[Congressional Record Volume 145, Number 102 (Monday, July 19, 1999)]
[Senate]
[Page S8777]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




                            SOCIAL SECURITY

  Mr. THOMAS. Mr. President, I want to talk about a bill introduced on 
Friday on Social Security in which I and other sponsors were involved. 
I mention it because it seems to me that it is one of the issues that 
is most important. I just came back from Wyoming, and I talked with 
folks about issues. Social Security is one of those that is, of course, 
a top priority.
  Obviously, most everyone knows Social Security has to be changed if 
we are to fulfill the goals all of us want, and that is to protect 
Social Security for those who are now beneficiaries, to keep it going 
for those who are now paying in and will pay in for many years and can 
then expect to be beneficiaries. Those are the things that have to 
happen, and there have to be changes to cause that to happen.
  We have a rapidly aging population. When we started Social Security, 
there were some 30 people working for every one who was drawing 
benefits. An individual paid $30 a year into Social Security in the 
1930s. Then we got to where there were five people working for every 
one who was a beneficiary. Now I believe it is less than three, and we 
will soon be to the point where there will be one individual working 
for every one person drawing benefits. We have to make changes. Of 
course, people are living longer, so that also brings new demands on 
the programs.
  What are the options? There are several that are fairly obvious, some 
of which are not particularly popular. A tax increase: We already pay 
12.5 percent of what we make into Social Security. That is a rather 
high percentage. For many people that is the largest tax they pay. So 
tax increases are not particularly a good option.

  We could cut benefits. I do not think people generally want to cut 
benefits. There may be some changes made in benefits because people are 
living longer and there are changes in our lives.
  The third alternative is one which I think probably has the most 
appeal, and that is to get a higher rate of return on the money we are 
putting into Social Security and have been putting into it for some 
time. That is the part of the bill we have introduced.
  It is a bicameral, bipartisan bill that enhances the program through 
private accounts. It will take a portion of the money you and I put 
into Social Security--I believe it is about 2 percent of the 12.5 
percent--and that becomes a personal account for each person. It can be 
invested then at the direction of that account owner. It can be 
invested in equities, stocks, it can be invested in bonds, or it can be 
invested in a combination of those things. It will be invested by a 
private investor such as the Federal employees program is now. You will 
have a broad choice. The owners will not be doing the investing, but 
they will be choosing the kinds of investment they want.
  This can then accumulate as a nest egg for the owner. If the owner is 
unfortunate not to live long enough to receive the benefits that will 
accrue to his or her estate, it will be the owner's.
  We have been talking a lot about a safety box, some way to take the 
money that comes in to Social Security and ensure it is used for that 
purpose and not spent for some other purpose or not loaned to the 
general fund. This probably and certainly is the best way to do that.
  I make the point that we are not looking at total privatization. Some 
people accuse us of that. That is not the case. It is a partial 
privatization. It puts money in so it can earn more than it has earned 
in the past. As most people understand, excess in the trust funds now 
has to be invested in Government securities. It has a relatively lower 
return, lower than if you and I invested those securities. This is a 
change for improvement.
  We need to work on the lockbox. We tried five times to pass the 
lockbox legislation to have some way to ensure Social Security funds 
coming in are not expended for other things, and that they are, indeed, 
kept for the purpose of maintaining and strengthening Social Security. 
That is what we want to do.
  There are some other good features of the plan. It is more 
progressive. It guarantees larger benefits for low-income workers. It 
increases widow benefits, which has been unfair in the past. It repeals 
earnings limitations, if you are a beneficiary and choose to continue 
to work. In, in fact, there are several incentives for continuing to 
work. Since people are living longer and are healthier, there is more 
reason and opportunity and willingness to work.
  This bill is designed to protect current retirees. Current 
beneficiaries will not be affected by the changes. It is aimed 
primarily at young people who are beginning to pay into the program. 
Almost all young people 20 years old say: We probably won't get 
anything out of this; all we will do is pay. That is very unfair, and 
we can change that.
  There is a great deal of talk about doing something with Social 
Security, but, frankly, the administration and our friends on the other 
side generally have not come up with a plan. Now we have a bipartisan 
plan which is before the Senate. We can do something that will make the 
changes we propose to make and which are good for the American people.

  Mr. President, I yield the floor.
  Mr. GRASSLEY addressed the Chair.
  The PRESIDING OFFICER. The distinguished Senator from Iowa is 
recognized.
  (The remarks of Mr. Grassley pertaining to the introduction of S. 
1390 are located in today's Record under ``Statements on Introduced 
Bills and Joint Resolutions.'')
  Mr. GRASSLEY. I yield the floor and suggest the absence of a quorum.
  The PRESIDING OFFICER (Mr. Thomas). The clerk will call the roll.
  The legislative clerk proceeded to call the roll.
  Mr. DOMENICI. 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. DOMENICI. Mr. President, what is the pending business?

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