[Congressional Record Volume 146, Number 56 (Tuesday, May 9, 2000)]
[House]
[Page H2657]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




                           ON SOCIAL SECURITY

  Mr. SMITH of Michigan. Mr. Speaker, I would like to make a couple of 
comments on Social Security.
  If the American people insist that it be an issue in this 
presidential campaign, it will receive the kind of discussion and 
debate that is needed and very appropriate.
  Social Security is one of our most important government programs. 
Spendingwise it is our largest government program. Social Security 
benefits takes a larger percentage of the Federal budget than the 
Department of Defense, more than we spend on the other 12 appropriation 
bills.
  The interest on the total debt is about 20 percent of our total 
budget. Social Security payments represent approximately 22 percent of 
the total Federal budget.
  It has been suggested by some that Social Security is not that big a 
problem; that if we are able to have the kind of economic growth that 
we have had in the past, then the economy will take care of the 
problems. Two facts need to be considered: One, that the official 
estimate of increase in GDP, (gross domestic product), is not going to 
be as great in the next 30 years as it has been in the last 30 years, 
simply because, even with the increase in productivity, we have fewer 
workers trying to produce the gidgets, the gadgets, the goods and 
services that represent the GDP. GDP ultimately represents productivity 
times the number of people involved in trying to utilize that 
productivity. So the growth in GDP is slowing down.
  Secondly, because of the fact that Social Security's benefits are 
based on earnings, the greater the earnings, the higher the eventual 
benefits are going to be. So even if we were to have an exceptionally 
strong increase in the economy, GDP, the cost of benefits would grow 
proportionally.
  Existing retirees have a cost of living or inflation index to adjust 
their benefits. Future retirees, as they retire, have their Social 
Security benefits increased based on wage inflation that is higher than 
standard inflation. So, again, as the economy expands, with lower 
unemployment and higher wages, so will the cost of eventual benefits.
  So over the short run, we see an increase in Social Security taxes 
coming in that makes the situation look somewhat better than it is 
because, ultimately, eventually, when those workers retire, they are 
going to receive that much higher Social Security benefit.
  Now, some have said let us do nothing. We do not want to disrupt this 
great program where we are guaranteed a monthly payment for the rest of 
our lives. The problem is that we are running out of money in the 
Social Security system. It is, in effect, going broke.
  Some people have said, well, look, somehow government is going to 
keep those promises. But in that regard, let me just bring to the 
attention of those interested, what happened in the past when Social 
Security had problems. The Congress and the President in 1977, reduced 
benefits and increased taxes. In 1983, again short of money. What 
happened? Again, benefits were reduced and taxes were increased.
  Seventy-five percent of Americans, Mr. Speaker, now pay more in 
Social Security tax than they do their income tax. It is important we 
face up to this problem this election; that we do not put it aside, 
that we do not demagogue it; that we do not start criticizing some of 
the solutions. Because if we start criticizing particular parts of the 
solutions, it will be that much tougher, when Democrats and Republicans 
ultimately get together, hopefully under the leadership of a President 
that is willing to move ahead on this issue, to save Social Security, 
to keep it solvent.




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