[Congressional Record Volume 148, Number 16 (Monday, February 25, 2002)]
[Senate]
[Pages S984-S986]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]


                            MORNING BUSINESS

  The PRESIDENT pro tempore. Under the previous order, there will now 
be a period for the transaction of morning business, not to extend 
beyond the hour of 2 p.m., with Senators permitted to speak therein for 
up to 10 minutes each.
  The Chair, in his capacity as the Senator from the State of West 
Virginia, suggests the absence of a quorum.
  The clerk will call the roll.
  The assistant legislative clerk proceeded to call the roll.
  Mr. GREGG. Mr. President, I ask unanimous consent that the order for 
the quorum call be rescinded.
  The PRESIDENT pro tempore. Without objection, it is so ordered.
  Mr. GREGG. Mr. President, are we in morning business?
  The PRESIDENT pro tempore. The Senate is in morning business.
  Mr. GREGG. I seek recognition under morning business.
  The PRESIDING OFFICER (Mrs. Lincoln). The Senator is recognized.
  Mr. GREGG. Madam President, I rise to speak about an issue that I 
have spoken about a number of times on the floor in my term of office, 
and that is the issue of Social Security and how we reform it and how 
we make it solvent. I would make it a system that continues to support 
our senior citizens as they retire. And more importantly, it 
addresses--or equally importantly, it addresses the needs of the next 
generation, a very large generation, as it heads into retirement and 
does so in a solvent way, a way that doesn't bankrupt either our Nation 
or leave our senior citizens without adequate resources to live a good 
life once they retire.
  I was extraordinarily disappointed, extraordinarily disappointed, to 
read an article in the Washington Post which was picked up, I guess, in 
a variety of different ways by different news sources, so it was not 
unique to the Post's view. It was entitled ``Democrats View Social 
Security as Election Issue'' and it went on to talk about a letter that 
had been sent jointly by the minority leader of the House, Congressman 
Gephardt, and the majority leader of the Senate, Senator Daschle, which 
essentially raised the red shirt of Social Security, and basically laid 
out a political agenda versus a substantive issue for correcting the 
problems which we face in Social Security. It is extraordinarily ironic 
but unfortunately consistent with the policies of some Members of the 
other side of the aisle that they would use Social Security as a 
political club for the purposes of attacking Members of my side of the 
aisle.
  This is now unique. It is not new. In fact, when I served in the 
House of Representatives, I had the good fortune to serve under a very 
strong leader of the House, Congressman ``Tip'' O'Neill from 
Massachusetts, and I got to know him personally while we didn't 
necessarily agree on everything. But I got to know him very well, and 
he was from neighboring states. I once asked what was going to be the 
issues that we would hear about as Republicans running in the next 
election. I think this was in 1986, 1985. And he told me, we were going 
to hear about three issues from his folks. No. 1, we were going to hear 
about Social Security. No. 2, we were going to hear about Social 
Security. And No. 3, we were going to hear about Social Security.
  And, unfortunately, that's the way it proceeded. But that's not 
constructive to resolving the issue of Social Security. In this 
Congress, in the Senate especially, we have had a number of people who 
have attempted from both sides of the aisle to be positive and 
constructive forces on resolving issues of Social Security, but 
politicizing it certainly doesn't accomplish that.
  In fact, the recent commission which it appears this letter was built 
around as a purpose of attack, was headed by the former Senator from 
this body, Senator Moynihan, who was an extremely positive force for 
good governing in this country. I again didn't always agree with 
Senator Moynihan but I admired him as a Senator and as a thoughtful 
person on public policy. The commission which was headed by Senator 
Moynihan appears--and which put forward a series of proposals as to how 
we could address the Social Security issue--appears to be the focal 
point which is going to be used to try to leapfrog into an issue of 
politics on the question of Social Security.
  This is unfortunate because that commission attempted in a sincere 
and aggressive way to be a positive force for a discussion on the issue 
of how to make Social Security solvent.
  Let's return to the fundamental underlying problems involved in the 
Social Security debate, and how we address them. To begin with, there 
is the question of the Social Security trust fund. It is a concept 
which has been created over the years, under which citizens who pay 
into Social Security have a right to put a claim against. As a 
practical matter, there is no trust fund. We all know that. What senior 
citizens have in our country is a right to claim on younger citizens, 
working citizens of our country the right to a certain amount of their 
tax dollars to support them, the senior citizens in retirement.
  That is the basic agreement that has been reached under the terms of 
Social Security. What you pay into the Social Security system has 
absolutely no relationship to what you get out of the

[[Page S985]]

Social Security system in the long run. For example, if you were a 
senior citizen today who retired in the mid-1960s or late 1970s, or 
late 1960s or late 1970s or even into the 1980s, you essentially paid 
into the system only a fraction, a fraction of what you have received 
back from the system in the form of benefits. Ironically, if you happen 
to be a young person working today, say you're in your 20s, especially 
if you're an African American, what you are going to pay into the 
system for what you're going to get back from the system is going to be 
more, actually more in the terms of taxes than what you will receive in 
benefits.
  So it really doesn't depend on how much you paid into the system as 
to what you received in the system. It depends more on when you were 
born and when you started contributing to the system and when you 
retire. And that's why the system rather than being a fully funded 
system, essentially is a system which says to one generation, you shall 
support the older generation.
  To put it another way, rather than owning assets, what the Social 
Security system owes is the right to raise and take taxes from working 
Americans. And to use those taxes to pay for the benefits of people who 
are retired. That is what the Social Security system essentially owns.

  Throughout the 1990s and even today or most of the 1990s, beginning 
the early part of the 1990s, the Social Security system began taking in 
a lot more money than it was paying out. So you might say, well, where 
did that money go? Isn't that money sitting there as an asset which a 
senior citizen down the road can take advantage of? Actually, no, it is 
not.
  Where that money went was to operate the Federal Government. For 
years the Social Security excess payments were used to pay for the day-
to-day operation of the government. And in exchange for that, the 
Social Security system received a note, a debt from the Federal 
Government. What did that mean? That debt essentially meant that when 
the Social Security system needed money, they could come to the General 
Treasury or the taxpayers of America, and say, pay us on this note. But 
when the notes weren't there during that period from about 1975 to 
about 1987 when the Social Security system was running a deficit--in 
other words, it was taking in less money in taxes than it was paying 
out--during that period when the Social Security system had no notes to 
theoretically repossess or reclaim or get back, the benefit payments 
continued to be made.
  And it was tied not to the fact that there was a note but it was tied 
to the fact that the American public believed that there was a standard 
of living and a standard of benefit which should be maintained for 
people who are retired. And so the younger generation paid additional 
taxes to support the older generation.
  And now, of course, we are, as I mentioned, in a period of surplus, 
so there is enough money there to pay the older generation the benefits 
it needs. But beginning--and this is where the problem starts--in the 
year 2008 when the baby-boom generation starts to retire and accelerate 
rather dramatically as the full baby-boom generation retires by the 
year 2015, we will see the actual cash flow into the Social Security 
system not meeting the demands of the system.
  In other words, we have a higher cost for benefits than we have 
payments coming in under the Social Security taxes. And so once again 
we will be in a situation as we were in the mid-1970s and mid-1980s 
where the American worker, younger Americans will be asked to pay 
additional taxes in order to support people who have retired in order 
to maintain their benefit level.
  This will be a significant issue for us as a country. And this is the 
issue that the Moynihan Commission tried to address, the fact that 
beginning in the year 2008, we will be back into a negative cash flow 
from a standpoint of Social Security taxes, and we have got to do 
something in order to maintain the benefits to senior citizens and give 
them and assure them the promise that we have made to them. And the 
Moynihan Commission pointed out that this is not going to be like the 
1970 and 1980 period. This is going to be a much more severe stress on 
the system because ironically, the size of the retiring generation will 
be the largest in the history of our country.
  To try to put it in perspective, in 1940, there were 100 people 
paying into the system to support one retiree. In 1950, there were 16 
people working and paying taxes into the system for every person who 
was retired and taking benefits out of it. By 1990, we were down to 3.5 
people paying into the system. For every one person taking out. So we 
have gone to a pyramid to almost a rectangle. Well, by the year 2020, 
between 2015 and 2020, we're essentially going to be at a rectangle. 
There are only going to be two people paying into the system for every 
one person taking out because this huge population boom that came after 
the end of World War II, the post-war baby boom of which I am a member, 
President Clinton is a member. This generation is so large that it 
simply is overwhelming the system.
  The point that the Moynihan Commission was trying to make is we have 
got to start planning for this. As a government and as a culture or we 
are going to suffer an extremely severe situation. And so they put 
forward three or four fairly reasonable proposals dealing with a very 
narrow part of the resolution of the problem. Specifically, whether or 
not today when we are running a surplus in the system--in other words, 
when people are paying in more taxes than are necessary to support the 
benefits, should those taxes be used to support the general government, 
or should we allow people to keep some small percentage of the taxes 
they are paying in today and allow them to take that money and put it 
into some investment vehicle which would be controlled by the Social 
Security Administration. It would be much like the--what we as 
government employees have, a Federal thrift savings plan. It would be a 
market basket of some sort of securities, very risk averse securities, 
securities that don't have a lot of risk. You would have three or four 
or maybe five choices.
  Allow people to take a small percentage of their Social Security tax 
which they are paying in today which is not being used to support the 
Social Security benefit but is instead being used today to operate the 
general government and take that small percentage, 2 percent in most 
cases is what has been talked about out after 12.5 percent tax burden, 
take that small percentage and put it into an asset which you, the wage 
earner, the working American, would actually own. It would be yours. 
You wouldn't have to depend on the Federal Government, the largess of 
the Federal Government to exist; you wouldn't have to depend on the 
goodness of a bunch of folks here in the Senate to exist. It would 
physically be your money. And if you happen to die before you reached 
age 59 or 60, that would go to your children, or to your family or to 
whoever else you wanted it to go to. Under today's law, of course, if 
you happen to work all your life and you have the misfortune of getting 
hit by a truck when you are 59, you get absolutely nothing out of the 
Social Security system and your wife gets very little on top of that. 
This would allow you to actually own that asset. It would allow all 
Americans to actually realize wealth because every American would have 
a savings account with real assets in it that could be used for their 
retirement.

  But what does the rear of the other side of the aisle do? When a very 
responsible former Senator of this body puts out talking points, simply 
talking points as part of a commission resolution for how we might 
address one small part of what is going to be the most severe fiscal 
and cultural issue we face as a country, particularly as we head into 
the next decade? They start waving the red shirt. They start accusing 
everybody of trying to steal from senior citizens or trying to 
manipulate the system to wipe out the benefits of senior citizens. They 
start scaring people. How totally irresponsible can you be?
  And then they say this is going to be their policy as a party. They 
say the Democrats have used Social Security as the election issue. 
Well, we probably should debate Social Security as an election issue. 
We ought to debate it responsibly. We ought to talk about ideas like 
those that Senator Moynihan has proposed, like Senator Bob Kerrey 
proposed from the other side of the aisle, like Senator Breaux has 
proposed from the other side of the aisle,

[[Page S986]]

like former Senator Robb proposed on the other side of the aisle.
  Those are the exact same ideas that Senator Moynihan proposed and yet 
when Senator Moynihan's commission proposes them, they suddenly become 
an issue of partisan nature that should be driven as a political issue 
and we will once again see those envelopes come out that are made to 
look like Social Security checks which say urgent, open quickly, and 
when you open them, there will be a form from the Democratic National 
Committee telling us, you are about to lose you Social Security because 
the evil President and his commission headed up by Senator Pat 
Moynihan--they may not mention that--has suggested that a percentage of 
the money that is being paid today, not by you the recipient but by 
workers which is not only for you, the recipient to get your benefits 
but is also important for those workers to get theirs when they retire, 
and that a percentage might be used as a savings account owned by 
individuals in America, owned by the people who are paying excess taxes 
and Social Security today. We will get those letters. And you will get 
the phone calls at dinner time saying your Social Security is going to 
be lost if you're a senior citizen.
  And once again, we will have an approach to Social Security which 
does absolutely nothing to address this critical public policy question 
but does a great deal to poison the well so that it can't be addressed 
constructively. This is such a crucial issue of public policy. It is 
absolutely inexcusable that it is being promoted and addressed in such 
a smear manner--cavalier manner. Listen to this language. The dangers 
of Social Security privatization has been tragically illustrated in 
recent months by the fate of the Enron employees who lost their savings 
when Enron collapsed. How outrageously demagogic can you be to make 
that type of a statement as an attack on the Moynihan proposal?
  The Moynihan proposal didn't suggest investing in a single company. 
Just the opposite in fact. It suggested that a basket be used, a basket 
which would be under the supervision most likely of the Social Security 
Administration. But because Enron has become the classic poster boy and 
appropriately so for fraudulent activity in the marketplace, there is 
an attempt here to merge the issue of Social Security and making it 
solvent for the next generation with Enron. Pure despicable, political 
demagoguery which makes one wonder if there is anybody in the 
leadership of the Democratic Party, at the National Committee or in the 
Congress who actually wants to solve the problem. I suspect there are 
very few.
  It appears most of the Senators on that side who did want to solve 
the problem have decided to leave the Senate, unfortunately, and nobody 
has stepped forward other than Senator Breaux, to pick up the flag. But 
what is very clear is that a number have stepped forward to pick up the 
flag of Tip O'Neill and the National Democratic Party, as they try to 
polarize the American public on this issue. At the expense of a 
resolution of the issue, and one wonders what we're going to say to 
senior citizens who retire in the years 2015 and 2017, when we will be 
in a crisis. One wonders what we are going to say to our children who 
are working today and are coming into the working place and will have 
to have their taxes increased radically in order to meet the 
obligations of Social Security. One wonders what you're going to say to 
the person, especially the African-American who's in their 20s today, 
who has a likelihood that they will get less back from Social Security 
than what they paid into it. What are you going to say to the person 
coming into the work place who will have essentially no assets when 
they retire?
  Senator Moynihan and his commission has suggested you say to them, 
let them start to build a nest egg that is in addition to the Social 
Security benefit, a guaranteed Social Security benefit. But even as 
moderate a proposal as that, which was not even put out in the form of 
legislative language, is attacked in the most flagrantly partisan 
manner by the leadership of the House and the Senate. It is going to be 
hard to make substantive progress on the issue of Social Security if 
this is going to be the reaction of Senator Daschle and Congressman 
Gephardt.
  The PRESIDING OFFICER. The clerk will call the roll.
  The legislative clerk proceeded to call the roll.
  Mr. REID. Madam President, I ask unanimous consent that the order for 
the quorum call be rescinded.
  The PRESIDING OFFICER. Without objection, it is so ordered.

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