[Congressional Record Volume 145, Number 38 (Wednesday, March 10, 1999)]
[Extensions of Remarks]
[Page E381]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




                    DON'T BLOW AWAY SOCIAL SECURITY

                                 ______
                                 

                          HON. BERNARD SANDERS

                               of vermont

                    in the house of representatives

                       Wednesday, March 10, 1999

  Mr. SANDERS. Mr. Speaker, I would like to call your attention to an 
article printed in the March edition of the Labor Party Press, and ask 
that it be printed in the Congressional Record for my colleagues' 
benefit:

                  ``Don't Blow Away Social Security''

       There is no Social Security crisis. But if Democrats and 
     Republicans get their way and privatize the system, there 
     will be.
       ``It's weird,'' says economist Dean Baker of the Preamble 
     Center, who has been studying and writing about Social 
     Security reform. ``We're all looking at the same numbers, and 
     what the numbers say--even the pessimistic ones--is that we 
     could take absolutely no action on Social Security for the 
     next 34 years, and the program would continue to pay out all 
     its benefits.'' And yet, politicians of both parties are all 
     aflutter about the need to radically reform Social Security 
     right away.
       The picture they paint does sound grim. Mostly because 
     people are living longer, today's workforce is supporting a 
     greater and greater number of Social Security recipients. And 
     the trend will probably continue. In 1995, there were nearly 
     five people under 65 for every one person over retirement 
     age. But by 2030, the ratio will be more like three workers 
     for every retiree. And since Social Security is actually a 
     pay-as-you-go system--current workers pay for current 
     retirees--that spells trouble. (See ``Social Security 
     Basics'' on page 4.) For the time being, we can supplement 
     the shortfall by drawing from the extra pot of money the 
     Social Security system has amassed (the Social Security Trust 
     Fund). But then, in 2034, according to some projections, that 
     fund will be depleted, and Social Security money will have to 
     come from active workers alone. And, under the current 
     formula, they would only be able to cover about 75 percent of 
     the benefits retirees had been promised from Social Security.
       President Clinton and members of Congress say ``saving'' 
     Social Security is at the top of their agenda (after 
     impeachment, of course). Many recipes have been written for 
     rescuing Social Security. The most extreme plans involve 
     privatization. Some people want the Social Security payroll 
     withholding to go into our own ``personal security account'' 
     that we can invest ourselves. Less radical plans would allow 
     the Social Security Trust Fund to be invested in the stock 
     market, where it would supposedly get a higher return than 
     where it is invested now, in U.S. Treasury bonds.
       President Clinton favors a combination of both ideas. He 
     wants to invest part of the Social Security Fund (eventually 
     up to 15 percent of it) in the stock market. He also proposes 
     setting up voluntary new private accounts for middle- and 
     low-income Americans--but outside the Social Security system.
       At a time when the stock market is in the stratosphere, 
     record numbers of Americans are investing, and the airwaves 
     are full of experts advising the general public on how to get 
     the best return, the idea of turning Social Security into a 
     personal Wall Street investment portfolio is appealing to a 
     lot of people.
       But not everybody's sold on the idea. To begin with, many 
     people question whether there even will be a Social Security 
     shortfall. They argue that the Social Security hullabaloo is 
     all based on some very gloomy economic projections made by 
     Social Security trustees. In their reports, the trustees 
     assume that over the next 75 years, the U.S. economy will 
     grow at less than half the rate it has grown for the past 75 
     years. According to a report by the New York-based Century 
     Foundation, an increase in annual economic growth of just .15 
     percentage points over the next 35 years would raise output 
     by as much as the combined increase in the cost of both 
     Social Security and Medicare. Meaning: Workers of the future 
     may have no trouble supporting the growing ranks of the 
     retired.
       And yet, our politicians have managed to convince a 
     majority of Americans that there really is a crisis at hand. 
     Polls of younger Americans show that many believe they can 
     expect little or no money from Social Security when they 
     retire (unless, perhaps, the system is radically changed).
       So who started this rush for a ``solution'' to the Social 
     Security ``crisis''? Follow the money. Wall Street could 
     stand to gain $240 billion in fees within the first 12 years 
     of a privatized system, according to economist Christian 
     Weller. That, he points out, is enough to give 20,000 fund 
     managers an annual salary of $1 million each. No wonder the 
     financial industry has spent millions of dollars of late to 
     promote the idea of Social Security privatization.
       Economist Dean Baker believes there's a deeper motive 
     behind the privatization push: ``I think much of this is 
     being driven by people who are just plain anti-government,'' 
     he says. ``And Social Security is the government's flagship 
     social program.''
       It may be, says Baker, that some minor adjustments will 
     need to be made to allow the Social Security system to 
     continue in good health. (See the sidebar on ``What We Should 
     Do.'') But privatizing the system and investing Social 
     Security money in the stock market is not the way to go. In 
     fact, he believes, it would take the ``security'' out of 
     Social Security. Most of us would see our retirement incomes 
     dramatically reduced.

     

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