[Congressional Record Volume 144, Number 30 (Wednesday, March 18, 1998)]
[Senate]
[Pages S2150-S2154]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]
SOCIAL SECURITY
Mr. THOMAS. Thank you, Mr. President. For some time now, we have had
what we call a freshman/sophomore focus in which those of us who have
come here in the last 2 to 4 years come to the floor to talk about some
of the issues that we believe are the pivotal issues before this
Congress and the American people, the ones that have the highest
priority and are most difficult. We come again this morning to talk
largely about the questions and problems associated with Social
Security. All of us, of course, are dedicated to continuing to have a
strong Social Security program. So that is the focus of our freshman
focus this morning.
I yield to the Senator from Minnesota, Senator Grams, for 10 minutes.
The PRESIDING OFFICER. The Senator from Minnesota is recognized.
Mr. GRAMS. Mr. President, I rise this morning along with my colleague
to make a few brief observations about Social Security and how we can
preserve and strengthen it. I thank my colleague from Wyoming for
reserving floor time so that we can address this critical issue.
I was shocked by a recent poll revealing that Americans would rather
put their Social Security money under their mattress than entrust it to
the Government. According to that poll, 46 to 56 percent of Americans
said they would prefer to put their retirement savings under their
mattress--only 28 to 35 percent would rely on Uncle Sam. Why are so
many Americans skeptical about the government-run Social Security
program? The answer is simple: in its present form, the program is a
raw deal for most Americans. It will not be there for baby boomers, and
it will heavily burden our children and grandchildren.
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Mr. President, the American people's skepticism and worries about
Social Security are well founded. Social Security's future is being
challenged by a massive demographic shift now underway that will
continue for the next 33 years. In 1941, there were approximately 100
workers for every retiree. Today, there are only three workers for
every retiree; that ratio will soon drop to two workers per retiree.
Even though Congress has increased the payroll tax 51 times since
Social Security's creation, the program is clearly headed for
insolvency and the future tax burden on workers will be overwhelming.
The Congressional Budget Office warns that if these problems are not
fixed, federal deficits could shatter our future economy, placing a
heavy burden on our children and grandchildren. The federal deficit
would increase from $107 billion in 1996 to $11 trillion in 2035. The
national debt would balloon to $91 trillion during that same period of
time. Such rapid growth of federal debt and the deficit would bankrupt
this nation, making any bailout impossible.
Mr. President, I welcome the fact that the Administration has started
to pay attention to the Social Security crisis. I am pleased we all
agree that Social Security is facing serious financial and demographic
challenges. It is a fiscal disaster-in-the-making, unsustainable in its
present form. We desperately need reform to preserve and strengthen the
Social Security program. The sooner we do it, the less pain we will
suffer in the future. But the real question is, how we should go about
it?
It is obvious to me that simply funneling money back into Social
Security won't help fix the problem. It will not re-build the fund's
assets for current and future beneficiaries and it does not address the
flaws of the current finance mechanism.
The fundamental problem with the Social Security program is that it
is funded on a pay-as-you-go basis. The Social Security payroll taxes
are not directly invested in assets, and retirees' benefits are not
paid from the sale of earlier invested assets. Instead, the current
payroll taxes are largely paid directly to current retirees, and the
federal government uses the remainder to fund other programs--stealing
from the Social Security trust fund to pay for other programs. The
Social Security's trust-fund ``assets'' consist of nothing but Treasury
IOUs that can only be redeemed if Congress cuts other spending, raises
taxes, or borrows from the public to raise the cash.
Without fundamental reform, using general revenue to pay for Social
Security is nothing but an increase in the payroll tax on American
workers. I believe that reforming the Social Security program to ensure
its solvency is vitally important, and the sooner we get about the task
of doing it the better. Any projected budget surplus should be used
partly for that purpose, using it to build real assets by changing it
from pay-go to a pre-funded system.
Yet, I also believe strongly that Congress owes it to the taxpayers
to dedicate a good share of the surplus for tax relief. After all, the
government has no claim on any surplus because the government did not
generate it--it will have been borne of the sweat and hard work of the
American people, and it therefore should be returned to the people in
the form of tax relief.
Washington and bureaucrats should not be first in line to take any of
the surplus and spend it. It should go back to the taxpayers.
Should we save Social Security first or provide tax cuts first? My
answer is we should do both. We had a similar debate last year about
whether we should balance the budget first and provide tax cuts later.
The truth is we can absolutely do both at the same time, as long as we
have the political will to reform Social Security.
The President is maintaining that not one penny of the surplus should
be used for spending increases or tax cuts--that every penny should go
to save Social Security. But in his FY 1999 budget, he has already
proposed to spend some $43 billion of the surplus. That's an obvious
contradiction.
Moreover, in the next five years, the President will have to use more
than $400 billion out of $600 billion from the Social Security trust
funds surplus to pay for his government programs.
If we're serious about saving Social Security, we should first stop
looting the Social Security surplus to fund general government
programs, return the borrowed surplus to the trust funds by cutting
government spending, and begin real Social Security reform.
Mr. President, several other recent polls prove that Americans are
increasingly concerned about the future solvency of the current Social
Security program. A USA Weekend poll showed that one out of two
Americans fear they would have inadequate Social Security benefits.
In a survey conducted during a Social Security conference I hosted
recently in my home state of Minnesota, we found that 73 percent of the
participants fear they may not achieve a secure retirement from Social
Security.
Eighty-five percent believe America's young people will be facing a
major financial crisis and significantly higher taxes because of
current and future spending on older generations.
Eighty percent believe most people could make more money investing
their retirement funds in the private sector than they get from Social
Security.
Seventy-nine percent would support conversion of the current pay-go
system to a prefunded system.
Again, 79 percent, or 8 out of 10 Americans, would support the
conversion of the current pay-go system to a prefunded system.
Clearly, the American people want reforms to ensure that any
retirement benefits continue to be available to all Americans. And I
believe we should consider any Social Security reforms that will
provide a better retirement safety net for all Americans by allowing
compound interest to work.
Mr. President, the success of Social Security reform depends on
informing and educating the American people. Only a knowledgeable
public can make a sound decision about how we should go about saving
Social Security.
As a first step in this effort, I have introduced a bill to require
statements providing the American people with essential information on
their future Social Security benefits. The information provided by the
Social Security Information Act will give us a better idea of what our
Social Security benefits will be at retirement age, as well as a
comparison to what those retirees would get if Social Security dollars
had been invested privately. They need to have that information. They
need to have that comparison. Americans need to know up front what they
can and can't expect of the Social Security System compared against
what they are paying into it and what their employer is contributing.
Giving individuals an honest accounting of that information serves, I
think, the very fundamental objectives of the Social Security Program
by enabling workers to judge to what degree they should supplement
their contributions with other forms of retirement savings such as
pension plans, personal savings, and investment. The Social Security
Information Act is a good first step in the fundamental reform that
needs to be undertaken.
Mr. President, in closing, I am looking forward to working with my
colleagues and the administration in exploring every possible solution
that we can to strengthen Social Security and to help provide better
benefits for today's recipients and also provide better benefits for
future generations.
Thank you very much, Mr. President. I thank my colleague from
Wyoming, and I yield the floor.
Mr. THOMAS addressed the Chair.
The PRESIDING OFFICER. The Senator from Wyoming.
Mr. THOMAS. Mr. President, I thank the Senator from Minnesota, who
has worked very hard in the area of deficit reduction and strengthening
Social Security. And I know he continues to feel strongly about it.
One of the interesting things--and I suppose it is true of any
institution, and it seems more particularly true of government--is the
difficulty in making changes. I doubt that there is anyone who is
knowledgeable at all about Social Security who wouldn't agree that
there needs to be some changes made; who wouldn't agree that if we do
not make changes, the results will not be what we want, and,
conversely, if we expect some different results, we have to do some
things differently. But it is very difficult to do. So I think it is
important for us to continue to talk
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about it, continue to stress it, and continue to point it out.
Social Security is a major component of senior citizens' income.
Thirty-seven and one-half million senior citizens depend at least
partially--and many times totally--on Social Security payments. In many
cases, it is the only source of retirement income. That is unfortunate,
of course, because it isn't designed to be a retirement program, it is
designed to be a supplemental program.
So there is something to the idea that we need to deal with taxes and
Social Security simultaneously so that we encourage people to save on
their own and have opportunities to do that through IRAs, or whatever
technique, and at the same time strengthen Social Security, because
they do, in fact, go together. All of us, I think, on the other hand,
recognize that the system as it is now set up is not simultaneous. In 8
years, the system will begin to feel the pinch of retirement and the
baby boomers, and this idea of having a surplus will begin to go away,
and by the year 2012 it is expected that we will be running a deficit
in terms of revenues.
What does this mean? It means, of course, that the Government will
not be able to pay the benefits that are due without making some other
kinds of changes.
There is some talk about taking the money and spending it for
something else, which, of course, is true. But the fact is that under
this system, the surpluses can only be invested in Government
securities. And, therefore, when the Government needs to borrow money,
for whatever the reason, it borrows from somewhere, and if it didn't
borrow from Social Security, it would borrow from us as individuals.
But the problem is, when we take $100 billion a year out of Social
Security and put it into debt, then, of course, when the time comes for
that debt to have to be repaid, we have to do something quite different
than what we have been doing in the past.
It seems to me that the real clincher is, it is pretty clear that the
longer we wait, the more difficult it will be and the more severe the
changes will have to be. If we can make those changes as soon as
possible, they can be more incremental and, hopefully, less painful.
And change always has a certain amount of pain.
During the State of the Union message, of course, the President
brought up this notion of Social Security, and, of course, he said,
``Social Security first,'' which is good. And I think it is fine that
this thing was brought up there. I think it is fine that the White
House has committed itself to this being the issue. The unfortunate
part of it is, I think, that primarily a political statement is one
that people like to hear --``Social Security first.'' But,
unfortunately, the President does not have a plan to do anything about
it.
Someone--I think Kevin Kearns from the Council of Government Reform--
indicated that it is a little like the captain of the Titanic who saw
the distress signals from the Titanic but didn't do anything about it.
That is kind of where we are.
So it is a responsibility and an opportunity for the Congress, I
think, to step up to the plate and to do something about changing the
way that we fund this program. There are some very hard questions to be
answered. Let me just share a couple of the things that are talked
about--certainly the surpluses, as I mentioned; and Social Security
will be about $105 billion in 1999. So the $10 billion surplus that is
applied there is a relatively ineffective remedy in that it doesn't
really amount to very much compared to the kind of lending that is
taken.
First, there are several ways to make changes. The idea of putting
some of these funds into an investment that grows and compounds has a
number of advantages. One is, we would remove the excess payroll taxes
from the unified budget. In other words, if we sent 2 percent over into
this investment program, those would not be available as trust funds to
be loaned to the Government as expenditures. That would be a plus. The
second is, the amount that was invested would almost surely return a
higher return than maybe Government securities. Whether the market goes
up or down, it also moves that way, and the private sector also, at
least from the point of view of some. If we set aside a portion of this
to be dedicated to our retirement funds, it would be a fund that would
become an asset and, if not exhausted by the user, would be a part of
transfer to heirs. That again may or may not be the case, but that is
one of the arguments that we hear.
The Washington Post, on the other hand, interestingly enough, some
time ago said there are only three possible answers: Tax increases,
spending cuts, or borrowing from the public. I don't believe the
analyses of the answers are complete. Some of the answers are different
kinds of investments, different kinds of returns, and perhaps something
about age. So the idea of simply more taxes, I think, is not the
answer.
The fact is that taxes, as my friend from Minnesota indicated, have
been raised, I think, some 63 times over the course of Social Security.
The 15.3-percent tax rate we now have is the most burdensome tax, after
all, to most taxpayers. Seventy-two percent of all Americans pay no
more than 15 percent in income tax. This means that this payroll tax is
the largest tax, as a percentage to Americans, that Americans pay.
If, in fact, we don't do something, the National Center for Policy
Analysis says the rising cost of Social Security and Medicare will
raise the payroll taxes 53 percent by the time today's college students
are ready to retire. Obviously, that is an unacceptable alternative.
Some talk about age differentials. In 1940, the labor force
participation rate for men 65 years of age was 70 percent. Seventy
percent of men 65 years of age were in the work force. Today, 33
percent are in the work force. So, obviously, we have less input and
more outgo in this program.
So there are a number of things, all of which will be kind of new,
all of which, I suppose, will be difficult. But, unfortunately, it is
difficult to make change. The Social Security Program is not treated
like a pension. Our contributions don't go into assets like stocks and
bonds or mutual funds that increase in value over time, as we know. In
the 1950s, there were 16 workers for every retiree, and Social Security
taxes could be low and the benefits relatively high. Because of the
number now, there are approximately three workers per retiree. This
decline, as I mentioned, has resulted in 63 tax increases over this
period of time.
So I think the evidence that we have a problem is clearly there. Now
the question is, What are we willing to do about it? One of the
suggestions, of course--and I think is a good one--is to put you and me
as workers in charge of some of our own funds, not simply to raise
taxes but rather to make Social Security financially sound. The program
was originally financed on the 6-percent payroll tax. Today, of course,
the tax rate is 12.4, plus Medicare, which makes it 15 percent. In
order to keep this, as I mentioned, solvent, payroll taxes will need to
be 18 percent by 2020 and 50 percent by 2075.
What are some of the ideas? Of course, to allow workers to divert a
portion of their current payroll taxes to personal investment accounts;
investing these funds into private securities; providing some ownership
for this portion of that fee that goes there; and investing, of course,
in private securities. I think it is important, on the other hand, that
we continue to ensure that everyone is involved, that everyone makes
some effort to prepare for their own retirement. And Social Security
needs to be a concept that we continue to have.
So both of these options--of diverting it into a personal account,
investing the budget surplus funds that we might have now into private
securities, as opposed to the way we do it in Government securities--
are an alternative, and both of these can go hand in hand. I think it
is fair to say that the investment of the current surplus into private
securities will not, in fact, solve the problem but will move us
forward. But can you imagine young people, such as the young people who
are here today as pages and as interns, when they come into the work
force and are able to invest immediately 2 percent of that fund? Over a
period of time, it will amount to a great deal of money.
So that is kind of where we are, Mr. President. We have a problem. We
have some difficulties, of course. One of them that we are talking
about this morning in another context is the unified budget. There is a
great debate
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over the unified budget. As you know, all of the money that comes to
the Federal Government goes into the unified budget, even though it may
be in a trust fund, such as Social Security, such as a highway fund.
Some say we ought to take those out of the unified budget and let the
Social Security be off budget and let the highway fund be off budget. I
suppose you have to say let the airport fund be off budget, and about
50 others be off budget. We would end up a bit like my State
legislature, which I think has control of about 30 percent of the funds
that come to the State, and all of it is earmarked for certain things.
I understand there is merit in that. I don't favor that, however. But
that is one of the debates that goes on. The other one, of course, is
as we spend more than we take in, we borrow from someone. And
obviously, since the law requires that Social Security has to be
invested in Government securities, you borrow there. You borrow there
first, which makes a pretty good deal for the rest of the programs, if
you are going to spend more than you take in. But it is not a good deal
for those people who have their money set aside in the trust fund such
as Social Security.
So we have, I think, a great deal to do. We have some hard topics to
undertake. One of them is age. Obviously, we live longer than we did
before. I already mentioned the work force at 65. We are moving towards
the 67 age limit rather than 65. But I believe it is 2020 before we
reach that level of gradually moving up 1 month a year.
So that needs to be reviewed. It is very difficult. It is true that
things need to be done prospectively so that people who have paid in
based on one set of circumstances are not affected, particularly during
their time of benefits, but that those who come into the program more
recently may come in under a different set of circumstances. So if ever
there was a program, it seems to me, where you really have to decide,
is this something we want to go on in the future, is this something you
begin at age 22 to pay into to expect to enjoy the benefits, it is
Social Security.
Polls have indicated that people in the 20 to 30 age bracket do not
expect to have any benefits come to them. I think that is unfortunate.
I think we have a responsibility to see that they do, so that it is not
strictly a pay-go, that they are paying in for someone else with no
hope of benefits. I think it can be done. I really think it can be
done, and I think it can be done with relatively modest changes if we
will move quickly to make those changes. The longer we wait, the more
severe those changes will have to be and the more difficult they will
be to obtain.
Mr. President, I think we are going to be joined in a moment by
another one of our colleagues. In the meantime, I suggest the absence
of a quorum.
The PRESIDING OFFICER. The clerk will call the roll.
The bill clerk proceeded to call the roll.
Mr. THOMAS. Mr. President, I ask unanimous consent that the order for
the quorum call be rescinded.
The PRESIDING OFFICER. Without objection, it is so ordered.
Mr. THOMAS. Mr. President, we have been joined now by our other
associate, the Senator from Colorado, to conclude our comments this
morning with respect to our focus on Social Security. So I yield to the
Senator from Colorado 10 minutes.
The PRESIDING OFFICER. The Senator is recognized.
Mr. ALLARD. I thank the Senator from Wyoming for giving me an
opportunity this morning to talk a little bit about Social Security
reform. It is a delight to be able to work with the senior Senator from
Wyoming on this and many, many other issues.
One of the most important challenges that we face as elected
officials is the reform of Social Security. This issue, I think, is a
test of our concern for future generations. The problem is far enough
into the future that we could get away with doing absolutely nothing,
but I do not believe this is acceptable. I am committed, and I think a
majority of Members of both parties are committed, to the reform of
Social Security, and doing it now.
Currently, Social Security payroll taxes exceed the level of benefits
that are paid out. We, therefore, have a temporary surplus in the
program. This will continue to be the case until around the year 2013
when we begin to run Social Security deficits. Unfortunately, none of
the current Social Security surpluses are saved. They are spent on
other Government programs. If a private company established a pension
system like this, the administrator would be sent to jail.
With each passing year, we lose valuable time. Several years ago, the
bipartisan Commission on Entitlement and Tax Reform forecast where they
thought the budget would be headed over the next several decades. The
most startling fact was that unless we reform entitlements such as
Social Security and Medicare, those entitlements will consume virtually
all tax revenues by the year 2030. Obviously, taxes would either have
to be increased dramatically or spending would have to be cut
dramatically on critical Government functions such as defense, law
enforcement, transportation, and education.
This is a future that we simply must avoid. But we can only do this
by moving now to reform Social Security. In my view, it is time to
begin the transition from an exclusively tax-financed system to an
investment-based system. This will take time. Any transition will
probably have to be implemented over a period of 25 to 30 years. That
is why it is so critical that we begin the transition no later than the
year 2000.
Obviously, under any transition, we must guarantee current retirees
the return that they have been promised. However, younger generations
should be given the option of setting up some type of personal
investment account similar to an IRA for a portion of their payroll
taxes. Currently, the payroll tax on wages that is dedicated to Social
Security is 12.4 percent. Half of this is paid by employees and the
other half is paid by the employers. An initial transition might permit
2 percent to be invested in a mandatory account held by the taxpayer.
These funds could be invested in common stock, bonds, Treasury notes,
money markets, or any mixture desired by the taxpayer. The principal
difference between this and the current system is that the personal
investment account would be real money. This type of system is
gradually being put into place in countries around the world.
Australia, Chile, and Great Britain have also begun the transition to
an investment-based pension system.
The long-term benefits are significant. This system would gradually
reduce the claim on the U.S. Treasury that exists with the current
system. Taxpayers would get a better return on their payroll tax
dollars. Each and every American would become a shareholder in the
economy. The economy would benefit from the higher level of national
savings by forcing everybody to save for their retirement.
Mr. President, this is just one of a number of ideas being considered
for Social Security reform. The important point is that we need to
begin a national debate on this issue right now. We need to set to work
now in devising a retirement system for the 21st century.
Mr. President, I now yield the floor.
Mr. MOYNIHAN addressed the Chair.
The PRESIDING OFFICER (Mr. Thomas). The distinguished Senator from
New York is recognized.
Mr. MOYNIHAN. I am sure that the distinguished Senator from Colorado
has other appointments he has to meet and will have to leave the floor
shortly.
But could I congratulate him on his remarks, and to say that we are
about to introduce a bill, the Social Security Solvency Act of 1998,
that is almost precisely the one he contemplates, or is in that range
of reference. For his particular concern, we reduce the present 12.4
percent payroll tax by 2 percentage points, to 10.4. That puts us on a
pay-as-you-go system, which with other adjustments, particularly the
cost-of-living adjustment, means we will never go much above 13.4
percent, and we stay at 12.4 all the way to the year 2045. And then we
give to each worker-employee the option of having 2 percent, the
reduction in tax under our bill, put into a personal savings account--
not very different from the Federal Thrift Savings Plan in which you
have a whole catalog of mutual funds of various kinds in which you can
invest.
The magic of compound interest is extraordinary. The Wall Street
Journal
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this morning comments on this proposal and notes that--well, I will
just read it:
Why shouldn't working stiffs have the same chance others
have to exploit the magic of compound interest? Mr. Moynihan
shows that workers earning $30,000 a year--
Which is not a high income at this time--
can at a modest 5 percent return amass $450,000 in savings
after 45 years.
By just shifting that 2 percent.
And this gives workers something they have not had in the past. It
gives them an estate they can pass on to their children. Oh, heavens, I
am about to say something which I suppose should be stricken from the
Record, but it will make them all Republicans. Still, it is very much
in line with the Senator's comments. I very much appreciate what he has
said, and I congratulate him on doing so.
Mr. President, I ask unanimous consent that the article from the Wall
Street Journal be printed in the Record, and I yield the floor.
There being no objection, the article was ordered to be printed in
the Record, as follows:
[From the Wall Street Journal, Mar. 18, 1998]
Public Trust Busting
When Senator Pat Moynihan speaks, liberals listen. So it
just might mark a watershed in the Social Security reform
debate that the New York Democrat this week embraced private
investment retirement accounts.
Mr. Moynihan's welfare state credentials are impeccable. He
helped to expand it during the Johnson and Nixon years and
he's been its most intellectually nimble defender since. He
bitterly opposed President Clinton's decision to sign a
welfare reform law. And only last year, writing in the New
York Times, he seemed to rule out any significant change in
Social Security.
Well, he's now revising and extending those remarks. On
Monday at Harvard, he said Social Security can be saved only
by changing it. And not merely with the usual political
kamikaze run of raising taxes and slashing benefits. He's
also endorsing a redesign that would allow individuals to
invest two percentage points of their payroll tax as they
please, presumably in stocks, bonds and other private
investments.
This is a big breakthrough, ideologically and politically.
The idea of a private Social Security option has until
recently been the province of libertarians and other
romantics. When Steve Forbes talked up the concept in 1996,
he was demagogued by fellow Republicans. Even such a free-
marketeer as Ronald Reagan was forced to accept a Social
Security fix in 1983 that relied mostly on tax hikes.
What's changed? Only the world, as Mr. Moynihan admits. The
weight of the looming Baby Boom retirement has caused a loss
of public faith in Social Security's sustainability. Few Gen-
Xers even expect to receive it. More and more Americans also
began to see the virtue of private retirement vehicles like
IRAs and 401(k)s, which grew like Topsy as the stock market
boomed.
``In the meanwhile the academic world had changed,'' Mr.
Moynihan also told the mostly liberal academics at Harvard.
``The most energetic and innovative minds had turned away
from government programs--the nanny state--toward individual
enterprise, self-reliance, free markets.'' (No, he wasn't
quoting from this editorial page.) Privatizing Social
Security suddenly became thinkable, in many minds even
preferable.
In short, the same economic and political forces that have
remade American business are now imposing change on
government. Global competition and instant information
have forced industry to streamline or die. Now those
forces are busting up public monopolies--the public
trusts, to adapt a Teddy Roosevelt phrase--that deliver
poor results.
In the U.S., that means breaking a public school monopoly
that traps poor kids in mediocrity or worse. And it means
reforming a retirement system that gives individuals only a
fraction of the return on their savings that they know they'd
receive if they invested the money themselves. These are
ultimately moral questions, because in the name of equity
these public trusts are damaging opportunity for those who
need it most.
The rich have known for years how to exploit the magic of
compound interest, for example. Why shouldn't working stiffs
have the same chance? Mr. Moynihan shows that a worker
earning $30,000 a year can, at a modest 4% annual return,
amass $450,000 in savings over 45 years by shifting just 2%
of the payroll tax into a private account. Thus do even
liberals become capitalists.
Now, let us acknowledge that ``privatizing'' Social
Security is not what Mr. Moynihan desires. His political goal
is to reform Social Security just enough to be able to save
its universal guarantee. He fears, sensibly enough, that if
liberals oppose any change they may find the debate has moved
on without them. ``The veto groups that prevented any change
in the welfare system,'' he says, ``looked up one day to find
the system had vanished.''
No doubt many conservatives will want to go much further
than the New Yorker, us among them. If investing 2% of the
payroll tax rate is desirable, why not more? Workers ought to
be able to decide for themselves if they want to trade lower
taxes now for a lower Social Security payment at retirement.
We also disagree with Mr. Moynihan on some of his details.
To defray the cost of reducing the payroll tax, he would
increase the amount of wages subject to that tax--from
$68,400 now to $97,500 by 2003. This is a large increase in
the marginal tax rate for many taxpayers that would defeat
reform's very purpose. He'd also raise the payroll tax rate
down the line as the Boomers retire--something that needn't
happen if the reform were more ambitious than the Senator
says he wants.
Yet for all of that, Mr. Moynihan moves the debate in the
direction of more individual control and more market sense.
Along with his pal and co-sponsor, Nebraska's Bob Kerrey, he
has broken with liberal orthodoxy. Maybe their daring will
even give courage to Republicans.
Mr. ALLARD. Mr. President, I would like to respond briefly to the
senior Senator from New York. I compliment him on his leadership on
this particular issue. Obviously, those of us who are just new to the
Senate appreciate the background and wealth of information that he
brings to this issue and actually look forward to working very closely
with him on these issues. A lot of what he says I agree with, and I
think it is an issue that needs to be addressed today. With people like
the Senator from New York working on this problem, I feel even more
confident we will be able to address the problem in the near future.
The PRESIDING OFFICER. Under the previous order, the Senator from New
York, Mr. Moynihan, and the Senator from Nebraska, Mr. Kerrey, will
have 30 minutes to speak.
Mr. MOYNIHAN. Mr. President, I suggest the absence of a quorum
awaiting the arrival of Senator Kerrey.
The PRESIDING OFFICER. The clerk will call the roll.
The bill clerk proceeded to call the roll.
Mr. MOYNIHAN. Mr. President, I ask unanimous consent that the order
for the quorum call be rescinded.
The PRESIDING OFFICER. Without objection, it is so ordered. The
Senator from New York is recognized.
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