[Congressional Record Volume 143, Number 76 (Thursday, June 5, 1997)]
[Extensions of Remarks]
[Page E1131]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




   STATEMENTS BY MATTHEW NESTO AND LUCASS HERSEY, ESSEX HIGH SCHOOL, 
                       REGARDING SOCIAL SECURITY

                                 ______
                                 

                          HON. BERNARD SANDERS

                               of vermont

                    in the house of representatives

                         Thursday, June 5, 1997

  Mr. SANDERS. Mr. Speaker, for the benefit of my colleagues I would 
like to have printed in the Record this statement by high school 
students from Essex High School in Vermont, who were speaking at my 
recent town meeting on issues facing young people.

       Mr. Nesto: Good morning, Congressman Sanders. Social 
     Security first began August 14, 1935 when President Franklin 
     Delano Roosevelt signed the Social Security Act. Social 
     Security was started because people began facing the 
     uncertainty of debt in old age. After Social Security numbers 
     were signed the first taxes were collected beginning in 
     January 1937, and until 1940 Social Security paid benefits in 
     the form of single lump sum payments.
       In January of 1940, Ida Mae Fuller became the first person 
     to receive new monthly Social Security benefits. She received 
     $22.54 payment per month for the rest of her life.
       In 1950, there was new legislation to increase the checks 
     to offset the increase in the price of living and inflation.
       In the 1960s the age requirement for Social Security was 
     lowered to 62. Also Medicare was added so that people age 65 
     years and older could receive health care.
       In the 70s it became clear that Social Security was having 
     a problem. Programs were run by the state and local 
     government. The programs became more complex and inconsistent 
     with each other. They decided to convert over three million 
     people from state control to federal control to solve the 
     problem, but in the '80s more problems formed. Social 
     Security ran into long-term financial problems which led to 
     many cut-backs.
       Today many believe that Social Security--some people 
     believe that Social Security is in trouble. People who have 
     reached the age for benefits expect to be paid what they have 
     put into the system all their lives. During the month of 
     December, 1996, $28,147,981 was paid out nationally. In 
     Vermont there was $6,280,000 paid out. There is currently 
     43,557,700 people who receive money nationally. This right 
     here shows the breakdown of different people that receive 
     payments. It is broken down into widowers and retired people, 
     too. 98,316 people receive that in Vermont.
       Mr. Hershey: According to the Social Security 
     Administration there is currently more money going in than 
     there is being paid out. This is to create a surplus for baby 
     boomers.
       The problem we foresee is the amount of money we receive. 
     7.65 percent of your paycheck goes to Social Security, and 
     your employer pays out 7.65 percent. Out of that 15.3 
     percent, 10.5 percent goes to retirement, survivor's, 
     dependents and trust fund insurance. the total reserve for 
     that category for one year is $416 billion. 1.7 percent goes 
     to disability insurance which has a reserve of $6 billion. 
     2.9 percent goes to Medicare and we reserve $127 million and 
     currently we have a .02 percent that is unaccounted for.
       For retired workers per month average payout is $745. 
     Disabled workers will have about $704 and nondisabled widows 
     and widowers will have $707. Even the maximum of $725 a month 
     is not enough for a person to live. This is our biggest 
     concern. Many retired people have many problems because 
     Social Security doesn't pay enough, plus added to the problem 
     is the government needs more money; Social Security is an 
     easy target.
       Our solutions are short and simple. The easiest thing is 
     for Social Security to be set aside like a piggy bank making 
     it a law for the Government not to take out of it. The other 
     is that a person who works for about 50 years should have 
     built up enough money to pay for themselves for at least a 
     half of that time. We recommend that the taxes be put in a 
     fund that gains interest over the time they work. A certain 
     amount will go to a fund for disabled people who have had to 
     stop work earlier. If the first taxes are left alone and 
     allowed to make interest over 50 years we should be able to 
     have every two or three working months to pay for one month 
     of retirement.
       There is a chart here, it sort of maps out the government 
     mandates savings which go to a direct fund and basically it 
     will be there for you when you retire. We hope you will take 
     our ideas into consideration and practice.
       Mr. Nesto: Right now the Social Security Administration is 
     taking in more money than they are giving out right now and 
     so they do not have any problems right now. But speculation 
     in the upcoming years, people believe, and I do not 
     necessarily believe that there is going to be a problem but 
     it is speculation because as the baby boomers age, pretty 
     soon as those people are going to be retiring and that's why 
     we are taking in more money now so we can give them back 
     their funds. So when that money is used for the baby boomers 
     is there going to be enough money to pay for our retirement?
       Right now there is not really any education on this. A lot 
     of people believe that the Social Security Administration is 
     going bankrupt and stuff like that, but they do not really--
     if they research the subject they wouldn't really--they'd 
     find out it is not really a problem right now.
       Mr. Hersey. I have seen a lot of like news shows where 
     people are living on Social Security where there is a company 
     that is creating insurance funds so people pay for it and 
     perhaps those companies are creating that impression so they 
     can make more money in their fund.

     

                          ____________________