Congressional Record, Volume 146 Issue 65 (Tuesday, May 23, 2000)

[Congressional Record Volume 146, Number 65 (Tuesday, May 23, 2000)]
[Senate]
[Pages S4249-S4253]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]

SOCIAL SECURITY

Mr. DURBIN. Thank you. I come to the floor this morning to talk about
an issue which is dominating the Presidential race across the United
States. It is the issue about the future of Social Security.
It is interesting when you ask Americans how important it is. As an
issue in this Presidential campaign, 71 percent of Americans say it is
very important. It is understandable, because, at least since the era
of the New Deal and Franklin Roosevelt, Social Security has really been
there as an insurance policy against the devastating impact of age and
retirement of people before its creation.
There was a time in America before Social Security when, if you were
lucky enough to have saved some money, or if you were among the
fortunate few with a pension, retirement was kind of an easy
experience. But for the vast majority of Americans who didn't have that
good fortune, retirement was a very troubling and dangerous experience.
It is no surprise that before Franklin Roosevelt conceived of the
notion of creating Social Security, one of the highest ranking groups
of poor people in America was parents and grandparents who were
elderly. In his era, President Franklin Roosevelt changed the thinking
in America to say: we are going to create, basically, a safety net to
say to everyone, if you will give the Social Security fund some money
as you work during the course of your employment, we will put that
aside and guarantee to you that there will be a safety net waiting for
you; that you will have a nest egg; that the Federal Government will be
watching; and it will be there.
Over the years, of course, because of medical science and other
things, we have gotten to the point where we live longer and more and
more people are taking advantage of Social Security. Over the years,
the amount of payroll tax for Social Security went up so you could take
care of those senior citizens. But Social Security in America, for 70
years, has been that basic insurance policy.
When political leaders of either political party--Democrats or
Republicans--start talking about changing Social Security, a lot of
American families start listening--not only those who are receiving it
but many who are near retirement. Certainly, a lot of younger workers
ask very important questions, such as: Will it ever be there when I
need it? I think for the last three or four decades in America that
question from younger workers has been very common. It is natural to be
skeptical--when you are 20 years old or 25 years old--that the money
you are putting into the payroll tax for Social Security will ever help
you.
Yet if you take a look at the record in America, Social Security has
always been there. Payments have always been made. We have kept up with
the cost-of-living adjustments to try to improve and increase those
payments over the years. But we have kept our promise. A program
created almost 70 years ago has been an insurance policy for every
American family.
There are warnings, of course, for people: Do not count on Social
Security for a living because it is a very spartan existence. It
doesn't provide a lavish lifestyle once you have retired. But you are
not going to starve. You are going to have some basic health and
necessities of life. Americans have built this into their thinking
about their future. What will happen to us at the age of 65? We would
like to think we are prepared with savings and retirement, but we
always know that we have worked for a sufficient number of quarters for
our lives so that we will qualify for Social Security.
It is interesting. In the year 2000, in this Presidential campaign,
there is a brand new debate, and the debate suggests that we ought to
take a brand new look at Social Security. On one side, George Bush has
suggested we ought to change it rather dramatically; that we ought to
take at least 2 percent of the payroll savings taxes that are taken out
for Social Security and put that into a private account in which
individuals can invest.

There is some appeal to that because a lot of people say maybe that
will be a better idea--maybe I can make more money by investing it
personally and directing my investments than if the Federal Government
buys a very conservative investment plan with the whole Social Security
trust fund. It is not uncommon to think that people across America are
feeling good about directing their own future.
I say at the outset that--I think I speak for everyone in the Senate,
both Democrat and Republican--we believe in encouraging people to save
for their future. We believe in giving them options for investment.
That is why we have created IRAs and 401(k)s, and all sorts of vehicles
under the Tax Code so people can make plans for their future. But
George Bush raises a more important question, and one that I would like
to address for a few minutes.
What would happen if George Bush had his way? If we took 2 percent of
the

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proceeds going into the Social Security trust fund and said they will
no longer go into the trust fund but people will be allowed to invest
them individually, what impact would that have? Frankly, it could have
a very serious and, I think, a very negative impact.
Keep in mind that the money being taken out of the payroll taxes each
week in America goes to pay the current benefits of Social Security
retirees. There is not some huge savings account that is blossoming.
But basically we are talking about a pay-as-you-go system. If you take
2 percent away, you are still going to have the retirees needing their
Social Security check. You are going to have to figure out some way to
plug this gap.
If you say that 2 percent of payroll taxes will stop going into the
Social Security trust fund, who will make up the difference? How big is
that difference? Some estimate that the difference is $1 trillion. If
you think about that, you have to ask George Bush and others who
support this: Where is that money coming from? How will we make up the
difference if we start saying to people they don't have to put it all
in the trust fund, keep 2 percent and invest it personally? That $1
trillion transition has to be taken in the context of George Bush's
other suggestion of a $2 trillion tax cut primarily for the wealthiest
people in America.
I will concede that we are in good times in America for most
families. The economy is strong. For the first time in decades, we are
seeing surpluses in the Federal accounts. You can attribute that to
leadership in Washington, leadership in business, and leadership in
families. It has all come together in the last 8 years. America is
moving forward. We are in a surplus situation. Who would have thought
we would be talking about this on the floor of Congress just a few
years after we debated a balanced budget amendment?
But many of us believe that even in a surplus situation we should be
cautious because we are not certain what is going to be around the
bend. We want to make certain that the decisions we make now about
investing surplus funds makes sense for ourselves, for our children,
and for our grandchildren.
To come up with an idea for taking this surplus and putting it into a
massive tax cut for wealthy people or putting it into a Social Security
change that could cost us another trillion dollars, in my mind, is not
fiscally conservative. Yes. That is right--fiscally conservative.
The conservative approach being proposed by President Clinton and
Vice President Gore says take the surplus and instead of putting it
into something of great risk, such as a tax cut or some privatization
of Social Security, let us buy down parts of the national debt. The
national debt costs taxpayers in America $1 billion a day in interest.
That is right. You are paying taxes now--payroll taxes and income
taxes--to the tune of $1 billion a day for interest payments on old
debt.
If you think about it, what is a better gift to our children and
their children than to reduce this debt, and to say to them that we are
going to take care of our mortgage, the one that we were going to leave
to you, by paying down the national debt? That is Vice President Gore's
suggestion. He says, in the Social Security program, pay down the debt
in the trust funds. Pay down all of the bonds that have accumulated.
When you do it, incidentally, you can extend the life of Social
Security and make it stronger to the year 2050. It is a twofer--
reducing the national debt and reducing the interest payment on it, and
at the same time strengthening Social Security. That is the Gore
approach. It a conservative approach. I will concede that. But I think
it is the fiscally responsible approach.
On the other side, George Bush has said don't worry about paying down
debt; Let's talk about a tax cut of $2 trillion for wealthy people, and
let's talk about a new Social Security privatization idea that will
cost at least $1 trillion in transition. That is not conservative, nor
do I think it is prudent. I think you can appropriately call it a risky
idea.
I joined with Senator Byron Dorgan of North Dakota and Senator
Charles Schumer of New York and my friend and colleague Senator Boxer
of California in sending a letter to George Bush saying to him: If you
want to talk about one of the most important programs to America's
families, Social Security, and you want to talk about dramatic changes
in Social Security, then we want you to come forward with an idea about
what this means. What impact will this have on families?
We are anxious to receive a reply because, you see, George Bush, in
the last few weeks, has gone beyond the 2-percent suggestion--that we
can take 2 percent and invest it in the stock market--and now he says
he can envision a day when we invest all of our Social Security in the
stock market.
I readily concede that over the last 8 years, during President
Clinton's administration, the stock market has done very well. It
doesn't from day-to-day for those who follow it, but over the long term
it has. The Dow Jones Industrial Average of 3,000 back in 1993 is now
up to 10,000. That suggests a lot of wealth has been created in
America. Those that were smart enough, and could, invested in the stock
market and have seen their savings grow.
It is naive to believe this will go on indefinitely. We have
certainly seen in the last 6 months the roller coaster of the NASDAQ
and the roller coaster of the New York Stock Exchange, to suggest there
have been good days and bad days. To take your life savings, or take 2
percent of your payroll tax and Social Security, and put it in the
stock exchange, you understand there are risks. I think most Americans
appreciate that fact.
As I said earlier, for those who want to invest their savings, that
is their business. When it comes to Social Security, we have always
said this is a part of our system that should be protected. If we go
forward with George Bush's plan to privatize Social Security, it would
truly give to individuals some power to invest. However, it also raises
questions about the future of this Social Security system. Where will
we come up with the $1 trillion in transition payments?
There are only so many ways to achieve that: We can tax Social
Security to come up with more revenue; we can reduce benefits, for
those who are currently receiving Social Security; or we can raise the
retirement age under Social Security.
Frankly, I reject all three of those. I don't think America's
families who are looking forward to enjoying their retirement years and
counting on Social Security will sign up for George Bush's deal when
they understand it could jeopardize Social Security as we know it and
as we count on it. That is truly one of the serious problems we face.
Second, if we accept the George Bush approach on privatizing Social
Security, we don't have the money that Vice President Gore wants to
invest in paying off the national debt and paying off the debt of the
Social Security trust fund. So we leave that interest payment out there
for future generations. We don't stabilize Social Security. We don't
give it a longer life.
A point made earlier by my colleague from the State of California,
Senator Boxer: What if George Bush guesses wrong? What if people invest
some part of their Social Security into the stock market and the market
goes down and they are losing money? What will the response be of the
elected officials across this country? We don't know because we have
never faced it.
History tells us it is likely that Democrats and Republicans will
say: Wait a minute; we cannot let a sizable number of Americans fail.
People cannot be in a position where they don't have enough money to
live on in retirement.
We are then likely, on a political basis, to ride to the rescue.
Anyone remember not too long ago we did that with the savings and loan
bailout? Too many institutions had lost money across America, and a lot
of people lost their savings accounts. We bailed out the savings and
loans. I didn't like voting for that, but I didn't see any alternative.
The economy was at stake and we did it.
I happen to believe if the Bush privatization scheme goes through and
it doesn't work, this Congress will be called on to come up with the
money to bail out the families who guessed wrong in the stock market.
Think about where this leads. From the dark days of deep red ink and
deficits, we are now in a surplus. George Bush is saying let's try
something that is a little new and a little innovative and

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hasn't been tried. He is suggesting changes which could jeopardize the
strength of this economy, the strength of our recovery, and what we
envision as a strong American economy for decades to come. He is taking
what I consider to be a leap of faith that some scheme which someone
has come up with will work.
Vice President Gore is urging a more conservative approach: Put the
surplus into bringing down the substantial debt, into strengthening the
Social Security trust fund; put the surplus into making certain that
Medicare is there for years to come; reduce the national debt so our
children and their children don't continue to pay $1 billion in
interest a day on old debt that we have accumulated.
That is the fundamental choice. It is not a question of whether
people should have the right to invest their savings in the stock
market--that is their right in America; 50 percent of families are
doing that now. Our family is one of them--but whether or not you take
the Social Security system, and after 70 years, turn it upside down and
say we are now going to make this a much different system.
In the words of George Bush: We will privatize Social Security. I
think there is a great amount of risk to that. I can understand the
skepticism of a lot of American families about this proposal.
Mrs. BOXER. Will the Senator yield for a couple of questions?
Mr. DURBIN. I am happy to yield to the Senator.
Mrs. BOXER. I thank my colleague. Once again, he has explained quite
clearly what the risks are to this Bush plan.
I was reading some of the quotes that appeared in the press
surrounding the Bush plan. I ask my colleague to comment on some of
them.
Bush's top economic adviser, Lawrence Lindsey, acknowledged somewhat
sheepishly he bailed out of the market years ago. He said: That was
because of my personal situation. I don't take risks. I hate losing
money.
That was from the Philadelphia Inquirer: I don't take risks; I hate
losing money.
I think that reflects certain people are more conservative. Others
are willing to take a risk.
The point my colleague and I have tried to make is that we think it
is fine if you want to take a risk with certain accounts you have, but
you don't want to risk the foundation of your retirement, the safety
net of your retirement. You want to count on that.
Bush's top economic adviser is saying he hates losing money, and yet
the person he advises is essentially putting money at risk for other
people.
I want to mention something else. The word ``privatization'' is a
good word. I like it. It is similar to the word ``deregulation.'' It is
a nice word. Everybody likes ``privatization.'' It is a nice word that
indicates individual control. Of course, much of what we do in our life
is privatization. We have our own accounts, whether they are savings
accounts, or we own bonds, and we direct them. However, Social Security
is a little bit different. It is the foundation.
The Houston Chronicle reported that Bush said on Tuesday, his plan to
create private savings accounts could be the first step toward a
complete privatization of Social Security. That would be the end of a
program that has worked for 70 years. There is more at stake than a 2-
percent diversion of funds.
Finally, the New York Times reports, when answering the question
about his plan, Mr. Bush said the Government could not go from one
regime to another overnight. It is going to take a while to transition
to a system where personal savings accounts are the predominant part of
the investment vehicle. When he is asked by the Dallas Morning News,
would beneficiaries receive less money, he says: Maybe; maybe not.
I ask my friend for his comments on the volatility of the stock
market expressed by Bush's own top economic adviser, the fact that this
could be the first step toward the end of Social Security, and the fact
that George Bush cannot answer today whether anyone would have to take
a cut in your benefits.
Mr. DURBIN. I thank the Senator from California. Quoting George Bush
on this issue tells me more than anything else that he has not thought
this through. In the 18 years I have served on Capitol Hill, when the
issue of Social Security has come up, I have had a tendency to step
back and wait. I want to hear both sides.
This is complicated. We are literally talking about a Social Security
system that benefits tens of millions of Americans today and that many
more Americans are counting on for the future. When people start
talking about change in Social Security, I am very cautious. I think
the people of Illinois who have sent me here expect me to be cautious.
I recall when the Senator from California and I were serving in the
House of Representatives many years ago when there was a debate on the
floor about the so-called ``pickled-pepper'' amendment. Jake Pickle of
Texas and Claude Pepper of Florida had a fight over the future of
Social Security and whether to raise the retirement age from 65 to 67.
I voted against that. I really think the retirement age is an important
milestone in people's lives, particularly if they have jobs involving
manual labor and physical work. So when people start talking about
changing Social Security--``We will change a little bit here and a
little bit there''--I am very skeptical because I don't want to see us
put in a position where someone's great campaign promise in the year
2000 means someone trying to retire in just a few years from now finds
out that the window is closed at Social Security:
``No, you have to wait a few more years.''
``Why?''
``We wanted to try a new approach to Social Security.''
The Senator from California is right. When George Bush says--and this
is a quote from the Houston Chronicle--``creating private savings
accounts in Social Security could be the first step toward a complete
privatization of Social Security,'' that is a frightening idea. Let me
explain to you why.
If we ever privatize Social Security, we will still have millions of
Americans who worked their whole lives, paid their taxes, obeyed the
laws, and counted on Social Security, who need to receive their
benefits. If you are going to have that requirement out there, you have
to figure out a way to keep Social Security moving while George Bush
creates a brand new system, his new idea, whatever it is. That is a
massive investment. When we talk about keeping America's economy moving
forward, not increasing our deficit, creating more surpluses, keeping
job creation online and businesses thriving, I think this is a risky
venture by George Bush when it comes to Social Security.
Frankly, I think the American people should ask of George Bush what
several Members of the Senate have asked: Sit down and explain this to
us; put it on paper. Before you start messing with Social Security,
explain to us what you have in mind because a lot of us--a lot of
families across America--are counting on this system.
Mrs. BOXER. If my friend will yield further, I understand Senator
Grams came down and quoted me as saying I like the idea of people
investing in the market. I do. But not taking it away from the
foundation of Social Security. Social Security is that foundation. As
my friend pointed out, this is really serious.
Since Governor Bush is now saying he envisions the day when we don't
have any more Social Security, when it would all be private accounts--
that is not Social Security. He is right to point out: What happens to
those of us who have worked our 40 quarters? There would be nothing
going into the Social Security fund to pay those benefits. What does
that mean? We are not going to let those people go poor; everyone knows
that. The pressure will be on us. We will bail out the system.
If you take it a step further and look at his $2 trillion tax cut,
where is he going to get the money? He will print it. We will go back
to those days his father oversaw, with $300 billion deficits which
added to the national debt. As my friend well knows, we had more debt
in the Reagan-Bush years than we had from George Washington to Ronald
Reagan.
We do not want to go back to those days. We don't want to go back to
those days when our President had to go visit another country to find
out how to run the economy. Those were

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bad days for this Nation--bad, bad days. It took us a long time to get
out of it. A lot of people lost their seats around here because they
had the courage to vote to balance this budget. It did not take courage
to vote for a balanced budget amendment to the Constitution. It did
take courage, however, to vote to actually balance the budget. It meant
some tough stuff.
I want to ask my friend, we have a colleague on this side of the
aisle who says: Yes, we ought to go into privatizing Social Security.
But he is one of the most courageous and straightforward colleagues,
Senator Bob Kerrey. What does he say about it? He says if you are going
to go that route, this is what you have to do: Raise the retirement
age.
My friend has already pointed out we have raised it to 67 over time.
What is it going to be, 75? People will die long before they get their
checks or they will be too old to really appreciate it. We don't want
to see that happen, raising the retirement age after people worked so
hard, and then make them work longer, or raise taxes on the Social
Security that you get, or on your interest from these personal
accounts. Raise taxes, raise their retirement age, lower benefits--you
have to do a combination of those things.
I have to say, there are a lot of things we do around here that are
not very good. But would my friend not agree we have a good system here
that has lasted through time--70 years, as he points out? It is a basic
retirement, a basic safety net.
One last point I would make for my friend to comment on. Around here
we are like everybody else; we want to make sure we can take care of
our families. I think what we do around here is a good system. We have
had Social Security since the 1980s. We decided to make sure we paid
in. We have Social Security retirement as our basic foundation, and
then, if we want, we can add a thrift savings plan. So, yes, we can
pick out investing in the market--or, by the way, Government bonds, or
corporate bonds--in addition to our Social Security.
That will be my last question to my friend. We know it is good to not
put all your eggs in one basket, but we also think it is important to
have a basic account, No. 1; No. 2, don't go back to the bad old days
of these yearly deficits that were dragging our economy down. Yes, you
want to add something to sweeten your retirement pie, take a little
risk with it. We know some people who have taken some risks and didn't
do too well; others have done very well. That is fine. Don't mess with
the foundation of the house. If you want to add a room, fix it up. That
is great. But don't mess with the foundation.
Mr. DURBIN. I thank my friend, the Senator from California.
It is interesting in this debate how the roles have been switched. It
used to be not that long ago the Democrats were faulted for being
fiscally irresponsible, too liberal when it came to tax and spend. In
this debate over the future of Social Security, the fiscally
conservative and, I think, from my point of view, the prudent approach
is being pushed on the Democratic side. That is, make certain before we
take the surplus economy for granted, and make certain before we talk
about any changes for Social Security, that we have thought them
through.
Here we are in the middle of the Presidential campaign, with George
Bush, the Republican candidate, suggesting sweeping changes in Social
Security, changes which could literally affect millions of American
families.
The concept that we would somehow privatize Social Security would
have been laughable not that many years ago. Now it is being said with
a straight face during the course of this Presidential campaign.
Unfortunately, the candidate, George Bush, who is making these
statements, refuses to come forward and explain how he would achieve
it.
I think it is natural for those of us on the other side, those
supporting Vice President Gore, to ask of him to be specific. If you
are going to start talking about Social Security, start telling us in
specific terms how you are going to change it and what it is going to
cost us.
I think the plan on the other side, from Vice President Gore, is a
conservative, sensible approach that does not assume this economic boom
which we have seen over the last 8 or 9 years will continue
indefinitely. What Vice President Gore has said is take the surplus we
have coming into the Federal Government and invest it back to pay off
the debt of our Nation.
We in Illinois, I think, represent kind of a microcosm. I represent a
microcosm of this Nation--rural, urban, liberal, conservative, and you
name it--across our great State. When I go back and talk to business
leaders about what to do with our surplus, they universally agree with
Vice President Gore's position: Be prudent, be sensible, take the
surplus and invest it in such a way so if 6 months from now we are in a
recession or a downturn, we will not regret decisions we have made.
Take a look at what has happened to us in just a short period of
time. Because we have had fiscal discipline for the last several years,
the Nation's debt is already $1.7 trillion lower than it would have
been. In other words, if we had not made this decision a few years ago
to balance the budget and to make certain that Social Security trust
funds were not spent for other reasons, we could be $1.7 trillion
deeper in debt, meaning we would have bondholders in the United States
and around the world asking every month for their interest payment and
being paid with taxes coming out of families, businesses, and
individuals across America.
We are on the right track. I think we in Washington got the message.
Under the Clinton-Gore administration, we have started bringing down
this debt and the economy has flourished for most people. There are
exceptions: In the farm belt, exceptions in the inner city, exceptions
in small towns. But by and large, most people believe America is moving
in the right direction.
Along comes a Presidential campaign. Really, this is a referendum on
our future. I am not going to question the motives of George Bush on
the Republican side, and I hope he would not question the motives of
Vice President Gore.
The American people basically have a crucial choice this November. In
a time of prosperity, what should America's future look like? What
should we be doing for the young people across America to say to them:
We want to create at least as good an opportunity for you as we have
had in this country.
Frankly, the Democratic approach, Vice President Gore's approach, is
the sensible one. It basically says: Don't assume prosperity forever;
pay down the debt so we don't have to collect more in taxes to pay
interest on this debt. Reduce the debt of the Social Security program
so that it will be stronger for a long period of time.
In fact, under Vice President Gore's proposal, for another 50 years,
it will be solvent, so we can even say to those who are just getting
their driver's license this year: Social Security is going to be there
when you show up at the window 50 years from now. That is a good thing
to say to the future of America.
Also, we are saying when it comes to Medicare--this is a program
often overlooked by this Congress; it is not overlooked by tens of
millions of elderly and disabled who count on Medicare for their health
insurance--we believe we should take part of this surplus and invest it
in Medicare as well to make sure it is stronger and is affordable. This
is the Gore approach.
The other side is a much different view of our future. What George
Bush has proposed for America's future is let's try something new and
untried. First, let's talk about a $2 billion tax cut, and it is a tax
cut that is not targeted to families who need it. It is a tax cut that,
frankly, goes to a lot of people who are already wealthy.
I am joined on the floor by my colleague from New York, Senator
Schumer. Senator Schumer has a proposal most American families would
applaud. He has suggested targeting the tax cuts where they are really
needed. One of Senator Schumer's proposals is to allow families to
deduct up to $10,000 a year in college expenses for their children.
That means about $2,800 in the bank for a lot of families to help pay
college education expenses. That is a smart investment. That is a
targeted tax cut that does not go to the wealthiest in America but
prepares the next generation of Americans to compete in a global
economy.

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This election is coming down to: Do you want the Bush tax cut for
primarily wealthy people, and do you want to target the tax cuts and
invest in paying down the debt? Do you want to keep Social Security
strong for decades to come, or try a privatization approach which
Governor Bush proposes which has never been tested and will cost us a
trillion dollars and runs the risk of more red ink, more deficits, and
problems in the future?
We are taking the Gore and Democratic side, fiscally prudent approach
which says: Let's look to the future in real uncertain terms.
I know we only have until 11:30 for morning business. My colleague
from New York is here. I yield the floor to Senator Schumer.
The PRESIDING OFFICER. The Chair recognizes the Senator from New
York.
Mr. SCHUMER. I thank the Chair. Mr. President, I also thank the
Senator from Illinois for his, once again, enthusiastic, as well as
erudite, presentation on our fiscal policy and on Social Security.
Maybe after I finish what I have to say I will say a few words on that.
I do not know the time situation.

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