[Congressional Record Volume 145, Number 148 (Wednesday, October 27, 1999)]
[House]
[Pages H10904-H10905]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




                       SOCIAL SECURITY TRUST FUND

  (Mr. SMITH of Michigan asked and was given permission to address the 
House for 1 minute and to revise and extend his remarks.)
  Mr. SMITH of Michigan. Mr. Speaker, I come to the well of the House 
today with what I consider good news but also maybe some bad news, a 
little bit sweet and a little bit sour.
  The good news is that there is a great deal more attention to the 
serious problem of saving Social Security. The bad news is that we are 
not doing too much about it.
  I was disappointed when the President sent over his proposed 
legislation that in effect says, let us add another IOU promissory note 
to the Social Security Trust Fund. An IOU is, of course, a promise to 
pay in the future. And that is what this would do is say, somehow, some 
way, raising revenues from some source down in future years, Congress 
will come up with the money to keep Social Security going for a little 
while longer.
  Let me, Mr. Speaker, just give a little background on Social 
Security. It was started in 1935. It was a program then and always has 
been a pay-as-you-go program. In other words, existing current workers 
were asked to pay a Social Security tax. That tax came in and was 
immediately sent out to senior citizens, retirees, beneficiaries.
  So today the money comes in one day and by the end of the week it is 
sent out in benefit payments. Right now we are bringing a little more 
in because we have substantially increased the FICA tax, the Social 
Security tax; we are bringing a little bit more money in than is needed 
to pay benefits. That is what is called the Social Security Trust Fund. 
And that is what Republicans, the Democrats and the President have been 
arguing about, should we continue spending that Social Security Trust 
Fund money for other government programs.
  I think now most of us agree, no, that we should not. And the 
challenge is how do we calm the desire of the President and some of the 
spenders in this body that would like to spend more money and yet not 
spend the Social Security Trust Fund reserve.

                              {time}  1530

  That, however, not spending that Social Security trust fund, does not 
solve Social Security. The trust fund, the IOUs in the trust fund, the 
money the government has borrowed in the past, now accounts for 
approximately $800 billion. But when we consider that benefit payments 
are $400 billion a year, that trust fund reserve would not even hardly 
last the full of 2 years. The actuaries at Social Security and the CBO, 
the Congressional Budget Office, estimate that the unfunded liability, 
I will go into detail on those words, but the unfunded liability of 
Social Security is $9 trillion. In other words, if we were to hire a 
private firm and say we want you to continue paying Social Security 
benefits indefinitely, they would say, okay, you have got to give us 
the right to tax all workers 12.4 percent of their taxable payroll, 
plus you have got to give us $9 trillion today to put in an interest-
bearing account so that that will be the only way that we will take on 
as a private sector industry the responsibility of paying Social 
Security benefits in the future. $9 trillion. Compare that with our 
annual budget in this country of $1.7 trillion. It means that we have 
got a long ways to go. It means that Social Security is not solvent and 
cannot continue the way it is currently structured.

[[Page H10905]]

  So back to the good news. The good news is there is more attention to 
it. I say hurrah to the President for the last two State of the Union 
speeches, saying let us put Social Security first and so the Republican 
leadership, the Democrats, all of us in Congress have said, good idea, 
let us put Social Security first but we have not done it yet. We have 
not come up with the kind of proposals that are going to keep Social 
Security solvent.
  Next Wednesday at 11 a.m. in room 210, Mr. Speaker, I will be 
announcing my Social Security bill that does just that. It keeps Social 
Security solvent into the future. It is not easy. To pretend that 
somehow the Social Security trust fund and the promise that government 
has made that it will somehow pay that trust fund money back is going 
to save Social Security is not true. It is not right. It will not work. 
Somehow, we have got to increase benefits for widows and widowers that 
are asked to substantially reduce their money coming in from Social 
Security as they try to survive. I think we are challenged with a 
situation that Congress does not usually react and do something unless 
the people of this country demand that something be done. That has not 
happened yet. There needs to be better information. There needs to be 
more understanding that at risk are future generations and current 
retirees if we do not step up to the plate and solve Social Security 
now.

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