[Congressional Record Volume 146, Number 31 (Monday, March 20, 2000)]
[Senate]
[Pages S1461-S1463]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]

      By Mr. GREGG (for himself, Mr. Kerrey, Mr. Breaux, and Mr. Bayh):
  S. 2249. A bill to amend title VII of the Social Security Act to 
require the Commissioner of Social Security to provide Congress with an 
annual report on the Social Security program, and for other purposes; 
to the Committee on Finance.

[[Page S1462]]

         the social security reporting improvements act of 2000

  Mr. GREGG. Mr. President, I want to speak today about the issue we 
are going to take up tomorrow, the Social Security earnings limitation, 
and the fact that we are going to pass a bill tomorrow which will 
eliminate a limitation on the ability of people once they retire to 
make money independent of Social Security benefits they receive and not 
have their Social Security benefits reduced.
  Under present-day law, unfortunately, a retired individual--or not 
even retired person, a person who has reached eligibility age for 
Social Security benefits--the age for eligibility retirement is really 
the wrong term to apply to that individual. That person is penalized if 
he goes out and gets a job because his benefits under Social Security 
are reduced if he makes a certain amount of money under that job.
  That is wrong. It is something I have tried to correct, and a number 
of Members of this Senate have tried to correct, for a number of years.
  I have a bill, cosponsored by Senators Kerrey, Breaux, Grassley, 
Thompson, Robb, and Thomas. It is a very bipartisan bill, obviously, 
and is strongly supported by many of the Members on the Finance 
Committee. That bill is, in substance, a reform bill for the entire 
Social Security system to allow us to have a Social Security system 
which is solvent for the next 100 years. It is a creative and 
imaginative piece of legislation, and it accomplishes that growth which 
is to create solvency in the Social Security system over the next 100 
years and do it without raising taxes.
  One of the elements of that bill is the repeal of the earnings 
limitation. It has been something I have supported and I have backed up 
with legislative language, cosponsored by myself, as I mentioned, and 
also by other Members of the Senate. Over the years, we have worked in 
this area. It is a very appropriate area to go into. However, tomorrow 
when we take up the bill for repealing the earnings limitation, we are 
going to take it up as sort of an isolated event. We are not taking it 
up very much as an isolated event but as part of a Social Security 
reform package. I guess that is where I have my concern, because we 
know the Social Security system, although solvent today and running 
very large surpluses, is headed towards the disastrous crash.
  When the baby boom generation, the Bill Clinton generation, arrives 
at retirement, which starts in the year 2008 and accelerates 
aggressively so that by the year 2014 we actually are running a cash 
deficit within the Social Security system, we will have so many people 
retired in this country during the post-2008 period that we will have 
too many people retired for the younger generation to be able to 
support them effectively under the present structure of the Social 
Security system.
  It will cost the next earnings generation--that generation who are my 
children, the children of the Members of this Senate, and their 
children's children--over $7 trillion in general fund revenues. We are 
not talking about Social Security taxes; we are talking about general 
fund revenues over the period from 2014 to 2034. It will cost $7 
trillion of general fund revenues to keep the Social Security system 
solvent.
  What does $7 trillion in general fund revenues mean? That means there 
will have to be tax increases of $7 trillion in order to pay for those 
benefits, or, alternatively, we will have to cut them.
  Some of us have said let's not force this crisis on the next 
generation, let's not turn to our children and say, Here is the 
problem; we are going to give it to you. Many of us have said let's 
look at the problem today and try to solve it, let's try to put in 
place systems that will allow us to build up a process which will 
protect our children from having to face the catastrophe of having to 
support our generation in retirement at levels which they could not 
possibly afford to support and which would put an undue burden on the 
next generation in the area of tax increases.
  We have put together substantive pieces of legislation. The one I 
mentioned, for example, the Gregg-Kerrey-Breaux-Grassley-Thompson-
Thomas-Robb--Senator Roth is also on that--is one of the proposals.
  There is another bill in the House called Kolbe-Stenholm, an 
aggressive piece of legislation. Senator Moynihan has a piece of 
legislation. Senator Gramm from Texas has a piece of legislation. The 
chairman of the House Ways and Means Committee, Congressman Archer, and 
Congressman Shaw have proposals. Congressman Kasich and Congressman 
Smith have proposals.
  There are a lot of proposals out there. Many of them are very 
substantive and thoughtful. I would like to think ours is. Almost all 
of them will do a lot more than we are doing today trying to put in 
place and under control a system that will address the Social Security 
problem as it is facing us and as it is facing the next generation.
  I see the pages down here. These folks are going to end up paying a 
huge bill as a result of our inaction today in Congress. It is not fair 
and not right for us to put the next generation in this position.

  As we take up the earnings limitation repeal tomorrow, it is 
necessary and appropriate. It is something we should do. But we should 
be much more aggressive on this issue. We should be addressing the 
fundamental problems that are facing us in the Social Security system, 
the most fundamental of which is that it is an unfunded liability.
  Essentially, the Social Security system says we promise you, the baby 
boom generation, all of these benefits. But we don't do anything about 
getting the baby boom generation into a position where we can pay those 
Social Security benefits. Rather, we go on a pay-as-you-go basis. One 
dollar taken in today is paid out today, or spent on some other 
operation of government today. So when the baby boom generation 
retires, there are no dollars available for them to support their 
benefit structure.
  We ought to address that. The best way to address it is to do 
something which will be called prefunding liability. That is probably a 
technical term which is sort of lost in its translation. It basically 
means giving people savings, assets, and gives people something they 
can physically own and possess, so that when they retire, they will 
have assets they can use to pay for their retirement benefits under the 
Social Security system.
  In our proposal, this is called a personal savings account. 
Essentially, we reduce the payroll tax today. We say let's reduce the 
payroll tax today because it is running a surplus, take that money we 
save on payroll taxes and give it to all of the Social Security earners 
today, and allow those Social Security earners to save that money for 
themselves. So that by the time they retire, they will have a nest egg, 
a physical nest egg that is based in stocks, Treasury notes, and bonds, 
which will be available to them to spend on their retirement. It is 
called free-funding liability, so their actual assets are there when 
they retire. They actually physically own something they can use to 
benefit them in their retirement and to support the costs of their 
retirement structure in Social Security.
  That is the essence of what we propose in our bill--to prefund the 
liability through personal savings accounts. It is an idea for which 
the time appears to be coming.
  I notice Governor Bush is talking about this aggressively. Other 
people who are running for the Presidency are talking about this 
aggressively. Regrettably, this administration has not been willing to 
talk about this aggressively. This administration has walked away from 
the opportunity to fundamentally reform and improve Social Security so 
we can past on to our children a solvent system instead of passing on 
to them an insolvent system.
  I and a number of Members on the other side of the aisle have great 
frustrations. I know Senator Kerrey from Nebraska has on numerous 
occasions--and will tomorrow, I suspect, when he offers his amendment--
expressed the frustration he feels and many of us feel about the fact 
we are unable to get White House leadership on this critical issue of 
moving forward Social Security reform so the next generation isn't 
passed a sour lemon but is given an opportunity to have a lifestyle 
that is equal to ours, or hopefully significantly better, and isn't 
instead passed a huge bill from our generation that they have to pay 
off in order to support our generation's retirement. I believe

[[Page S1463]]

this administration refuses to take any aggressive action in this area 
for political reasons because they want to keep the issue alive for the 
next election cycle.

  Clearly, there is bipartisan support in the Senate. As I mentioned, 
the Members of the Senate supporting the bill are Senator Kerrey, 
Senator Breaux, and Senator Grassley--a bipartisan group. Their 
philosophies are significantly different. We could build a coalition in 
this Senate to pass substantial Social Security reform which would make 
the system solvent for the next 100 years without raising taxes on the 
next generation.
  If we could get leadership and assistance from the White House, we 
could do that. Unfortunately, we have not gotten that. Instead, we are 
getting one little snippet of the Social Security issue, the earnings 
limitation test. It has been passed by the Senate, passed by the House, 
and the President says he will sign it if it is a clean bill.
  What is the effect of taking up one little part of the whole puzzle? 
This happens to be a part of the puzzle that ends up costing more money 
to the system. In other words, when we repeal the earnings limitation, 
we end up actually putting the system in a less financially sound 
position than it is today. It is an appropriate thing to do because the 
earnings limitation is bad public policy. We should not be saying to 
senior citizens: You shouldn't go out and work; or, if you do work, we 
will reduce your Social Security benefit.
  That is bad policy, especially bad policy when we have a potentially 
large soon-to-retire generation, the baby boom generation. When our 
generation retires, as a nation we are going to need to keep people 
working even though they may be retiring. We won't have enough workers 
in this country. That is going to be a demographic fact.
  The earnings limitation is bad policy. It has a negative impact on 
Social Security long-term solvency. It aggravates the problem for the 
next generation by repealing it as a freestanding event. It should, 
rather, be repealed in the context of an overall reform effort. By 
doing that, we can adjust for the fact that this may negatively impact 
the financial situation of the Social Security system, while other 
things could positively impact it, and we can weigh them off.
  But we are not going to do that. We are doing just Social Security 
limitations. If that is all we can do, that is what we should do. But 
we should be honest with the American people. We should tell them what 
the effect of it will be. More importantly, we should tell them the 
present status and the future status of the Social Security trust 
funds. We shouldn't continue this babble about how solvent the Social 
Security trust fund is. Although it is running a surplus today, it is 
as predictable as night follows day, as the sun rises in the east and 
sets in the west, it is an absolute known fact that beginning in the 
year 2008, as the large baby boom generation retires, we are going to 
see the system head toward massive insolvency if we don't have massive 
tax increases or major benefit cuts.
  We ought to tell the American people so they know it is coming and 
they can plan. If the Congress isn't going to plan, if the White House 
isn't going to plan, at least give the American people the information 
they need to plan.
  I hope to have this bill agreed to because I think it is reasonable. 
I am introducing a proposal which was essentially the proposal put 
forward in November 1999 by the Technical Panel On Assumptions and 
Methods of the Social Security Advisory Board. It is a professional 
group, an independent bipartisan group set up by the Social Security 
trustees for the purpose of reviewing what should be done with the 
Social Security system. This Technical Panel on Assumptions and Methods 
of the Social Security Advisory Board put out a series of 
recommendations regarding information that should be available in plain 
English--they stress ``in plain English''--to the American people. I 
have suggested we amend this effort by putting in place that 
recommendation, have the panel's recommendations become a requirement 
of law, and thus they will be disclosed to the American people.

  What will be disclosed? The following:
  What the program will cost each year;
  What is the projected cash-flow deficit in dollars, real and nominal;
  What are the benefits the system can actually fund as opposed to what 
we tell the public;
  What is the impact of all of the above on the Federal budget.
  These are not complicated. These can be simply stated. But they are 
very important facts for the American people to know.
  Some don't want the American people to have this information. They 
realize if people were actually informed about the significant 
financial crisis we are facing in the Social Security system beginning 
when the baby boom generation retires, people would get pretty upset. 
They would ask: Why hasn't Congress acted? Why isn't the White House 
displaying leadership? Some would rather not have this information on 
the table. It is ``vanilla'' information. It is information the 
American people have the right to know. It is information I am 
suggesting be made available. It is information the Social Security 
Advisory Board is suggesting be made available. It is not a partisan 
effort on my part; it is simply a desire to, hopefully, further the 
effort to inform the American people of the problems we face if we do 
not get on this issue of Social Security and begin to solve it.
  That is the amendment I will offer. That is the bill I am introducing 
today. I see the Senator from Iowa, the ranking Republican on the 
Finance Committee. He has been a leader on the issue of Social Security 
reform in this Congress. I greatly appreciate his support, 
cosponsorship, and initiation in drafting the bill which solves the 
overall problem. I thank him for his support.
  I thank the Chair for its indulgence, and I yield the floor.
                                 ______