[Congressional Record Volume 151, Number 10 (Thursday, February 3, 2005)]
[Senate]
[Pages S961-S964]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




                            SOCIAL SECURITY

  Mr. DORGAN. Mr. President, we are embarking on a debate with respect 
to the subject of Social Security. Last evening, the President gave a 
State of the Union Address and today is traveling around the country to 
talk about a very important issue, Social Security.
  In many ways the issue is about values. There has been a great deal 
of discussion about values in this country, especially as it applies to 
political debates. I think the debate about the Social Security system 
is a debate about values.
  Some months ago, a friend of mine died in a small community in North 
Dakota. I sent some flowers and called. He was a man in his eighties. 
He lived a great life. He was a wonderful person. I got a note from his 
wife. Here is what she said about her husband. She said: Oscar always 
helped his neighbors and he always looked out for those who did not 
have it so good. That is all she said. But what a wonderful description 
of someone's value system and of someone's life: He always helped his 
neighbors and always looked out for those who did not have it so good.
  In many ways that prompted the origin of the Social Security program. 
In the 1930s, one-half of America's senior citizens were living in 
poverty.
  When I was a young boy, my father asked me, in the town of 300 people 
where we lived, to drive an old fellow to the hospital. The man lived 
alone in a very small shack. He did not have any relatives. He lived 
alone, and he was quite sick. My dad asked if I would drive him to the 
hospital. The nearest hospital was 60 miles away.
  I went over and picked him up and drove him to the hospital. He never 
made it back. But this old man, who was then sick and did not have very 
much, lived on Social Security. The only thing he had was a small 
Social Security check, but it was the difference for that man between 
not having money to buy food, not having money to live, and being able 
to survive.
  I know--and my colleagues know--how critically important Social 
Security has been to so many of America's elderly. Yes, I am talking 
about the people who built this country. I am talking about the people 
who built America's schools and roads and worked in America's 
factories. They are the people who turned this country into the 
strongest economy in the world, a beacon of hope for all people. Then 
they grow old and retire, and they reach their declining income years. 
The question is, what is there for them?
  The one thing that for 70 years has always been there for them is 
something called Social Security. No, it is not an investment program. 
It is an insurance program. The money that goes into the Social 
Security system comes out of paychecks in something called the FICA 
tax. The FICA is not for investment. The ``I'' stands for 
``insurance.'' Social Security has been a core insurance program. It 
provides insurance with respect to benefits for those who retire. It 
provides benefits for those who are disabled, and it provides benefits 
for dependent children. For example, when the breadwinner of the house 
lost their life, dependent children received the benefits. So it is 
more than a retirement program, but it is also that. It is the risk-
free portion of retirement. It is the piece that for 70 years the 
American elderly could count on. They would know it would be there no 
matter what.
  Some have never liked it and have always wanted to take it apart. 
There was a memorandum leaked about 3 weeks ago from the White House 
that was interesting. It was from the chief strategist who is putting 
together this program to privatize a portion of Social Security. That 
memorandum said toward the end something that was very interesting. It 
said: This is the first time in six decades we have a chance to win 
this fight on Social Security. Of course, the whole implication of that 
is, we have never liked it, but we have had to bear with it. Now we 
have a chance to deal with it.
  The administration, as announced by the President last evening, wants 
to make some changes. He says the Social Security system is in crisis. 
He predicted last night that at a certain time the Social Security 
system would be bankrupt. But it is not in crisis, and it will not be 
bankrupt. He is simply wrong.
  Our colleague, former Senator Pat Moynihan, used to say: Everyone is 
entitled to their opinion, but not everyone is entitled to their own 
set of facts. I hope we can discuss this issue using the same set of 
facts, at least.
  Let me begin by saying something most everyone would acknowledge. In 
the year 1935, when Franklin Delano Roosevelt signed the law that 
created Social Security to protect our elderly from what he called 
``poverty-ridden old age,'' one half of the senior citizens in this 
country were impoverished. Now it is slightly less than 10 percent.
  Has the Social Security program worked? Of course, it has. It has 
been a remarkable program that has lifted tens of millions of senior 
citizens out of poverty. It has worked over the years unfailingly.
  The President says it is in crisis. It is set to be bankrupt at some 
point. Therefore, let's make some changes. He says: Let's create 
private accounts with a portion of the Social Security system and 
invest it in the stock market.
  What he didn't say last night was how he would do that. He would be 
required to borrow $1 to $3 trillion at a time when we are up to our 
neck in debt with the highest budget deficits in the history of 
America. He would borrow $1 to $3 trillion in additional funding, 
invest it in private accounts in the stock market, cut Social Security 
benefits at the same time, and say that somehow this is going to be 
better for our elderly. With great respect--and I

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have great respect for this President--he is flat wrong.
  I know he is telling us what he thinks will happen in the year 2020, 
2040, 2050. Four years ago the President told us what he thought would 
happen in the next 10 years. He said: We will have the largest budget 
surpluses in history. Four years later, we have the largest budget 
deficits in the history of our country. This administration can't see 4 
years ahead, let alone 40 years. Economic projections are very 
uncertain under the best of circumstances. You show me great economists 
and I will show you people who can't remember their address or their 
telephone number, but they can tell us with great certainty projections 
of 40 and 50 years. Of course, that is all nonsense.
  All of us hope for a future that has robust economic growth. We hope 
things will be well. But we don't know. That is why 4 years ago, when 
the President was saying: We are going to have huge budget surpluses 
and let's provide very large tax cuts the bulk of which went to upper-
income people let's do that right now, I stood up in the Senate and 
said: Maybe we ought to be a little conservative. What if these budget 
surpluses don't materialize? What if something happens? Never mind, 
they said. And so they put in place these policies. We now have the 
largest budget deficits in the history of the country. They say: What, 
us? We didn't do that.
  Of course, this fiscal policy is way off track.
  Now the President said last night that Social Security is broken. It 
is going to go bankrupt and somehow it must be fixed. He says it ought 
to be fixed by privatizing a portion of it, by putting it in the stock 
market and borrowing a substantial amount of money to accommodate that 
and cut Social Security benefits at the same time.
  Let me go through a couple of points about that. This is from Paul 
Krugman of the New York Times. He says:

       The actuaries predict that economic growth, which averaged 
     3.4 percent per year over the last 75 years, will average 
     only 1.9 percent over the next 75 years. In the long run, 
     profits grow at the same rate as the economy. . . . Any 
     growth projection that would permit the stock returns the 
     privatizers need to make their schemes work would put Social 
     Security solidly in the black.

  His point is an interesting one and central to the discussion. The 
President says there are serious financing problems with Social 
Security. He uses language such as ``flat busted'' and ``bankrupt.'' 
They do that because the Social Security actuaries use a very 
conservative estimate of economic growth, much below the economic 
growth of the past 75 years. But then he says: If we put money in the 
stock market, that will have higher investment returns. And they base 
these higher returns on higher economic growth.
  The point is, if you have the high economic growth that they use to 
project these returns, the Social Security system doesn't need fixing 
at all. It doesn't need adjustments at all. It is well and able to be 
available for the long term. If we get any kind of reasonable economic 
growth, the Social Security system is fine for the long term. If we 
don't get the kind of economic growth we would hope and expect, then 
the investments in the stock market the President wants to make by 
taking Social Security funding away are not going to provide the 
returns he promises.
  You can't have it both ways. You can't argue both sides of that. It 
doesn't make any sense. Mr. Krugman is right.
  Peter Orszag from the Brookings Institute testified last Friday at a 
hearing I chaired:

     . . . young workers today in the middle of the income 
     distribution would experience a reduction in benefits of 
     almost 40 percent, or about $9,000 a year, even including the 
     payout from the individual accounts included in the plan.

  To better illustrate, this is from the Congressional Budget Office, a 
nonpartisan office that we rely on. We fund it and rely on it, 
Republicans and Democrats, for our estimates. The Congressional Budget 
Office points out the Bush plan would not only slash guaranteed 
benefits but private accounts don't nearly make up for the loss.
  In fact, workers will be worse off than they are now--much worse off, 
as you can see from the graph. The green represents the guaranteed 
benefit, and the workers would receive the yellow, which is the income 
from private accounts. As you see, it falls far short of what they 
would receive under the current Social Security program.
  The Congressional Budget Office, which I referenced, said that the 
Social Security program can pay 100 percent of its benefits from now 
until 2052. After 2052, it can pay only 78 percent. That assumes that 
we have dramatically lower income growth for the next 75 years than we 
had in the previous 75 years. If we have any reasonable economic 
growth, we don't have any kind of a problem here. There is no 
shortfall. In 2052, the Congressional Budget Office says we would be 
about 22 percent short of paying full benefits. The benefits we would 
pay then will still be higher than we pay now in real terms.
  If all of this happens, we will need to make adjustments in Social 
Security. But those adjustments don't represent a major surgery or a 
wholesale operation. They can be reasonably modest adjustments that 
keep Social Security whole and strengthen Social Security for the long 
term.
  Let me show you what is happening with respect to the trust fund. The 
money that is taken out of workers' paychecks to put into the Social 
Security account is now more than is necessary to fund Social Security. 
This past year, $151 billion more was collected in Social Security than 
is necessary. That is to be put into a trust fund, not for the purpose 
of spending on other things, not for funding the war against terrorism, 
not for highways or health care or law enforcement; it is only for the 
purpose of funding Social Security. And so the trust funds are made up 
of Treasury bonds. That is what the money is used to purchase--a 
Treasury bond. That treasury bond then pays interest. This is what 
happens to those buildups of assets: $1.68 trillion in 2004. It would 
be more than that in 2005, an annual surplus in Social Security trust 
funds. You can see what is happening on this graph all the way out to 
2040. That is the taxes that are collected to be put into this account 
as well as the interest that is earned on these trust funds. You can 
see what is happening. It is not something that justifies someone 
calling this bankrupt or flat busted as some do.
  Even Mr. George Will, a columnist who is a rather predictable and 
consistent conservative and has written for many years as a 
conservative voice, has said that this is not about economics, it is 
about philosophy. Why did he say that? Because the arguments for the 
President's plan don't stand on their own in terms of economics. They 
don't add up, they don't fit, and they don't square with the facts. It 
is about philosophy. It is about people who have not liked Social 
Security and would like to take it apart.
  If we have any kind of robust growth--this is from the Social 
Security trustees' annual report--if we have optimistic economic growth 
assumptions, not the pessimistic ones, on the graph you see what 
happens: The trust fund assets go up out into the future past 2080. So 
this notion that somehow that is a crisis, there is an impending 
bankruptcy, the system is flat busted, is just wrong.
  Once again, I respect very much the President. I understand that he 
has a right to offer these proposals. Some see this as novel and 
aggressive. He would see it as transformational. I happen to think 
there are some things that represent timeless truths. There are some 
values that to embrace is not old-fashioned, or if old-fashioned is 
worthy of credit. If it is old-fashioned to support a program that has 
worked well for 75 years and will work for the next 75 years and 
longer, which helps lift America's elderly out of poverty, then we 
should just accept the notion and plead guilty to being hopelessly old-
fashioned, believing that this is the value that strengthens America.
  When those who build in this country--the people who go to work every 
day, build the private companies, build the manufacturing plants, build 
the roads and the schools--when they retire and reach their diminished-
income years, we don't want them living in poverty. That is why as a 
country we put together this program called Social Security as a basic 
insurance program.
  Some say--England has gone to private accounts, and Chile, which 
everybody points to as a country which has

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gone to private accounts--that means you can earn more in the 
marketplace. Let me talk about Chile. In Chile, the only program that 
exists are those private accounts. You don't have company pensions, for 
example; you have these private accounts. Do you know what happened in 
Chile? They are telling old folks: Why don't you delay retirement until 
the stock market comes back a bit?
  That is the experience with Chile. In England, what we have 
discovered is the companies are charging massive fees, overcharging 
people. They have had bad experiences with these private accounts. In 
this country, the Social Security system has been there consistently, 
and it works. So the question is, why would we want to take apart 
something that works? There is such an urgency in this Congress to move 
toward policies that benefit those who are the most affluent. It is 
always a rush to do that. What about an urgency to support the kind of 
program that makes life better for those who have reached their 
retirement years? What about an urgency to support, strengthen, and 
preserve the Social Security system? That represents an important part 
of our value system in the Congress.
  I know we debate a lot of issues here; some are big, some are little. 
Some treat the serious too lightly; some treat the light too seriously. 
Some people think we are just a bunch of windbags in blue suits. I 
understand that. But there are occasions in which we sink our teeth 
into something important and have a debate that matters. This is a 
debate that really does matter.
  If President Bush is able to convince this Congress to begin taking 
apart the basic retirement insurance program that has lifted so many 
tens of millions of Americans out of poverty in their retirement years, 
I think this country will have lost ground, not gained ground.
  I am not suggesting there are no changes that can be made from time 
to time. Most people do not realize that in Social Security, a change 
is being made now. In 1983, when there was a reform package dealing 
with Social Security, it was decided that people are living longer and 
better lives. Because of that, the age of retirement had to be 
increased. So it was--two months a year going from age 65 to age 67 
retirement. That is happening. We are on the road, from now until 
another 20 years from now or so, to take the retirement age to 67. The 
Congress supported that. The President--Ronald Reagan at the time--
supported that. That is underway. Adjustments have been made and will 
be made. But again, that doesn't justify someone claiming that there is 
bankruptcy pending in the Social Security program and that we ought to 
begin taking it apart.
  I have told my colleagues previously about my uncle. I will do it 
again briefly. It describes what is happening in our country. My uncle 
and aunt went to something called the Prairie Rose Games; I think it 
was probably 12 years ago. The Prairie Rose Games are the games in our 
State, like in many States, that give people of different age brackets 
an opportunity to engage in different sports. My uncle and aunt, I 
believe, were 72 at the time. They bowl. As they looked at what was 
going on, they saw mixed bowling. They thought, that is something we 
can do, so they entered bowling. They had driven down to the Prairie 
Rose Games in their small RV and pulled up in the campsite and looked 
at this and said: We are going to bowl.
  My uncle, age 72, saw that they had foot races for people 70 and 
above and for all different age brackets. That was his age bracket. He 
entered three races. He had never run a race in his life. At age 72, he 
entered the 400, the 800 and the 3K. He won all three of them. He won 
all three easily at age 72. He thought to himself, this is really quite 
extraordinary. I appear to be faster than people my age. So he started 
running. He went to Minnesota and ran in the Minnesota games, and he 
went to South Dakota and ran in the South Dakota games. Then he went to 
Arizona and ran there. He also went to California.
  My aunt thought he had a stroke. She thought it was the dumbest thing 
she had ever seen--this old man going all over the country engaging in 
races. My uncle has 43 Gold Medals. He discovered he could run faster 
than anybody his age. He just had a bout of illness, but up until about 
a year ago, he was still running at age 81.
  That would not have happened 20 years ago or 40 years ago. Now people 
are living longer, healthier, more active lives, and good for them.
  So all of these issues, to the extent there might be a strain on 
Social Security, not bankruptcy, but a strain on Social Security--this 
is born of success. People are living longer. It is not rocket science 
to fix these things. Small adjustments can be made if they are needed 
to be made. But given what is happening with our elderly in this 
country living longer, needing to rely more on Social Security--no one 
should decide now is the moment to turn our back on them. That does not 
make any sense. Or to decide a program that has enriched the lives of 
so many tens of millions of Americans somehow ought to be taken apart. 
Why? For philosophical reasons.
  One of the leading conservative voices of the far right said Social 
Security is the soft underbelly of the welfare state. That tells you a 
little something of what is going on, doesn't it? It is not a worthy 
program; it is some sort of welfare. It is not, of course. People pay 
for their Social Security insurance. They paid for it every month they 
worked out of their paychecks. And when they reach retirement age, they 
do not know a lot of things, but they know this: That this country, as 
good as it is, as big as it is, as wealthy as it is, as generous as it 
is, and as consistent as it is in values will continue to maintain a 
Social Security program that people paid for so that it is there.
  It is certain to be there. It is not the risk part of retirement. It 
is the guaranteed part of retirement because people paid for it.
  We have also said, in addition to Social Security, we want everyone 
to save more for retirement. So we have 401(k) plans, IRAs, and we say 
you get tax incentives for this and that. I support all of that. In 
fact, I believe we ought to have a two-step program instead of the 
President's plan as he outlined it last night.
  The first step is to preserve and strengthen the Social Security 
program as it now exists for the long term, and we can do that without 
breaking a sweat. The most important thing is to preserve, protect, and 
strengthen Social Security. Don't take it apart. Preserve it and commit 
our country to do that.
  Second, provide dramatic new incentives for retirement savings 
programs, IRAs, 401(k)s, and all the other programs we have to try to 
convince people to save more and invest more. I support that. That 
makes sense. But we ought not mix the two and decide to take apart 
Social Security and borrow $1 trillion to $3 trillion, stick it in the 
stock market, and cut Social Security benefits. That is a giant step in 
the wrong direction. We can do better than that. This Congress can do 
better than that, and the American people deserve better than that.
  As I said before, this is about values and priorities. For example, 
you can fix whatever adjustments are necessary in Social Security by 
deciding that the tax cuts given to those whose incomes are half a 
million dollars a year or more need not continue.
  Here is the choice: Tax cuts for people with half a million dollars a 
year in income or more, or make Social Security whole for 75 years and 
longer. That is the choice. That is just one of a dozen choices. It is 
an easy choice. It is a values question. What really is our set of 
priorities with respect to our commitment to America's elderly? What 
kind of country do we want to have? What do we think enhances and 
promotes value in this country?
  Finally, as I have told my colleagues many times, I grew up in a town 
of 300 people. It is a town that had its own programs without 
Government, people taking care of people. It would be nice if that were 
the case all across the country, but we know that is not the case. So 
we put together certain efforts to incentivize people to take care of 
themselves, to invest for the future, to save for the future.

  One part of that is Social Security. From 1935 until the year 2005, 
we can be proud of what this important Social Security program has done 
for our country. We ought to, in the spirit of Franklin Delano 
Roosevelt and in the

[[Page S964]]

spirit of tens of millions of lives that have been enriched and pulled 
out of poverty because of this program, be dedicating ourselves to 
preserving and strengthening Social Security, not taking it apart, not 
borrowing money, not sticking Social Security money in the stock 
market, and not continuing to spend Social Security trust fund revenue 
on something for which it was not intended. But instead we should be 
putting our shoulder to the wheel and doing the right thing for this 
country.
  We will have a great debate about this. A lot will be said about it. 
I do not attempt to tarnish anyone else who feels differently. I have 
respect for the President. We have a disagreement. I will not denigrate 
those who have a different feeling or who oppose my position, but I 
must say I feel very strongly about this issue because I think it is 
part of the core value system of this country.
  This is a great, big, strong, wonderful, generous country, and doing 
the right thing is not very hard for this Congress in this 
circumstance.
  Mr. President, I yield the floor, and I suggest the absence of a 
quorum.
  The PRESIDING OFFICER. The clerk will call the roll.
  The assistant legislative clerk proceeded to call the roll.
  Mr. DORGAN. Mr. President, I ask unanimous consent that the order for 
the quorum call be rescinded.
  The PRESIDING OFFICER. Without objection, it is so ordered.

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