[Congressional Record Volume 149, Number 99 (Tuesday, July 8, 2003)]
[House]
[Pages H6323-H6324]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




                    SOCIAL SECURITY'S COMING CRISIS

  The SPEAKER pro tempore. Under a previous order of the House, the 
gentleman from Michigan (Mr. Smith) is recognized for 5 minutes.
  Mr. SMITH of Michigan. Mr. Speaker, I rise today to talk about Social 
Security's coming crisis. The actuaries and trustees of the Social 
Security Administration have long understood, at least for the last 15 
years, the challenges facing our Social Security program. With the 
impending retirement of the large baby-boom generation starting around 
2012, there will be a shift in the proportion of workers paying into 
Social Security compared to those retirees drawing benefits. As a 
result, there will not be enough money as benefits going out will 
exceed taxes coming in by about 2015.
  Recently I met with White House staff and political director Karl 
Rove to encourage Presidential leadership and Republicans and Democrats 
in Congress to deal with the coming crisis. It is easy to put off. 
There is even a greater need to face up to the Social Security problem 
now with the probability of more money being spent for a very expensive 
prescription drug benefit that probably is going to be added to 
Medicare.
  Let me talk about what is happening to the population 65 years old 
and older. It is going to increase from currently 37 million today to 
75 million in 2035 and to 95 million by 2075, so a huge increase in the 
number of retirees while the birth rate is going down, so fewer workers 
to pay their in taxes to cover those benefits. This population will 
grow much faster than the workers due to increased life expectancy for 
seniors and lower birth rates. Because Social Security is a pay-as-you-
go system, with workers' payroll taxes going immediately to pay 
benefits to seniors, these demographic changes are going to lead to the 
program's insolvency in a little over 10 years unless something is 
done.
  The options for Social Security are straightforward, I think. We can 
increase payroll taxes, which are already

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too high. Seventy-five percent of American workers now pay more in the 
payroll taxes than they do the income taxes. We can cut benefits, or, 
instead of using all the extra money coming in now from Social Security 
taxes for other government spending, get a real rate of return on 
payroll taxes we already collect.
  It is obvious, to me at least, that the last option is best, but it 
cannot work unless we give money time to grow with interest. If we wait 
another decade to act, there will be no choice but to take drastic 
action.
  I have introduced my own reform proposals in each of my last five 
terms in Congress. They have been based on slowing down the increase in 
benefits for high-income retirees and having a real rate of return on 
some of that extra money coming in. I am working on the final aspects 
of this year's bill, which I plan to introduce in the next 2 weeks, and 
as I finalize provisions to make the system more fair for women in this 
bill.
  One thing I have learned over the last decade is that time is running 
out for reasonable solutions. As I have introduced each new bill in 
each new session of Congress, the way to solve the problem has been 
more drastic as we have been giving up the extra funds coming into 
Social Security that are dwindling, that are running out. It is this 
situation that gives me such a sense of urgency to act so we can avoid 
burdening our children and grandchildren with more debt, more taxes, 
and a failing Social Security system.
  Many people are concerned that a Social Security system with worker-
owned accounts is unsafe because people might invest poorly or lose 
their savings. I have studied the problem as chairman of the bipartisan 
Social Security Task Force and think that investments can be limited 
and protected as they have been in other countries such as Britain, 
Australia, New Zealand, Chile. My bill requires the government to start 
paying back what has been borrowed from the trust fund, and that 
current payroll taxes go someplace safe, earn interest and end up 
keeping Social Security solvent.
  In conclusion, Mr. Speaker, government officials here in Washington 
need to act on Social Security, but they are too often focused on the 
next election to deal with problems that are still a decade away. The 
truth is that Social Security is headed for a cliff, and if we begin to 
turn and slow down now, we can avoid it smoothly. If not, a panicky 
swerve and screeching brake is coming. Let us avoid that. Let us stand 
up to our responsibility and deal with Social Security.

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