[Congressional Record Volume 147, Number 28 (Tuesday, March 6, 2001)]
[House]
[Pages H630-H631]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




                           ON SOCIAL SECURITY

  The SPEAKER pro tempore. Under the Speaker's announced policy of 
January 3, 2001, the gentleman from Michigan (Mr. Smith) is recognized 
during morning hour debates for 5 minutes.
  Mr. SMITH of Michigan. Madam Speaker, I would like to spend just a 
couple minutes talking about some of the issues that this Congress, 
both the House and the Senate, are really struggling with, and that is 
the debt that has been mounting up, the total Federal public debt, of 
this country. I would like to comment about the legitimacy of a tax 
reduction and would like to comment on the challenge that is facing 
this body and the President in terms of keeping Social Security 
solvent.
  First of all, on the debt: if my colleagues will bear with me, let me 
break down the current Federal national debt of now $5.7 trillion. Of 
that $5.7 trillion, I break it down into three segments:
  The treasury debt. When we issue Treasury paper, Treasury bills, 
Treasury bonds, the so-called debt held by the public, that now 
represents $3.4 trillion out of the $5.7 trillion.
  The debt that has been borrowed from Social Security represents $1.2 
trillion, $1.2 trillion out of the $5.7 trillion. That is what we have 
been borrowing pretty much ever since we dramatically have increased 
the Social Security taxes, the FICA taxes, over the last 20 years. 
There has been much more money coming in than has been needed, and that 
is especially true since the 1983 increase in Social Security taxes. So 
we have accumulated $1 trillion worth of IOUs that this government owes 
Social Security when it comes time for Social Security needing that 
money.
  So we have $3.4 trillion that is Treasury debt, debt held by the 
public; we

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have $1.1 trillion that is owed the Social Security Trust Fund, and 
then the other 117 trust funds that the Federal Government has 
represents additional IOUs of another $1.2 trillion.
  So we divide it in three different levels. Most of the surplus is 
coming from the Social Security surplus, the excess of Social Security 
taxes over what is needed to pay Social Security benefits. And I think 
we should remind ourselves, Madam Speaker, that Social Security is a 
pay-as-you-go program; that when Social Security taxes come in, by the 
end of the week, that money is sent out in benefits. So there is no 
reserve. There are no accounts with individuals' names on it. And that 
has left us with the problem of how we are going to pay back that money 
when the baby boomers start retiring in 2008. So we have a huge 
increase in the number of retirees, recipients, as we are looking at a 
relatively fewer number of workers that are paying in those taxes to 
pay the benefits for those retirees.
  We have been talking in both the White House and in both Chambers of 
Congress about paying down the debt held by the public. Some people 
refer to it as the public debt. Technically, that is not correct. It is 
the debt held by the public. The dollars that we are using to pay down 
that debt held by the public are the extra dollars mostly coming in 
from the Social Security Trust Fund. So we write out an IOU, and we use 
those dollars to pay down the debt held by the public.
  To assume this has anything to do with helping to keep Social 
Security solvent is incorrect. The only thing that might be worse than 
using this money to pay down the debt and writing out an IOU is 
possibly using it for increased spending and starting new entitlement 
programs. If we do this, and then we have a problem with Social 
Security in the next 8 to 15 years, it is even more difficult because 
we have expanded the size of the Federal Government.
  Let me mention the tax cuts that will be coming up in this Chamber in 
the next couple or 3 days as we talk about a tax reduction. If things 
were perfect, we should not have a tax reduction, but that money should 
be used to make sure Social Security stays solvent. I think one way to 
do this is to put it in privately held and owned accounts where the 
flexibility, where the alternatives of an individual to invest that 
money are limited, such as in a 401(k). So they would be limited to 
safe investments. They would be limited to only a certain percentage 
that could go into equity, stocks, and the remainder would have to go 
into interest-bearing accounts.
  If we were to accomplish that and use this money now, it would 
simplify and help us solve the long-term problems of Social Security. 
And I just mentioned, we are looking at surpluses coming in in the next 
several years of $5.6 trillion. We are looking at an unfunded liability 
for Social Security of $9 trillion.

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