[Congressional Record Volume 144, Number 59 (Tuesday, May 12, 1998)]
[House]
[Page H3029]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




                            SOCIAL SECURITY

  The SPEAKER pro tempore. Under the Speaker's announced policy of 
January 21, 1997, the gentleman from Michigan (Mr. Smith) is recognized 
during morning hour debates for 5 minutes.
  Mr. SMITH of Michigan. Mr. Speaker, I want to talk briefly about 
Social Security. I see a lot of young people in our gallery today, and 
not only for their future, and what might happen in their retirement 
years but all workers today, including all retirees today, need to be 
concerned about Social Security. Let me just give a brief history of 
how we started our Social Security program. In 1935, somewhat after the 
depression, there were a lot of seniors, if you will, going over the 
hill to the poorhouse. A decision was made by the Congress and by the 
President to develop a program where existing workers paid in their 
taxes to pay for the benefits of existing retirees, again, sort of a 
Ponzi game where existing workers paid in taxes. Immediately it was 
sent out to existing retirees.
  It worked very well when it first started because up until, up 
through the late 1930s, there were almost 40 people working, paying in 
their taxes for every one retiree. By 1950, that got down to 17 workers 
paying in their taxes for every one retiree, 1950, 17.
  Today, guess how many workers are working paying in their FICA tax 
for every retiree? Three workers today are working now, paying in their 
taxes for every retiree. Of course, with fewer and fewer workers in 
relation to the number of retirees, the only way to keep enough money 
coming in was to increase the tax on those workers. Here is a statistic 
that should give us some trouble, and that is, since 1971, we have 
increased Social Security taxes 36 times. More often than once a year, 
we have increased that tax on today's workers in order to have enough 
money coming into Social Security to immediately send out to pay the 
benefits that were promised.
  The chart that I show here on my left I have titled Social Security's 
Bleak Future. The little blue segment at the top left shows how much 
extra surplus money is coming into Social Security over and above what 
is immediately paid out. So there is a little surplus. That surplus 
goes into what has been called the Social Security Trust Fund. Not a 
very good name because it is not very trustworthy because what has been 
happening is, Congress and the President have been spending all of the 
extra money from Social Security on other programs. So we pretend it is 
revenue.
  You will hear a lot of bragging that we are going to have a surplus 
this year for the first time in 30 years. Actually, if we consider the 
over $70 billion that we are borrowing from the Social Security Trust 
Fund this year, then we do not really have a surplus.

                              {time}  1300

  I am introducing legislation that does a couple of things. It says, 
from now on, we are not going to pretend that we have a balanced budget 
by including the amount of money that is coming into the Social 
Security trust fund, and it directs the Office of Management and 
Budget, under the President, and it directs the CBO, Congressional 
Budget Office, under Congress, to no longer use in their calculations 
for balance the money that is coming in from the Social Security trust 
fund that is borrowed by the Federal Government to spend on other 
programs.
  I think this is important, simply to increase awareness of how we are 
going to solve the Social Security problem. We can see the dilemma. 
When we get to the year 2015, 2018, this chart, in today's dollars, by 
2010 it will cost $100 billion. The general fund is going to have to 
come up with $100 billion, way up in this area of the chart, to satisfy 
benefit needs. But if we use the dollars that will exist because of 
inflation in 2018, then it is going to take $600 billion out of the 
general fund, or additional borrowing, to pay back the Social Security 
trust fund what is owed to it. So I say it is very important that we 
move ahead now to solve the Social Security trust fund.
  The bill that I am introducing does a second thing that I think is 
reasonable. It says, from now on, instead of using IOUs that are not 
negotiable, not marketable, from now on anything that the government 
borrows from the Social Security trust fund has to be a marketable 
Treasury bill. In other words, the trustees can take it around the 
corner and cash it in whenever they need it.
  Let us be honest, let us be fair, let us move ahead with a solution 
to Social Security.

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