[Congressional Record Volume 148, Number 77 (Wednesday, June 12, 2002)]
[Senate]
[Pages S5393-S5395]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




                            SOCIAL SECURITY

  Mr. CORZINE. Mr. President, as many of my colleagues know, I have 
over the last few weeks been speaking regularly with regard to Social 
Security and proposals to privatize Social Security. I think this is 
one of the most important debates we as the Senate and Americans need 
to have. It needs to be done before elections, not afterwards, because 
I think we need to hear from the American people about what it is they 
want.
  To many Americans, certainly to whom I talk, and many of my 
constituents in the State of New Jersey--and I certainly hear it from 
my colleagues, and I feel strongly--these proposals that are 
circulating with regard to private takings of Social Security are not 
the mindset of most Americans. That is particularly true when people 
become aware that they will involve deep cuts in guaranteed benefits 
and that, by implication, is going to force many Americans to work 
longer, delay their retirement, and develop a level of insecurity in a 
program that was really designed to promote security among senior 
citizens in our Nation.
  The fact is that we have seen developing an undermining of retirement 
security for a whole host of reasons, whether it is the diminishment of 
the number of Americans who are covered by defined benefit programs or 
the insecurity of 401(k)s which we have seen in light of some of the 
elements that have come out of Enron. It is very hard for me and for 
most of the people with

[[Page S5394]]

whom I have conversations to understand why we should be taking the 
security out of Social Security.
  President Bush's Social Security Commission proposed privatization 
plans--there were three of them--that would cut guaranteed benefits for 
current workers by more than 25 percent. Those cuts would exceed 45 
percent for those who would be retiring long in the future. They would 
apply even to those who choose not to invest in privatized accounts, 
and they would be even deeper for those who did not make such 
investments. In fact, actual cuts are likely to be deeper still. This 
is an important part. There is a high probability the cuts will be 
deeper since the Commission's plans--all three of them--are dependent 
on significant infusions of general revenue funds to accomplish the 
transition from the current system we have, the pay-as-you-go system, 
to the privatized system. This is arithmetic. It is not something that 
is political or partisan.
  The only way to get from one place to the other is by taking roughly 
a trillion dollars from general revenues to make it supportable, if the 
same benefit payment schedule is going to be held to that which we have 
now for most future retiring American citizens.

  It is hard to understand how we can talk about taking funding from 
general revenues in the current circumstance when we passed a debt 
ceiling limit yesterday of another $450 billion, and that is only 
expected to take us for 18 months. We have a growing deficit problem in 
this country. Put that together with a need to be able to provide 
general revenues to support this initiative towards privatization and I 
think we have a real problem. We have a train wreck coming. To me, that 
is not the direction in which we should go.
  So I hope we will look at these in a serious way. The Commission's 
report itself talks about these 25-percent cuts and 45-percent cuts. 
The Social Security actuaries are the ones who present them. While they 
did not speak to it directly, those cuts will even be more serious and 
more immediate for surviving beneficiaries and disabled beneficiaries 
from the Social Security Program.
  We are basically taking a program that has worked, has reduced the 
poverty level for senior citizens in America, and really putting it at 
great jeopardy. That is why I feel so strongly about speaking out on a 
repeated basis to develop this debate.
  Despite the very clear proposals developed by the Bush Commission, my 
fear is that few Americans have any real idea what is at stake in 
regard to what I have described. I am afraid a lot of this is not on 
people's radar screens because there has not been a lot of debate about 
it. There has not been a lot of talk about it.
  There is a point of view that this ought to be put off until after 
the election. I think it is important that those of us who believe in 
protecting Social Security as we basically know it--there will have to 
be some changes but basically as we know it--should be talking about 
the true nature of the kinds of cuts that are being talked about.
  A little bit of this dialogue on the Senate floor has developed into 
some debate, at least inside the beltway. I would like to take it 
outside the beltway because that is where the real impact will lie. But 
there has been a continuing dialogue between the Cato Institute and 
myself. A minority of members of the Bush Commission have responded to 
some of the commentary I have tried to make. We have both exchanged 
long and relatively detailed treatises that are translated into 
explaining each other's positions, and I think that is all healthy. I 
think that is good. Hopefully, there will be more debate in the future.
  This past weekend, a new player entered the debate, at least as 
reported by the Washington Times. The Commissioner of Social Security, 
Ms. Anne Barnhart, went on the record to criticize Democrats--at least 
one Democrat--for using false charges and for what the article calls 
incendiary rhetoric. I hope people do not presume the kind of language 
I am using today is incendiary. It is trying to get to a healthy debate 
about how Social Security should work and how it will impact seniors, 
survivors, and disability beneficiaries in America.
  The article quotes Ms. Barnhart as stating:

       The most important message I want to send out is that 
     benefits are not going to be affected.

  Let me repeat, ``benefits are not going to be affected,'' according 
to Ms. Barnhart.
  Ms. Barnhart then seemed to back off in the article--again, I did not 
see the full text of her remarks--and adopt a little less absolute 
approach. That is hopeful because that cannot be an absolute condition 
of the interpretation of the President's proposals, offering assurances 
only to retirees, current retirees, near-term retirees.
  In any event, I was very disappointed by these reported statements 
which, in fact, I have tried to respond to in a number of venues, which 
I believe are highly inaccurate in themselves. The truth is, as I said 
before, President Bush's Social Security Commission proposed 
privatization plans that call for deep cuts in guaranteeing benefits. 
This is by the Social Security actuaries themselves. I do not happen to 
have the pages, but I can cite it in the report that the Commission put 
forward. As I said, these cuts apply to even those who do not choose to 
invest in privatized accounts.
  It seems to me we ought to have this on facts at least as they are 
talked about. I do not want to go back through the point, but if we are 
to avoid these cuts, even for near-term retirees, or certainly for 
survivors and disability beneficiaries, we will have to have 
significant transfers from the General Treasury to be able to sustain 
Social Security benefits even for those groups. I think that is going 
to be an increasing challenge for this body, for public policymakers in 
general, because we are running deficits.
  Arguing that benefits are not going to be affected seems precisely 
the kind of false charge for which Ms. Barnhart reportedly was 
criticizing Democrats.
  This is a debate we need to have. We need to have it on substance. We 
need to make it balanced, thoughtful, very public. I will work to that 
end. There is not a more important issue--perhaps prescription drugs, 
as the Presiding Officer is articulately making the case to the 
American people. This gets at retirement security, things that make a 
difference in real people's lives. I was in the chair several weeks ago 
when the Presiding Officer made the case that he went to a diner and 
heard what was on people's minds. Prescription drugs are on people's 
minds, and making sure that Social Security is there as people have 
expected, as they have paid into the system. It is right in the gut to 
most Americans, at least those diners I go to in New Jersey. This is 
something we have to be attentive to, we need to debate, we need to 
come to a conclusion, and get on with the process.
  I am hopeful Ms. Barnhart was misquoted in the Washington Times. I 
have been misquoted once in a while, as I am sure all Members have. I 
do not think engaging in incendiary commentary is helpful, nor do I 
think many of my colleagues do. I hope she will write to the editor of 
the paper and clear up the matter. I would love to get into a very 
serious debate about the substance of how we will finance Social 
Security as we go forward. That is an important element of our 
necessary debate to get to long-term solutions that make a difference 
in people's lives.
  I hope she will review the facts involved in the President's 
commission's report when we are talking about these deep cuts in 
guaranteed benefits. They are there in black and white.
  I ask unanimous consent a copy of the Washington Times article and my 
response to Ms. Barnhart be printed in the Record.
  There being no objection, the material was ordered to be printed in 
the Record, as follows:

               [From the Washington Times, June 8, 2002]

                    Social Security Reform Defended

                           (By Donald Lambro)

       The head of the Social Security Administration criticized 
     Democrats yesterday for using false charges and ``incendiary 
     rhetoric'' to stir up political fears over President Bush's 
     plan to reform the retirement system.
       Jo Anne Barnhart said there is no truth to Democratic 
     claims that Mr. Bush's plan will cut retiree benefits or that 
     the administration was robbing the trust fund.
       ``I think the fear factor is really unfortunate. It is 
     important that Social Security beneficiaries be reassured,'' 
     said Mrs.

[[Page S5395]]

     Barnhart told The Washington Times yesterday--her first 
     interview since Mr. Bush selected her last summer to run the 
     nation's largest retirement program.
       ``The use of highly charged, incendiary rhetoric doesn't 
     accomplish this,'' she said.
       Mrs. Barnhart spoke approvingly of Mr. Bush's plan, saying 
     it's important to restore faith in the program and give 
     people more control over their retirement funds.
       ``The most important message that I want to send out is 
     that benefits are not going to be affected. Regardless of 
     what proposal you look at in terms of reform, I want to 
     reassure retirees and near-retirees that they will not have a 
     reduction in benefits,'' she said.
       Democratic leaders have been escalating their attacks on 
     Mr. Bush's Social Security reform plan in recent weeks, 
     believing that the issue will motivate older Americans to 
     vote in larger numbers against Republican congressional 
     candidates this fall.
       ``It is indisputable that the Bush Social Security 
     Commission's privatization proposals include drastic cuts in 
     guaranteed Social Security benefits,'' said Sen. Jon Corzine, 
     New Jersey Democrat, who has been leading the attacks in the 
     Senate.
       Until yesterday, the White House had not directly struck 
     back at its critics, and Mrs. Barnhart's surprisingly strong 
     remarks signaled that the administration now believes it 
     should respond to the Democrats' mounting political 
     offensive.
       Mrs. Barnhart declined to compare the Social Security 
     benefits with what workers would get under Mr. Bush's plan to 
     let workers voluntarily invest part of their payroll taxes in 
     stock and bond mutual funds.
       ``These are highly technical issues that our actuarial 
     analysts can answer,'' she said.
       But when asked about questions of financial risk and safety 
     that Democrats are raising about Mr. Bush's investment plan, 
     she revealed that her own federal pension was fully invested 
     in stocks.
       ``I'm a federal employee. I participate in the Thrift 
     Savings Plan. I went into the stock fund,'' she said. The 
     government's popular Thrift Savings Plan lets federal 
     employees invest their retirement funds in stock and bond 
     funds.
       Such stock funds are ``widely diversified to lower risks'' 
     and government bond funds posed no risk, she said. The 
     president's commission on Social Security, which proposed 
     three different plans to implement Mr. Bush's reforms, 
     examined the Thrift Savings Plan as a possible model to 
     follow.
       Mrs. Barnhart said that she thinks that ``we can look at 
     the Thrift Savings Plan'' as the basis for a larger 
     retirement for the general public.
       ``I don't think there is any question that people, 
     particularly younger people, would have more control over 
     their investments in the future,'' she said of the 
     administration's proposed reforms.
                                  ____



                                                  U.S. Senate,

                                    Washington, DC, June 12, 2002.
     Hon. Jo Anne Barnhart,
     Commissioner, Social Security Administration, Baltimore, MD.
       Dear Commissioner Barnhart: I am writing with respect to 
     statements attributed to you in an article published in the 
     Washington Times on June 8 on the topic of Social Security.
       According to the article, you ``criticized Democrats for 
     using false charges and `incendiary rhetoric' to stir up 
     political fears over President Bush's plan to reform the 
     retirement system.'' The article quoted you as saying. ``The 
     most important message that I want to send out is that 
     benefits are not going to be affected.''
       I am very concerned about this last statement, which is 
     simply not accurate. President Bush's Social Security 
     Commission proposed privatization plans that call for deep 
     cuts in guaranteed benefits. The Social Security 
     Administration's own actuaries have calculated that the cut 
     for many current workers would exceed 25 percent, and cuts 
     would exceed 45 percent in the future (see page 75 of the 
     actuaries memo on the report, dated January 31, 2002). These 
     cuts would apply even to those who choose not to invest in 
     privatized accounts. The cuts would be even deeper for those 
     who do make such investments.
       I recognzie that, after stating simply that ``benefits are 
     not going to be affected'' you seemed to back off and provide 
     assurances only to retirees and near-retirees. However, the 
     Commission's plan relies on significant infusions of general 
     revenues none of which have been provided for in the 
     President's budget. If and when these revenues fail to 
     materialize, retiree benefits clearly could be at risk. 
     While, in the short-term, I hope that Congress somehow would 
     find the resources to protect current retirees, over time the 
     threat of further benefit cuts for retirees seems very real. 
     In addition, based on the text of the Commission's report 
     describing Model 1, it appears that some near-retirees would 
     have their guaranteed benefits reduced if they participate in 
     the program of privatized accounts.
       I understand that reasonable people can disagree about the 
     merits of privatization and believe it is importannt that the 
     debate on Social Security's future be conducted without 
     excessive rhetoric on either side. I have tried not to engage 
     in attack language in the discussion so far, and I am hopeful 
     that other parties will adopt a similar approach. The future 
     of Social Security is too important to be decided by 
     misleading claims or partisan politics.
           Sincerely,
                                                      Jon Corzine.

  Mr. CORZINE. I hope we continue this dialog in a thoughtful, balanced 
matter.
  I yield the floor and suggest the absence of a quorum.
  The PRESIDING OFFICER (Mr. Bayh). The clerk will call the roll.
  The legislative clerk proceeded to call the roll.
  Mr. CRAIG. Mr. President, I ask unanimous consent the order for the 
quorum call be rescinded.
  The PRESIDING OFFICER. Without objection, it is so ordered.
  Mr. CRAIG. Mr. President, I believe we are in morning business, is 
that not correct?
  The PRESIDING OFFICER. That is correct.

                          ____________________