[Congressional Record Volume 143, Number 144 (Thursday, October 23, 1997)]
[House]
[Pages H9479-H9480]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




                            SOCIAL SECURITY

  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, today in Budget Committee, we 
heard testimony about what we might do if there were more revenues 
coming into the Federal government than required under the existing 
caps for expenditures; in other words, if we reached a surplus sometime 
next year. That looks like it might be a possibility. We heard 
testimony that some of that money should go for infrastructure and more 
money for roads. We heard testimony that some of that money should go 
for tax cuts. We heard testimony that maybe it should simply go towards 
reducing the debt of this country that is now at $5.3 trillion.
  I would like to put in a suggestion, Mr. Speaker, that we use some of 
this money to start paying back the Social Security trust fund and 
start dealing with the huge unfunded liability that we are now faced 
with with this program of Social Security.

[[Page H9480]]

  The red chart that I have over here, the blue part shows the short-
term blip where we will have more money coming in than is required to 
pay out existing benefits. The red portion of this chart that goes as 
much as taking $400 billion a year out of the general fund because 
there will not be enough in the Social Security taxes coming in shows 
the length of time of the seriousness of this unfunded liability. I 
think it deserves just a brief review of the program that started in 
1935.
  In 1935, we started the Social Security program. It was started as a 
``pay as you go'' program with existing workers paying in their taxes 
to pay for the benefits of existing retirees. At that time when we 
started, there were 47 workers paying in their taxes, at that time it 
was 2 percent on $3500, paying in their taxes to support each retiree. 
47 of them. By 1950 that got down to about 16. Today there are only 3 
workers working paying their Social Security taxes, 12.4 percent with 
the employee and the employer's share, supporting each retiree, a 
tremendous burden on those individuals that are working and paying in 
this huge tax.
  Let me just show Members, for example, something that should be very 
startling to everybody under 50 years old. This chart shows how long 
you are going to have to live after retirement in order to get back 
just the money that you and your employer put into the Social Security 
taxes. Not a good investment. If you happened to retire here in 1960, 
you could get back everything you and the employer had put in in 2 
years. In 1995 it took 16 years if you retired in 1995. But if you are 
going to retire in 2005, 23 years, or 2015, you are going to have to 
live 26 years after retirement just to get back what you and your 
employer put into Social Security.
  It is time we took our heads out of the sand and started dealing with 
this huge problem. This shows the projected growth of the senior 
population in relation to the workers. The senior population goes up 73 
percent between now and 2025. The working population only goes up 14 
percent. Here is the chart that shows in 1950 we had 17 workers working 
to pay their taxes for each retiree, 3 today, 2 by 2029. I think this 
should be the startling chart that should make us be a wakeup call for 
all Members of Congress, because if we put this off, that means that 
the solutions are going to be more drastic later on, either in 
increasing taxes or reducing benefits.
  What we have done in the past is simply increased taxes every time 
there was a shortage of funds. Since 1971, we have increased the Social 
Security tax 36 times. We cannot do that.
  I have got a proposal that I will be introducing next week that 
solves the Social Security problem without any tax increase, without 
taking away any benefits for anybody 57 years old or older, and it 
starts dealing with this huge problem by allowing some private 
investment. What we do is slow down the increase in benefits for higher 
income recipients and the amount of money coming into the trust fund, 
we use some of that for private investment. So the worker has the 
ownership of some of that investment that they can invest in the stock 
market, the equity stocks, equity bonds, equity mutual funds to allow 
them to gain some of the magic of compounding interest, and they will 
actually retire with much more benefits than if they stayed on the 
existing Social Security system.
  Another call to arms I think is the fact that the workers today, 78 
percent of those workers today pay more in Social Security tax than 
they do in the income tax. It is unfair, it is going to be generational 
warfare if we do not do something about it. I say, let us start 
immediately as we look towards this short-term blip of balancing the 
budget and start dealing with this huge problem of Social Security to 
make sure that the existing retirees in future generations have the 
kind of benefits that we promised them.

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