[Congressional Record Volume 143, Number 87 (Friday, June 20, 1997)]
[House]
[Page H4123]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




               INSOLVENCY IN SOCIAL SECURITY AND MEDICARE

  The SPEAKER pro tempore. Under a previous order of the House, the 
gentleman from Michigan [Mr. Smith] is recognized for 5 minutes.
  Mr. SMITH of Michigan. Mr. Speaker, I would like to spend a couple of 
minutes talking about some of the things that were not in the budget 
agreement that should have been in the budget agreement. One is the 
problem that we are facing on the insolvency of Social Security; and 
another is the situation developing with an increasing insolvency 
problem for our Medicare Program.
  What we are doing in this country now is we are asking young working 
families to pay in additional taxes to pay for the benefits going to 
senior citizens in such areas as Medicare and Social Security. I am 
especially concerned with Social Security because according to 
statistics, more and more young people are depending on that Social 
Security for retirement benefits as they are saving less than past 
generations for their own retirement.

                              {time}  1415

  Let me briefly discuss the problem that we are running into on Social 
Security. Since it is a pay-as-you-go program, the taxes paid in by 
workers are taken by the Social Security Administration. Those Social 
Security taxes, those FICA taxes, are then paid out to existing 
retirees. So despite what many Americans think, that there is some kind 
of savings, there is not.
  Since 1983 when we substantially increased the Social Security tax on 
working Americans, we have had a surplus coming into that fund. For 
every penny of surplus that has come in, we have seen the Federal 
Government--the U.S. Congress and the President spend every cent of 
that surplus coming in from Social Security taxes for other social 
spending that this Government has suggested it needs.
  Here is the problem. When some of us brag that we are actually 
balancing the budget in the year 2002, the fact is that in that year, 
2002, we are actually borrowing $110 billion from the Social Security 
Trust Fund. So the budget is not truly in balance. Truly what we are 
doing is pretending that we are in balance because we are using money 
that is coming into the Social Security Trust Fund and spending it for 
other purposes.
  Mr. Speaker, there are only two ways to deal with the insolvency of 
Social Security. We either in some fashion increase revenues or we 
decrease benefits.
  I have introduced a Social Security bill in this last session. It is 
the only bill introduced in the House that deals with the problem of 
the insolvency of Social Security. That bill has been scored by the 
Social Security Administration to keep Social Security solvent for the 
next 75 years.
  Somehow we have to get the message out to the American people, 
especially the younger people working, that they had better look at 
what their retirement benefits are. They had better look at the 
transfer of wealth from the working generation to the retired 
generation; and as we have more and more retirees in relation to the 
number of workers, the problem is compounding.
  Here is what is happening. No. 1, people are living longer. Our 
medical technology has done a great job. When we started Social 
Security, the average age at death was 62-years-old. Today, guess what 
the average age at death is? The average age at death today is 75-
years-old. Once you live to be 65 and start collecting Social Security, 
then, on the average, you are gong to live to be 84 So you have, No. 1, 
people who are living longer, and then, No. 2, we had the biggest 
increase in the birth rate ever before in our history with the baby 
boomers, the children of the veterans of World War II.
  Those baby boomers are now in their maximum earnings years. They are 
going to start retiring around 2008, and when they start retiring, of 
course, two things happen. Many more people will collect benefits and 
the maximum earnings of those people are not going to be taxed anymore 
for Social Security to pay out benefits.
  So the experts are suggesting we are going to run short of money as 
early as 2005. Maybe it is going to be 2011 or 2012, but it could be as 
early as 2005. Then what do we do? How does this Federal Government, 
how does this Congress, Democrats and Republicans, start paying back 
what they have borrowed from the Social Security Trust Fund? How do we 
come up with the additional money necessary to pay existing benefits?
  Look, politicians are going to have to take their heads out of the 
sand and start dealing with these tough, real problems that are facing 
us in the future. It is not politically popular, so many Members think 
they are going to be beat up back home, and I suggest that they may be 
right. But we have to take our heads out of the sand. Let us start 
dealing with these problems.

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