[Congressional Record Volume 146, Number 135 (Wednesday, October 25, 2000)]
[House]
[Pages H10879-H10880]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




                            SOCIAL SECURITY

  The SPEAKER pro tempore. Under a previous order of the House, the 
gentleman from Michigan (Mr. Smith) is recognized for 5 minutes.
  Mr. SMITH of Michigan. Mr. Speaker, Social Security has really come 
to light, so I am going to spend 5 minutes talking about Social 
Security, the problem and the potential solution, and what the 
presidential candidates are doing in their suggestions to help resolve 
this serious problem of Social Security.
  Mr. Speaker, I came into Congress in 1993; and I introduced my first 
Social Security bill. I have introduced a Social Security bill every 
session, and the last three were scored by the Social Security 
Administration to keep Social Security solvent for the next 75 years.
  I was selected to be chairman of the bipartisan task force on Social 
Security. I have found it is sort of like an automobile mechanic, the 
more the mechanic knows about the inside operations, probably the 
better he lubricates and adds the oil and greases his car. I am 
concerned, knowing some of the internal operations of Social Security, 
that there is a lot of friction there, that it is not solvent.
  Just briefly, insolvency is certain. We know how many people there 
are. We know when they are going to retire. We know that people will 
live longer in retirement. We know how much they are going to pay in 
and how much they are going to take out. Payroll tax is not going to 
cover the benefits starting in 2015. It is a pay-as-you-go program. 
Current workers pay in their tax, and it is almost immediately sent out 
to current retirees. It is going to take $120 trillion over and above 
tax revenues over the next 75 years to accommodate the promises we have 
made in Social Security.
  Some have suggested that economic growth is great now, that that is 
going to help solve the problem of Social Security. Not true. Social 
Security benefits are indexed to wage growth. So the higher the wages, 
the higher the benefits for everybody. When the economy grows, workers 
pay more in taxes, but also they will earn more in benefits when they 
retire. Growth makes the numbers look better now but leaves a larger 
hole to fill later.
  The administration has used these short-term advantages as an excuse 
to do nothing. So if there is one criticism I would have it is the 
missed opportunity over the last 8 years of not really stepping up to 
the plate and fixing Social Security.
  The Vice President has suggested that if we pay down the debt to the 
public, the debt we owe to the public is $3.4 trillion, the suggestion 
is that we use some of the Social Security surplus, pay down that debt, 
and then apply another IOU, or use the interest savings on that debt to 
help fix this big tall tower over here of $46.6 trillion. So the 
suggestion is that by paying down the debt, we will solve this problem. 
This next graph shows why that will not happen. The blue at the bottom 
represents $260 billion a year that we are now paying in interest on 
the debt.
  So, look, it has to be a priority. Putting Social Security in the 
lockbox was a great thing the Republicans did. This year saying that at 
least 90 percent of the surplus has to go to pay down the debt was a 
good idea. But even if all of the $260 billion every year for the next 
57 years was used to go into the Social Security Trust Fund, there 
would still be a shortfall of $35 trillion.
  Look, this is a big-time problem. We have to do it now and not leave 
a big mortgage for our kids.
  Very briefly, the biggest risk is doing nothing at all. I want to 
show these charts, because Al Gore has criticized Governor Bush of 
taking a trillion dollars out of Social Security, or using it twice. He 
is saying that the Governor is going to use it once to pay benefits and 
once to start private investment accounts.
  Over the next 10 years, the revenues coming in to the Social Security 
Trust Fund are $7.8 trillion. The benefits, or the money going out, is 
$5.4 trillion. That leaves a surplus of $2.4 trillion. Governor Bush is 
suggesting we take $1 trillion of that and start using that to 
accommodate personally owned retirement accounts that individuals own; 
that if they die it goes into their estate, unlike Social Security, of 
course.
  So as we can see, having current medium-income workers retire much

[[Page H10880]]

wealthier by having this kind of magic that will develop with the magic 
of compound interest is one way to increase retirement benefits and 
save the system.
  Some people have said it is too risky. I show this chart just because 
this represents the up and down of a 30-year average. Over a 30-year 
average for the last hundred years, the average income is 6.7 percent.

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