[Congressional Record Volume 148, Number 61 (Tuesday, May 14, 2002)]
[Senate]
[Pages S4294-S4297]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




                       SOCIAL SECURITY AND WOMEN

  Mr. CORZINE. Madam President, this morning I rise to speak on perhaps 
the most important long-term domestic issue facing our Nation--the 
future health and security of our Social Security system. Today, I want 
to focus on proposals to privatize Social Security and the special 
threat privatization poses to women in America.
  Last December, late on a Friday afternoon, before Christmas, 
President Bush's Social Security Commission released its 
recommendations for changes in the Social Security system. The 
Commission's report did not get much media coverage because of the 
timing of its release, and I think that was obviously by design, if you 
read the report.
  The recommendations of the Bush Commission are dramatic and damaging, 
if implemented, for the future of all Social Security beneficiaries but 
particularly for women. They involve deep cuts in guaranteed Social 
Security benefits--cuts of 25 percent or so for those currently working 
and up to 45 percent for future workers. Undoubtedly, these proposals 
would force millions of Americans to delay their retirement so that 
they would have the ability to live their senior years with economic 
security.
  Few members of the public actually have even heard of the Bush 
Commission, and they certainly have not talked or debated the 
recommendations. And fewer have any idea that the Commission is calling 
for drastic cuts in guaranteed benefits, the type that I outlined.
  Americans need to know about these plans, and they need to consider 
them and debate them in a serious way, making sure they know the 
implications of taking these recommendations to fruition.
  Unfortunately, so far, the administration says it wants to put off 
any discussion of these proposals until after the election. That is 
unfortunate and, frankly, it is wrong. We should be debating this issue 
openly and publicly before the American people, on the Senate floor and 
certainly before the voters in this November's elections.
  To that end, I intend to continue to raise this subject and its 
implications for the American people as much as I can to make sure that 
the American people understand what the Bush Commission is recommending 
to the American public. This Senator thinks it is too important to be 
decided among closeted policy wonks and politicians in the dark of the 
night.
  Today, I specifically want to raise those aspects of privatization 
that are damaging to women. I know this is an issue that is near and 
dear to the Presiding Officer.
  Women have a reason to be especially concerned about privatization 
proposals because they would be among the biggest losers if Social 
Security is privatized and benefits are cut.
  As Joan Bernstein, president of the organization known as OWL, notes 
in

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her introductory letter to OWL's Mother's Day report, ``Social Security 
Privatization: A False Promise for Women'':

       Social Security is a women's issue. I would go so far as to 
     say that it is the retirement security issue for women today.

  OWL notes that today women represent 58 percent of all Social 
Security recipients--slightly more than 50 percent. They represent 71 
percent of beneficiaries aged 85 and over.
  Without regular cost-of-living adjusted Social Security benefits, 
more than half of all older women would be living in poverty. Let me 
repeat--more than 50 percent. If you look at Hispanic women, it is 
about 68 percent. If you look at African-American women, it is 61 
percent.
  I note that Social Security is important not just to older women but 
also to children and nonretired adults who constitute one-third of 
current Social Security beneficiaries. These include many women and 
children who benefit from benefits resulting from the death or 
disability of a family member.
  For a caregiving mother, cutting these benefits is unthinkable.
  For these reasons, women have a special stake in Social Security, and 
their stake in protecting guaranteed benefits should be obvious given 
women's historic position--sometimes I think unfortunate historic 
position--in the economic system.
  First, women earn less than men. There is a wage gap: on average, 73 
cents on every dollar a man earns. Also, they are not compensated for 
the 12 years, on average, they spend on unpaid caregiving, whether for 
their children, parents, spouse, or other relatives. And when women 
work as caregivers, they are often in the economic system as part-time 
workers, so that their average pay is significantly lower.
  The way Social Security is calculated, you look at 35 years of 
working level--the highest average--and women come up short. The 
average payout of Social Security benefits for women is about $756 per 
year. For a man, it is just shy of $1,000 a year.
  All this pulls together as women often save less during their working 
lifetime and are less likely to be eligible for pensions as well. They 
are denied private pensions. If they do have private pensions, it is 
often generally less generous, the same way Social Security is less 
generous for women. In fact, average private pension benefits for women 
are only about half of those for men. And for most women, their Social 
Security benefits will also be lower because of those averaged lower 
earnings that I talked about. It works doubly--in the pension system 
and also in Social Security.
  Finally, and most importantly, women tend to live longer than men--6 
years longer on average. That makes Social Security especially critical 
for women, since the program, unlike private savings, protects against 
the risks of outliving your savings and, certainly, ongoing rising 
inflation.
  Privatizing Social Security would undercut many of the program's 
benefits for women, whether it is retirement security or the social 
insurance about which we spoke.
  Taking trillions of dollars out of the Social Security trust fund 
will force a cut in these guaranteed benefits--25 percent or more, as I 
noted earlier, for current workers and 45 percent for those who enter 
the workforce later. That is unacceptable.
  It will also undermine Social Security's role in the social insurance 
area, leaving women less protected against a variety of risks in our 
society.
  I know many people around here are convinced that we need to cut 
Social Security benefits to make sure that Social Security meets its 
long-term financial objectives and its long-term financial needs to 
deal with those pressures. Most Americans do not believe that. I want 
you to know, I do not believe that. We can save Social Security without 
cutting it. The truth is, the American people are right. It is a matter 
of our priorities.
  Consider these two figures: First, the long-term Social Security 
shortfall is $3.7 trillion. It is about $74 billion a year if you 
factor it out over the 75-year actuarial life we are talking about. The 
long-term cost of last year's tax cut is $8.7 trillion over the same 
period. Remember, $3.7 trillion to fix Social Security; $8.7 trillion 
in our tax cuts. In other words, the tax cut will cost more than twice 
as much as the entire Social Security shortfall.
  I don't get it. Where are our priorities? What is important? I hope 
my colleagues will remember that the next time someone says we have no 
choice but to cut benefits, that they will put that into the framework 
of what we need to be thinking about as we deal with fiscal policy in 
this country.
  We certainly could, and should, consider--this is a personal view--
postponing some of the remaining tax cuts to deal with Social 
Security's fiscal needs first. That is a priority. Social Security 
should come first.

  Last week, as I said, I attended a press conference with the leaders 
of OWL, a grassroots membership organization that focuses on the needs 
of midlife and older women. OWL developed an excellent report called 
``Social Security Privatization: A False Promise for Women.'' I sent 
copies to every Senator's office, and I hope my colleagues will take a 
look at it. There are individual stories inside this excellent report. 
There are details about how the financial structure of Social Security 
works. It is a composite that pulls together an overview.
  It makes in clear and compelling terms the case that privatizing 
Social Security would be extraordinarily bad for women. They do that on 
a personal level, they do it on an analytical level, and they do it in 
ways and terms that I believe the American people can understand.
  That is the message all women and all Americans must understand and 
debate before the election. We need to understand what is going on with 
the Bush recommendations. We need to understand what will happen if we 
follow and implement those recommendations.
  I believe we ought to be looking for ways of strengthening Social 
Security. We can deal with some of those from a fiscal policy 
standpoint, but we need to strengthen Social Security, not cut 
benefits. We need to deal with how we look at women's participation in 
the workforce and the calculation of their benefits.
  We ought to be getting on with that debate now, before the elections. 
After all, I repeat, the future of Social Security is too important to 
be decided behind closed doors. This is an issue that affects all 
Americans--the financial security of all Americans, and particularly 
the financial security of women. Let's get on with that debate. Let's 
have that debate.
  I ask unanimous consent that a copy of the executive summary of the 
OWL report be printed in the Record.
  There being no objection, the material was ordered to be printed in 
the Record, as follows:

                           Executive Summary


                       social security and women

       The Social Security system is an embodiment of the long-
     standing American principle of social insurance, providing 
     nearly universal coverage for workers and their families 
     through a pooling of resources benefits, and risk.
       One-third of the program's beneficiaries are not retirees 
     but include children, widows, and people with disabilities. 
     Social Security offers an unmatchable set of insurance 
     protections for workers and their families, providing 
     protection against poverty in the event of death, disability 
     or old age.
       Women comprise the majority of Social Security 
     beneficiaries, representing 58 percent of all Social Security 
     recipients at age 65 and 71 percent of all recipients by age 
     85.
       Accounting for more than 70 percent of older adults living 
     in poverty, women are more vulnerable in retirement. During 
     this time they most need the stability of a guaranteed source 
     of income--the Social Security check. Without it, 52 percent 
     of white women, 65 of African American women, and 61 percent 
     of Latinas over the age 65 would be poor.


             women's realities and retirement consequences

       For women, poverty in old age is often rooted in the 
     realities that shaped their lives early on: the reality of 
     the wage gap, the reality of caregiving, and the reality of 
     flexible jobs that offer few benefits, especially pensions.
       Almost 40 years after the Equal Pay Act was passed, women 
     still earn only 73 percent of what men earn. You can't save 
     what you don't earn.
       Caregiving directly affects women's retirement security, as 
     they often take more flexible, lower-wage jobs with few 
     benefits or stop working altogether in order to provide 
     unpaid caregiving services. In fact, women spend, on average, 
     12 years out of the work force for family caregiving over the 
     course of their lives.
       Older women are less likely than older men to receive 
     pension income (28 percent of 43

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     percent); when they do, the benefit is only about half the 
     benefit men receive.
       Women live an average of six years longer than men. Women's 
     longer lifespans make them more vulnerable to the impact of 
     inflation and to the risk that they will outlive their money.


                       the great solvency debate

       Social Security is a ``pay-as-you-go'' system. Current 
     workers not only see the societal and family benefits of 
     supporting our nation's vulnerable seniors, but also know 
     that they are covered by the same set of social insurance 
     protections.
       Changing demographics mean that the system will eventually 
     have to use trust fund dollars to cover out-going benefits. 
     This situation was predicted and addressed by Congress in 
     1983, when it adjusted the system to build up the trust fund 
     for the retirement of the baby boomers.
       The trust fund consists of U.S. Treasury bonds, considered 
     the safest investment vehicle available to individual or 
     institutional investors worldwide.
       Experts do have suggestions about how to plan for a 
     potential financing shortfall. There are many proposals that 
     preserve the integrity of the program while shoring it up for 
     the future. These stand in stark contrast to private 
     accounts, which would speed insolvency and destroy the social 
     insurance compact that is Social Security.

  Mr. CORZINE. I thank the Chair.
  Madam President, I know this is an issue that is near and dear to 
your heart. It is an issue to which it is absolutely essential we pay 
attention and debate, that we get to a conclusion that supports 
America's women, making sure they have retirement security commensurate 
with the rest of Americans.
  I thank the Chair.
  The PRESIDING OFFICER. The Senator from Michigan.
  Mr. LEVIN. Madam President, first, I commend Senator Corzine for the 
leadership role he is taking in trying to protect Social Security for 
all Americans. Today we are particularly focusing on the Social 
Security needs and concerns of women, but the effort is a much broader 
one. It is to protect Social Security from the recommendations of the 
President's Commission on Social Security which would lead to a 
lessening of the security, would make it less of a social instrument, 
and leave it more up to the whims of the stock market, which may or may 
not go up, which may or may not, therefore, lead to more funds in the 
hands of people who own private accounts but, overall, would make this 
Nation and its seniors and people who are about to become seniors, in 
their forties and fifties, a lot less secure.
  A week ago a report was released by the National Older Women's 
League, or OWL, to commemorate Mother's Day. It was an appropriate day 
to release this report. The report shows the problems that would be 
created if the recommendations of that President's Commission were 
adopted. It is entitled ``Social Security Privatization: A False 
Promise for Women.'' I encourage every Member of this body to read this 
report. It clearly demonstrates that the recommendations of the 
President's Social Security Commission are a bad deal for Americans and 
particularly bad for women.
  Currently, women comprise 58 percent of Social Security beneficiaries 
over the age of 65 and 71 percent of those over the age of 85. Women 
depend on Social Security more than men, despite their increasing 
presence in today's workforce. Women earn less than men: 73 cents on 
every dollar a man earns.
  These statistics indicate that changes to the Social Security system 
that result in reduced benefits will have a negative disparate impact 
on women.
  The President's Commission is based on privatization plans that would 
divert Social Security payroll taxes into individually owned private 
accounts, shifting the system from shared risk and collective gain 
among workers to private accounts that would leave workers to sink or 
swim on their own.
  This concept would have a particularly negative effect on women for 
several reasons. Private accounts ask women to bear more of a risk 
because of their increased dependency. Private accounts would undermine 
the social insurance nature of Social Security. Private accounts cost 
more to administer. Private accounts may speed up Social Security 
insolvency.
  By most accounts, Social Security is the most dependable source of 
retirement security for a majority of women. Privatization takes that 
reliability and that dependability and gambles the financial future of 
women and all seniors on the volatility of the stock market. America's 
seniors, and in particular women, deserve better than that.
  Women account for more than 70 percent of older Americans living in 
poverty. Without Social Security, 52 percent of white women, 65 percent 
of African-American women, and 61 percent of Hispanic women over the 
age of 65 would be poor. These alarming statistics and the OWL Mother's 
Day report are an eye-opening experience for all of us.
  The President's Commission takes the fundamental principles of Social 
Security and abandons them for a market-driven scheme that is 
unreliable at best and discriminatory at worst. Social Security is an 
entitlement program based on the concept of social insurance. It is not 
supposed to be a gamble which pays benefits based on how the stock 
market did yesterday or last year or tomorrow or next year.

  Women live an average of 6 years longer than men and, as a result, 
women are more likely to outlive the benefits of private accounts. In 
addition, older women are three times as likely to lose their spouse.
  We should protect this program, we should make the changes we need to 
ensure its solvency, and we should not overhaul it or undermine its 
basic principles by eroding the social insurance components, as the 
President's Commission would have us do.
  Yesterday on the Senate floor, Senator Bingaman commented that 
retirement security is a three-legged stool, with one leg representing 
Social Security, one leg representing pensions, and the final leg 
representing personal savings and investment. I could not agree more. 
We should not take the President's Commission recommendations and blur 
the lines between Social Security and private investments.
  I commend the OWL report because it shows that the detrimental effect 
Social Security privatization would have on women is severe, it is 
important, and it is relevant. I hope every Member of this body will 
take the time to read this report, to reflect on its findings as we 
contemplate the recommendations for structural changes to the Social 
Security program.
  I yield the floor, and I thank the Chair.
  The PRESIDING OFFICER. Who yields time?
  Mr. CORZINE. Madam President, will the Senator from Michigan 
entertain a question?
  Mr. LEVIN. I will be happy to.
  Mr. CORZINE. Did I hear the Senator indicate that roughly 51 percent 
of women would be in poverty if we did not have a Social Security 
system?
  Mr. LEVIN. The figure I used was 52 percent of white women and a 
larger percentage of African-American and Hispanic women.
  Mr. CORZINE. If I am not mistaken--maybe the Senator from Michigan 
can refresh my memory--with Social Security we have something less than 
10 percent of Americans now living out of poverty. That is what the 
whole design of the program was, to provide a fundamental foundation--
``social insurance'' I think was the term the Senator used. Is that the 
way the Senator from Michigan understands both the number and the 
reality of how it has worked?
  Mr. LEVIN. The Social Security system, along with Medicare, is 
probably the reason that only, as I understand the number, 1 out of 20, 
about 5 percent, of seniors live in poverty. My number may be a little 
low. But the point is that 20 percent of American children live in 
poverty, and yet approximately 5 percent of seniors live in poverty. It 
is shameful that 20 percent of Americans live in poverty, but one of 
the main reasons a smaller number of seniors live in poverty than our 
kids is Social Security and Medicare. The Senator from New Jersey is 
exactly right.
  Mr. CORZINE. We have a lot to do, if at least my analysis and others 
of the Social Security benefit cuts that are implied by the 
privatization process are implemented, for women, obviously, but 
Americans broadly and, quite frankly, a number of children because 
Social Security is a program for disability, spouses, and children 
survivors as well.
  I was interested to hear the Senator talk about transaction costs and 
privatization. I remember recently we had

[[Page S4297]]

a presentation by a Member of Congress at one of our briefings on 
Social Security. Did I recall hearing that there is a privatization 
scheme in Britain where 40 percent of the dollars that are allocated 
for savings in this privatized account go to transaction costs?
  Mr. LEVIN. I think that was the number I heard. My memory is very 
similar to that. It is an astounding number that the people who 
recommend privatization don't even factor.
  There are a lot of other things they don't factor, by the way; some 
of them are even more focused. They don't replace the money. They don't 
say how they will replace the money which would be lost to the Social 
Security system by people not contributing to it and supporting folks 
who are retired or near retirement. They never talk about that huge 
hole in the general fund that would be created. They don't talk about 
the uncertainty of private accounts as much as they should, the fact 
that the market over time may go up depending on what time period you 
look at, but not for everybody.
  Even within that long window, there will be some losers. Maybe most 
people will win, but what about the losers? They don't talk about that 
as much as they should. The thing they never talk about are these 
administrative costs, these transaction costs which, as the Senator has 
pointed out, are apparently a very significant percentage of the money.
  Mr. CORZINE. If the Senator from Michigan will give me the grace of 
making sure my arithmetic is right, if you add a 25-percent cut for 
people who are now working plus 40 percent in administrative costs, 
that 65 percent out of the total amount of benefits from Social 
Security seems to be a big chunk out of how one would have their 
retirement financed. Certainly it would go a long way to eroding the 
base of benefits that people have come to expect from Social Security.
  Mr. LEVIN. It would, indeed. It makes that enticement of private 
accounts, when you analyze it, a lot more superficial. The reality is a 
lot more negative than that superficial glow of riches.
  Mr. DAYTON. Will the Senator yield for another question?
  Mr. LEVIN. Sure.
  Mr. DAYTON. Contrary to what most people in this country probably 
believe, the Social Security Administration is extremely efficient, 
and, in fact, less than 1 percent of Social Security goes for 
administrative costs. The Senator cited some of the figures from the 
OWL report, which is an excellent document, about the disparities 
between men and women. I have seen the statistic that one-quarter of 
the retirees in America today don't receive any pension fund 
whatsoever.
  My experience in Minnesota would be that probably 80 or 90 percent of 
those are women, particularly older women who are widowed and often, 
with the older pensions, lose any benefit payments whatsoever once 
their husband dies. I wonder if the Senator from Michigan has had that 
same experience. Would the Senator say in Michigan that number applies?
  Mr. LEVIN. It is a very large percentage. I don't have it directly in 
my mind, but it is a large percentage of people, particularly women, 
who rely exclusively on Social Security. We encourage people, of 
course, to have private savings, and some people have pensions. That 
three-legged stool Senator Bingaman talked about of Social Security and 
private pensions and private savings is a one-leg stool for a large 
percentage of our seniors and a larger percentage of women.

  Mr. DAYTON. The Senator is absolutely right. That is exactly the 
dilemma, the predicament in which so many elderly women find 
themselves. There is only one leg to that stool. As the Senator from 
New Jersey pointed out, with the average Social Security payment for 
women being only $750 a month, that is not much money on which to live. 
I think that creates part of the lure of the personal privatization 
which the Republican Commission has now come forward with, which, 
obviously, someone receiving that little amount of money would be 
tempted, enticed by something else. As the Senator pointed out very 
well, there is no reward without risk.
  I wonder if the Senator--certainly the Senator from New Jersey who 
spent a career in financial pursuits--is aware of anywhere where there 
is that potential for reward in the private sector without commensurate 
risk.
  Mr. LEVIN. There will be winners and losers. It turns Social Security 
into a social insecurity system.
  Mr. DAYTON. I compliment the Senator from New Jersey in bringing this 
important report to the Senate. He is to be commended. It is a very 
important topic, as we look ahead to the future of Social Security.
  Mr. LEVIN. One last word: I have met with the women who are active in 
the OWL commission. They are very keenly aware of the problems with the 
President's Commission and the uncertainties it would create for women 
in particular who are seniors. And I think the opposition to the 
President's Commission's findings is very strong and is growing.
  Mr. CORZINE. Will the Senator from Michigan yield for a moment to 
say, I am very appreciative of the discussion you have had, the 
contributions the Senator from Minnesota made with regard to raising 
this issue so we can have a debate about it. This debate ought to be 
had before the election, not after the election. People ought to have 
to make a statement about how they feel about these recommendations 
since it has such an impact on Americans lives, particularly women in 
America. That is what the OWL report was about. I very much appreciate 
the contributions my colleagues have made to this discussion.
  Mr. LEVIN. One additional word: I hope we will actually not only 
consider the recommendations of the President's Commission but actually 
vote on them. We ought to put them to rest. There is a lot of concern 
in the country about those recommendations, that they would totally 
make the Social Security system much less secure. I think we ought to 
try to address the concerns by voting on those recommendations. I 
believe they will be voted down, as they should be, so that the people 
out there who are not only retired but in their forties and fifties, 
who rely on Social Security, want it to be there, don't want the 
uncertainty that will be created by the contributions being reduced--
which is what would happen without any idea of where the replacement 
funds would come from--I think it would be healthy for the country not 
just to debate it but, if possible, before the election to vote up or 
down on those recommendations. I hope and believe that all of them will 
be rejected.

                          ____________________