[Congressional Record Volume 148, Number 104 (Friday, July 26, 2002)]
[Senate]
[Pages S7414-S7417]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




                            SOCIAL SECURITY

  Mr. CORZINE. Mr. President, I bring up a subject that I have been 
speaking about frequently. That is our Social Security system, one that 
I believe the American people deserve to have a debate about before the 
election in November.
  There have been many attempts to put off this debate until after the 
election so we can decide policy that will truly impact the American 
people for many, many years and decades to come. It is extremely 
disappointing we have had a hard time engaging in that debate. This 
week we actually made some progress, at least with regard to debate, 
not necessarily with regard to the content of the debate.
  I express my great disappointment and, frankly, my utter amazement

[[Page S7415]]

about comments made this past week by the President's press secretary, 
Mr. Ari Fleischer, with respect to the privatization of Social 
Security. I will read the beginning of an article from the Washington 
Post on Thursday on the press secretary's remarks, and I will ask 
unanimous consent to have this article printed in the Record.
  The article is titled: ``Bush Continues to Back Privatized Social 
Security.''
  It reads:

       The White House yesterday stood firmly behind President 
     Bush's plan for workers to divert some of their social 
     security payroll taxes into the stock market, despite the 
     dramatic drops suffered in recent months.

  Basically, for the past 2\1/2\ years.

       White House Press Secretary Ari Fleischer took a swing at 
     the existing Social Security Program, calling it 
     ``dangerous'' to let the people pay a lifetime of high taxes 
     for a Social Security benefit that under current projections 
     they'll never receive.

  Let me repeat:

       . . . calling it ``dangerous`` to let people pay a lifetime 
     of high taxes for a Social Security benefit that under 
     current projections they'll never receive.

  Often we hear people talking about trying to scare seniors and all 
kinds of hyperbolic commentary about Social Security, but this tops it.
  Yesterday, the Congress, under your leadership, took the leadership 
with regard to corporate reform to help make sure corporate America, 
the Nation's accounting profession, those who are responsible for 
managing corporate America, are more responsible. But after reading Mr. 
Fleischer's remarks, I think we should consider a similar initiative to 
make the administration's statements on Social Security equally 
responsible.
  It is inconceivable that we would be talking to the American people 
in terms that, under current projections, they will never receive their 
benefits.
  Let me take a moment to review where things stand on this issue of 
Social Security, which I do believe truly needs a full debate--maybe 
not in context that Mr. Fleischer is talking about, but we do need a 
debate in front of the election.
  Last December, President Bush's Social Security Commission proposed 
plans to privatize Social Security that would require deep cuts in 
guaranteed benefits--not eliminate, deep cuts. For workers now in their 
twenties, those cuts would exceed 25 percent. From younger workers and 
future generations, those cuts could be much deeper, up to and beyond 
45 percent.
  Unfairly, and in my view inappropriately, these cuts would apply to 
everyone, even those who choose not to risk their Social Security 
benefits in privatized accounts. For those who do participate in 
privatized accounts, the cuts in their guaranteed benefits would even 
be larger than those I just mentioned.
  Incredibly, for the disabled and for surviving children and family 
members, the cuts in their benefits would be especially disastrous, 
more extreme than the numbers that are cited for retirees.
  These deep cuts would undermine the fundamental purpose of Social 
Security, which is about providing a basic level of security to those 
who have worked hard, contributed to our Nation, paid into the Social 
Security system, and they did it in good faith that the system would be 
available, and those resources would be available for their retirement. 
Social Security promises Americans a basic level of security on which 
they can count. It is the bedrock of a social insurance program that 
our Nation overwhelmingly supports, has for generations--70 years--and 
that retirees can depend on for a rock solid guarantee regardless of 
what the stock market does or what asset markets of all kinds do, 
regardless of inflation and regardless of one's lifespan. Social 
Security will be there and that fundamental guarantee is what the 
program is all about.
  By contrast, privatizing Social Security would shred, would break 
that guarantee, and in my view we must not let that happen. It is one 
of the most important issues our Nation should be debating as we face 
this election this fall. The lines are very clearly drawn. Mr. 
Fleischer suggested they stand firm in their belief that the 
privatization of Social Security is the direction we should take.

  The huge volatility in the stock market over the past several months 
should make clear to all Americans that equity investments by their 
nature cannot offer the same security that Social Security provides. 
Being an old market hand, markets go up, they go down, they go 
sideways. They are volatile through time. Sometimes they have serious 
erosions in value.
  In the past 2\1/2\ years, stocks have lost nearly $8 trillion in 
value. The S&P index has declined by about 45 percent. This year alone, 
stocks have lost close to $3 trillion. That translates to real 
undermining of retirement security for those who were dependent on it, 
primarily focused on a 401(k) in the stock market. Many of those losses 
have been suffered in our pension systems. They have been suffered in 
IRAs, 401(k)s, personal savings accounts. Those have truly undermined 
the security that one might draw from them.
  But through all of that, Social Security stands firm. The guaranteed 
benefits are in place. One doesn't have to wonder whether those 
resources for one's retirement security are going to be available. 
Basic, critical benefits will be there for the beneficiaries, 
regardless of the state of the stock market.
  In light of that dramatic volatility, I had hoped that President Bush 
would reconsider his support for privatizing Social Security. As I 
said, Mr. Fleischer was crystal clear. The President's position had not 
changed.
  For me, this is extremely disappointing, and I certainly call on the 
President to rethink his position. On these matters of great national 
import--whether it was the corporate reform activity that we had a 
debate about for 3 or 4 months, leading up to yesterday's successful 
passage of corporate reform; whether it is with regard to the fiscal 
policy that has seen us move from substantial surpluses, 3 years of 
surpluses into substantial deficit; and now, on Social Security--we see 
this continual sense of inflexibility.
  Leadership is about thoughtful respect for the facts, changing 
realities that might require a change in one's position. I hope the 
President will consider that in the context of Social Security, taking 
into account the kind of market volatility we have seen, taking into 
consideration the kind of risk that might be brought to bear on those 
who have had their investments in the stock market over long periods of 
time.
  Having said that, my concern about Mr. Fleischer's statement 
Wednesday goes beyond his reaffirmation of this administration's 
continuing support for privatizing Social Security. He went much 
further. Let me just read again from the story I cited from the 
Washington Post. Mr. Fleischer claimed that Social Security was ``going 
bankrupt,'' and that it was dangerous to:

       . . . let people pay a lifetime of high taxes for a Social 
     Security benefit that under current projections they'll never 
     receive.

  ``Going bankrupt,'' if that is not scare language, I can't imagine 
how one could otherwise categorize it.
  This statement is simply outrageous. It is simply outrageous to 
suggest that people now paying into the system will never receive a 
Social Security benefit. It is not just misleading, it is absolutely 
factually wrong. I am afraid it is part of a concerted effort by those 
advocates of privatization to scare Americans, especially younger 
Americans, into believing that the only way they are ever going to get 
a retirement benefit out of Social Security is to invest it in personal 
accounts, to invest it in privatized accounts, to invest it in the 
stock market.
  I am not against investing private funds beyond Social Security in 
all kinds of assets. But we are talking about a guaranteed benefit for 
all of Americans. In the 1930s, before we had Social Security, or 
before 1930, almost 50 percent of senior Americans lived in poverty. 
Because of the benefit of Social Security, now we are down to about 10 
percent. It is a fundamental, solid program. People know that our 
Government has created a situation where they can have security in 
their retirement. It is a sacred trust with the American people. It is 
based on a promise that if you work hard and contribute to your 
country, you will enjoy a very basic level of security in retirement.
  By the way, this is not exactly a princely sum that people get out of 
Social Security. I wish we could make it better.
  Last year, the average retiree benefit was about $10,000--not exactly 
what

[[Page S7416]]

some of the salaries of big corporate executives are about--and about 
$9,000 for women. That is not exactly a princely sum, as I suggested, 
in my part of the country. In New Jersey, the average rental payment 
for an individual is about $1,200 a month. I don't think $10,000 
matches up with what you even have to pay for rent in many parts of the 
country. It is not exactly as if our Social Security system is 
providing excessive amounts of resources for individuals in their 
retirement. But it does provide that bedrock safety.
  Unfortunately, I guess there are those who seem to think $10,000 is 
too much. They want to break Social Security's promise to seniors in 
the future by cutting those benefits by 25 percent, or 45 percent. 
Those are big numbers. That is hard to put together against the cost of 
retirement for most Americans.
  One way they justify such claims is by arguing that the current 
system will leave today's workers high and dry. We heard Mr. 
Fleischer's remarks. They seem to be hoping that will be a self-
fulfilling prophecy, that somehow or another they can scare people into 
believing we ought to undermine Social Security. I stand here today 
quite confident that folks on this side of the aisle, if we have 
anything to say on the matter, are not going to let that happen.
  That is why we need to have this debate about Social Security 
privatization before people go to the polls this November. It is one of 
those defining issues for the American people to express themselves 
about. It is very clear: Do you want privatization of Social Security 
that puts the responsibility and the risk on the shoulders of Americans 
or do you want a guaranteed system that provides benefits if you have 
paid into that system when you retire? It is very clear, it is not a 
complicated concept--guaranteed benefits versus risk.
  For those concerned about the future of Social Security, let me 
remind my colleagues that Social Security benefits are established in 
the United States Code and represent a legal commitment--I think we 
call it an entitlement--by the Federal Government and with the full 
faith and credit of the United States.
  Unlike many other programs, Social Security is not subject to a 
yearly appropriations process. The entitlement and benefit is not 
dependent on future congressional action. Mr. Fleischer is just flat 
out wrong.
  As a purely legal matter, this entitlement would remain a binding 
obligation of the Government even if Congress were to allow the Social 
Security trust fund to become insolvent. However, as a practical 
matter, the point is moot. First, the nonpartisan actuaries at the 
Social Security Administration project that the trust fund will be 
fully solvent for 40 years; that is, 2041. After that, there still 
would be enough funding for three-quarters of the benefits to the 
actuarial life on which they are making the calculations.
  But there is nothing in the law to prohibit Congress from 
replenishing the funds or changing some of the terms and conditions. We 
can do a number of things to establish the security of that trust fund.
  We ought to start by balancing our budget so we are not spending the 
Social Security trust fund on everything under the Sun other than for 
what it is intended. But we could take actions here on the floor of the 
Senate with the Congress and the President working together to flush 
that up. As a matter of fact, we have a legal obligation to do that.

  I think it is absolutely essential that Mr. Fleischer review the 
context in which he says we are going to have a bankruptcy because we 
have written into law that that is not going to happen. I am confident 
that long before 2041, the Congress and the White House will come 
together in a bipartisan way, as they have in history in different 
periods of time, move beyond privatization proposals which would 
actually worsen the Social Security financial system, and work together 
to solve the program's long-term funding needs. It can be done. It is 
not beyond the realm of a lot of reasonable people. We ought to talk to 
the American public about that.
  But the reality is that privatization is not the direction that is 
going to provide the kind of security that I think most Americans are 
looking for in their retirement.
  I think we ought to get away from giving blatantly false and 
misleading arguments and scaring people about the solvency of Social 
Security, as Mr. Fleischer did on Wednesday. I think we need to stop 
the scare tactics for young people and talk about real solutions for a 
real problem, that I think can be addressed if we are thoughtful, in 
the way we have addressed a number of issues in the Senate.
  I conclude by again urging the Bush administration to reconsider 
their position on privatization, particularly in light of the dramatic 
events of recent weeks. Just as September 11 led to fundamental changes 
in Americans' perceptions about the risks of terrorism, I think the 
recent volatility of this market has captured the reality of what 
markets can provide as far as undermining security is concerned, and we 
have developed a much greater appreciation as a nation about the 
uncertainties of the market. I hope the Bush administration will face 
up to that reality and readjust its attitude and its views on its 
policies accordingly.
  Mr. President, I ask unanimous consent the article to which I 
referred be printed in the Record.
  There being no objection, the material was ordered to be printed in 
the Record, as follows:

               [From the Washington Post, July 25, 2002]

           Bush Continues to Back Privatized Social Security

                           (By Amy Goldstein)

       The White House yesterday stood firmly behind President 
     Bush's plan for workers to divert some of their Social 
     Security payroll taxes into the stock market, despite the 
     dramatic drops Wall Street has suffered in recent months.
       White House press secretary Ari Fleischer took a swing at 
     the existing Social Security program, calling it 
     ``dangerous'' to ``let people pay a lifetime of high taxes 
     for a Social Security benefit that under current projections 
     they'll never receive.''
       Fleischer made clear that Bush continues to favor 
     permitting Americans to take a portion of the taxes they 
     ordinarily contribute to Social Security trust fund and 
     invest it on their own. ``That would include markets,'' 
     Fleischer said. ``Nothing has changed his views about 
     allowing younger workers to have those options.''
       However, Fleischer recalibrated his sale pitch for private 
     retirement accounts, deemphasizing earlier arguments that 
     such investments would generate more retirement savings 
     through higher rates of return. Instead, he said that the 
     current system is ``going bankrupt'' and that the government 
     should grant people more control over their money. He used 
     the word ``options'' a dozen times.
       The White House's reminder that Bush wants to overhaul 
     Social Security comes as the administration is redoubling its 
     efforts to draw attention to strong points in the economy. 
     The remarks about the retirement system, on a day when the 
     stock market rose after nine weeks of historic declines, 
     typify an administration that has prized consistency in its 
     policy positions, rather than shifting with changed 
     circumstances.
       Bush's position on Social Security was a major tenet of his 
     2000 campaign. Last year, he assigned a commission to 
     recommend such a system, and the panel responded in December 
     with three proposals. Each would require at least $2 trillion 
     to convert to the new approach, the commission found. It also 
     concluded that the program, destined to face enormous 
     economic strains by the middle of the next decade as the baby 
     boom generation retires, will require reductions in benefits, 
     money from elsewhere in the federal budget--or both.
       For now, the White House essentially is speaking into a 
     legislative vacuum. Republicans, fearing that the volatile 
     issue could prove damaging in the elections this fall, 
     persuaded Bush last winter that Congress should not consider 
     any Social Security reforms until 2003. Now some in the party 
     are suggesting that debate should be deferred until after the 
     2004 presidential election.
       House Republicans have distanced themselves from Bush's 
     ideas--at least rhetorically--by passing a bill that promised 
     not to ``privatize'' the retirement system, although many in 
     the party still favor what they now call ``individual 
     investments.'' House Democrats are trying to force a vote on 
     the president's proposal, believing that a debate may prove 
     politically advantageous during a season of investment losses 
     and corporate scandals.
       In the absence of legislation, the most ardent proponents 
     of individual accounts continue to press their cause. This 
     week, the Cato Institute, a libertarian think tank, issued a 
     poll it sponsored suggesting that two-thirds of voters 
     support that arrangement. Andrew Biggs, who works on Social 
     Security at Cato and was a staff member of the White House 
     commission, said the findings are striking because the survey 
     was conducted during an interval earlier this month

[[Page S7417]]

     when the stock market fell 700 points. ``Nobody can claim we 
     had the environment stacked in our favor,' he said.
       A Washington Post-ABC News poll this month found that about 
     half the public supports investing some of their Social 
     Security contributions in the stock market, significantly 
     less than two years ago, but about the same proportion as 
     last year.
       Democrats and other opponents of the change have been 
     raising the issue particularly in congressional campaigns. 
     ``There is a link between the rising crisis of confidence in 
     corporate America and the scheme to privatize Social Security 
     and cut Social Security benefits as Republicans are still 
     seeking to do,'' House Minority Leader Richard A. Gephardt 
     (D-Mo.) said this month.
  Mr. CORZINE. I suggest the absence of a quorum.
  The PRESIDING OFFICER. The clerk will call the roll.
  The legislative clerk proceeded to call the roll.
  Mr. SARBANES. Mr. President, I ask unanimous consent that the order 
for the quorum call be rescinded.
  The PRESIDING OFFICER (Mr. Corzine). Without objection, it is so 
ordered.

                          ____________________