[Congressional Record Volume 148, Number 22 (Tuesday, March 5, 2002)]
[House]
[Pages H667-H668]
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 Missouri (Mr. Gephardt) is recognized for 5 minutes.
Mr. GEPHARDT. Mr. Speaker, I rise to urge a full and fair debate on
Social Security. Three months ago, the President's commission issued a
report. It called for sweeping changes to the Social Security system.
It called for the creation of private accounts. It called for three
plans to meet these goals. Then last week, in a speech to the Cato
Institute, the majority leader urged a debate on this issue. He urged
us to reform Social Security. He urged us to privatize Social Security.
And the President of the United States argued the same in speeches also
delivered last week. Yet in Congress, Republicans are refusing to have
that full and fair debate on their schemes of privatization. Do they
have something to hide?
We hear that soon we are going to get a proposal to send certificates
out to seniors, at a cost of $14 million, that tells them that if you
are over the age of 62, your benefits will never be cut. The first
question is, What if you are under 62? What should they assume? We are
also told that CRS and other agencies have said that there is no legal
effect to this document. It is not anything that anybody can rely on.
Jo Anne Barnhart, the Social Security commissioner, suggests that the
plan would drain millions of dollars from the administration's fund and
alarm seniors who did not get their certificates. I could not agree
with her more. The certificate idea is a political exercise that will
squander taxpayer time and taxpayer money. It will create confusion.
And it is an insult to seniors who put their faith and trust in Social
Security.
We do not need a secret plan on Social Security. We do not want
people to go into the voting booth and elect candidates next fall who
say, ``Oh, I'm going to guarantee your Social Security benefits,'' and
then turn around the day after the election and cut their benefits in
some scheme of privatization.
I am not afraid to stand on this floor and fight for my beliefs. I
say to my Republican colleagues, in the words of the old hymn, ``be not
afraid.'' That hymn says that if you believe in something and you care
about it, you ought to go ahead without fear. I want a debate on this
issue before the election, not after the election. If Republicans fail
to put Social Security on the floor, I intend to mount a discharge
petition to bring up the Presidential commission's plans so that we can
have a full and free debate, the House of Representatives at its best.
I think it is essential. Social Security is at the heart of our
retirement security system. Thanks to Social Security, millions of
Americans avoid poverty. They have lived their lives free from fear.
People with disabilities and surviving family members have put food on
the table because of Social Security. They have roofs over their heads.
For 67 years, Social Security has been there for the people of this
country when they have needed it.
My mother is 94 years old. She lives in an independent-living
facility in St. Louis, and about half the costs of that facility every
month come from her Social Security. You better believe she cares about
Social Security. And you better believe I care about Social Security.
And you better believe that millions of Americans care about Social
Security. And you better believe that there are millions of people out
there who care about Social Security and are concerned and rightly
concerned about secret Republican plans to wait until after the
election to put forward plans that will cut their benefits.
We are not talking about an academic exercise here. We are talking
about people's lives and what happens to them every month. We are
talking about the biggest changes in the program that the President has
proposed in the history of the program. We are talking about a sea
change in the way this program works. The Republican Party has always
sought to weaken Social Security. In 1935, they voted against it. In
1964, they wanted to make it voluntary. And in 1994, Representative
Armey appeared on national television admitting that ``I would never
have created Social Security.''
Today, the Republican slogan seems to be, ``Save Social Security
last, not first.'' In today's New York Times, Paul Krugman is dead on.
His argument is that Social Security has never been a simple pension
fund. It really, he says, is a social contract. Each generation pays
taxes that support the previous generation's retirement and expects to
receive the same treatment from the next generation. Republicans
propose to allow younger workers to place their payroll taxes in
private accounts, in effect to break this ongoing contract, in
Krugman's words.
He says, we are left with two options: make room for the trillions
diverted into private accounts by slashing baby boomer benefits, or use
money from other, unidentified sources to replace the diverted funds.
The Republican plan makes promises that sound too good to be true,
because they are too good to be true. According to Krugman, private
accounts will create a financing crisis requiring sharp benefit cuts or
large infusions of money from unspecified sources, or both.
Republicans say privatization will not cost a dime. The Social
Security actuaries say it will drain $20 trillion from the budget.
Republicans say privatization will strengthen people's retirement
security. Tell that to the employees at Enron. They cannot even pay the
cost of health care for their kids. Republicans say that 40 years of
neglect have permanently damaged Social Security's financial health, in
the words of Majority Leader Armey. Bob
[[Page H668]]
Ball, an expert on the subject, calls this statement flat out untrue.
Our challenge is to strengthen Social Security into the future. We
need to honor our commitments. We need to strengthen the trust funds.
We need to save Social Security first. America had a golden opportunity
about 15 months ago. Fifteen months ago, we could have passed tax cuts
to promote long-term economic growth while paying down the national
debt and investing in Social Security for Americans everywhere.
Republicans rejected our approach. Today, the President's budget breaks
pledges by both parties. Both parties promised to safeguard the trust
funds. The President's budget invades them for the next 10 years. It
drains $1.5 trillion from the trust funds, and plans proposed by his
commission fail to explain how we will pay for privatization. And they
will lead to cuts in benefits for seniors, even for individuals opting
out of private accounts.
This is not a debate about numbers. It is a debate in the end about
our values. What is the value we place on Social Security? Our values
call for understanding that Social Security will be solvent for the
next 36 years, at a minimum. Our values call for recognizing that
people have faith and trust and confidence in our most respected
program. Our values call for realizing that Social Security offers
economic security not just to seniors but to widows, disabled
Americans, and children of parents who die before the age of 65. Our
values call for keeping our intergenerational contract and commitment
in the 21st century.
{time} 1845
Our values call for keeping our word to the seniors of this country.
Our values call for investing in Social Security today, not tearing it
down as baby-boomers retire a few years from now.
I urge Republicans, be not afraid. Let us get about having a real
debate before the voters speak in November of this year. Let us get
about the task of saving Social Security first and today.
Breaking the Contract
(By Paul Krugman)
If converting Social Security to a system of private
retirement accounts is such a good idea, why can't advocates
of that conversion try, just once, to make their case without
insisting that 1+1=4?
Last week George W. Bush did it again, contrasting Social
Security benefits with what retiring workers would have if
they had invested all the Social Security taxes in the stock
market instead. As an article in The Times pointed out, this
was a misleading scenario even on its own terms; financial
planners strongly advise against investing solely in stocks,
and a diversified retirement account wouldn't have risen
nearly as much in the 1990's bull market.
But there's something much more serious wrong with Mr.
Bush's story. Indeed, the latest remarks perfectly illustrate
how he uses bogus comparisons to make private accounts sound
like a much better idea than they really are. For by
emphasizing what today's 65-year-olds could have done if they
hadn't paid Social Security taxes, Mr. Bush has forgotten
something rather important. Without those taxes, who would
have paid for their parents' benefits?
The point is that when touting its plan to privatize Social
Security, the Bush administration conveniently fails to
mention the system's existing obligations, the debt it owes
to older Americans. As with so many other administration
proposals, private accounts are being sold with deceptive
advertising.
The truth--which Mr. Bush's economists understand perfectly
well--is that Social Security has never been run like a
simple pension fund. It's really a social contract: each
generation pays taxes that support the previous generation's
retirement, and expects to receive the same treatment from
the next generation.
You may believe that Franklin Roosevelt should never have
created this system in the first place. I disagree, but in
any case Social Security exists, and older Americans have
upheld their end of the bargain. In particular, baby boomers
have spent their working years paying quite high payroll
taxes, which were used mainly to support their elders, and
only secondarily to help Social Security build up a financial
reserve. And they expect to be supported in their turn.
Mr. Bush proposes to allow younger workers to place their
payroll taxes in private accounts--in effect, to break this
ongoing contract. But then what happens to older workers, who
have already paid their dues?
There are only two possibilities. One is default: make room
for the trillions diverted into private accounts by slashing
the baby boomers's benefits. The other is to buy the baby
boomers out--that is, to use money from other sources to
replace the diverted funds.
Those really are the only alternatives. Last year the
special commission on reform of Social Security, which was
charged with producing a plan for private accounts, came to
an ignominious end--it issued a deliberately confusing
report, then slunk quietly out of town. But wade through its
menu of options, and you'll find that in the end the
commission grudgingly rediscovered the obvious: Private
accounts won't ``save'' Social Security. On the contrary,
they will create a financing crisis, requiring sharp benefit
cuts, large infusions of money from unspecified outside
sources, or both.
But nervous Republican members of Congress want to send all
Social Security recipients a letter (at government expense,
of course) assuring them that their benefits will never be
cut. And now that the magic budget surplus has turned back
into a pumpkin, the government is in no position to infuse
new money into Social Security--on the contrary, the
government at large is now borrowing from Social Security at
a furious pace.
So why is the Bush administration reviving its push for
private accounts right now? Did it really learn nothing from
the implosion of the reform commission? I doubt it; the
administration's economists aren't fools, though loyalty
often requires that they pretend otherwise.
A more likely interpretation is that this is entirely
cynical. War frenzy is subsiding, the Bush domestic agenda is
stalled, and early indications for the November election
aren't as good as Karl Rove expected. So it's fantasy time:
tantalize the public with visions of sugarplums, then blame
Democrats for snatching the goodies away. And it doesn't
matter that the numbers don't add up, because the plan will
never be tested by reality.
The SPEAKER pro tempore (Mr. Shimkus). Under a previous order of the
House, the gentleman from Illinois (Mr. Lipinski) is recognized for 5
minutes.
(Mr. LIPINSKI addressed the House. His remarks will appear hereafter
in the Extensions of Remarks.)
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