ratified by the States, is it not the responsibility, then, of this
body and the House to implement, by law, that amendment?

[[Page S5975]]

Mr. SIMPSON. That is correct.
Mr. FORD. Is there anything to prevent a majority from voting to
include Social Security trust funds in the operation of the budget of
the United States?
Mr. SIMPSON. Mr. President, there is no way to avoid doing anything
to try to hide Social Security from the budget problems of the United
States.
Mr. FORD. Mr. President, I asked a question, and I was chastised for
not asking the question. What I want to know is, is there any way to
prevent a majority vote from using the Social Security trust funds as a
part of reducing the deficit for balancing the budget?
Mr. SIMPSON. I have no idea, Mr. President. For 17 years, this
Senator has talked about the absolute certainty of pretending that
something is off budget when it is $360 billion a year. You would have
to ask a majority at that time. For me, it is absolutely absurd to
believe that you do not talk about Social Security when you are trying
to balance the budget of the United States of America, which today is
$1.506 trillion, and $360 billion of that in there is called Social
Security. If you want to leave it out, fine, but it will not be this
Senator. I will not be here, but somebody can tap on my box and tell me
how it went.
Mr. FORD. Knowing the Senator from Wyoming, he will not have to take
his money with him. He can write a check where he is going.
I am very concerned that we talk about IOU's and they are really the
bills. We talk about raiding and, no, we are not raiding. You cannot do
that. But the Members of this body will implement an amendment to the
Constitution. As the senior Senator from Oklahoma said yesterday, he
objected to voting on the amendment to put up the firewall for Social
Security because it was taxes collected and taxes expended. He wanted
it in the balanced budget amendment.
I thank the Chair and my friend from Wyoming. I am going to leave the
Senator. I am hungry.
Mr. SIMPSON. Mr. President, I do not believe that my good friend
would check through the Senate ethics and financial records and find
that I was listed among the millionaires of the Senate. So I think that
that was a rather gratuitous shot.
Mr. FORD. How did the Senator take that?
Mr. SIMPSON. Now, Mr. President, if we can get back to the issue,
which is the law, and stick with this and try to stick in this debate
without going into emotion and who has the bucks and who does not have
the bucks, and the rich versus the poor, and all the rest of it, and
know that the Social Security Act is right here--(f) and (d). The
trustees report is right here, and I am ready to move forward and
discuss those and let us do that.

Mr. DORGAN. Will the Senator yield for a question?
Mr. SIMPSON. Indeed, certainly.
Mr. DORGAN. Let me clear up two things, and one is minor. The Senator
is not accurate with respect to the issue of the notch. This is
probably not relevant. That was not adjusted in the 1983 legislation.
That was in the 1977 legislation, which was implemented in 1979. The
1983 legislation had nothing to do with the notch. The notch was
created, as the Senator might remember, because of a cost-of-living
adjustment in Social Security that was opposed in the early 1970's.
Subsequently, it was discovered that that cost-of-living adjustor, or
formula, was inappropriate in 1977. Congress made an adjustment,
effective 2 years ago. It was not in 1983. That was not such a big
deal, but I wanted to make that point for those who are interested in
the history of it.
Second, the Senator used a chart that is demonstrably false. If the
Senator would put the chart back up, I am sure he did not do this
deliberately.
Mr. SIMPSON. No; the dates are not correct. The dates here should be
2020 here, 2025 here, 2030, 2035, and 2040.
Mr. DORGAN. When I saw the chart, I knew one would not want to use a
chart like that. The impression would be that there is a one green line
and a lot of red lines. When I saw your dates, I realized they were not
accurate.
Let me give the accurate numbers. Here will be the annual surpluses,
not deficits. In the 1996, your chart had a red line, and that was in
error. There will be a $71 billion surplus, then a $74 billion surplus,
then $80 billion, $87 billion, $91 billion, and, next year, $97
billion.
In the year 2002, there will be a $103 billion surplus--that is,
receipts into Social Security over expenditures. This surplus will
continue out on into the two-thousand-teens, after which there will be
red lines.
It would be appropriate to have a chart that shows the red lines, but
you would not want to show that unless you showed very substantial
surpluses. I wanted to make the point that if somebody saw that chart
and started going, ``We have big troubles,'' that is not accurate.
Mr. SIMPSON. Mr. President, I said that. I said that the reserves
could easily be $2 trillion by 2010. I want the record to be absolutely
correct. Nobody needed to palpitate on that.
Mr. DORGAN. There are so many charts showing the deep red canyons,
and that chart should have showed surpluses.
Let us talk, for a moment, about these surpluses, and let us talk
about this one. The year 2002 is the 7th year of a budget plan. In the
year 2002, the Social Security system will have receipts of $103
billion that are greater than the need for expenditure in that year.
I will ask the Senator from Wyoming a couple of questions about that.
The first question is, Is this an accident, or is this part of a
deliberate strategy to have receipts that far exceed needs or
expenditures in that year? Is that a deliberate strategy or an
accident?
Mr. SIMPSON. Well, Mr. President, that is a deliberate strategy. The
purpose was to build the reserves, and it was going to work
beautifully, until this year, in the year 1996. Every 7\1/2\ seconds
somebody turns 50, and 15 years from now, in the year 2012, there will
be a dramatic drawdown. We ought to link the two cases together,
because they are so dramatic that it is hard to describe.
Mr. DORGAN. I accept that. In many respects, I sat here and listened
to a debate that, if you won, it was a debate we were not having. I
accept much of what you say. But that is not the framework of the
debate that we have ventured on the floor with.
Let me try to understand and describe the debate as between what you
were describing earlier and what I am saying. If you are right--and I
think you are, because I was part of the team, as you were, that said
let us deliberately begin saving money, so that when the baby boomers
retire, or the war babies, more appropriately, retire after the turn of
the century, we will have built up some reserves. That was a
deliberate, sober reflective action on the part of the Congress. I
think it was an appropriate and courageous won.
Now, if in the year 2002, we have said we want $103 billion more to
come in in Social Security than we are going to spend, and if in the
year 2002 the majority's budget provides a balanced budget in 2002,
but, they say, we are $108 billion short in their paper, but say to the
American people we will balance the budget, is it not the case that
they claim that they have balanced the budget because we have not had
enforced savings of the $103 billion that year, which should have been
above what is necessary to balance the budget if you are going to have
an enforced national savings pool, but, in fact, they have taken that
$103 billion and said, by the way, we are using it over here so we can
say we balanced the budget.
Is that not a misuse of the term ``double entry booking,'' to say we
have a deliberate reserve and, at the same time, that we are using it
here saying we have a balanced budget?
That is the major point of contention between us because we will, I
fear, get to the end of this process and we will never have an enforced
national pool of savings above an otherwise balanced budget that is
used, or usable rather, when we need it when the war babies retire.
Mr. SIMPSON. Mr. President, that would be a good argument if we were
saying that we were going to ``use it to reduce the deficit.'' But it
will have already been used because the minute there are surpluses in
the Social Security trust funds, they are invested in T bills or notes
or whatever, and all the money goes to the general fund. If we can get
to the point where you and I are, will you please describe to all of us

[[Page S5976]]

what you mean when you are describing ``looting and raiding'' of the
trust fund?
Mr. DORGAN. Exactly. The year 2002 would be a year in which the
Federal Government would have balanced its budget plus had a $103
billion additional revenue above the balanced budget as an enforced
pool of national savings to be saved for the time we are going to need
it. That would comport with what the idea was in the early 1980's about
creating a national pool of enforced savings. The scheme that we now
have, I respectfully say to the Senator from Wyoming, means that we
will never have a pool of enforced national savings to meet the Social
Security needs. Instead, we will simply have a regressive payroll tax
added to the general revenue stream to be used for whatever other
purpose it is used for.
Mr. SIMPSON. Mr. President, may I ask a question of the Senator from
North Dakota? How does the Senator from North Dakota propose to avoid
looting, or raiding? Does that mean it will not be in T bills?
Mr. DORGAN. No.
Mr. SIMPSON. What does it mean?
Mr. DORGAN. You are not winning a debate that we are not having. I am
not debating whether or not it is invested in T bills. Of course it is.
Your basic contention has been because it is invested in T bills it
does not exist. I have asked the question. ``Gee. If you purchase a
savings bond for your grandchild for Christmas, are you going to tell
him when he opens it that, `By the way, what you see does not exist?'
'' No. It is an asset. That asset exists in the trust fund.
My point is you will not have saved $103 billion in the year 2002
that you promised to save if on the budget side of things you take the
$103 billion over and say, ``Well, we are $103 billion short of
balancing the budget generally speaking but we will count this revenue
against it in order to say to people that we balanced the budget'';
ergo, you have not, in my judgment, created any kind of national pool
of enforced savings to meet the future needs of Social Security.
That is the point.
Mr. SIMPSON. Mr. President, how do we achieve this result--by
suggesting then that we defeat the balanced budget amendment?
Mr. FORD. We do not.
Mr. SIMPSON. That is what you have been saying; that we can avoid
this result by defeating a balanced budget amendment.
Mr. DORGAN. Excellent question. Let me tell you exactly how you
achieve the result. The result is achieved specifically by voting for
the alternative balanced budget amendment that we attempted to offer
yesterday that we offered previously, that was voted against by the
Senator from Wyoming, that is this: It is identical in every respect to
the constitutional amendment to balance the budget brought to the floor
with one exception; that is, section 7. Section 7 says you will not
count as revenues or expenditures the Social Security trust fund and
Social Security account, which means that you would balance the budget
and say, ``All right. Now the budget is in balance plus what we have is
in 2002, or 2005, whatever the year is, plus we have $103 billion extra
money that came in above the balanced budget. That is the only way you
develop a forced pool of national savings. In the absence of that, what
you ought to do is get rid of this payroll tax. If you are not going to
do what you said you are going to do, why should workers and business
not be paying it?

Mr. SIMPSON. Let me ask, Mr. President. And I appreciate your
correcting us and getting the correct dates.
Mr. DORGAN. That was a pretty big correction, actually.
Mr. SIMPSON. It is not a correction.
Mr. DORGAN. We are not saying that the sky is falling.
Mr. SIMPSON. Not to give too much credit, but simply these dates are
incorrect, 2020, 2025, 2030--you know those facts. I know those facts.
Mr. DORGAN. That chart is a fundamentally improper disclosure of what
is happening. You would have to show substantial green surpluses on
that same chart.
Mr. SIMPSON. This is from the Social Security Administration, and it
is listed in their way as to what is going to happen to this. This is
2020. There is 2025. This is 2030. There is 2035, and 2040.
Mr. DORGAN. There are four categories of green, and you just skipped
20-some years of good news to get to the bad news. There is bad news.
We are not disagreeing about that.
Mr. SIMPSON. Let me ask a question. You have used a figure of $60
billion in your debate about surplus?
Mr. DORGAN. It is $69 billion.
Mr. SIMPSON. The accumulated surplus to date is $496 billion to date.
So that is rather an incorrect figure. You have used the figure.
Mr. DORGAN. What is incorrect?
Mr. SIMPSON. The accumulated surplus to date in Social Security is
$496 billion, and it is going to go way beyond those figures in the
outyears. It is going to go to $1.1 trillion--not $1.2 billion. It is
going to go to $2 trillion.
Mr. DORGAN. We are not having a debate; it is a misunderstanding.
These are not cumulated numbers. These are yearly numbers. I said for
this year, $69 billion. When you are saying that is wrong, I do not
understand.
Mr. SIMPSON. The cumulated surplus in Social Security is $496
billion. We need to know that. You have listed an annual figure of $60
billion or $69 billion. The present surplus, cumulated surplus, in
Social Security today is $496 billion headed for maybe $2 trillion in
the year 2010. Then a precipitous decline in accordance with the charts
of the Social Security Administration.
Mr. DORGAN. There is no disagreement about that. I do not understand
the point. The point I was making is that this year we are collecting
regressive payroll taxes from workers and businesses, because you voted
for it and I did, believing that it was done to collect more than we
needed this year in order to save it for the future. My only point is,
if it is used to offset for other revenues that we should have made, or
other expense cuts we should have made, then it is not saved. If it is
not saved, why are we collecting it? Why not say to the people, ``We
will not collect it to misuse it; keep in yourself''?
Mr. SIMPSON. Mr. President, I just hope that perhaps somewhere into
the national debate will come pages 78 and 79 of this year's 1996
annual report, which is so clear that there is no Social Security trust
fund. There is nothing in the way of a pool other than the IOU's. These
are IOU's, and the entire cash, when we sell them, goes to the general
fund.
Is that what the Senator means when he describes ``looting or
raiding?'' Please tell me, because these are two terms that have been
used by the Senator from North Dakota day after day after day, that we
are ``looting and raiding.'' I want to know what the Senator means when
he says ``looting or raiding.'' Does ``looting or raiding'' mean that
we should not be putting it into T bills? Does ``looting or raiding''
mean that we should not see the money go into the general fund, as is
the law of the United States? What is, for this Senator ``looting or
raiding''?
Mr. DORGAN. Let me try it again. I just refuse to let you win a
debate we are not having. We are not having a debate.
Mr. SIMPSON. I am trying to inform the national citizens as to what
is happening here.
Mr. DORGAN. I understand. Let me try to explain it. I will do it
again. I have done it before.
Mr. SIMPSON. Could you use the term ``looting or raiding'' and define
what that is?
Mr. DORGAN. Let me explain it to you. In the year 2002--the Senator
from Wyoming, I, and others voted to decide that we wanted to collect
more money than is necessary in the year 2002 for the funding of the
Social Security program--not a little more; a lot more; $103 billion
more than is necessary to fund that program. We said we want to do that
because we want to be responsible in order to save it for the future.
It is invested in Treasury bonds. The Senator is correct. If he wants
to have a debate about that, he cannot debate that with me because I do
not contest that. It is invested in Treasury bonds. But the $103
billion ought to represent in 2002 $103 billion of revenue above a
balanced budget. And it does not, because the Senator from Wyoming and
his friends support a budget scheme that says we will show up about
$108 billion short in the year 2002, and we will use the Social
Security trust funds to make up the difference.

[[Page S5977]]

If that were in the private sector, they would call it looting. But
you could call it whatever you want to call it. Abraham Lincoln said,
``Calling a horse's tail a leg doesn't make it a leg,'' but you can
describe this however one wants to describe it. I simply maintain that
if you decided and I decided we should have a pool of enforced national
savings to meet the needs of the future, that in 2002 you cannot
accomplish that if you have used the same money in order to balance the
general operating budget of the United States. That is the point, a
very simple point.
I would say to the Senator from Wyoming I understand--I have listened
patiently--I understand the presentation he made. He and I do not
disagree on a lot of this. The Social Security system is now healthy. I
disagree, sometimes, when I hear the Senator and others talk about the
``Social Security system is going broke.'' In a lot of ways I lament
that that language is used because it is true that a third of a century
from now it is going to be out of money, but that is a third of a
century from now.
It is also true we are going to make some changes. The fact of the
matter is, the Senator from Wyoming is a leader: he is a leader on this
issue. He has proposed substantial changes to secure the financial
well-being of the Social Security trust fund. The Congress must make
changes. But here is the situation. He and I do not disagree about the
circumstances. We have surpluses; they will continue to build into the
two-thousand-teens, after which they will diminish. In the year 2029,
we will be out of money. Adjustments will have to be made long before
then to solve this in the long term. The Senator is absolutely correct
about that.
The disagreement we have is in a budgeting scheme that says let us
treat the Social Security funds as if they are no different than any
other funds. I would say, my colleague has made the point, I think,
that the Democrats have done that and the Republicans have done it. The
answer is, yes, they have. And I have disagreed no matter who does it.
Now they want to enshrine it in the Constitution. That is the
difference.
Mr. SIMPSON. Mr. President, I want to be sure that the American
people know that this is not a partisan issue. So, when we say, ``My
friends on this side of the aisle,'' the friends on this side of the
aisle joined with a remarkable number of friends on the other side of
the aisle, a total of 64 of us who really think we ought to do
something with the balanced budget amendment and do not feel we are
going to do anything to the Social Security trust fund, because we know
we cannot do anything to the Social Security trust fund because it is
all invested and the money comes out of the general revenue. I guess
the debate has to end there. Unless--and I am going to come back to
this question. I would like, honestly, an answer.
I want to know what--if we are going to use the term ``looting and
raiding,'' the American people, I think, are being overly excited by
that term. There is no need to use a term like ``looting and raiding,''
because we do not loot or raid. We are putting it where the law
requires it to go, and nothing more. So to say that it is looted or
cut, there was never any suggestion that these dollars would not have
to be raised by general revenue in the year 2012, or 2005. They come
from payroll taxes and revenue. So we are only arguing about how the
deficit is measured, not about the disposition of Social Security trust
funds.
Mr. DORGAN. Will the Senator yield for a question on that?
Mr. SIMPSON. I think there is no reason to portray the balanced
budget amendment as a place to talk about Social Security trust funds.
They do not fit.
Mr. DORGAN. Will the Senator yield for one brief question?
Mr. SIMPSON. Yes.
Mr. DORGAN. Is it not the case, then, that in the year 2002 the
majority party's budget plan is either $108 billion in deficit or it is
balanced by using the $103 billion in Social Security funds? Is that
not the case?

Mr. SIMPSON. Mr. President, there was another one, so we get away
from the partisan aspect if we can.
Mr. DORGAN. That is not a partisan question. I am just asking you.
Mr. SIMPSON. I heard it that way. You know that. But let us look at
the Chafee-Breaux proposal.
Mr. DORGAN. Same thing. Same thing.
Mr. SIMPSON. Mr. President, 46 of us, 24 Democrats and 22
Republicans, voted for that. I thought that was a very responsible
thing. And whatever you are talking about in the national budget, all
has to do with balancing or not balancing the national budget--
everything in the stack.
Mr. DORGAN. But that is not responsive to my question. The Chafee-
Breaux budget falls short of balancing the budget, if you are going to
actually save the Social Security trust funds. And so does President
Clinton's budget. They are not in balance, just as the majority party
budget is not in balance.
So my question is, is there a balance? We are using the Social
Security trust funds improperly, or they are not in balance, they fall
$108 billion short of being in balance.
Mr. SIMPSON. Whether we call it balanced or unbalanced in the year
2002, whether under the Republican plan or President Clinton's plan or
Chafee-Breaux, Social Security moneys will be in exactly the same
place. That is what I am saying. It will be in the form of Treasury
bills or notes backed by the full faith and credit of the United
States. So if you want me to say it will be balanced, fine. If you want
me to say it will be unbalanced, fine. But the issue is, this will go
on like ``Old Man River,'' and all America ought to know that.
Mr. DORGAN. Will the Senator yield to one more point? I think we get
to the point where we disagree. My point is the budget that you
support, the budget the President has offered, and others, fall short
of balancing the budget by the equivalent amount of the Social Security
surpluses that we deliberately decided we wanted to receive and save.
That is the point I made.
Look, let us finish because I know the Senator from Massachusetts is
waiting, but----
Mr. SIMPSON. If we want to use the phrase of ``deliberately saved''
and so on, I have no problem with those terms. What I have a lot of
problem with is the continual reference to ``looting and raiding,''
because that is not true.
Mr. KENNEDY addressed the Chair.
The PRESIDING OFFICER. The Senator from Massachusetts.

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