[Congressional Record Volume 151, Number 13 (Wednesday, February 9, 2005)]
[House]
[Pages H497-H498]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




                            SOCIAL SECURITY

  The SPEAKER pro tempore. Under a previous order of the House, the 
gentlewoman from South Dakota (Ms. Herseth) is recognized for 5 
minutes.
  Ms. HERSETH. Mr. Speaker, I rise today to discuss Social Security and 
the current efforts to fundamentally change the nature of this 
important retirement security and collective insurance program. I want 
to focus specifically on the impact of these efforts with respect to 
younger workers.
  For years, my generation has been told that Social Security would not 
be there for us when we reach retirement age. We have been told that we 
are fools to count on expected Social Security benefits when planning 
for our own retirement; and lately we have been told that if we divert 
a portion of our contributions into private accounts it will somehow 
shore up Social Security's balance sheet while improving the return on 
our investment.

                              {time}  1830

  But those claims simply are not supported by the facts.
  Make no mistake, the Social Security program faces some challenges 
over the next 50 to 75 years. There are a number of proposals currently 
being developed to try to address these problems while encouraging 
private savings. And I am committed to working in a bipartisan manner 
to support smart targeted solutions that are fiscally sound; that do 
not require slashing of scheduled benefits; and that do not add to the 
Federal deficit. But I have serious concerns with any proposal, 
including that of the administration, to privatize or establish 
personal accounts within Social Security.
  First, such proposals require substantial mandatory benefit cuts to 
retirees; and, second, they require massive amounts of borrowing to 
finance the transition costs, a fiscally irresponsible plan at a time 
of record deficits. Despite claims to the contrary, these benefit cuts 
will be particularly significant to younger Americans.
  The Social Security System's own actuaries estimate that the average 
48-year-old will see his or her benefits reduced by 10 percent if the 
privatization plan is implemented. The average 18-year-old can expect a 
33 percent, and by some estimates a 40 percent, reduction in benefits 
by the time they retire in 2052 with this risky privatization plan. The 
average 28-year-old will see his or her benefits reduced by 26 percent.
  As a member of our Nation's younger generation of workers, I know we 
can do better, and I know that my generation and younger generations 
will not be duped into believing that Social Security faces a crisis, 
especially as the details of privatization plans and the structuring of 
proposed private accounts are made clearer.
  Rather than slashing the benefits of those who are at the beginning 
of their careers, we should empower them to take control of their 
retirement security in order to enhance private savings and give them 
the tools to manage their financial futures with confidence and 
certainty. Rather than add trillions to a growing national debt, a debt

[[Page H498]]

increasingly owned by foreign countries, we should act in a way that is 
fiscally responsible. And at a time when it is harder to qualify for 
pension benefits, Congress should undertake meaningful pension reform 
rather than continuing to weaken the three-legged stool of a solid and 
well-rounded retirement plan.
  Mr. Speaker, Congress needs to take the long-term difficulties facing 
Social Security seriously, but we must be fair and comprehensive about 
our solutions. It is irresponsible to characterize Social Security's 
fiscal situation as one of imminent collapse. In order to make good 
decisions about the future of the program, we must engage in an honest 
debate about the longer-term problems facing Social Security, and that 
includes a real and accurate accounting of the cost of privatization as 
we debate the budget over the upcoming months.
  The data on the proposals to privatize Social Security show that 
private accounts do little to improve the financial health of the 
program. Indeed, the massive transition cost, an estimated $1.4 
trillion over the first 10 years and another $3.5 trillion over the 
following decade, will hasten the date of Social Security's insolvency.
  Importantly, even without changes, without any changes, Social 
Security will be able to pay full benefits for nearly 40 years, 
according to the more conservative estimates of Social Security's own 
actuaries. After that, Social Security will continue to pay 75 to 85 
percent of scheduled benefits. So, clearly, younger workers and future 
generations are not going to be inheriting a Social Security System 
that is bankrupt.
  I share the concern of many independent commentators that efforts to 
fix Social Security through privatization will ultimately do more harm 
than good. What we need is a broader debate about real retirement 
security. If we approach that debate with an open mind and the resolve 
to strengthen Social Security as well as enhance opportunities for 
private savings, we can ensure that generations of Americans can look 
forward to spending the best years of their lives without worrying 
about how to pay for their basic needs. Americans of all ages deserve 
nothing less.

                          ____________________