[Congressional Record Volume 148, Number 150 (Tuesday, November 19, 2002)]
[Senate]
[Pages S11576-S11577]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]

      By Mr. GRAMM (for himself and Mr. Hagel):
  S. 5. A bill to strengthen and permanently preserve social security 
through the power of investment and compound interest without benefit 
reductions or tax increases, and for other purposes; to the Committee 
on Finance.

[[Page S11577]]

  Mr. HAGEL. Mr. President, I rise today to join the senior Senator 
from Texas in introducing the Social Security Preservation Act. He has 
worked a decade on this proposal, and I want to ensure that, as he 
leaves this distinguished body in a few short weeks, his time and 
effort will not have been wasted, for the stakes are far too high.
  Everyone knows that America's demographics are rapidly changing. In 
just nine short years, in 2011, the first of my generation of baby 
boomers will retire. In the 20 years thereafter, the number of 
Americans aged 65 and older will grow four times as fast as the number 
of working Americans. Under the current system, where no real 
investments are ever made and current benefits are paid entirely by 
taxing current workers, how do we expect to pay for this shift in 
demographics? In 2015, Social Security will be distributing more in 
benefits than it collects in payroll taxes, and by 2038, the system 
will be completely bankrupt. Congress will be forced to either raise 
taxes on the next generation of workers by nearly 40 percent or cut the 
benefits of retirees by nearly 30 percent. If we continue to defer the 
difficult decisions on how we fix the system, that will be the position 
we will find ourselves in. If we begin now, however, we can stabilize 
and enhance the system before it is scheduled to go broke. But we must 
start now.
  In his message to Congress on Social Security in 1935, Franklin 
Delano Roosevelt called for a Social Security system of ``voluntary 
contributory annuities by which individual initiative can increase the 
annual amounts received in old age.'' This bill embraces that vision, 
and will strengthen and permanently preserve Social Security by 
actually making investments. All workers will have the option of 
investing a portion of their wages into accounts that earn a higher 
rate of return. Upon retirement, these investing workers would use the 
money in their accounts to purchase an annuity to pay benefits promised 
under the current system plus a bonus for participating in the new 
system. They could keep any excess. All workers, both those who invest 
and those who choose to remain in the current system, would be 
guaranteed every dollar of their currently promised benefit. No worker 
would ever experience a cut in benefits or a hike in taxes at any time. 
And when fully implemented, these changes to Social Security will yield 
benefits over two times those currently provided to an average worker. 
And the system's coming insolvency in 2038 would be reversed.
  It is time for our Nation to confront Social Security's impending 
financial crisis. For too long, we have ignored our nation's changing 
demographics which will result in a crushing burden being placed on our 
Social Security and Medicare systems if we don't deal with this 
challenge now. It will demand either higher taxes or reduced benefits 
later if we continue to defer our responsibilities. For too long, we 
have feared open and informative debate about reforming the Social 
Security system, believing that the American people are unwilling to 
consider the realities that we face. Politicians have been afraid of 
the political risks in honestly dealing with Social Security. The 
Congress and the President must face up to their responsibilities in 
dealing with this challenge. I will reintroduce this legislation to 
reform the Social Security system at the beginning of the next Congress 
and look forward to working with my colleagues and President Bush in 
this effort.
                                 ______