[Congressional Record Volume 147, Number 103 (Monday, July 23, 2001)]
[House]
[Pages H4408-H4409]
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 Oregon (Mr. DeFazio) is recognized for 5 minutes.
  Mr. DeFAZIO. Mr. Speaker, there was an extraordinary report published 
the end of last week which should be required reading for every 
American. It is a staff draft of the Bush Social Security privatization 
commission. Now they want to call it the bipartisan commission on the 
future of Social Security or something, but let us make no bones about 
it. It is a privatization commission. The basic assumptions under which 
they are operating and the orders they have from the President are they 
must privatize at least a portion of Social Security.
  But that is no surprise. President Bush has taken that position for 
many years, as have many on the other side of the aisle who have never 
liked the idea of Social Security. But what is shocking about this 
report is that on page 14 they say, we have become used to the idea 
that Social Security is going to have a financing problem beginning in 
2038. Beginning in the year 2038, Social Security under current 
assumptions, without a single change, can pay 73 percent of benefits 
from that date forward but 100 percent of all promised benefits up to 
2038. That is a fact.
  The Bush commission, the privatization commission, says they question 
whether Social Security can or will pay any benefits beginning in 2016, 
which means they are raising the specter first raised by Treasury 
Secretary O'Neill that they may not honor the debt of Social Security. 
That is, the fact that we have all paid taxes in excess of that 
necessary to pay current benefits with the idea we are accumulating a 
trust fund, the trust funds are held in Federal Treasury securities, 
and Federal Treasury securities are supposed to be the safest security 
in the world.
  Now, Secretary O'Neill and, by implication, President Bush, are 
raising the question whether the Federal Government will honor those 
securities. That is unbelievable. That is extraordinary. It is 
frightening. It could bring about an economic collapse worldwide.
  Beyond that, they are doing it for one petty reason, because they 
hate Social Security, they want to attack it, and they want to 
privatize it. Because the people on Wall Street say, ``Hey, if we could 
have 250 million separate accounts to manage, we would charge all of 
them a little bit of money every month, we would make tens of billions 
of dollars.''

                              {time}  1915

  Disregard the fact that those management fees over a person's 
lifetime would reduce their retirement by 40 percent in that little 
fund, and, for most lower income workers and others who this report 
feigns to really care about, they are shocked, shocked, shocked, that 
the widows and poor people and minorities do not have large retirement 
plans. They are not offering anything new for them, they are just 
saying Social Security has not been providing them with a high standard 
of living. Yes, that is true. But at least it has been there, it has 
been predictable.
  This year, Americans will pay $93 billion, ``B,'' billion more in 
Social Security taxes than are necessary to meet current benefits. We 
thought that $93 billion was then being deposited with the Federal 
Treasury with notes and it would be paid back, but Secretary O'Neill 
and this Commission and President Bush are saying no, we might not pay 
that back.
  Well, if that is the case, then let us lower the tax now. You rushed 
out here to lower taxes for people who earn over $273,000 a year, yet 
more working Americans pay more in FICA taxes to Social Security than 
they do income taxes. If you are saying you are not going to honor 
those debts, then lower that tax today. Give us back that $93 billion 
extra we are going to pay this year, if you are questioning whether you 
are going to honor that debt.
  It is absolutely extraordinary and irresponsible and unbelievable 
that this group, the Privatization Commission, is going down this path. 
The trust

[[Page H4409]]

funds hold not accumulated reserves of wealth, but only promises that 
future taxpayers will be asked to redeem. That is the same as any other 
Federal Treasury security. So they are raising a question about whether 
the full faith and credit of the Federal Government lies behind not 
only the Social Security trust funds, but the $6 trillion of debt the 
United States of America has accumulated over the years.
  If that filters through to the world financial markets, there will be 
a catastrophic collapse of the dollar, a run on the dollar; U.S. 
securities will be dumped in the market, and it will bring about 
economic catastrophe.
  So I recognize they are trying to do a job here. The President 
ordered them to come up with the rationale for privatization. But do 
not do it in this extraordinarily irresponsible way. Just say, look, we 
want to cut people's benefits so that we can then transition to a 
privatized plan, and, of course, the models in Great Britain, Argentina 
and Chile did not work out so well, but we think they will work out 
better here.
  Be honest. Do not lie and do not threaten the security of the world 
by threatening the sanctity of U.S. Treasury bills.

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