[Congressional Record Volume 146, Number 132 (Thursday, October 19, 2000)]
[Extensions of Remarks]
[Page E1861]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




   ACTION TO PROMOTE GREATER RETIREMENT SECURITY SHOULD BE A PRIORITY

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                            HON. MARK UDALL

                              of colorado

                    in the house of representatives

                       Thursday, October 19, 2000

  Mr. UDALL of Colorado. Mr. Speaker, we are nearing the end of this 
106th Congress--but we have not finished all the work that needs to be 
done. When the new Congress meets next year, it will find a long list 
of unfinished business. An important thing on that list will be action 
to support and improve the ability of all Americans to look forward to 
fiscal security in their years of retirement. I want to take this 
opportunity to outline my thinking about the steps that Congress should 
take toward that goal, in several areas.


                            SOCIAL SECURITY

  Social Security is our most important and most successful program 
dealing with retirement security. Today its guaranteed benefits provide 
the primary source of income for 66 percent of Americans over age 65, 
and are especially important for the 42 percent of the elderly for whom 
Social Security is all that keeps them above the poverty line. It is 
also an important compact between generations and across divisions 
based on income levels.
  I strongly support maintaining adequate and appropriate guaranteed 
defined benefits for current Social Security recipients, and for people 
who will retire in the future--but that does not mean that I oppose any 
changes in Social Security.
  Earlier this year, I supported the successful effort to remove the 
earnings limit that could reduce Social Security payments to people 
retiring at age 65. And there are some other additional steps to revise 
Social Security that we should take right away. For example, we should 
limit the so-called ``windfall elimination'' offset so that it will not 
apply to individuals whose combined monthly income is under $2,000. And 
we should again allow blind individuals to earn up to the social 
security excess earnings threshold without losing benefits.
  Further, as we look ahead, we must recognize that Social Security 
faces future demographic problems because retirement of the ``baby 
boom'' generation will greatly increase the number of beneficiaries in 
comparison with the number of people paying into the system.
  Congress will have to address this problem, and should do so sooner 
rather than later--but, obviously, that will take time. In the 
meantime, our first priority should be to avoid making the problem 
harder. That means--Social Security's current surplus revenues should 
not be spent for any other purpose. That way, the Treasury Department 
will use these revenues to reduce the publicly-held debt. By paying 
down the debt, we will reduce the amount of interest the
  Congress also must avoid excessive and ill-targeted tax cuts that 
would endanger our ability to protect Social Security and Medicare and 
strengthen them for the future.


                         SAVING FOR RETIREMENT

  Social Security is indispensable, but people will be better off if 
they can also have other sources of retirement income. So, we should 
make it easier for them to save and invest and accumulate assets. 
Previous action has led the way in several areas, and we can build on 
those foundations in some important ways, including--Increasing the 
amount that individuals can put into Individual Retirement Accounts 
(IRAs) and benefit from favorable treatment under the tax laws.
  Enabling people to make additional contributions to 401(k) or similar 
retirement accounts, and making it easier to take full advantage of 
such retirement plans.
  Making it easier for people to maintain their retirement accounts 
when they change jobs.
  Making it more feasible for employers--especially small businesses--
to establish and maintain retirement plans for their employees.


                            OTHER PROPOSALS

  As we all know, both Vice President Gore and Governor George W. Bush, 
have proposed additional new initiatives. Under each, the federal 
government would assist people to set up, maintain, and benefit from 
individual investment accounts. But there is a big difference.
  Under Governor Bush's plan, the federal assistance would come from 
allowing people to decide to divert part of their Social Security taxes 
into these accounts. In contrast, under the Vice President's plan 
general federal revenues--not Social Security revenues--would be used 
to add to the money people choose to put into tax-free individual 
savings accounts.
  I am concerned about the effects of the Bush proposal on Social 
Security. Diverting revenues out of Social Security now will make it 
harder to maintain adequate guaranteed benefits in the future. And that 
effect is compounded because the diverted amounts cannot be used to pay 
down the debt, so it will be necessary to pay hundreds of billions of 
dollars in additional interest.
  Those who support privatizing a portion of Social Security (the plan 
proposed by Governor Bush and by my Republican opponent, Ms. Carolyn 
Cox) claim that differences in benefits will be made up from the higher 
returns that can be earned by investing a portion of individual account 
balances in stocks and equities. But many economic forecasters have 
suggested that for this claim to be true, stock returns for the next 75 
years will have to equal those of the last 75 years--a rate that seems 
unlikely to be sustained. It seems to me that to rely on that scenario 
would require a dramatic leap in faith that our national economic 
growth will continue the record pace of the last decade.
  Moreover, the costs of administering individual retirement accounts 
have to be taken into account, and even conservative estimates suggest 
that these costs would be high enough to cut accumulations in 
individual retirement accounts by 20 percent over a worker's lifetime.
  Diverting funds away from the Social Security Trust Fund strikes me 
as an unnecessary and potentially dangerous step in ``reforming'' 
Social Security. It has an element of risk in some ways similar to 
those involved in having the government invest the Trust Fund directly 
in the securities markets--which was one of the reasons I declined to 
support President Clinton's earlier proposal for such investments, even 
though the President at least tried to address the questions of stock 
market volatility.
  In short, both the Bush plan and a similar one supported by my 
opponent, Ms. Cox, strike me as not the right way to proceed as we work 
for the long-term stability of Social Security.
  I also have some questions about the Vice President's plan, but the 
fact it would not mean that kind of diversion--it is ``Social Security 
plus,'' not ``Social Security minus''--means that it would not start 
out by making it harder to assure that Social Security will continue to 
remain as the indispensable safety net for future retirees.

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