[Congressional Record Volume 146, Number 65 (Tuesday, May 23, 2000)]
[Senate]
[Pages S4247-S4249]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




                            SOCIAL SECURITY

  Mrs. BOXER. Mr. President, it is interesting that Senator Grams and 
Senator Santorum came to the floor to praise Governor Bush's Social 
Security plan. I come here to express my deep alarm over this plan and 
to place into the Record the reasons I believe it is very dangerous to 
the future of this country, to our senior citizens, and to those who 
really depend on Social Security for themselves or for their aging 
parents.
  I think the first question to ask is, What is Social Security? Why is 
it called security?
  I used to be a stockbroker. I can tell you that I have seen the 
smiles when the market goes up, and I have seen the tears when the 
market goes down. At the time I was a broker, there was a very 
traumatic period in our history. It was the tragic assassination of our 
great President John Kennedy. I will never forget, the market was just 
crashing that day. It went down so much that there was a halt in the 
trading. Anyone who retired that day, and had an annuity plan, would 
have been in the deepest trouble.
  I believe in investments in the stock market. I believe in 
investments in the bond market. I think it is very important that we 
let our people know Social Security is not meant to be your full 
retirement. What it is meant to be--and what it has worked so well as--
is a basic foundation, a safety net, not guesswork but a basic return 
you can expect every month with a check you will get which will meet 
your basic needs.
  Let me describe it this way: You have a house. It is very modest, but 
it is good. It has a roof. It protects you. It is a place where you can 
be comfortable, warm. It works for you.
  Maybe you want to add a room to that house. That is wonderful. That 
is an amenity. That is something additional you could use--a family 
room, an extra bedroom. But you do not mess with the foundation of the 
house. You keep that a solid house--that Social Security. Anyone who 
challenges this idea is making a huge mistake. I will explain why.
  You do not have to go that far to look at the ultimate result if we 
just said: People can just have individual accounts and forget Social 
Security. Because we know that happened in Texas. I will show you what 
happened in Texas when three counties left Social Security and went 
into the market and said to their people: We will allow you to deal 
with your accounts. This isn't theoretical; it has actually happened in 
Texas. Let me tell you about the Texas example where every single 
family lost out.
  It was the same idea Governor Bush has. He started off talking about 
2 percent of your Social Security being diverted. As I understand it, 
last week he said he could foresee a time when everybody has private 
accounts--100 percent. We know what happened in this experiment. The 
source here is the U.S. General Accounting Office, February 1999.

[[Page S4248]]

  They did a study of the Texas experiment. This is what happened. 
Those counties went off Social Security, instead of saying: We will 
have a supplemental plan, like a 401(k). Keep your Social Security. 
Let's do a supplemental plan.
  By the way, around here, a lot of us have a supplemental plan. We 
have our basic Social Security, and then we have what we call thrift 
savings, which is added on. That is fine. But we do not mess with 
Social Security.
  These counties messed with Social Security. They walked away. This is 
what happened: The bottom 10 percent of earners, had they stayed in 
Social Security, would be getting a monthly benefit of $1,125. But in 
their retirement plan--where they just said forget Social Security, we 
will have an individual account--they are getting $542 a month. That is 
utter poverty. If they are in the median, the moderate income, instead 
of getting $1,488 a month from Social Security, they are getting $810 a 
month. If they are in the highest income, instead of getting $1,984 a 
month, they are getting $1,621 a month.

  So when Senator Santorum and Senator Grams come to the floor--I say 
to my friend from Illinois, they have been lauding the Bush plan--I 
think we have to note that if you took the Bush plan to its ultimate, 
which he in fact said he could foresee, abandoning Social Security for 
individual accounts, every family lost, regardless of their income 
bracket.
  I do not want to see this for America's families. I do not want to 
see it. I ask the next question: What happens if we go this route, and 
people are living in poverty instead of having a social safety net 
because of this? Do you think Congress would turn its back on the 
families of America? You know we would not. What would we do? We would 
say: Oh, my God, we had better bail them out. We have done it before 
for the savings and loans. We do not want to see people go destitute.
  Then you have to ask yourself a question: If George Bush is President 
and he gets this huge tax cut for the wealthy but has used up all the 
money for that tax cut, where is he going to find the money to do this 
bailout? Are we going to go back to the days of printing money? We just 
finally got out of that situation--thank God--where we were running 
these deficits; we finally got it under control.
  Let me tell you, this election is a watershed election. This is a 
risky plan.
  The women Democratic Senators held a press conference just a few days 
ago. We decided to look at what this plan would do to women in our 
Nation. We went to the experts and asked them how they felt about it. 
This is what one of them said. I want to put his credentials into the 
mix. This is John Mueller, of Lehrman Bell Mueller Cannon, Inc., a 
former adviser not to Al Gore, not to Barbara Boxer, not to Dick 
Durbin, but an adviser to Representative Jack Kemp, an adviser to 
Republican Jack Kemp. This is what John Mueller said:

       . . . the largest group of losers from ``privatizing'' 
     Social Security would be women. This is true for women in all 
     birth-years, all kinds of marital status, all kinds of labor-
     market behavior, and all income levels.

  Why does he say this? We went into this in the press conference we 
women Senators held. I want to try to find that clip so I can share 
with you why it is a fact that women will suffer.
  First of all, there is no question that private accounts will lead to 
the reduction of benefits. Why do I say that? I want to make sure 
people understand that, because when you divert money away from Social 
Security into private accounts, what happens? The Social Security fund 
drops, and we do not have enough money to keep paying those benefits. 
So benefits would have to be cut. Women live longer, and they count on 
those benefits, so they would lose more; they would suffer more.
  Now, here is an irrefutable fact, and the group that analyzed this 
was the Center on Budget and Policy Priorities. With just a 2-percent 
privatization--in other words, taking 2 percent of your taxes and 
putting it into an individual account--the trust fund will go broke in 
the year 2023. That may sound like a long way off, but trust me when I 
tell you it is not; 20 years is not a lot of time. I remember back to 
1980, and it doesn't seem that long ago. Twenty years from now, with 
the 2-percent privatization that George Bush is calling for, assuming 
he does nothing to cut the benefits--and he won't admit to that--the 
trust fund goes broke.
  Right now, without doing anything, the trust fund is solvent until 
2037, so we make this trust fund go broke by many years. That is 14 
years sooner that the trust fund is broke. Al Gore has a plan to take 
the interest payments on the debt he is going to save because he is 
much more conservative than George Bush in paying down the private 
debt, which is the bonds. He is going to absolutely make sure we don't 
have to keep issuing more bonds and we will pay down that debt. His 
plan keeps the funds solvent until 2050.
  So let's take a look at the three scenarios. If you do nothing, the 
fund is solvent until 2037. If you follow the Gore plan, the fund is 
solvent until 2050. If you do the Bush plan and you don't cut benefits 
or raise taxes--which he will not tell us what he is going to do--you 
go bust in 2023. This is from a conservative. We know if you carry this 
plan to the ultimate extreme and go beyond 2 percent, you essentially 
know, from looking at what has happened before, people will suffer. You 
set up a real problem and you may have to do an S&L-type bailout. That 
is not good.
  So the women Democratic Members are very clear on all of this. Let me 
say, in closing--and I know my friend, Senator Durbin, is anxious to 
address this issue--I think a robust debate over Social Security is 
right on target. I think encouraging people to save and put money into 
the stock market and have a nest egg there is good because I believe 
that is a good idea. But don't mess with Social Security. If you want 
to have a supplemental plan, your basic Social Security plus a 401(k), 
a thrift savings plan, and IRA, added on to the basic safety net, that 
is just fine. I believe in that. I think it is smart and good. But if 
you mess with the foundation, you are in a lot of trouble.
  Senator Schumer was talking about this earlier today. He made the 
point that he is saving for his kids' college education. He decided he 
needed to have that money, no ifs, ands, or buts. He took that money 
and put it into the safest Government bond-type of investment because 
he can't gamble. What happens if on the day he has to start paying 
those bills the market goes down? We have seen the volatility of these 
markets. He says: My kids have to go to college. I am not going to tell 
them they can't go. So, yes, for other types of savings; it is a good 
idea to invest in markets; but for your basic retirement, don't gamble 
as they did in Texas. Don't gamble as the candidate for President, 
George Bush, wants to do. There are a number of us who are sending a 
letter--and I hope Senator Durbin will describe it--to Governor Bush 
asking him to come clean on the details of his plan.
  I ask unanimous consent to have this document on solvency printed in 
the Record.
  There being no objection, the material was ordered to be printed in 
the Record, as follows:

            Privatizing Social Security: A Riverboat Gamble

       Social Security Trust Fund Solvent Until: 2037.
       With 2% Privatization, Trust Fund Solvent Until: 2023.
       (Source: Center on Budget and Policy Priorities.)

  Mrs. BOXER. Mr. President, his plan will take us into the red. 
Combined with his risky tax scheme, he won't be able to bail out the 
people. So it is a dangerous idea. Stock market investments are good, 
but not as a foundation of an insurance plan, which is what Social 
Security is.
  You will be hearing a lot more from the women Senators on our side of 
the aisle on this question because, under the leadership of Senator 
Mikulski, we have set up a checklist where we are going to judge every 
plan against this checklist that women should be able to count on. We 
should be able to count on several things: Preserving the Social 
Security guaranteed lifetime inflation and protecting the benefit; 
preserving Social Security protections to workers when they are 
disabled, as well as when they retire, and for workers, spouses, and 
children, and when workers are disabled, retired or die; three, protect 
against impoverishment of women by maintaining Social Security's 
progressive benefit structure;

[[Page S4249]]

four, strengthen the financing of the Social Security system while 
ensuring that women and other economically disadvantaged groups are 
protected to the greatest degree possible.
  Look at that plan. Does it further reduce poverty among older women? 
I told you that his plan does not. We certainly want to see if it 
includes retirement savings options. Are these options something that 
will work for women? That is where we are.
  I will close by repeating a quote from an expert, John Mueller, a 
former adviser to Representative Jack Kemp, who said:

       The largest group of losers from ``privatizing'' Social 
     Security would be women. This is true for women in all birth-
     years, all kinds of marital status, all kinds of labor-market 
     behavior, and all income levels.

  If you look at this experiment in Texas, everyone lost--all families, 
women, everyone. Let's not go down this path. We can't afford to do 
that.

                          ____________________