[Congressional Record Volume 143, Number 50 (Thursday, April 24, 1997)]
[House]
[Pages H1856-H1857]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




                    KEEPING SOCIAL SECURITY SOLVENT

  The SPEAKER pro tempore (Mr. Ney). Under a previous order of the 
House, the gentleman from Michigan [Mr. Smith] is recognized for 5 
minutes.
  Mr. SMITH of Michigan. Mr. Speaker, today the trustees of Medicare 
issued their report and also the trustees of Social Security issued 
their report. I think this is another indication that this country, has 
got to do something, if we are going to keep Social Security solvent, 
if we are going to keep Social Security available to not only existing 
retirees, but future retirees.
  In the report, the trustees estimated that the time that the Social 
Security Trust Fund was going to run out of money, the time that there 
was going to be less money coming in in taxes than was required for 
benefit payout would be 2012. And they also calculated a slight 
increase in their estimate of the tax increases necessary to keep 
Social Security solvent.
  One year ago, they estimated that it would take a tax increase of 
2.19 percent of payroll. This year they are estimating that it is going 
to take a tax increase of 2.23 percent of payroll, slightly a worse 
condition.
  However, there is a couple of assumptions that the Social Security 
trustees used to come up with this estimate. One is they calculated 
that CPI would be one-half of 1 percent less than their estimates of a 
year ago.
  The second assumption was that real interest rates would increase and 
therefore, the interest paid from the general fund to the Social 
Security Trust Fund on the Government securities in the fund would 
actually increase.

[[Page H1857]]

  What we have to face up to, Mr. Speaker, is the fact that when there 
is less money coming in than is required for payout, somehow Congress 
and the U.S. Government is going to have to come up with the money to 
pay back the money borrowed from the trust fund. How do they do it? How 
would they come up with these billions of dollars.
  They have several options. One is to cut spending in other programs. 
One is to increase taxes on existing workers and say, in effect, look, 
what we borrowed from you we are going to pay back by increasing your 
taxes and make you pay this additional sum in.
  Let me just give my colleagues a couple examples of how much the 
general fund is going to have to come up with to continue to pay the 
benefits that are now promised under Social Security.
  In the year 2020, for example, the general fund is going to have to 
pay to Social Security $219 billion in order to come up with the money 
necessary for promised benefits.
  Mr. Speaker, Members of Congress, the President, politicians are 
going to have to take their heads out of the sand. They are going to 
have to face up to the problem that this Ponzi game of Social Security 
cannot maintain itself, and we need to take immediate action. The 
suggestion of the gentleman from Wisconsin [Mr. Neumann] that has the 
support of a lot of us that say at the very least, let us stop 
Government from reaching into the Social Security Trust Fund and then 
using that money for other program payments.
  The long-range solution will be, I hope, similar to the bill that I 
have introduced that is now scored by the Social Security 
Administration to keep Social Security solvent for the next 75 years. 
The bottom line is we have to pay attention to it. The longer we put it 
off, the more drastic the solutions will have to be.

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