[Congressional Record Volume 150, Number 102 (Wednesday, July 21, 2004)]
[House]
[Pages H6540-H6544]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




         THE BURDEN WE ARE PASSING ON TO OUR KIDS AND GRANDKIDS

  The SPEAKER pro tempore. Under the Speaker's announced policy of 
January 7, 2003, the gentleman from Michigan (Mr. Smith) is recognized 
for 60 minutes as the designee of the majority leader.
  Mr. SMITH of New Jersey. Mr. Speaker, I recently received this in the 
mail, and I do not know if the cameras can really pick it up. It is a 
front page that is sort of startling.
  It says the budget, bloated with pork. The national debt, soaring 
past $7 trillion. Is it not time to fight back, is the main headline. 
Interest rates rising. Entitlement program, $73 trillion in unfunded 
liabilities.
  Sort of makes one realize the tremendous burden that we are passing 
on to our kids and our grandkids. It speaks of $7 trillion dollar 
national debt, and of course, you have to pay interest on that national 
debt because you are borrowing the money.
  Interest on that national debt now represents about 14 percent of the 
total budget. This pie chart represents how we are spending the $2.4 
trillion of expenditures this year. Interest at 14 percent, that 
represents $800 billion that we are paying in interest, and interest 
rates now are relatively low. So that means, as interest rates go up, 
the portion of the total income coming into the Federal Government is 
going to be used up paying interest.
  So two things: interest rates are going up, and the debt is going up 
faster than it ever has. We are now increasing the debt by over $500 
billion a year, and that is because we have a propensity to spend. 
Politicians have found out that they are more likely to be re-elected 
if they bring home the pork barrel projects. They get on the paper 
cutting of the ribbon of the new facilities, of the jogging trails or 
the libraries or whatever, and that overspending, because of efforts to 
try or politicians to try to be liked by the people back home and to 
get elected is part of what is driving up our debt.
  Over $500 billion a year of deficit spending. Deficit spending means 
how much in 1 year we are overspending, over and above the revenues 
coming into government. That $500 billion of increased debt a year, how 
do you put it in perspective?

[[Page H6541]]

  Well, we are a country about 228 years old. It took the first 200 
years of this country to amass a debt of $500 billion. Now, we are 
going deeper in debt $500 billion every year.
  What does that do to our kids? I am a farmer from Michigan; and the 
way I was raised, what a farmer did for his kids was try to pay down 
the mortgage, hopefully make their life a little better than mom and 
dad's life was. But in this Congress, in this city of Washington, we 
are driving up that mortgage for our kids and our grandkids to pay off.
  So two areas: one is the increased debt that we are laying on our 
kids and our grandkids, and the other is the increased promises of 
unfunded liabilities. Unfunded liabilities are the green-shade, the 
economists' words, for how much we are promising in benefits for 
programs such as Medicare, Medicaid, Social Security, how much we are 
promising in benefits over and above what revenues we have to pay for 
those benefits. This is $73 trillion and putting $73 trillion sort of 
in some kind of a measurable fashion, and I am not sure any of us can 
do that. Our current spending every year is just a little over $2 
trillion, and here is $73 trillion that is needed to go into a savings 
account today that is going to have a return of at least interest rates 
that will accommodate inflation to pay for what we have promised in 
programs over and above what is coming in in revenues from the payroll 
tax.
  Let me go around this pie chart, and then we will talk a little bit 
more about the unfunded liabilities.
  You can see the biggest piece of pie is Social Security, using up 21 
percent of total government spending; and so many people say, well, 
Congressman Smith, you should not have that as part of the pie. Social 
Security is separate.
  I would just point out that the Supreme Court now on two decisions 
has said that there is no entitlement to Social Security benefits just 
because you have paid in Social Security all your life. The Social 
Security payroll tax is simply a tax. The benefits that you might get 
are a separate, different program that Congress and the President has 
signed into law saying here are some benefits that you get at age 65; 
and of course, if you look back at history, we know that over the years 
we have changed those benefits dramatically. When we run out of money, 
we increase the tax and reduce benefits usually.
  Going around the pie quickly, Medicare is at 12 percent. Now, with a 
prescription drug program, it is estimated that Medicare is going to 
overtake Social Security as a percentage of total spending within the 
next 20 years.
  Medicaid is growing very rapidly at 6 percent. The reason Medicaid is 
going to be growing is more people who thought they were saving enough 
for retirement now are living much longer than they anticipated. They 
are using up their savings; and once they are broke, they go on 
Medicaid.

                              {time}  2200

  Of course if you go to a nursing home, you end up paying $40,000, 
$50,000, $60,000 a year to go into that nursing home facility, and if 
you are living very long, that means a lot of your savings are used up, 
and you go on Medicaid and then taxes pay for the Medicaid program.
  Other entitlements represent 10 percent. Defense, I am going to skip 
over here to defense at 20 percent. Before Afghanistan and Iraq, 
defense was a little under 19 percent. Now we are going up to 20 
percent, not a huge increase in terms of percentage of total budget, 
but here is the domestic discretionary spending that uses up 16 percent 
of the total Federal budget. On those 12 appropriations bills, it is 
what we spend most of the year, at least half to three-quarters of the 
year arguing about how we are going to spend that 16 percent of the 
budget.
  My point is, unless we look at these other expenditures, the 
indebtedness and interest on the debt, Social Security programs that 
are going broke, Medicare programs that are going broke, Medicaid 
programs that are going broke, the so-called entitlement programs, 
which means that you are entitled to receive these benefits from other 
taxpayers if you are at a certain level of poverty, if you are at a 
certain level of poverty and have children, if you reach a certain age, 
if you are a veteran that is retiring, if you are a farmer that is in 
the farm programs.
  So the entitlements are sort of like on automatic pilot. Unless we 
deal with some of those problems, the overpromising of those 
entitlement programs, we are going to leave our kids, grandkids and the 
future generations not only this massive debt that is now $7 trillion, 
but the problem of trying to raise enough money to pay for the 
promises, and I would say the ``overpromising'' that this Congress has 
done.
  I asked Art Laffer, an economist that I respect, the originator of 
the so-called Laffer Curve, I said ``Art, what is worse, increasing 
taxes or increasing the debt?''
  He said, ``Well, in the long run they are about the same because 
increasing indebtedness is the promise of future taxes,'' and it is. To 
accommodate that 14 percent that we are now paying in the total Federal 
spending pie for interest, and that 14 percent is going up very quickly 
as interest rates go up and as we increase the debt, it is going to 
mean that we have to come up with money in some fashion to pay for it. 
So that brings us back to the propensity of politicians to spend more 
and promise more.
  How do we get control of the overzealousness to try to solve more and 
more problems of the country? If we look back at the Framers of our 
Constitution that were brave enough to declare independence from Great 
Britain, that wrote a Constitution that designed an economic incentive 
that those that work hard, that try, that save, that invest, that go to 
school and use that education are better off than those that do not, 
that is what has helped us be the strongest, most successful Nation on 
earth. It is not that we are smarter than anybody else in the world; it 
is that we have had that kind of motivation and incentive to do our 
very best, to come up with ideas and work hard.
  Now, over the years we have sort of said, well, if you work hard and 
get a second job, and you wanted that second shift so you could have 
more money for your family, we are not only going to tax you more, we 
are going to tax you at a higher rate. So dividing that wealth of those 
that are successful, and so if you work hard and are successful, we are 
going to tax you more and more, and give it to the people over here. So 
it is sort of pay in according to your ability to pay in, and take out 
according to your need.
  Mr. Speaker, we have to be careful that we do not lose that kind of 
incentive that has made this country great in our overzealousness to 
divide the wealth, number one, and to pass on to future generations the 
overspending that we are doing today. It is really somewhat 
egotistical, I think probably a better word might be 
``unconscionable,'' to think that our problems today are so great that 
it justifies spending the money our kids have not even earned yet.
  Next chart, unfunded liabilities. What are they and what are the 
promises?
  The three largest categories of unfunded liabilities are Medicare, 
Medicaid and Social Security. The Social Security and Medicare trustees 
have calculated that these programs have over $73 trillion in unfunded 
liabilities. So $73.5 trillion are going to have to be invested today 
to have a return that is going to accommodate inflation to pay what is 
needed to make up the difference between the revenues coming in in the 
payroll tax and what is needed to accommodate the current promises.
  Breaking them down, Medicare Part A, mostly hospitals, $21.8 trillion 
unfunded liability; Medicare Part B, $2.2 trillion unfunded liability; 
Medicare Part D, the new prescription drug program, $16.6 trillion 
unfunded liability; and Social Security with our promises, about $12 
trillion unfunded liability.
  Those are huge problems. How are we ever going to solve those kinds 
of promises in relation to what this country is worth, what we can 
produce in our gross domestic product every year? We are now spending 
approximately 20 percent of the GDP in our funding at $2.4 trillion. So 
that means 12, 13, some good years, maybe $14 trillion is the total 
product, the total gross domestic product that we produce in this whole 
country in 1 year, and yet we are talking six times that amount that we 
need

[[Page H6542]]

right now if we are going to accommodate the future promises, the cost 
of the future promises we have made over and above what is coming in in 
revenues. Just huge problems.
  So what do we do about it? We do not do anything. The longer we put 
the solutions to these problems off, the more drastic the solution is 
going to have to be. I have been working on Social Security, and I am 
going to talk a little bit about Social Security tonight.
  It was estimated back in 1987 that we were going to run out of money 
for Social Security. Actually, I was in Michigan, and I was chairman of 
the Senate finance committee, the Senate taxation committee, if you 
will. That is where I wrote my first Social Security bill. When I 
looked at the fact that with people living longer and the birthrate 
going down, Social Security was going to go broke. It was going to run 
out of money.

  So I came into Congress. I was elected in 1992, and every session 
since I have introduced a Social Security bill. I have had my Social 
Security bills scored by the Social Security actuaries. They say that 
my bills would keep Social Security solvent essentially forever, even 
though they do it for the next 75 years. The way I structured my bills, 
it would keep Social Security solvent forever.
  Nobody really wants to deal with Social Security, and let me tell you 
why. Because most of the seniors on Social Security depend on Social 
Security for 80 percent or more of their total retirement income.
  So if you are dependent on that Social Security check, you can 
understand that it is very easy to scare a senior by saying, well, the 
gentleman from Michigan (Mr. Smith) wants to ruin your Social Security 
and take your Social Security away from you.
  It was tough in my first few elections. I have probably given between 
270 and 300 speeches on Social Security in my district. I suspect that 
my Seventh Congressional District of Michigan is more aware of the 
problem of Social Security and that it is going broke than maybe any 
other part of the country. It is a huge problem.
  I was made chairman of the Bipartisan Social Security Task Force, and 
we spent a year having expert witnesses come in to explain to the 
Republicans and Democrats on that task force the problems of Social 
Security, the fact that it was going broke, the fact that the longer we 
put off a solution, the more drastic that solution is going to have to 
be. So when we finished, we had a bipartisan agreement that there has 
got to be a better way to invest some of the money coming in to get a 
better return than we have in Social Security. We had an agreement, the 
longer you put off not dealing with this huge problem, the worse it is 
going to be, so it was important we all agreed to deal with it as 
quickly as possible.
  So we wrote and introduced Social Security legislation. I have had 
Social Security legislation introduced for the last 8 years which has 
had bipartisan sponsors of that legislation because those individuals 
on both sides of the aisle that are aware of the magnitude of this 
problem agree that we have got to move ahead with a solution to Social 
Security. We have to do the same thing with Medicare and Medicaid. We 
cannot go on pretending that it is okay to continue to increase 
spending because it seems to be popular at home.
  Why is it popular at home? Here is my two bits worth as a farmer from 
southern Michigan. We now have approximately 50 percent of the adult 
population in the United States that only pays 1 percent of the income 
tax. So you can see that there will be some people in this country that 
say to Washington, to the President and Members of Congress, to the 
Senators, well, spend some more tax dollars helping me with my problem 
because it ends up that they are getting much more out of government 
than they are paying in in taxes.
  That is another talk on where we go with this complicated Tax Code 
and the unfairness of the Tax Code. I think we need the kind of Tax 
Code that everybody pays at least something in to run the Federal 
Government so they have a stake in the overzealousness of politicians 
to spend tax dollars and increase taxes.
  Now, in an election year and approaching this Presidential election, 
we have a lot of concerns from the Democrat side of the aisle that we 
are shortchanging spending on needed programs, such as this needed 
program and this needed program, so let us increase taxes to make sure 
that we are doing the right thing to spend money for this program.
  This evening we heard a lot of comments that we have to go into Sudan 
and the atrocities which have been occurring in Darfur is partially our 
responsibility. I think it is, but it is not just singly the 
responsibility of the United States, it is the responsibility of all 
the countries of the world.
  Maybe we sent the wrong signal when we went into Iraq. Maybe other 
countries sort of heard the message that if they did not do anything, 
the United States would do it anyway. There were 17 U.N. resolutions 
condemning Iraq. We knew that there were problems of tyrant dictators, 
accommodations for terrorists, and developing more and more weapons in 
several countries, Syria, Libya, Iran, Iraq, North Korea. After the 
terrorist attack of 9/11, it was appropriate that we go to the source 
of that problem and go into Afghanistan.

                              {time}  2215

  But here are countries developing more and more weapons, with tyrant 
dictators, accommodating terrorists, and so what should the choice be? 
Our first choice was go to the United Nations to try to get more 
countries to join with us in going after all of these countries to send 
a strong signal that we are not going to allow the proliferation of 
weapons of mass destruction.
  I bring this up because other countries said, well, why don't you go 
ahead and do it alone? We sort of did. Thank goodness for Great Britain 
that has joined us in that venture. But now we are challenged with some 
of these other countries. Maybe we are moving ahead with North Korea 
now in their development of nuclear weapons with the help of China 
because North Korea does not want to offend China and the other five 
countries that are putting pressure on them to stop their weapons of 
mass destruction, but my guess is we will do something like President 
Clinton did and that is essentially paying off the blackmail to get 
them to stop developing and selling weapons of mass destruction.
  The decision was made because of the many U.N. resolutions, because 
of the fact that Saddam had used weapons of mass destruction on his own 
people, because of the fact that maybe if we could get Iraq to make a 
transition to a democracy and have an increased standard of living, it 
would make a huge difference in the countries surrounding them. I think 
that is true. If we are successful in Iraq, I think the people of Iran 
will not stand for not moving ahead with more liberty and more freedom 
in their particular country.
  I recently visited Libya and met with Colonel Qaddafi. I think it was 
partially because he did not want to end up like Saddam Hussein did, is 
sort of my guess. As I talked to Colonel Qaddafi, it was like him 
coming to confession that he was a terrorist but he saw no reason to 
continue having those weapons of mass destruction. It is a good start 
and Colonel Qaddafi and Libya now are more a part of the World Trade 
Organization. It is going to end up being better for their country. But 
now we need to encourage the rest of the world to encourage these other 
countries to move in and be part of the world community, in trade, 
because in the long run it is going to be good for those countries.
  It is going to be a huge challenge in stopping terrorism in this 
world. I am just so convinced that we cannot turn tail and run, that we 
have got to stick to it, we have got to be dedicated and whether it is 
Iraq or whether it is a continued fight to do away with terrorists in 
this world, we have got to work together to do it.
  Mr. Speaker, next I am going to briefly go through a couple of these 
charts. This is the general revenue transfer. To make up the difference 
between what we promised in Medicare, Medicaid and Social Security and 
what is coming in from the payroll tax, this is in a few years what is 
going to have to come out of the general fund if we simply do nothing 
and let it go.
  By 2020, that means that we are going to have to take 28 percent out 
of the general fund to make up the difference

[[Page H6543]]

between what is coming in in the payroll tax and what we promised in 
benefits for these programs. If we just go to 2030, another 26 years 
away, it is going to take over 52 percent of the general fund revenues 
to accommodate those programs.
  So why do we not deal with it? Partially maybe because it is a tough 
question and it is a tough solution. There are only a couple of ways to 
fix the programs. You either increase taxes and have more revenue 
coming in, or you reduce benefits. Of course, that is what we have done 
over the years. Every time we have had problems with Social Security, 
we have either increased revenues or reduced benefits or a combination. 
That is what I think we need to guard against, simply because most 
adults in the United States today pay more in the payroll tax than they 
do in the income tax.
  Here is a quick visual snapshot of the problems with Social Security. 
After the Greenspan Commission in 1983, we have surplus revenues coming 
in because we had a dramatic increase in the payroll tax, increased 
revenues coming in over and above what Social Security is paying out; 
and then by 2017 the red portion of the chart begins, and that is the 
time when we have to come up with money from more borrowing or more 
taxes to pay promised benefits.
  Here is how Social Security works. Just very briefly, the payout is 
very progressive. The taxes being paid in are not progressive. Benefits 
are progressive, and they are based on earnings at retirement. All of a 
worker's wages up to the tax ceiling, which is now $89,000 a year, are 
indexed to present value using wage inflation. Present value means if 
you had a certain job 20 years ago and wages double every 10 years, 
then for calculating your Social Security benefits, they up the wages 
to what that job would be paying on the day you retire. The best 35 
years of earnings are averaged, the annual benefits for those retiring 
in 2004, and here is the progressive part: if you are very low income, 
you get back in a monthly check 90 percent of what you were getting 
when you were working. So 90 percent of the earnings up to $7,300 are 
what you get in your Social Security check. Thirty-two percent of the 
earnings between the $7,300 and the $44,000. Then everything over that, 
you get 15 percent of your earnings above $44,000.
  If you are very rich, you get maybe 16 percent of your average wage 
back in Social Security benefits. If you are very low income, then you 
get 90 percent of what you are earning weekly or monthly or biweekly 
back in a Social Security check. Early retirees receive adjusted 
benefits, and I added a column on this one. When we started Social 
Security in 1934, it was interesting going through the archives. 
Franklin Roosevelt said that there should be a private sector savings 
account owned by the individual, and actually the Senate passed a 
Social Security bill that had a savings account owned by the 
individuals but with the provision that you could not use any of the 
money until you retired at age 65. Actually, it worked very well then 
because the average age of death was 62 and so most people died before 
they became eligible for benefits and this pay-as-you-go program worked 
very well.

  Pay-as-you-go, let me just explain that a second. When you have the 
deduction of the 12.4 percent for Social Security, a total of 15.2 
percent payroll tax, your employer sends in that money. By the end of 
the week, that money is sent out to existing retirees. So there is no 
savings account with anybody's name on it. It is a pay-as-you-go 
program. So the taxes come in, and they are immediately sent out to 
existing beneficiaries, sort of like the chain letter.
  I remember a cartoon I once saw with the elderly person saying, well, 
I am going to retire, how does Social Security work? And here is Uncle 
Sam saying, well, see this long list. You put your name at the bottom 
of the list, and then you send your money to the person on the top of 
the list.
  And so it is sort of like a chain letter and you hope there is going 
to be some money left when your name at the bottom of the list gets 
closer to the top of the list.
  Social Security was supposed to be one leg of a three-legged stool. I 
would encourage every person under 55 years old to make an aggressive 
effort to start putting aside savings for your retirement. The 
challenges for this country in the next 10 years when we start running 
out of money for Social Security and Medicare and Medicaid, between 10 
and 20 years, there is going to be a dramatic pressure to increase 
taxes and reduce benefits.
  My argument to try to get business and industry on board in terms of 
the need to have a Social Security solution and a Medicare and Medicaid 
solution is the consequences of doing nothing and that is what we see 
happening in many countries around the world.
  Mr. Speaker, I would ask everybody to just make a guess of what the 
payroll tax is, for example, in France to accommodate their senior 
citizens. It is now over 50 percent of the payroll. So you can see that 
that makes that country much less competitive. They have either got to 
pay their workers less wages, and that is why there are a lot of 
strikes over in France, or they have got to increase the price of their 
product that makes them less competitive. In Germany, the payroll tax 
in Germany just went over 40 percent. Japan is hard-pressed in terms of 
their taxes that are needed to accommodate their senior population.
  So for goodness sake, let us not keep putting off these problems for 
the next Congress because we do not know exactly how to deal with it, 
so we end up with that kind of taxes and that kind of pressure on our 
businesses that are going to put our businesses at a greater 
competitive disadvantage as they try to compete in world trade.
  Social Security is a system stretched to its limits. There are 78 
million baby boomers that begin retiring in just 3\1/2\ years; 78 
million baby boomers begin retiring in 2008. Social Security spending 
exceeds tax revenues in 2017, and the trust funds go broke. Insolvency 
is certain. It does not take a guess. We know how many people there 
are, and we know when they are going to retire. We know that people 
will live longer in retirement. We know how much they will pay in and 
how much they will take out. The actuaries' estimate right now is 
payroll taxes will not cover benefits starting in 2017, and the 
shortfalls will add up to $120 trillion between 2017 and 2075, $120 
trillion that we are going to need. The $120 trillion is what we need 
in all those future years one year after the other. That is what would 
be accommodated if we put $12 trillion into a savings account now that 
would have a return of at least inflation and the time value of money.
  Here is sort of a chart that shows what has gotten us into this 
predicament. That is the demographics. Our pay-as-you-go retirement 
system will not meet the challenge of demographic change. Back in 1940, 
we had 28 workers working and paying in their Social Security tax to 
accommodate every one retiree. So here are 28 people sharing the cost 
of every one retiree. By the year 2000, it got down to three workers 
paying in their taxes, and the three of them sharing the cost and 
benefits for Social Security of every retiree. The estimate by the 
actuaries is by 2025, we are only going to have two workers trying to 
pay enough tax to accommodate one retiree. That is what is happening, 
and that is why our taxes continue to go up; and if we do nothing, it 
means increasing the tax.
  I have read by some, some on this side of the aisle, that, look, all 
we need is a strong economy, so if we can have a strong economy and 
better jobs and better wages and more profit, it will do it. But here 
is the problem. Because benefits are directly related to the wages you 
get in and as there are more jobs and more people working and more 
wages, that means that temporarily it fixes the problem because you 
have a little more money coming in; but because benefits are directly 
tied to the wages that you make, it means the payout in future years is 
going to be greater. So in the long run it does not fix the program. 
Growth makes the numbers look better now, but leaves a larger hole to 
fill later. In my talks around the country and around Michigan, people 
say, well, if Congress would just keep its cotton-picking hands off the 
Social Security trust fund.

                              {time}  2230

  We should do that. What we should be doing with the trust fund is 
getting a real return on it. But what Congress has been doing, and the 
President, for the last 20 years is, every time there is

[[Page H6544]]

a little extra money coming in from Social Security, we spend it on 
other government programs. Right now, government owes the trust fund, 
because that is what we do, we write out an IOU. Government owes the 
Social Security trust fund $1.4 trillion, but the shortfall, what we 
are going to need, is $12.2 trillion. So just the trust fund by itself 
is not going to accommodate or solve the problem.
  Social Security has a total unfunded liability of $12 trillion. The 
Social Security trust fund contains nothing but IOUs, and to keep 
paying promised Social Security benefits, the payroll tax will have to 
be increased by nearly 50 percent or benefits will have to be cut by 30 
percent.
  In this chart I have tried to show that Social Security is not a good 
investment. The average retiree only gets back a 1.7 percent return 
over inflation for the money they and their employers send into Social 
Security. Actually, if one happens to be a minority whose average age 
is 63\1/2\ right now, they actually end up with a negative return 
because they die before they hit 65 and start collecting benefits. The 
average is 1.7 percent return.
  But the market, in this case I did a graph showing the Wilshire 5000, 
the average of 5,000 stocks for the last 10 years. Even with the poor 
returns that we have had for over the past 3\1/2\, 4 years, even with 
those poor returns, the Wilshire 5000 has returned 11.8 percent over 
and above inflation.
  So how about that? How about having some of this money coming in from 
Social Security, invested in accounts? And I think there has got to be 
a limitation on accounts, so what I do in my bills is, I do it sort of 
like the Thrift Savings Account, index stocks, index bonds, index 
mutual funds, the option of foreign stock funds. Once one has 
accumulated a certain $2,500 in their retirement account, and they 
cannot use it, government is going to control it, once they get to that 
level, then there could be more flexibility as determined by the 
Secretary of Treasury in terms of additional alternative investments 
that one might use.
  This is how many years one has got to live after they retire to break 
even on the money they and their employer put into Social Security or, 
if one is self-employed, the money they put in. If people retired in 
1960, it was a pretty good deal. They only had to live 2 years after 
retirement. But now, in 2005, people are going to have to live 23 years 
after they retire to break even on the money they sent in for Social 
Security. By 2015 it goes up to 26 years that people are going to have 
to live after retirement. And, look, that might be possible. The age of 
life has continued to increase.
  Here is the chart I want to finish with. And that is the danger of 
doing nothing. What we have done in the past is increase taxes or 
reduce benefits every time we have had a problem with enough money to 
pay out promised benefits. And over the years we have increased 
benefits, too, for Social Security. In fact, in 1965 we amended the 
Social Security bill to start the Medicare program. So that was a huge 
new challenge and huge new promises that are going to put our kids and 
our grandkids even deeper in debt.
  Just going up from the 1\1/2\ percent in 1940, we raised it to 2 
percent of the first 3,000. In 1960, running short of money again for 
the increased benefits, we tripled the rate, a 300 percent increase in 
the rate going up to 6 percent, and we increased the base, too, to 
4,800.
  By 1980, we raised the tax rate to 10.16 percent of the first 25,900. 
By 2000, again we raised the rate up to 12.4 percent of the first 
76,200; in 2004, 12.4 percent of the first 87,900, but now it is 12.4 
percent of the first 89,000. So we have continued to increase the tax.
  And I just plead, Mr. Speaker, with everybody that might be listening 
that they, as workers in America, or their kids that are going to be 
working if they retire, should not be asked to pay a higher and higher 
tax to accommodate the existing retirees. Probably the people that are 
retiring this year, and I have not seen the statistics, but I would 
guess they are probably one of the most wealthy generations that ever 
has retired in America.
  Six principles of saving Social Security, and here is what I sent out 
to all the Members of the House and all the Members of the Senate: 
Protect current and future beneficiaries; allow freedom of choice, and 
in my legislation, we can guarantee that they are going to have as much 
return by having their own investment as they would if they stayed in 
the current system, so we guarantee that the return on their private 
savings account that they own, that government is going to control it, 
that they cannot take it out until they are 65 or until they have an 
annuity that is going to prove that they are never going to fall back 
on other taxpayers. That, in a sense, says that one can be an average 
worker and retire as a very wealthy person if they start saving this 
money.
  And some of these counties have had the option of not using the 
Social Security because that is the way the legislation was written. A 
municipality or a State can have the option of investing their own 
money or going into Social Security. Some of these counties are giving 
to their retirees that invested their own money over the last 60 years 
up to nine and ten times as much as Social Security pays similar wage-
earning retirees.
  Mr. Speaker, I am going to close with the plea that we work together 
to make this kind of a bipartisan effort. It may be our chance next 
year after this Presidential election. I would guess that if we cannot 
do it in the first 4 years of a President's term, then it is going to 
be difficult to make the tough decisions that are required to solve 
these kinds of problems in Social Security and solve the kinds of 
problems that we need to be looking at in Medicare and Medicaid and 
some of the other entitlement programs. It is just unfair, 
unconscionable, to pretend that our problems are so great today that we 
have to take the money and the savings of our kids and our grandkids 
because they are going to have their own problems and their own 
concerns.

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