[Congressional Record Volume 146, Number 65 (Tuesday, May 23, 2000)]
[House]
[Page H3531]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




                      SOCIAL SECURITY AND MEDICARE

  The SPEAKER pro tempore. Under the Speaker's announced policy of 
January 19, 1999, the gentleman from Michigan (Mr. Smith) is recognized 
during morning hour debates for 5 minutes.
  Mr. SMITH of Michigan. Mr. Speaker, social security, as we see on 
this chart, now is the largest expenditure of the Federal Government. 
It uses 20 percent of all Federal Government funds. Medicare is 11 
percent, but within the next 35 years Medicare, the way it is growing, 
will actually grow faster and be a larger percentage of the budget than 
social security.
  Over the last 6 years I have introduced three social security bills, 
each one scored by the social security actuaries, to keep social 
security solvent for the next 75 years. I am very concerned what is 
happening in this presidential campaign.
  The Wall Street Journal reports that the chairman of the Democrat 
House campaign committee has sent a memo urging Democrat candidates to 
bash and criticize Governor Bush for proposing social security reforms. 
These election year tactics I think are very dangerous because it will 
discourage fact-centered dialogue about what the real problem is: How 
we are going to keep social security solvent to pay benefits for future 
retirees. Instead, they use fear-based rhetoric to reduce this 
important issue to demagoguery for political gain. I think American 
workers deserve better.
  Many will have payroll taxes taken from their paychecks for 40, maybe 
even up to 50 years. When it is time for them to retire, the promises 
made by candidates who demagogued during the 2000 elections will not 
produce the money to pay benefits at the levels that current retirees 
receive. Only real reform is going to do that.
  As we see by this chart, this is the predicament of social security. 
Social security in 2016 is going to run out of funds, a cash flow 
problem, so there is less money coming in from social security taxes 
than is needed to pay benefits. So somehow we have to come up with 
money in those future years to pay for the benefits that have been 
promised.
  There are only three or four ways to do that: We either cut existing 
programs, and probably that is not going to happen in this Chamber; we 
can increase taxes, and I think that is a very bad idea, because 72 
percent of American workers today pay more in social security tax than 
they do in income taxes. Every time we have been in trouble in the 
past, we have just said, well, we are going to raise the tax on 
American workers. So the problem is, how do we do it without raising 
taxes? Increase borrowing? Probably!
  Director Crippen of the CBO pointed out in Thursday's Washington Post 
that finding the money to repay this trust fund debt means taxes will 
have to be raised, spending cut, or borrowing increased. As he said, 
reform proposals that do not change some of the program's basic 
principles are not going to solve the problem. Another alternative is 
getting a better return on some of those taxes paid in.
  Right now, a young worker 20 years old going to work and paying 
social security can expect at the most a 1.2 percent inflation-adjusted 
return on what he or she and their employer pay in. So if that young 
worker can take some of their tax and get a better return than Social 
Security's 1.2 percent by investing in bonds, CDs maybe some of it in 
indexed stocks, they can have more retirement income. They now own that 
2 or 3% of their wage plus the compounded earnings. It is part of their 
estate if they might die early.
  We do not need Vice President Gore saying, we are just going to 
simply add giant IOUs to the Social Security Trust Fund and pretend 
somehow we are going to come up with the money in the future. It is our 
biggest, most important program in this country. Let us talk 
realistically, because the ultimate solution is going to require that 
Republicans and Democrats get together on a bipartisan basis to do 
this.
  Demagoguing it, criticizing it, having memos go out that say, bash 
Governor Bush for any proposal he makes on social security, is not the 
way to move ahead on a bipartisan solution. I urge the President of the 
United States, I urge the Vice President, to stop it and to talk in a 
cooperative, factual manner about the real problem and how we might 
save Social Security and keep it solvent for our kids and grand-kids.
  Mr. Speaker, Thursday's Wall Street Journal reports that the chairman 
of the Democrat's House Campaign committee has sent a memo urging 
Democrat candidates to bash Gov. Bush for proposing Social Security 
reforms. These election year tactics will discourage fact-centered 
dialogues about the reforms needed to keep Social Security strong for 
generations. Instead, they use fear-based rhetoric to reduce this 
important issue to demogoguery for political gain.
  American workers deserve better than this. Many will have payroll 
taxes taken from their paychecks for forty and even fifty years. When 
it is their time to retire, the promises made by candidates who demagog 
during the 2000 elections will not produce the money to pay benefits at 
the levels that current retirees receive. Only real reform that sets 
cash aside for the future will do this. Starting in 2016, Social 
Security starts to draw down its trust funds, and the Treasury must 
find the cash to meet these obligations. CBO Director Crippen pointed 
out in Thursday's Washington Post, that finding the money to repay this 
trust fund debt means taxes will have to be raised, spending cut, or 
borrowing increased. As he said, reform proposals that do not change 
the program's obligations or take actions to promote growth in the 
economy are an empty gesture.
  Governor Bush has shown true leadership by taking on this issue. He 
is not willing to accept the status quo, and we shouldn't be, either. 
The only way to get to real solutions is to discuss the facts and work 
together on a bipartisan basis to build a solution.

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