[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.

                              {time}  1630

  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.

                          ____________________