[Congressional Record Volume 148, Number 52 (Wednesday, May 1, 2002)]
[Senate]
[Pages S3597-S3598]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




                      OTHER FAST TRACK PRIORITIES

  Mr. FEINGOLD. Madam President, the Senate has put trade on the fast 
track, but there are a number of other priorities that the Senate would 
do better to put on the fast track.
  The Senate has put trade on the fast track, but what about a long-
overdue increase in the minimum wage? The Senate should put the minimum 
wage on the fast track.
  The Senate has put trade on the fast track, but what about updating 
Medicare to provide coverage for prescription drugs? The Senate should 
put prescription drug coverage on the fast track.
  The Senate has put trade on the fast track, but what about protecting 
people of color against racial profiling? The Senate should put racial 
profiling on the fast track.
  Madam President, the Senate has put trade on the fast track, but 
another thing that should be on the fast track for Senate consideration 
is ensuring the health of Social Security. As we debate the Senate's 
priorities, let me take a few minutes to address this other matter that 
requires the Senate's attention: the state of Social Security and 
Medicare and the well-being of the millions of Americans whom those 
important programs serve.
  Madam President, since the election, the topic of Social Security, as 
you well know, has all but fallen off the legislative agenda, and that 
is unfortunate, for at stake is little less than whether our elderly 
live in comfort or in poverty. Before Social Security, most elderly 
Americans lived in poverty. Before Medicare, more than a third of the 
elderly still lived in poverty--35 percent in 1959. Roughly 10 percent 
do now.
  Social Security and Medicare have been essential to this achievement. 
Nearly two-thirds of elderly Americans rely on Social Security for most 
of their income. Social Security has been one of the most successful 
Government undertakings in history.
  On March 26, the trustees of the Social Security and Medicare trust 
funds issued their annual reports on the financial condition of these 
two important programs. These reports give us another reason to turn 
attention to Social Security and Medicare and to our efforts to protect 
them.
  The Social Security trustees' report indicates that to maintain 
solvency for 75 years, we need to take actions equivalent to raising 
payroll tax receipts by 1.87 percent of payroll or making equivalent 
cuts in benefits. That is essentially equal to the long-term actuarial 
deficit in last year's report--1.86 percent.
  Another way of looking at these numbers is as a share of the economy, 
as measured by the gross domestic product. The Social Security 
trustees' report indicates that the long-term shortfall amounts to 
seventy-two one-hundredths of a percent of the size of the American 
economy that the trustees project over the next 75 years.
  The Social Security trustees project that the assets of the Social 
Security trust funds will keep the program solvent through 2041, and 
that is actually 3 years later than last year's report. When Social 
Security exhausts its assets in 2041, annual Social Security tax 
revenues will be sufficient to cover about three-quarters of annual 
expenditures.
  So the trustees' report thus sounds a warning: We can fix Social 
Security for 75 years if we make changes now equal to less than 2 
percent in payroll taxes or 13 percent of benefits. But if we wait 
until 2041, we will need payroll tax increases of more than 5 percent 
or benefit cuts of more than a quarter.

  The Medicare trustees' report indicates that to maintain solvency for 
75 years, we need to take actions equivalent to raising payroll tax 
receipts by 2.02 percent of payroll or making equivalent cuts in 
benefits. That is up slightly from last year's report, which showed a 
long-term actuarial deficit of 1.97 percent.
  The Medicare trustees project that the assets of the Medicare trust 
funds will keep the program solvent through 2030, and that is 1 year 
later than last year's report.
  The trustees' report raises a somewhat higher hurdle to keep the 
Medicare program solvent over the long run than Social Security. To fix 
Medicare for 75 years, we need to make changes now equal to about 2 
percent in payroll taxes or 38 percent of benefits. But, once again, if 
we wait until after the baby boom generation begins to retire in 
numbers, we will need much larger payroll tax increases or benefit 
cuts.
  These reports underscore the importance of working to ensure the life 
of these important programs earlier rather than later. As President 
Kennedy said:

       [T]he time to repair the roof is when the sun is shining.

  Regrettably, during the sunnier times of last year, the Government 
took steps that undermined the soundness of the Government's fiscal 
structure. Rather than repair the roof, the Government actually widened 
the hole.
  The question of Social Security and Medicare solvency is, in large 
part, as with all budgetary questions, a question of resources. Last 
year, the government dissipated many of the very resources that we 
could have used and that we should have used to shore up Social 
Security and Medicare.
  A recent analysis by the Center on Budget and Policy Priorities 
estimated the long-term cost of last year's tax cuts, assuming that 
Congress extends them, as many on the other side of the aisle advocate. 
According to that analysis, the long-run cost of last year's tax cut 
will equal 1.68 percent of the economy that the Social Security 
trustees project over the next 75 years.
  Compare that, for a minute, to the amount that we need to keep Social 
Security healthy over the same time period, which amounts to seventy-
two one-hundredths of a percent of the size of the economy that the 
trustees project over the next 75 years. The Center on Budget and 
Policy Priorities analysis shows, therefore, that ``the long-term size 
of the tax cut is more than double the entire long-term Social Security 
shortfall.''
  The Center on Budget and Policy Priorities study goes on:

       [I]f the tax cut were scaled back so that three-fifths of 
     it took effect while the funds from the other two-fifths of 
     the tax cut were used instead to strengthen Social Security, 
     the entire long-term deficit in Social Security could be 
     eliminated.

  That is an incredible fact. If we had just shown some restraint on 
this tax cut--still giving a very substantial tax cut--we could have 
eliminated the entire long-term deficit in Social Security.
  Like all budgetary questions, the question of Social Security 
solvency is, in large part, a question of priorities.
  I believe that we need to return to the priority of protecting the 
Social Security trust funds.
  This has not been a partisan issue. This is an issue upon which we 
have had a broad consensus. We should return to that consensus 
position.
  We should do what, in remarks in February of 2001, President Bush 
called ``prudent fiscal policy;'' we should, in

[[Page S3598]]

his words ``set aside all payroll taxes that are designed for Social 
Security to be spent only on Social Security.''
  We should preserve Social Security surpluses to reduce the debt. And 
that debt reduction will better prepare us for the challenges of Social 
Security and Medicare in the future.
  As then-Budget Committee chairman, Senator Pete Domenici explained in 
April 2000, when we were running surpluses:

       [T]here is less interest being paid because the Social 
     Security trust fund money is not being spent; it is being 
     saved, which means that we have that much less IOUs to the 
     public . . . .

  Chairman Domenici continued:
       I suggest that the most significant fiscal policy change 
     made to this point to the benefit of Americans of the future 
     . . . is that all of the Social Security surplus stays in the 
     Social Security fund . . . .

  In sum, we should, as President Bush said in a March 2001 radio 
address:

       keep the promise of Social Security and keep the government 
     from raiding the Social Security surplus.

  Returning to a budget where the Government no longer uses Social 
Security trust fund surpluses to fund other Government spending will 
require a change in policy. While the fiscally responsible actions we 
took in the 1990s led to balancing the budget without using Social 
Security in 1999 and 2000, the Government returned, last year, to using 
the Social Security surplus to fund other Government activities.
  According to the Congressional Budget Office's ``Analysis of the 
President's Budgetary Proposals,'' over the next 10 years, the 
President's budget would use $1.8 trillion of the Social Security 
surplus to fund other Government spending. In the Congressional Budget 
Office's analysis, the Government would not return to a balanced budget 
without using Social Security during the decade for which they make 
projections.
  But the Government will not have Social Security surpluses to use 
forever. Starting in 2016, Social Security will start redeeming the 
bonds that it holds, and the non-Social Security budget will have to 
start paying for those bonds from non-Social Security surpluses. The 
bottom line is that starting in 2016, the Government will have to show 
restraint in the non-Social Security budget so that we can pay the 
Social Security benefits that people have earned.

  That's why it doesn't make sense to enact either tax cuts or spending 
measures that would spend the non-Social Security surplus before we've 
addressed Social Security for the long run. Before we enter into new 
obligations, we need to make sure that we have the resources to meet 
the commitments we already have.
  To get the Government out of the business of using Social Security 
surpluses to fund other Government spending, we need to strengthen our 
budget process. At a minimum, we need to extend the caps on 
discretionary spending and the pay-as-you-go discipline that we began 
in 1990, and which expire in September of this year. The Senator from 
New Hampshire, Mr. Gregg, and I will offer an amendment to extend the 
spending caps during consideration of the budget resolution, and 
perhaps on other legislation, as well.
  But we need to do more. We need to improve the budget process so that 
it includes incentives to balance the budget without using Social 
Security. I am working with the senior Senator from Texas, Mr. Gramm, 
on proposals to do that, and I expect that sometime this year we will 
offer an amendment to improve our budget process.
  We must address the long-term challenges posed by the needs of Social 
Security and Medicare. As an essential first step, we must revise the 
budget process to protect the Social Security Trust Fund. We must put 
our economic house in order, and I look forward to working with my 
Colleagues to do so.
  I yield the floor and suggest the absence of a quorum.
  The PRESIDING OFFICER. The clerk will call the roll.
  The assistant 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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