[Congressional Record Volume 147, Number 44 (Thursday, March 29, 2001)]
[Extensions of Remarks]
[Page E493]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




       LET'S MAKE SOCIAL SECURITY SOLVENT FOR 75 YEARS AND BEYOND

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                         HON. MARTIN OLAV SABO

                              of minnesota

                    in the house of representatives

                        Thursday, March 29, 2001

  Mr. SABO. Mr. Speaker, we all want to ensure Social Security's long-
term solvency. So, the only remaining question is how we get it done.
  Congress could reduce benefits or increase the retirement age like 
the Social Security reform measures enacted in 1977 and 1983. During 
these past efforts, Congress phased in an increase in the normal 
retirement age from 65 to 67 and reduced benefit levels. I haven't 
heard a lot of support lately for further increasing the retirement age 
or cutting benefits for future retirees.
  Some believe we should create individual accounts to invest funds in 
the private market. This proposal would accelerate the Social Security 
solvency problem by taking funds out of the system that have already 
been counted when estimating long-term solvency.
  Further, concerns have been raised that using individual accounts 
would jeopardize the progressive nature of the system, which helps 
ensure low-income workers a basic benefit level. Social Security was 
established as a guaranteed minimum retirement package. Individuals 
already have the option of supplementing this plan with private savings 
and investments.
  Others suggest investing Social Security funds in equity markets, 
while also retaining guaranteed benefits. This approach might increase 
the earnings of the trust funds, but would also involve greater risk.
  I recommend another option--increase the interest rate we pay to 
Social Security. Over the past 10 years, the Social Security trust 
funds have received interest of about 4.5 percent over inflation. I 
propose that we raise that rate--or ``refinance''--at 6 percent over 
inflation, making Social Security solvent indefinitely.
  Under my approach, funds to ensure Social Security solvency must come 
from the General Treasury. This plan keeps our commitment to extend 
Social Security for future retirees, and provides for a straight-
forward accounting of the cost of these obligations within the budget 
framework that we use to fund our national priorities. It is not an 
instant solution, but an honest path to address the Social Security 
solvency problem for the coming wave of Baby Boom retirees.

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