[Congressional Record Volume 143, Number 18 (Wednesday, February 12, 1997)]
[House]
[Page H514]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




                HOW DO WE KEEP SOCIAL SECURITY SOLVENT?

  The SPEAKER pro tempore (Mr. Snowbarger]. Under a previous order of 
the House, the gentleman from Michigan [Mr. Smith] is recognized for 5 
minutes.
  Mr. SMITH of Michigan. Mr. Speaker, this is Ryan Hemker from Quincy, 
MI, coming in from my Michigan Seventh Congressional District as a 
page, so Ryan is going to help me flip these charts.
  Social Security is developing into an issue which more and more 
people are realizing has very serious consequences. We are talking 
about the question now of should we continue to dip into the Social 
Security trust fund to use for current other Government spending. What 
I want to talk about is how do we keep Social Security solvent, and is 
there a currently a real problem with Social Security?
  As we see by this first chart, Social Security is now the largest 
spending item in the Federal budget. This past year it was $347 billion 
larger than the defense bill, larger than the other 12 discretionary 
spending bills, of course larger than Medicaid or Medicare or the other 
entitlements. Interest on the public debt, and that interest includes 
the money that has been borrowed from the Social Security trust fund, 
now takes up 15 percent of the Federal budget.
  Let us go to the next chart. The next chart shows part of the 
problem. Our birth rate is going down and people are living longer, and 
that means that the expense that we are paying into the cost of Social 
Security is going up.
  Since those figures in billions are so huge, I brought it down to a 
minute out of every day. Right now we are spending $661,000 a minute, 
$661,000 a minute to pay Social Security benefits. But spending per 
minute in the year 2030 is going to be $5,717,000. It is going from 
$600,000 to over $6 million in these next few years.
  That is because more and more people are living longer, the birth 
rate is going down, and as the next chart shows, we are seeing that for 
Americans, when Social Security started in 1935, the average age of 
death was 63 years old. Now the average age of death is 74 years old, 
but if you happen to reach 65 and start collecting those benefits, then 
the average age of death for that person that reaches 65 years old goes 
up to 84 years old.
  As people live longer and the baby boomers retire to expand that 
senior population, we see the increase on this chart, that seniors are 
increasing at the rate of 108 percent between now and 2040, where 
workers that are paying in to pay for those benefits with their Social 
Security taxes are only increasing at the rate of 23 percent.
  Let me stop and pause here a minute to stress the fact that this is a 
pay-as-you-go program. Current workers pay their taxes to pay the 
benefits for current retirees. That is the way it is now. That is the 
way it always has been. There is no savings account. We talk about the 
trust fund, but the trust fund is only the surplus in every month when 
those Social Security taxes come in. If you subtract the benefits that 
are paid out, you have a little surplus, especially since we started 
increasing the Social Security taxes in the last 15 years. That surplus 
is what goes into the Social Security trust fund. Now there is $540 
billion in that trust fund, and it is a problem, because we are even 
using that money for other Government expenditures.
  I have proposed legislation that stops the Government from using that 
surplus money. That is a start. As we see on the number of people, the 
number of workers that are working, that are paying in their taxes to 
support each retiree, in 1950 we had 17 workers paying in their taxes 
to support each retiree. In 1996 we had three workers. By the year 
2029, we are only going to have two workers that are going to be asked 
to pay enough taxes to support each retiree.
  Look, anybody under 55 years old had better seriously look at 
changing the Social Security system. It needs changing. Politicians can 
no longer bury their heads in the sand and pretend the problem does not 
exist.
  Just let me flip through these charts. Right now we expect to take in 
less tax revenues than is required for the payout in 2011. However, 
Dorcas Hardy suggests that it could happen, and we could essentially be 
in bankruptcy or having less money than required for the payouts as 
early as 2005. We cannot wait to solve this problem. After that, the 
red part shows how huge the deficits are going to be, up to $400 
billion a year in today's dollars.
  So far we have relied on tax increases to cover the problems of 
Social Security, so we have gone from 2 percent of the person's 
payroll, and now we are up to over 12 percent. In fact, if we look at 
the tax increases since 1970, we have had tax increases 36 times. There 
has to be a change. I ask everybody to take a look at my bill. It is 
not the perfect solution. Let us take it up the flagpole, start 
shooting at it, but let us no longer ignore the real problem with 
Social Security.

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