[Congressional Record Volume 148, Number 23 (Wednesday, March 6, 2002)]
[House]
[Pages H725-H728]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]
SOCIAL SECURITY: AMERICA'S MOST IMPORTANT GOVERNMENT PROGRAM
The SPEAKER pro tempore (Mr. Crenshaw). Under the Speaker's announced
policy of January 3, 2001, the gentleman from South Carolina (Mr.
DeMint) is recognized for 60 minutes as the designee of the majority
leader.
Mr. DeMINT. Mr. Speaker, I appreciate being here today to continue
the discussion on this important issue, the issue of retirement
security for America's seniors.
There has been a lot of discussion about the need to have an honest
debate. I think that is very important. But we cannot have an honest
debate when we have one side who is just criticizing with no plan, and
our side who has been working diligently to develop a plan to guarantee
benefits for today's seniors as well as to improve the Social Security
system and guarantee even higher benefits for the next generation.
It is important that we recognize that Social Security is America's
most important government program. It is a sacred promise to the
American people. It is a Social Security contract that we cannot
ignore.
Social Security is a plan that Republicans believe in, and we think
that it cannot only make Americans free and secure, but it can secure
our future indefinitely if we plan correctly. But we cannot have an
honest debate, again, with a side that is full of critics, but no
plans.
The Democrats at this point have put forward no plan to improve and
save Social Security in the future. This is something we must challenge
every day.
About two-thirds of retired Americans get their primary source of
income from Social Security. It is too important to leave to chance. So
our purpose here today is to talk about Social Security as it is and
how it needs to be, how we can guarantee the benefits for today's
seniors and improve the program for tomorrow.
In order for that to happen, there has to be more truth about the
current Social Security program. It will not do to give a lot of
statistics and a lot of misrepresentations.
We just heard the gentlewoman speaking of money coming out of the
trust fund to go to corporations. This simply is not true. We want to
refute these things today and tell Americans the truth about Social
Security.
The first thing we need to do before we begin the debate is to stop
this shameful frightening of senior citizens. The gentleman from
Missouri (Mr. Gephardt) was on the floor last night and talked about a
secret plan to reduce benefits after the election. They say we do not
need to issue a written guarantee to seniors. We must issue a written
guarantee if the other side continues to say that this plan is in
jeopardy, that their benefits are in jeopardy. One moment they are
saying it is a rock-solid investment; the next moment they are saying
that someone is going to take it away from seniors.
We have a plan to tell every senior citizen in writing that their
benefits are guaranteed. The current Social Security program will meet
the promised benefits of today's senior citizens. They do not need to
worry that any reform plan will change that. The President has said
that he will consider no plan that reduces benefits for current seniors
or those near retirement. The plans introduced by Republicans, none of
them reduce benefits for seniors. The plan that the Democratic side
has, which is no plan, means that we will continue with the program
that we know is going bankrupt.
We need to tell people the truth. The first part of that truth is to
reassure our seniors that no one will reduce their benefits.
The next thing we need to do is to clarify for today's workers the
true nature of this Social Security system. The other side has just
suggested that it is the only accumulated savings program for many
Americans. Yes, it is the only savings program for many Americans. The
problem is that, even though over 12 percent of everything workers make
goes into Social Security for their retirement, not one penny of that
is saved for their retirement. All of that money is spent on current
retirees, paying down debt, or other government programs. The current
Social Security system is not set up in a way that allows it to
accumulate savings.
So, again, we work all of our lives. Many Americans, 20 percent, who
do not live over 65, lose everything they put into Social Security,
because there is no accumulated savings.
We need to guarantee benefits to today's seniors, but for today's
workers, we need to tell the Social Security Administration something
very simple and something Americans already think that we are doing for
them. We tell the Social Security Administration to start saving some
of the money that workers are putting into the Social Security program.
We do not need to privatize anything. The same Social Security system,
the same structure, the same payroll withholding, can continue just as
it is. The only difference is is we begin to save some of that money
for the future retirement of today's workers. We can do that without
compromising in any way the security and benefits of today's seniors.
There are several reform plans on the Republican side, and I want to
talk about one today that the gentleman from Texas (Mr. Armey) and
myself have introduced here in the House. This is a plan that answers
many of the questions that were posed by the other side, who has no
plan. This plan is called the Social Security Ownership and Guarantee
Plan.
Let us talk about the words ``ownership'' and ``guarantee.'' Today's
Social Security program, while it may be the only savings program for
most Americans, saves no money for seniors. We need to start saving and
allow individuals to own their Social Security retirement account. At
the same time, we need to tell every American that no American will
ever receive less from Social Security under the DeMint-Armey plan than
they would have received under the existing plan. They have a choice
not to leave the current plan at all. So they can stay where they are,
or they can begin to save some of the money that is coming out of their
paycheck for their retirement.
What will happen over the next 20, 30, 40 years is my children and
folks in their 20s and 30s will begin to accumulate large sums of money
in a personal Social Security account that guarantees them that they
will have at least as good or better benefits than the current system.
So instead of retiring after a whole life of putting money into Social
Security, under the DeMint-Armey plan, Americans will retire with
hundreds of thousands of dollars in a Social Security savings account
that is theirs. It can be turned into a monthly income and can be used
to pass on to their children and grandchildren.
We need to recognize that for many poor working Americans the only
opportunity for them to leave something to the next generation is from
Social Security, and the way Social Security is set up today, all of
one's benefits die with them. They have no opportunity to pass along
anything that one puts into Social Security.
The DeMint-Armey plan allows individuals to save, to invest in safe
investments, in government bonds, and to have the money they need for
retirement and money to pass on to the next generation.
Perhaps even more importantly, the DeMint-Armey plan recognizes that
we need to set aside even more of the income for the working poor so
that they will have enough when they retire to have their own income as
well as money to leave. The DeMint-Armey plan allows folks at the lower
income level to keep a larger part of their payroll withholding. They
do not take out any more taxes. The taxes stay exactly the same. But
they put up to 8 percent of their total salary into the savings account
so that, when they retire, they will have something of their own.
This is a plan that helps the poor, it helps seniors, it helps
America. Because what changes with this DeMint-
[[Page H726]]
Armey plan is, when the next generation arrives at retirement, they are
no longer dependent on the government for their income.
{time} 1615
They do not have to listen every election that somebody is going to
take their income from them, or there is some secret plan to reduce
benefits. They will have their own retirement account, their own
retirement income. Many Americans will be wealthy from the Social
Security system.
There are a lot of folks trying to frighten us today, to say if this
money is saved that somehow they will not be as secure. We need to
remind Americans that if they have no savings and they are totally
dependent on politicians to give them a retirement income, they are not
secure at all. In fact, they will continue to be frightened and
manipulated, like we have heard today.
It is critically important that we talk about the truth, that we
debate real plans for Social Security reform, and that we do not
continue the charade of the other side that nothing is wrong and
nothing has to be changed. If we do not change Social Security, within
30 years benefits will be cut nearly 30 percent. Those cuts will
continue, along with increases in payroll taxes over the years. That
will happen in about 2038.
Social Security is a promise of the future. This is not a problem
that we cannot solve. In fact, it is an incredible opportunity for us
as a Congress to reshape the Social Security program in a way that
makes people not only secure but makes them free and independent in
retirement. It gives the poor an opportunity to save and pass along
wealth to the next generation. This is the opportunity that we need to
give to the American people during the debate on Social Security.
Mr. Speaker, I yield to the gentleman from Indiana (Mr. Pence).
Mr. PENCE. Mr. Speaker, I thank the gentleman, not only for yielding
to me, but for his leadership on the issue of Social Security reform in
this Congress.
Mr. Speaker, this Congress has a responsibility to inform the
American people that Social Security faces serious financial problems
in the not-too-distant future. We cannot afford to sit idly by while
our Social Security system continues to mirror corporations that have
become insolvent, like ones that have made their way onto the front
pages of America's newspapers.
At present today, there are four workers supporting every one
beneficiary on Social Security. By the year 2020, that ratio will
dwindle to two workers for every one beneficiary. Americans will either
have to endure enormous payroll tax increases or support systemic
reform.
I am here today, along with the gentleman from South Carolina (Mr.
DeMint) and other colleagues, to stand in support of systemic and
visionary reform that even includes the idea of personal retirement
accounts. Mr. Speaker, the personal accounts proposals that are being
debated in Congress today are completely voluntary, and, I would offer
and emphasize, completely safe. Investments would be made in highly
diversified companies plus government and corporate bonds, a popular
pension plan among many Members of Congress.
If it is an option for those of us in this Chamber, it should
certainly be an option for American taxpayers. Let us give workers real
ownership of their Social Security by making it free from the influence
and political control of Congress.
But Mr. Speaker, let us move on to some of the myths from the left
that are hovering above our Social Security system today, and it makes
this Special Order and this time on the House floor so urgent and so
important as a beginning in this debate.
Myth number one: the President's budget raids Social Security. I
offer that this is absolutely false. The President has proposed a
budget well suited to this unique moment in American history when our
country is at war, our homeland and our citizens have been attacked,
and our economy is weak. This budget is an appropriate blueprint to
craft our response to the challenges before us. In fact, Mr. Speaker,
the Social Security trust fund continues to grow under the President's
budget. It provides for every penny of current law benefits and full
cost-of-living adjustments.
Myth number two: last year's tax cuts in some way threatened Social
Security. Again, Mr. Speaker, this is entirely false. Last year's tax
cuts have not affected the Federal Government's ability to pay
benefits, and the trust fund remains unchanged.
Some of those in this debate can and will continue to point to tax
cuts as a threat to Social Security, but the truth lies in the simple
demographics of an aging population. Eliminating tax cuts will not
improve worker-retiree ratios. It will not encourage seniors to delay
retirement. It will not encourage workers to save more for their own
retirement.
Myth number three: Social Security reform will somehow erode the
trust fund. In fact, that, again, Mr. Speaker, is false. Research
indicates that the creation of the proposals for personal retirement
accounts actually increase benefits for retirees well above what the
current Social Security system could ever imagine to pay. Without these
accounts, today's workers could face as much as a 30 percent cut in
benefits when they retire.
The research is accurate, and the myths have been dispelled. We as a
body must now move in the direction of offering a plan; and the
Republicans, Mr. Speaker, have a plan. We will save Social Security
from its bankruptcy and the course upon which it is headed in the next
20 years while guaranteeing that current retirees receive their
promised benefits.
Let me say again, Mr. Speaker, I think it is absolutely imperative,
and I extol the leadership of the gentleman from South Carolina (Mr.
DeMint) and others in this Chamber who have said we as leaders in this
country in both political parties should make an affirmative statement
to the American people that we will meet our obligations in the Social
Security system; that what people expect to receive from Social
Security in income and in benefits they will receive, and no less. I
believe the time has come for us to make this imperative statement
clear to the American people, and perhaps this Congress will do so this
year.
This leadership and this majority will ensure that workers are
allowed to earn higher benefits than under current law, as we have
before. We will give workers ultimately real ownership of Social
Security when reform finally arrives. We will enable younger workers to
build wealth through voluntary participation in their own personally
owned accounts that they can pass along to their heirs. We will
preserve the important disability and survivors components of the
program. We will reduce the financial burden on children and
grandchildren. We will improve the rate of return for all
beneficiaries.
Mr. Speaker, the Good Book tells us that if anyone does not provide
for his relatives, and especially for his immediate family, he has
denied the faith and is worse than an unbeliever. I submit today that
we must, in this country, make it more possible for more Americans to
not only provide for themselves but to provide for their families.
We do that through strengthening Social Security today. We do that
through strengthening the people's confidence in the commitments that
this government has made to Social Security, that we will meet those
commitments, that income and benefits from Social Security will remain
firm, and we will also keep the promise of Social Security alive, Mr.
Speaker, by being a reform Congress; by recognizing that if we simply
allow Social Security to continue along its way, that it is headed for
the shoals.
But if we will step in with the leadership that the gentleman from
South Carolina (Mr. DeMint) has provided in this Congress, that our
majority leader continues to provide, and that other visionary leaders
in this Congress have offered in this area, I am altogether confident
that there will be one bright, shining day when we will have a Social
Security system in America that builds wealth rather than dependency; a
Social Security system in America that engenders confidence about those
retirement years for all Americans; a bright, shining future when some
day, Mr. Speaker, perhaps Americans would not look longingly to the
Capitol dome hoping that their retirement security
[[Page H727]]
would be in place, but rather, they could look to themselves. They
could look to their own retirement accounts. They could look to a
system, and they could look to statements with their own resources, and
be confident on their future because of the resources that they have
placed in that trust.
It is a vision, it is a long-term vision; but it begins, I submit
today, as the gentleman from South Carolina (Mr. DeMint) has laid out
so eloquently, it begins with a promise. It begins with strengthening
the commitment that this Congress has to maintaining the income and
benefits of Social Security at the level of expectation that Americans
have today.
Once we reiterate this Congress's and this government's commitment to
Social Security, once we have laid the foundation of confidence with
the American people, then we will lead with reform that will ensure not
only Social Security for our parents but also for our peers and for
their children and for our grandchildren for years to come through
much-needed reforms.
Mr. DeMINT. Mr. Speaker, I thank the gentleman. It is so refreshing
to hear someone dispel the myths; to talk about the need to guarantee
benefits, to talk about real ideas that cannot only guarantee the
benefits for today's seniors, but to guarantee that no American will
ever receive less from Social Security than is promised by the current
system.
This is leadership, and I want to thank the gentleman from Indiana
(Mr. Pence) for being here today and helping us dispel the myths. We no
longer need to listen to the fear tactics, to the manipulation.
Surely the other side does not want us to issue a guarantee because
they do not want seniors to know that their benefits are safe, because
in the upcoming election, Mr. Speaker, they want to run these ads that
tell the seniors that someone is going to take their Social Security
from them.
I can guarantee today's seniors that as long as President Bush is in
the White House and the Republicans are leading the Congress, that no
American will ever receive less from Social Security than is promised
by the current system.
Mr. Speaker, I yield to the gentleman from Michigan (Mr. Smith).
Mr. SMITH of Michigan. Mr. Speaker, I thank the gentleman for
yielding to me, and I thank him for doing this Special Order.
If we can convey one message, it is that Social Security has real
problems. I think the temptation in a political election year is for
anyone that comes up with suggestions on how to solve Social Security,
how to keep it solvent, to criticize them, to maybe win some points
from seniors by scaring seniors that their retirement benefits might be
in jeopardy with any change.
Mr. Speaker, I have a couple of charts. This chart represents the
complications of the increased cost of Medicaid, Medicare, and Social
Security. So as we see, the percentage of the total gross economy of
the country, which is now around 7 percent, is going to go to about 15
percent in terms of the cost of these particular programs. Trillions of
dollars does not have a great deal of meaning for most Americans, and
probably not for most Members of Congress; but the unfunded liability
of Social Security right now in today's dollars is $9 trillion. That
means we would have to take $9 trillion, put it in a bank account with
a return of approximately 4 percent to accommodate the money that we
are going to need over and above the FICA tax, the money coming in, the
Social Security tax, to pay Social Security taxes in the future. That
is if we do nothing.
So if there is one message that the gentleman has been so successful
in conveying, and many of us have tried to pitch in, it is the fact
that the cost of doing nothing is so much greater than trying to reform
the program and get a better return on some of those dollars. This just
represents the portion of Social Security as it consumes the current
budget. So it is one of the biggest expenditures; 21 percent of
everything that government spends is now spent on Social Security.
Here is the danger. The danger is not doing anything, and we will
wait until the last minute and then increase taxes and reduce benefits.
That is what this country has done several times since 1934, because
this Congress, in very emotional, vulnerable areas such as Social
Security, waits until the last minute. They wait until it is almost a
catastrophe, running out of money, and then they do something. Here is
the something that they have been doing is raising taxes.
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On this chart you see in 1940 the rate was 2 percent on the first
$3,000; and the maximum tax was, of course, $60 a year. By 1960 they
raised the rate again to 6 percent on the first $4,800. In 1980 they
raised it to 10.16 percent on the first $25,900; and in 2000 it is 12.4
percent. In 2000 it was on a base rate of 76,200. Today it is 86,000.
So it is 12.4 percent of the 86,000. So as the number of workers has
declined in relation or in the ratio to the number of seniors, then you
charge those existing workers more and more.
So we have got that kind of demography facing this country. In 1940
there were about 40 workers for every one retiree. Today there are
three workers for every one retiree. And they expect in the next 25 to
30 years it will be two workers for every one retiree. The tremendous
burden on those two workers. And what we are suggesting now, nobody is
suggesting privatization, privatization is a word that the demagoguers
use to try to scare people.
Every plan that I have seen by every Republican, including some of
those that are joined in by Democrats, have a Social Security program
that gives the protection of benefits to current and future retirees.
The challenge is can we get a little better return than no return at
all on the money. Right now, with a little extra surplus coming from
the Social Security tax, it is put into government bonds; and when
interest accrues, another IOU is written but there is no real money. So
in 2016 when the revenues coming in from Social Security tax are less
than what is sent out to pay benefits, look, everybody needs to know
there is no account with your individual name on it as an American
worker that gives you any entitlement to Social Security benefits; and
that should be obvious over the past years when we have simply
increased taxes and reduced benefits.
If we can get some of that in individual workers' names and limit it
to certain kinds of indexed accounts, that is what the gentleman from
South Carolina (Mr. DeMint) does in his bill, that is what I do in my
bill, then you own it. If you die before you are 65, then it goes into
your estate because it is your money. Right now if you die before you
are 65, you get $225-or-something death benefits.
Can we get a better return on the money? And how dangerous is it to
keep putting this bill off? I chaired the bipartisan Social Security
Task Force last session, and I introduced four Social Security bills
since I came here in 1993 that were to keep Social Security solvent.
Every term, every session over the last 9 years that I have introduced
a bill, it had to be a little more drastic. And if we continue putting
this off, then it is going to be that much more drastic later on.
It is going to cost a lot of money to pay benefits. We are going to
pay benefits. The question is can we save almost 20 percent of the cost
by changing the programs now and getting some real return on that
investment.
Mr. DeMINT. Mr. Speaker, I thank the gentleman for taking the time to
understand the problems with the Social Security system and to tell the
truth about it. But even more importantly, for taking the time to
develop a plan to make Social Security better in the future. That is
what has been missing in this debate, truth about the current program
and a plan to make Social Security better in the future and to
guarantee the benefits. That is what we need to bring to this honest
debate that has been requested by the gentleman from Missouri (Mr.
Gephardt) is a plan in truth.
Again, I want to thank the gentleman. I want to thank the Speaker. I
want to thank everyone here for recognizing the importance of the
Social Security program, but to also recognize that it is Republicans
that have a plan to guarantee the future of Social Security. Our head
is not in the sand as the other side's is. We are not denying that
there is a problem.
We are recognizing the problem, but we are developing plans to
guarantee
[[Page H728]]
that no American will ever receive less from Social Security than is
promised by the current program. And we want to put that in writing,
and we want it put it down in a plan that will last.
Mr. SMITH of Michigan. Mr. Speaker, will the gentleman yield?
Mr. DeMINT. I will yield to the gentleman from Michigan.
Mr. SMITH of Michigan. Just to emphasize the point, we talk about the
magic of compound interest. I paid my grandson to come in and paint the
fence. And I said, Look, will you put this $36 in a Roth IRA? He said,
Geez, Grandpa, I want to put this in an account and buy a car with it
when I am old enough. So I explained to him, Look, if you put this $36
in an IRA it doubles almost every 8 years. So I figured it out and
projected it out so at age 65 he had $70,000 that that money would be
worth because of the magic of compound interest; and if he waited
another 7 years to age 72, then it would be worth $140,000. He said,
Gosh, Grandpa, that is good; but could I just put most of it towards
the car and a little bit towards the Roth IRA?
So the magic of compound interest is what can make today's workers
that are modest or median income retire as rich people. That is what we
are trying to do is having something more than just Social Security but
promise the Social Security, but then have the opportunity with the
magic of compound interest to have retirees gain even more in their
retirement years.
Mr. DeMINT. Mr. Speaker, I thank the gentleman, although I do think
he should have paid his grandson more than $36. But he makes an
excellent point. If Americans knew that even the poorest worker, if we
start now for those in their 20's and 30's, they will all have several
hundred thousand dollars that is theirs that can be turned into a
monthly income for their own retirement security, but even more
importantly, to have some additional income for their retirement, to
pay off a house, to help children or grandchildren. We need to help the
poor of America develop wealth that they can pass on to the next
generation and Social Security is that only opportunity.
We have plans to help them save more and at the same time guarantee
that their retirement income will always be as much or more than the
current Social Security system.
This has been a great start to the discussion. You will hear more
from the Republicans because it is the Republicans that have the plans,
and it is the Republicans that will tell you the truth.
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