[Congressional Record Volume 145, Number 40 (Monday, March 15, 1999)]
[Senate]
[Pages S2648-S2651]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]

      By Mr. HOLLINGS:
  S. 605. A bill to solidify the off-budget status of the old-age, 
survivors, and disability insurance program under title II of the 
Social Security Act and to protect program assets; to the Committee on 
the Budget and the Committee on Governmental Affairs, jointly, pursuant 
to the order of August 4, 1977, with instructions that if one committee 
reports, the committee have 30 days to report or be discharged.

[[Page S2649]]

             social security fiscal protection act of 1999

  Mr. HOLLINGS. Mr. President, on tomorrow afternoon, we begin to mark 
up the budget. That is, when I say we, I mean that the Budget Committee 
on the Senate side meets to mark up the budget for the year 2000 
commencing October 1 this year, and immediately we will hear the cry, 
``Surplus.''
  I am constrained to say--as in the earliest days of the Republic when 
Patrick Henry said, ``Peace, Peace, everywhere men cry peace,'' and 
there was no peace--``surplus, surplus, everywhere men cry surplus,'' 
but there is no surplus.
  The fact is that we are spending $100 billion more than we are taking 
in already this fiscal year, and under current policy the deficit for 
next year will be right at $90 billion.
  Also, Mr. President, another thing to note is the fact that you are 
going to hear the cry, ``Saving Social Security.'' I can tell you 
categorically that neither the Republican plan, policy or approach nor 
the Democratic White House plan, policy or approach will save Social 
Security. Both spend 100 percent of the Social Security moneys coming 
in the fiscal year 2000, as is the case already this year. And 
otherwise, all the wonderful talk about paying down the debt is nothing 
more than fancy rhetoric for a flawed policy that has got us into a 
situation of fiscal cancer.
  Now let me go right to the meaning of ``Surplus.'' Yes, we are making 
progress on the budget and the deficit. At a news conference earlier 
today I was asked about this and when did we ever expect to get some 
results. Well, I see that we are beginning to understand that there is 
no surplus. Most of the nation's astute commentators on the budget see 
this, too. Allan Sloan of Newsweek said, of course, that the 
President's plan was double accounting. Paul Samuelson talks about when 
they said ``surplus,'' it was ``surplus in the sky.'' The Concord 
Coalition, made up of our former colleagues, Senators Rudman and Nunn, 
with whom I have had an on-going engagement, finally says there is no 
surplus. And only two weeks ago Barron's, the conservative financial 
newspaper--which I hold it here--said: ``Hey, Guys, There is no Budget 
Surplus.''
  But be that as it may, the White House and many members of Congress 
are going to start dealing around the so-called surplus, nonexistent 
that it is, for education, Medicare, tax cuts, anything and 
everything--everything but saving Social Security. It has been a 
constant charade on messages of the party caucuses on both sides since 
January, even during the impeachment days; we have got to get our 
message out. Unfortunately, most of the media falls right in line with 
the message. They don't look into the actual fact or the reality.
  On the matter of the so-called surplus and the $100 billion that we 
are spending now: mind you me, Mr. President, we set spending caps year 
before last, and last year we broke the caps by $12 billion, and we 
have already broken the cap in this year's budget by $21 billion, which 
would mean in marking up 2000's budget we would immediately have to cut 
spending $33 billion to conform to the fiscal year 2000 budget cap.
  Instead of doing that, we have already met in unison, almost like a 
chorus singing ``Whoopee for the military,'' and we have spent $18 
billion on the military, money which is unaccounted for. Instead of 
cutting back, the Senate has already exceeded the agreed-to caps by $18 
billion. Unless, of course, they intend to cut $18 billion in domestic 
programs or cut $18 billion in operation, maintenance and readiness 
within the defense budget.
  We are going in the wrong direction. No one should think that Social 
Security has a surplus. This fiscal year, we have a surplus of the 
amount required to be paid out, but since we have been spending it each 
year there is a $730 billion deficit due and owing. Social Security is 
in the red.
  So there are no surpluses. Even trying to get around that to try to 
get something to politic on for this year and next year, the Campaign 
2000, they say, ``Well, wait a minute; we will start our tax cuts in 
the year 2002 when there is one document to the effect there might be a 
slight surplus in Social Security, over and above the Social Security 
amount or otherwise we can spend it on Medicare beginning in 2000''--
anything for the Campaign 2000.
  They talk in the Chamber about the Chinese. Come, come, come. It is 
not the Chinese. It is not the baby boomers in the next generation. It 
is the adults in Congress who are looting the Social Security trust 
fund. Each one of these particular plans spends 100 percent of the 
Social Security so-called surplus.
  How do I say that? Well, it is easy. You go back into the original 
law--and I have a copy of the law itself--section 201.
  I ask unanimous consent to have that printed in the Record.
  There being no objection, the material was ordered to be printed in 
the Record, as follows:

      The Social Security Act (Act of August 14, 1935) [H.R. 7260]


       Title II--Federal Old-Age Benefits Old-Age Reserve Account

       Section 201. (a) There is hereby created an account in the 
     Treasury of the United States to be known as the Old-Age 
     Reserve Account hereinafter in this title called the Account. 
     There is hereby authorized to be appropriated to the Account 
     for each fiscal year, beginning with the fiscal year ending 
     June 30, 1937, an amount sufficient as an annual premium to 
     provide for the payments required under this title, such 
     amount to be determined on a reserve basis in accordance with 
     accepted actuarial principles, and based upon such tables of 
     mortality as the Secretary of the Treasury shall from time to 
     time adopt, and upon an interest rate of 3 per centum per 
     annum compounded annually. The Secretary of the Treasury 
     shall submit annually to the Bureau of the Budget an estimate 
     of the appropriations to be made to the Account.
       (b) It shall be the duty of the Secretary of the Treasury 
     to invest such portion of the amounts credited to the Account 
     as is not, in his judgment, required to meet current 
     withdrawals. Such investment may be made only in interest-
     bearing obligations of the United States or in obligations 
     guaranteed as to both principal and interest by the United 
     States. For such purpose such obligations may be acquired (1) 
     on original issue at par, or (2) by purchase of outstanding 
     obligations at the market price. The purposes for which 
     obligations of the United States may be issued under the 
     Second Liberty Bond Act, as amended, are hereby extended to 
     authorize the issuance at par of special obligations 
     exclusively to the Account. Such special obligations shall 
     bear interest at the rate of 3 per centum per annum. 
     Obligations other than such special obligations may be 
     acquired for the Account only on such terms as to provide an 
     investment yield of not less than 3 per centum per annum.
       (c) Any obligations acquired by the Account (except special 
     obligations issued exclusively to the Account) may be sold at 
     the market price, and such special obligations may be 
     redeemed at par plus accrued interest.
       (d) The interest on, and the proceeds from the sale or 
     redemption of, any obligations held in the Account shall be 
     credited to and form a part of the Account.
       (e) All amounts credited to the Account shall be available 
     for making payments required under this title.
       (f) The Secretary of the Treasury shall include in his 
     annual report the actuarial status of the Account.

  Mr. HOLLINGS. Mr. President, I will send that momentarily to the 
desk, section 201 of the Social Security Act. Under section 201 of 
Social Security, we required at this moment--and have been doing so for 
years--under law to invest only and immediately in T-bills, Treasury 
bills, these special securities of the Federal Government. Once we do 
that, of course, we get a bond or IOU; the Government gets the money, 
and immediately all of those moneys are transferred to the Government 
account and it is spent, allocated, or used to pay down the so-called 
public debt.
  The one way to stop that is a bill, which I will send to the desk and 
for which I request proper referral. Mr. President, this bill simply 
says, amongst other things--and I will read section 5--that:

       Notwithstanding any other provision of law, throughout each 
     month that begins after October 1, 1999, the Secretary of 
     Treasury shall maintain, in a secure repository or 
     repositories, cash in a total amount equal to the total 
     redemption value of all obligations issued to the Federal 
     Old-Age and Survivors Insurance Trust Fund and the Federal 
     Disability Insurance Trust Fund pursuant to section 201(d) of 
     the Social Security Act that are outstanding on the first day 
     of each month.

  Advisedly, Mr. President, this was worked out by none other than my 
Social Security friends. At one time, I had the distinction of being 
the chairman of the Budget Committee. We had an outstanding staffer 
then named Ken Apfel. He is now the Social Security Administrator. I 
called over there and I said: Let's stop this roundabout dance

[[Page S2650]]

about surpluses and spending all the money and everything else; I want 
you to write a provision whereby we can do exactly what we said when 
Congress passed the Social Security Act.
  Remember old John Mitchell, under the Nixon administration? He said, 
``Watch what we do, not what we say.'' I am afraid on budget matters we 
have arrived exactly at that point. But, in any event, to do what we 
say, we have prepared this bill and now it has been introduced and, if 
passed by the Congress, yes, we will save Social Security.
  Immediately, one of the distinguished Senators said, ``Wait a minute. 
Is the money going to just sit there?''
  No. Mr. President, that money will be invested in T-bills, just as it 
has been all these years. Or, if there is an additional plan, like the 
Kerrey-Moynihan plan, like our Thrift Savings Plan--a certain 
percentage invested in the market in order to make more money but take 
on more risk--we can debate that. What this particular bill really does 
is save Social Security. Social Security funds will not be spent, save 
and excepting on Social Security purposes.
  This is exactly what was intended by Mr. Greenspan when he headed the 
Greenspan Commission in 1983. In 1983, section 21 of the Greenspan 
Commission report said to take Social Security outside of the unified 
budget, outside of the unified deficit, and set it aside in trust. I 
struggled from 1983 until 1990 to translate Chairman Greenspan's 
recommendations into law. I thought we had done it in 1990, when we 
passed the Budget Act by a vote of 98 Senators here on the floor of the 
Senate and almost an equal majority, overwhelming as it was, over on 
the House side. President Bush, on November 5, 1990, signed the bill 
into law, including section 13301 of the Budget Act, which stated 
Congress could not spend Social Security moneys on anything other than 
the Social Security program; you had it outside of the unified budget 
and the deficit.
  Unfortunately, Mr. President, that has been ignored. That is why I 
have to reword it this way. But the contemplation at the particular 
time, the law itself, the policy of the U.S. Government with respect to 
corporate America--we passed the Pension Reform Act of 1994 saying: 
Thou shalt not, in corporate America, spend your pension fund to pay 
off the company debt.
  The most interesting and ironic thing is, when Denny McLain, the 
former great pitcher for the Detroit Tigers, became the head of a 
corporation and paid off its debt with the pension fund, he was sent to 
jail for 8 years. If you can find what jail poor Denny is in, say to 
him, ``Denny, next time, run for the U.S. Senate. Instead of a jail 
term, they will give you the good government award.''
  That is exactly what we are doing. We violate our own policy. We pay 
off the debt with the Social Security Trust Fund and have been doing it 
for 15 years.
  That gets me immediately to the point of so-called paying off the 
public debt. You know, they have these euphemisms and different 
expressions that come around budget time and make you think you have a 
real policy on board. That has been the policy.
  Admittedly, if you had a stagnant economy, if you had a dormant stock 
market, you could welcome paying off the public debt to get the economy 
and the stock market moving and everything else. But to do it, not over 
just a year or 2, but to do it for the last 15 years to the tune of in 
excess of $100 billion, what it has really done is given us fiscal 
cancer. We have gone up, up, and away with the national debt, and the 
interest costs are killing us.
  Let me dwell a minute on the interest costs on the national debt. The 
interest cost, when President Lyndon Johnson last balanced the budget, 
was $16 billion. Today the interest cost is projected to be $357 
billion, almost a billion dollars a day. What it says to me is, this 
year I have to spend--and next year I have to spend--$357 billion for 
nothing. If I had been fiscally prudent, I could have had $80 billion 
for tax cuts plus $80 billion for spending increases plus $80 billion 
to pay down the debt plus $80 billion to save Social Security. That is 
$320 billion. I would have had $37 billion for you to have a party out 
here on the west front when I jump off the Capitol dome.
  Since 1995, I have been telling Chairman Domenici, trying to bring 
sense to this entire budget debate by talking in the extreme, that by 
the year 2002, if he had a balanced budget, truly balanced--if we were 
paying out less than what we were bringing in or just at that amount--I 
would jump off the Capitol dome. And I reiterate the pledge. Let's make 
the bets--``Get old Hollings to jump off the dome.'' Because under 
current policies, no one can possibly balance the budget while 
exceeding revenue by over $100 billion. Nobody is cutting $100 billion. 
They are spending $18 billion more unaccounted for, breaking the caps. 
Nobody is spending less than $90 billion. So we know with all of this 
spending for tax cuts, Medicare, education, housing, and everything 
else of that kind, that we are in deep trouble.
  We have fiscal cancer. What we really should do, probably, as Mr. 
Greenspan, the head of the Federal Reserve, finally came around to 
saying, is do nothing: take this year's budget for next year. I did 
that as the Governor of South Carolina. I capped the debt. By the way, 
that would bring truth in budgeting to this crowd, if they are right. 
Let's plead guilty: They are right, I am wrong, there is a surplus and 
we are going to pay down the debt. If that occurs, we can cap the debt 
as of October 1 of this year, the beginning of the next fiscal year. 
Whatever it is, since there is a surplus and since we are going to pay 
down the debt, let's cap it so it does not exceed that particular 
amount.
  You cannot get the White House--I faced them down in one of these 
briefings--to go along with it. I will make the motion and we will see 
how many people vote for that.
  I am trying to bring truth to our federal budget. I am trying to 
avoid the fiscal cancer. The Republicans talk about an $80 billion 
across-the-board tax cut. I want a $357 billion tax cut this year, next 
year, and right along the line. I want, in that 10-year period, $3.5 
trillion in tax cuts, not just this $800 billion tax cut. I want to get 
rid of this waste in Government.
  I served on the Grace Commission to Eliminate Waste. I know what 
waste is. I speak advisedly. Before long, if those interest rates go 
up, instead of $357 billion, we will be up around $500 billion in 
interest costs. It is the largest item in the domestic budget for 
spending at this minute.
  What we ought to do is get a hold of ourselves, start talking sense 
to each other, work out a plan to take care of the needs of Government, 
but quit using the Social Security surplus and trust fund as a 
political slush fund for any and every idea on the media message. And 
the media are going along with this nonsense and act like we actually 
are doing it. My particular bill will bring sobriety to the entire 
process and debate.
  Mr. President, I ask unanimous consent that the bill be printed in 
the Record.
  There being no objection, the bill was ordered to be printed in the 
Record, as follows:

                                 S. 605

       Be it enacted by the Senate and House of Representatives of 
     the United States of America in Congress assembled,

     SECTION 1. SHORT TITLE.

       This Act may be cited as the ``Social Security Fiscal 
     Protection Act of 1999''.

     SEC. 2. OFF BUDGET STATUS OF SOCIAL SECURITY TRUST FUNDS.

       Notwithstanding any other provision of law, the receipts 
     and disbursements of the Federal Old-Age and Survivors 
     Insurance Trust Fund and the Federal Disability Insurance 
     Trust Fund shall not be counted as new budget authority, 
     outlays, receipts, or deficit or surplus for purposes of--
       (1) the budget of the United States Government as submitted 
     by the President,
       (2) the congressional budget, or
       (3) the Balanced Budget and Emergency Deficit Control Act 
     of 1985.

     SEC. 3. EXCLUSION OF RECEIPTS AND DISBURSEMENTS FROM SURPLUS 
                   AND DEFICIT TOTALS.

       The receipts and disbursements of the old-age, survivors, 
     and disability insurance program established under title II 
     of the Social Security Act and the revenues under sections 
     86, 1401, 3101, and 3111 of the Internal Revenue Code of 1986 
     related to such program shall not be included in any surplus 
     or deficit totals required under the Congressional Budget Act 
     of 1974 or chapter 11 of title 31, United States Code.

     SEC. 4. CONFORMITY OF OFFICIAL STATEMENTS TO BUDGETARY 
                   REQUIREMENTS.

       Any official statement issued by the Office of Management 
     and Budget or by the Congressional Budget Office of surplus 
     or deficit totals of the budget of the United States 
     Government as submitted by the President

[[Page S2651]]

     or of the surplus or deficit totals of the congressional 
     budget, and any description of, or reference to, such totals 
     in any official publication or material issued by either of 
     such Offices, shall exclude all receipts and disbursements 
     under the old-age, survivors, and disability insurance 
     program under title II of the Social Security Act and the 
     related provisions of the Internal Revenue Code of 1986 
     (including the receipts and disbursements of the Federal Old-
     Age and Survivors Insurance Trust Fund and the Federal 
     Disability Insurance Trust Fund).

     SEC. 5. REPOSITORY REQUIREMENT.

       Notwithstanding any other provision of law, throughout each 
     month that begins after October 1, 1999, the Secretary of the 
     Treasury shall maintain, in a secure repository or 
     repositories, cash in a total amount equal to the total 
     redemption value of all obligations issued to the Federal 
     Old-Age and Survivors Insurance Trust Fund and the Federal 
     Disability Insurance Trust Fund pursuant to section 201(d) of 
     the Social Security Act that are outstanding on the first day 
     of such month.
                                 ______