[Congressional Record Volume 143, Number 59 (Thursday, May 8, 1997)]
[House]
[Pages H2431-H2432]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]


                       SALVAGING SOCIAL SECURITY

  The SPEAKER pro tempore. Under a previous order of the House, the 
gentleman from South Carolina [Mr. Sanford] is recognized for 5 
minutes.
  Mr. SANFORD. Mr. Speaker, I learned yesterday afternoon of an awfully 
interesting woman, a woman by the name of Osceola McCarthy of 
Hattiesburg, Mississippi. I think to a great degree she represents what 
the American dream is all about, because the American dream is built 
around the very simple idea of being able to get ahead, of actually 
being able to build something, of actually being able to build wealth.
  Because what is interesting about Osceola McCarthy, a woman of age 
87, is that she worked her entire lifetime as a washer woman. Yet 
toward the end of her life, she went to the local college and said, 
``I'd like to help out.'' They were thinking, well, maybe she will give 
us a cloth doily or maybe a bath mat or something that she had made. 
Instead she gives them a couple of hundred thousand dollars. The New 
York Times found this story so interesting that it actually went down 
and asked her, ``How did you end up with a couple of hundred thousand 
dollars only working as a washer woman?'' She said, ``Well, I put a 
little bit away whenever I got a chance, and I put it away for a long 
time.'' I think in doing so, she hints at what could be one of the keys 
to, I think, saving Social Security as we know it. Because Einstein was 
once asked, ``What is the most powerful force in the universe?'' His 
reply was, ``Compound interest.''
  As we all know, it is amazing what one can end up with at the end of 
a working lifetime by simply putting a little bit away over a long 
enough period of time. Because what the Social Security trustees have 
said is that if we do nothing, Social Security goes bankrupt in 2029, 
and it begins to run deficits in 2012, such that either we have got to 
look at raising payroll taxes by about 16 percent or we have got to 
look at cutting benefits by about 14 percent. Neither one of those seem 
to me to be acceptable options. If we look at the other options that 
are out there, I think they are non-options as well because the other 
options basically are driven by the fact the demographics have changed. 
A, as a country we are living longer. That is a great thing. Every year 
that I grow older, I hope that medicine keeps making medical advances 
such that they keep moving it out on that front. Average life 
expectancy when Social Security was created was 62. Today it is 76. 
That creates a real strain on a pay-as-you-go system. The other 
demographic fundamental that we are not going to change is that we have 
gone from having big families on the farm to having relatively small 
families today. We have gone from having 42 workers for every retiree 
to having 3.2 workers for every retiree, to being well on our way to 
having 2 workers for every retiree. Again, that is a fundamental that 
we are not going to change. So the question I think we are all left 
with is what do you do? I think that what Osceola McCarthy did has a 
lot to do with what we can do. That is, build a system that is based on 
the simple power of compound interest.
  When one talks about changing Social Security, we need to define what 
that change might be, what it might look like. Change for me does not 
mean in any way yanking the rug out from underneath seniors. My mom is 
retired. She has no ability to alter her income. You do not go and yank 
the rug out from under people like my mom. What it means is we leave 
people 65 and older alone. But what I think it can also mean is we give 
people below that age simply the choice. If you want to stay on 
existing Social Security, great, do so. But if you want to look at the 
idea of personal savings accounts, to build on Einstein's power of 
compounding, then you can do that, too.

  What are some of the benefits that might come with that? One benefit 
that I think is definitely worth noting is that you could choose for 
you your retirement age. If you think about it, our existing system 
comes at a tremendous cost in terms of human happiness. Because in my 
home State, we have got Strom Thurmond who wants to work until he is 
100, yet I have got plenty of other friends that say, ``Work is great 
but fishing is even better. I want to retire when I'm 50.'' With your 
own personal savings account, you could decide for you when you want to 
retire rather than a Congressman or a Senator or a bureaucrat defining 
for you your retirement age. I think that to be a big benefit. Again we 
have so many choices in America, we can choose between 25 different 
kinds of toothpaste, 30 different kinds of detergent, but you cannot 
choose for you when you want to retire.
  Mr. Speaker, I can see I am beginning to rub up against my 5 minutes, 
I will yield back the balance of my time, but again want to leave in 
everybody's

[[Page H2432]]

thoughts the idea of Osceola McCarthy and this simple theme of compound 
interest.

                          ____________________