[Congressional Record Volume 151, Number 13 (Wednesday, February 9, 2005)]
[House]
[Pages H499-H506]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]
SOCIAL SECURITY REFORM
The SPEAKER pro tempore. Under the Speaker's announced policy of
January 4, 2005, the gentleman from Florida (Mr. Shaw) is recognized
for 60 minutes as the designee of the majority leader.
General Leave
Mr. SHAW. Mr. Speaker, I ask unanimous consent that all Members may
have 5 legislative days within which to revise and extend their remarks
on the subject of my Special Order.
The SPEAKER pro tempore. Is there objection to the request of the
gentleman from Florida?
There was no objection.
Mr. SHAW. Mr. Speaker, President Bush has made it clear that the time
has come for an honest, straightforward, realistic discussion about the
future of our precious Social Security system. For today's generation
of senior citizens, the system is strong and fiscally sound, but
younger workers are concerned about whether Social Security will be
around for them when they need it.
The problem is simple. With an aging population and a steadily
falling ratio of workers to retirees, the system is on a course to
eventual bankruptcy. Here is the problem, and this is best demonstrated
on the graph next to me.
Social Security was designed in 1935 for a different world than the
one we live in today. It is a pay-as-you-go system in which the
benefits go to current retirees and they come directly from the payroll
taxes of current workers. When the program was still new in the 1940s,
there were 41 workers paying in for every retiree drawing benefits. By
1950, 16 workers paid in for every person drawing out. Today it is
about three workers for every beneficiary. And by the time our youngest
workers turn 65, the ratio will be down to two workers for each
beneficiary.
At present, Social Security operates with a substantial cash surplus.
In just a few years, when the baby boomers retire and begin collecting
benefits, the surplus will begin to decline. Then, in 2018, that is
just 13 years away, Social Security will begin paying out more than it
receives in payroll taxes. From then on the shortfalls will grow larger
and larger every year until 2042 when the Social Security trustees
estimate the system will reach fiscal collapse.
If we look at this chart, we can see we are here in a surplus
situation, but then we get to 2018 and we start to dip down. We still
have Treasury bills, and Congress is going to have to find the money to
pay benefits. That line continues to go down with ever-increasing
deficits for the next 75 years and beyond.
I want Members to notice the slope of this line. The further out, the
more steep it gets, going down. And look at the figure, that is a $26
trillion deficit in cash flow over the next 75 years. That is
unacceptable. At that point, with a projected shortfall in trillions of
dollars, the government will have no option other than to suddenly and
dramatically reduce benefit payments by over 25 percent or to impose a
massive economic, devastating tax increase on all Americans. And I am
not talking about 2075, I am talking about right in here. Within 13
years from now, that decision is going to have to be made by a future
Congress.
The longer we wait to address the coming crisis, the more difficult
and
[[Page H500]]
expensive the job will be down the line. So together, in this Congress,
under the President's leadership, we will save Social Security and we
will put it on a path to permanent solvency and stability.
To build a strong, workable, bipartisan reform, we must have
principles that will guide the effort. First, there must be no changes
in Social Security for those now receiving benefits or those who are
close to retirement. Today's seniors can be certain nobody is going to
touch their Social Security, nobody is going to take away the benefits
of today's retirees and the program as they know it; it will stay the
same for them.
Second, we must not increase the payroll taxes on the backs of
American workers. If we were to increase taxes this year to fix Social
Security, a family of four with an income of $40,000 a year would see
$1,400 disappear from their paycheck. We cannot tax our way out of this
problem. This is no longer an alternative.
Our third principle is to permit younger workers to have voluntary
personal accounts. Regular investment would be made in bonds or stock,
or a combination, throughout their careers, and then either use these
investments to meet expenses in retirement or leave them as an
inheritance to their children or grandchildren.
Social Security's future is more than a problem to be solved. It is
also a tremendous opportunity for all of our citizens to become owners
and investors. Many low-income workers who have nothing to spare after
taxes would have a chance to begin saving for their later years.
Personal accounts give Americans a retirement fund they control
themselves and can call their own. Everyone deserves a chance to live
the American dream, to build up savings and wealth, and to have a nest
egg for retirement that no one can ever take away from them, not even
the government.
Young workers who elect personal accounts can expect to receive a far
higher rate of return on their money than the current system can ever
afford to pay them. For example, if a 25-year-old invested $1,000 per
year for 40 years in Social Security's 2 percent rate of return, in 40
years she would have over $61,000. But if she invested the money in the
stock market earning even at its lowest historic rate of return, she
would earn more than double that amount, $160,000. If the individual
earned the average historical stock market rate of return, she would
have more than $225,000 or nearly 4 times the amount to be extracted
from Social Security.
Over time, the securities markets are the best, safest way to build
substantial personal savings, and this is with widespread investments,
not putting your money in one stock. These are wide investments and it
is done professionally through investment houses.
Having your own account for Social Security is purely a voluntary
option. We are confident, however, that millions of Americans will find
this option attractive. I cannot imagine any young person not taking
this option.
Another argument against Social Security reform with a voluntary
personal account is that the so-called transition costs will be too
high. There will be costs no matter what we decide. Social Security's
trustees report that each year we wait will add roughly $600 billion to
the cost of fixing Social Security for good. That cost is far in excess
of any of the so-called transition costs that have been projected for
any of the plans put forward by Members of Congress.
I would say here that we should also look at the cost of inaction,
the cost of doing nothing: A $26 trillion deficit over the next 75
years. What kind of a legacy is that to leave to our children and
grandchildren?
We will need bipartisan commitment in the months ahead, yet we should
not expect the work to be easy. Some have used this issue for political
gains, but we should all understand that it is disgraceful to play
politics with our children's future.
Let us look back a few years to the previous administration where we
see that President Clinton said at the State of the Union address on
January 21, 1998, ``We will hold a White House conference on Social
Security in December, and 1 year from now I will convene the leaders of
Congress to craft historic bipartisan legislation to achieve a landmark
for our generation, a Social Security system that is strong in the 21st
century.''
I went to that conference and we started to gather bipartisan
support, but let us see what the Democrats said after that conference.
Hillary Clinton, ``One of the most critical challenges of our time is
preserving and strengthening Social Security for future generations.''
First Lady Clinton said this at a White House event on Social Security
on February 17, 1999.
And then Senator Kennedy said on ABC This Week on July 11, 1999,
``The President has it right, and it is a position that I think
virtually all of the Democrats support in the Senate, protect Social
Security.'' I might say also this was partly made up of individual
accounts, personal accounts that President Clinton championed.
But the one I like perhaps the best, the Senate minority leader when
he said on Fox News Sunday on February 14, 1999, ``Most of us have no
problem with taking a small amount of the Social Security proceeds and
putting it into the private sector.''
This is what the leaders said then. What has happened now? Now we
find that we have leadership that has dug in and is prohibiting their
Members to even cooperate across the aisle, cooperate with Republicans,
in saving this most important part of our government.
Social Security is a sacred trust, something that we all can rely on
as we grow older. It is one that we know our parents enjoyed and our
kids will enjoy, and we want it for our grandchildren also. There is no
excuse for our not getting together and working together. It is more
important to save Social Security for future generations than worry
about who is going to be the next Speaker of the House of
Representatives in 2006. It is disgraceful to do otherwise.
Mr. Speaker, at this time I yield to the gentleman from Mississippi
(Mr. Wicker).
Mr. WICKER. Mr. Speaker, I want to congratulate the gentleman for his
remarks. We can save the Social Security system and also we can get a
better deal for our young workers in retirement.
Let me make one quick point and see if I have it right. There are
actually three aspects to the Social Security system. One is Social
Security disability, another is the survivorship program, and the other
is the old age retirement program.
I think what most of us are saying is, we can save the retirement
program through these individual accounts, but we do not have to do one
single change to disability. People do not have to worry about losing
their disability and they do not have to worry about the survivorship.
So if people raise that red herring, that is exactly what it is: It is
a false charge. Nothing will be done to disability and nothing will be
done to survivorship; is that correct?
Mr. SHAW. The gentleman from Mississippi (Mr. Wicker) is absolutely
correct and understands it perfectly.
Mr. WICKER. Mr. Speaker, I just want our constituents to understand
that, and I want the Members of this body to understand that. I thank
the gentleman for his leadership on this issue.
We are not going to do anything to Social Security disability and
survivorship, but we do need to give our younger workers an opportunity
not only to save the system for their future, but to get a better deal
than the one-half percent return or 1 percent return that they are
getting now.
{time} 1900
We can do better; and if we can, we certainly ought to for retirees
now and also for future generations. And I thank the gentleman for
yielding to me.
Mr. SHAW. Mr. Speaker, I say to the gentleman that he is absolutely
right on target. It is not a question of can; it is a question of must.
We must do this. And I would say from a very bipartisan way that if any
of our colleagues on the other side of the aisle, the minority party,
if they have an idea that they want to discuss, bring it over. I will
be glad to talk. I have chaired this Subcommittee on Social Security
for 6 years. I am no longer the Chair. The gentleman from Louisiana
(Mr. McCrery) is now the Chair; the gentleman from California (Mr.
Thomas)
[[Page H501]]
the Chair of the full committee. They are looking for ideas, and they
are leaving the doors open for new ideas. So the Democrats cannot
complain about being left out in the cold on this because we are
soliciting their support. We are reaching out to them, and we want them
to come down and come down with some good ideas. Not just come down and
start throwing rocks at us. Come down with something positive.
One cannot possibly debate these fiscal facts. This is what we are
heading for. And these are not Republican figures that we are looking
at. This has been done by the Social Security Administration, and we
had the same graph when President Clinton was President. So this is not
a Republican-created bankruptcy or crisis. This is an actual crisis
that is out there just because we are not having as many kids as we
used to have and we are living longer.
There are a lot of good things to say about that, but when one starts
talking about somebody to care for them in their old age, that is not a
good deal. So we need to start forward-funding the system. We need to
go to areas where we can actually make more than we would under the
existing system.
Mr. Speaker, I yield to the gentleman from Texas (Mr. Brady), a very
valuable member of the Committee on Ways and Means.
Mr. BRADY of Texas. Mr. Speaker, I thank the chairman for yielding to
me. First, let me join others in thanking him for his leadership on the
Committee on Ways and Means as chairman for 6 years on the Subcommittee
on Social Security, a resident and leader in Florida, which has a
number of America's seniors who care so much about this issue.
Back in Texas I know that every senior I visited with in the Eighth
Congressional District is worried about two things: their health care
costs and their Social Security. Prescription drugs, the new
technologies are doing just a wonderful job of creating a great quality
of life, but it is so expensive. They are worried about getting generic
drugs to the market faster so they do not have to pay so much for these
pills. They want more preventative services under Medicare so they can
detect that illness early and get treatment, prevent it rather than
having it occur to them. And they want to make sure they can see
doctors they know. All important issues on health care.
And they also want to make sure Social Security is there for them,
for their children and for their grandchildren, with greater cost-of-
living increases, that it is something that they can count on.
And for our seniors the great news is they are golden under Social
Security. Virtually nothing that can even be contemplated will change
for Social Security seniors, and that is the great news.
But our goal has to be to preserve Social Security once and for all
for every generation. Once and for all, meaning not another Band-Aid,
because we have gone through this exercise before. We have raised
payroll taxes. We have raised the age, and then in another 20 or 30
years we are right back where we started. Let us solve it once and for
all. Secondly, let us solve it for every generation. We know that
seniors above 55 are in very great shape with this. But the baby
boomers, we know there is not enough funding for them. And the young
people today, I just do not see how we take money from their paycheck,
a promise to have it ready for them when they retire and we know for
certain we cannot deliver on that promise.
And one thing we will hear in this debate is we will hear lots of
people talking about we are dismantling Social Security, we are making
huge benefit cuts, there is a guaranteed risk to personal accounts
within Social Security. But what those same Members of Congress will
not tell people is that they have their own retirement invested in
personal accounts just like the one the President has proposed. In
fact, Members of Congress, our staffs and our fellow co-workers invest
$15 billion every year, new dollars, into personal accounts. They are
invested and grow over time just like the accounts we offer and propose
for Social Security. And people back home always ask me, How come these
personal accounts are safe and secure for members of Congress's
families but all of a sudden they are a guaranteed gamble for us? How
come it is good enough for your families, but not good enough for
people who pay your salary?
It is a great question, and my thought is those who claim that
personal accounts are such a guaranteed gamble perhaps ought to lead by
example and withdraw from the Thrift Savings Plan and see what happens.
My guess is they will tell us wait a minute, that is how I am going to
build my nest egg. My question is why do we not allow other Americans,
the ones who pay our salaries each day, to build their own nest egg as
well?
What we are offering for seniors is to preserve it, but for young
people we are offering them a choice. For the first time in their
lives, they are going to get a choice in Social Security, real dollars
in a real account or an IOU in some imaginary government ledger. Real
dollars in a real account that build up over time that is theirs, for
their retirement, and when they get to 65 they are not begging
government for help in Social Security, they are not calling on their
Congressman. They are calling on their financial adviser because they
built up a nest egg that belongs to them and they have got that power.
And the fact of the matter is that back home in Texas, I always ask
two simple questions of the people I work with because they really have
great questions on Social Security. And I ask them, personally, they
are 50, or 60 years old, they are a baby boomer like me. If they could
go back, way back when and put all of that money that has gone from
their paycheck in a traditional retirement account and let it grow over
the years, would they be better off today than they were under Social
Security? And invariably they would say, I would give anything to have
that money back. Then I ask, if Social Security could have put that
money into real accounts, real dollars into real accounts, and let it
grow over the years, would Social Security be better off today than the
financial mess it is in? And invariably they answer the same way, yes.
Why not start now to build the same type of security? We know the
right thing to do is to move from this pay-as-you-go system that will
just run out of workers eventually and actually much sooner than we all
wish, to move it to traditional retirement accounts within Social
Security so that young people have real dollars in real accounts so
that they can rely upon their Social Security. It is, I think,
irresponsible by some to scare our seniors. It is irresponsible to
ignore this huge crisis.
I call it a crisis because it gets so big so fast. We have got to
move now. It costs us $600 billion a year every year we delay, $600
billion. The more we talk, it costs taxpayers. Why not, after decades
of gabbing about this, let us come together and solve it? And I think
too we have to be responsible for our seniors as well, focusing on
their health care, making sure that they have their Social Security
guaranteed with real cost-of-living increases. That is what the
President's proposal does. And, Mr. Speaker, there are so many great
ideas out there that have been proposed by Republican Members. I would
give anything if any of our Democratic friends who care about Social
Security would just come up with a plan. Just an idea. Just anything.
I read this week that they said Democrats will offer no Social
Security reform, which is one of the most important issues facing our
Nation and our future generations. They have got good ideas, bring them
forward. Let us talk about it. Let us work out a solution in a
bipartisan way. Let us think beyond the next election. Think about the
next generation. I am convinced and optimistic and hopeful we can fix
that.
Mr. SHAW. Mr. Speaker, reclaiming my time, it is really sad to say
that we only have one Democrat in the House today that had the courage
to come forward and defy his leadership. And I might say that that
particular Member, who is from the State of Florida, now has had a
campaign run against him in his position in his district by a Democrat
pack. To me that is absolutely unconscionable.
And I am glad the gentleman held those dollars up. I heard a town
hall meeting on C-SPAN just recently by one of the Members, and he kept
referring to cash in the trust fund. That is
[[Page H502]]
a myth. There is no cash in the trust fund. The trust fund is made up
of Treasury bills, and we are going to be in a position where we are
going to have to start cashing those in in 2018. And he talks about the
cash, the Congress is going to have to find the cash in order to pay
the benefits.
Mr. BRADY of Texas. Mr. Speaker, if the gentleman would continue to
yield, could I go back to what he said. Did he say there is a Democrat
Member of Congress being attacked for being open to working with the
President?
Mr. SHAW. Yes, as sad as that is. There are some bright people on the
other side of the aisle that could really help us get this thing done.
When I did welfare reform back in 1996, we finally got some help from
the other side and President Clinton signed the bill. And that was one
of the greatest pieces of social legislation that has come out of the
Congress, I think, in the last couple of decades. It was late coming,
but it came and we were able to do that. But in order to have the
confidence of the American people, this has to be done in a bipartisan
way.
Mr. BRADY of Texas. Mr. Speaker, if the gentleman will continue to
yield, I will tell the Members one thing the chairman has always said
is that this is not Republican Social Security, this is not Democrat
Social Security, this is not white or black or any other ethnicity
Social Security. This is Social Security for Americans, period. We
ought to come together as Americans in Congress on this issue and solve
that.
Mr. SHAW. Mr. Speaker, I thank the gentleman for his contribution.
Mr. Speaker, I yield to the gentleman from Georgia (Mr. Kingston).
Mr. KINGSTON. Mr. Speaker, I thank the chairman for yielding to me.
It is a great honor to be here with so many distinguished members of
the Committee on Ways and Means. And I wanted to follow up on the
gentleman from Texas's (Mr. Brady) comments because I think it is
important for us to know that President Clinton actually did say many
times over that Social Security was in a crisis stage and we needed to
do something about it. Similarly, the gentleman from Texas's (Mr.
Brady) former colleague, Mr. Stenholm, co-sponsored a bill with the
gentleman from Arizona (Mr. Kolbe) and, as I understand it now, will be
working now that he is not in Congress, but he is a Democrat taking a
leadership position, which we certainly appreciate, and then of course
we had former Senator Breaux from Louisiana, Democrat, and former
Senator, now deceased, Moynihan, who have all championed Social
Security reform and really have basically supported many of the ideas
that the President and the gentleman has promoted.
So I think it is very important for us to tell our friends on the
other side we want their ideas. We may not agree with absolutely
everything. We might not agree with some of these things from the
start, but we want all the ideas on the table because this is not about
Republican or Democrat; it is not about re-election. It is about the
next generation, and we need to protect and preserve Social Security
for everybody.
So I certainly appreciate what the gentleman from Florida (Mr. Shaw)
does, and I appreciate his yielding to me so I could make a point. And
I know the gentleman from Colorado (Mr. Beauprez), who has a great
financial mind, has some things to say; so I do not want to take up any
more time.
Mr. SHAW. Mr. Speaker, reclaiming my time, I appreciate the
gentleman's comments. And I know his family well and his kids, and we
are going to be working to help them together with mine. And, by the
way, I now have 14 grandkids and another one on the way. So the
gentleman can see I am going to be working overtime.
Mr. Speaker, I yield to the gentleman from Colorado (Mr. Beauprez), a
new member of the Committee on Ways and Means.
Mr. BEAUPREZ. Mr. Speaker, I thank the gentleman for yielding to me.
And I thank him as well for bringing this issue to the floor tonight.
My suspicion is that there will be many evenings and many days that we
spend in this 109th Congress talking about this extremely important
issue, and I think he framed the issue very well.
This is in many ways, I think, a classic case of good news. We have
got this chart up here again representing a little bit of the challenge
in front of us. My parents were young workers at about this point in
time, 1945. I was born in 1948. They are a part of these 42 that were
working back in 1945 to provide the benefits for one retiree. One might
call that one of their parents at the time. So this population of
workers, my parents, were out there doing their thing day after day to
provide the benefits for one retiree. Now today, which is where we are
at now, it is kind of my generation, except we can see the group gets a
little smaller. There is but three of us working for the benefits of
one. My mother is one of those, and she depends on that paycheck every
single month coming from Social Security, her benefits, and they are
guaranteed.
And that is a point that I think we cannot make often enough. The
full faith and credit of the United States of America, both parties,
Presidents from each party over the years have pledged that those
benefits are there, and they are there.
{time} 1915
There has been this rhetoric going around that somehow somebody has
got a devious plot to cut benefits. That is simply not true. The United
States has made a promise to our retirees, to our senior citizens,
those that worked hard for the benefits of others, and those benefits
will be there.
So we start out again with my parents' generation. It took a whole
lot of people to get the work done back then. My dad and mother both
were members of farm families. They had eight children in each family,
and somehow it took all eight of them just to keep the family going
back then.
Today, we get a whole lot more done with fewer people, but again the
facts are today we have got about three people paying for one
beneficiary.
Now we move on to when I and my wife are going to be retired, and my
kids are going to have a little bit of role reversal here. My kids are
going to be paying the benefits of us. And by the actuaries' own
calculations, there will be but two to provide what at one point in
time, not too many years ago, 42 were doing. That is the challenge in
front of us.
We get a whole lot more done with a whole lot fewer people it seems
in the United States of America now, but the simple arithmetic is not
our words; we did not invent it. It is an unsustainable. It is an
unsustainable system as it currently exists.
We Republicans were not the first ones to stumble over the problem.
As the gentleman from Florida (Mr. Shaw) has already pointed out, we
have had a whole lot of support. President Clinton certainly said it.
In fact, we have heard that FDR himself, the father of the Social
Security system, cited back then, This is but supplemental; this is but
a beginning, and you are actually going to have to come up with another
method. And he said, We are going to need something like an annuity to
provide the additional benefits that are there some day. Well, that
some day has finally arrived.
Senator Harry Reid, he understood it. As the gentleman from Florida
(Mr. Shaw) already pointed out there is another gentleman, a notable
gentleman in this Chamber, a notable Democrat, the gentleman from New
York (Mr. Rangel), ranking Democrat, most senior Democrat on our
Committee on Ways and Means, the committee charged with dealing with
this issue first and foremost.
The gentleman from New York (Mr. Rangel) on January 21, 1999, said, I
am one Democrat that truly believes that the Democrats will not benefit
by doing nothing on Social Security.
Ladies and gentlemen, Mr. Speaker, doing nothing is exactly what the
Democrats are today telling us they want to do. They have said no to
everything, no to every idea that is out there. No, no, no. No even to
the fact of life that there is a problem. They seem to deny the fact
that there is a challenge in front of us. So their answer is no.
What has changed between the comment of the gentleman from New York
(Mr. Rangel) in January of 1999, and Senator Harry Reid's comment,
February of 1999? I will tell you what has changed. Back then a
Democrat President, Bill Clinton was President of the United States,
and he was talking
[[Page H503]]
about the need to reform Social Security. Today, George W. Bush, a
Republican, is President, and it seems that anything that George W.
Bush is for, they are suddenly against, even if it happens to be the
blatantly obvious, what their own party has been saying needs to be
done for years and years and years.
Let me shift gears just slightly in the time that I have got
remaining. You know what this really ought to be about? It ought to be
about facts, yes. It ought to be about the truth, yes. But it should
also be about generational fairness.
Let me go back to this chart one last time. This generation made a
promise and they delivered. Social Security was there and the benefits
existed and were paid. That same situation exists today, but as the
gentleman from Florida (Mr. Shaw) very clearly pointed out, we have got
a big challenge in front of us because the dynamics represented by the
reduction in the number of workers to provide the revenue to pay for
the benefits, that challenge is getting ever greater. I do not know if
it is 2042 or 2043, but somewhere in and around there, we have a huge
problem.
I do not want to look at my kids, my four children back home, nor my
grandson, and say, The moment was in front of us in the 109th Congress;
we had the support, the strength, the encouragement, the power of the
President of the United States, and this Congress failed to act.
It is in front of us. And this Congress, Democrats and Republicans
alike, should deal with this issue in a forthright, straightforward
fashion.
There is another truth that my four children certainly understand.
They understand that all four of them are paying with every one of
their pay checks into Social Security to provide benefits for retirees
today. They know that in Social Security there is no line item that has
their name next to it. I think they deserve the right to have their
money. Whose money is it?
They understand it. It is their money. And it is their retirement
that we are sitting here, charged with dealing with. I think we ought
to deal with it in a straightforward, truthful fashion. Fix the
problem, fix it for today's generation, but for all generations as
well. With that, I yield back to the gentleman from Florida and thank
him once again for bringing this critical issue to the floor of the
House.
Mr. SHAW. Mr. Speaker, I thank the gentleman for a very enlightened
presentation. It certainly contributed very much to sharing with our
colleagues the full extent of the problem and making it personal in the
way he did, because that is the way it should be for every Member of
this body.
I now yield to the gentleman from Texas (Mr. Gohmert), a freshman
member.
Mr. GOHMERT. Mr. Speaker, what a pleasure and privilege it is to
share this time with Chairman Shaw, and the enlightening presentation
he made previously.
I came across some information that had been talked about in a local
newspaper, The Examiner, a new paper, and did some digging. And it is
indeed my pleasure in a bipartisan spirit to call attention to
statements made or endorsed by certain Senators, including some
prominent Democratic Senators who, in 2001, found that Social Security
simply was not as efficient as a system that allowed workers to invest
their own retirement funds in a personalized retirement account.
Privatization is not a good idea; we are not for that. However,
allowing young workers to personalize their retirement by taking a part
of their retirement funds and placing them in a personal Social
Security savings account that the individual actually owns is a good
idea. And we are open to discussion on that. I am proud to be a part of
looking at that. Such accounts currently are in place for State and
local retirees, and they are performing at least 200 to 300 percent
higher than Social Security.
What a great thing, to provide individuals with a decent retirement
while preserving Social Security for those that are on it and for those
that are over 55 years of age. Such an account could actually be owned
by the worker and not by the government. The State and local
governments manage the accounts and see that they are safely invested,
all a vast benefit for their employees. I was under such a system in
Texas as a judge and chief justice. Our retirement account was through
the Texas Employee Retirement System.
There are those who say, Mr. Speaker, There is no crisis. You have
heard it; we have all heard it. But that is akin to somebody falling
off a very tall building and all the way down at each window he is
heard to say, ``I am doing all right so far.'' Eventually there is
going to be a time of reckoning, and that is exactly what we are
looking at with Social Security. We want to avoid that now, while it
can still be avoided.
Most agree that in 2018 there will be more money going out of Social
Security than there is coming in. Some say that is still no big deal,
because Social Security has so much money in the lockbox.
Well, since 1935, when Social Security was created and FDR's Congress
immediately began spending that Social Security money, what they put in
the lockbox was Federal bonds, which is basically a government IOU.
Mr. Speaker, I heard the gentleman from Florida (Chairman Shaw)
talking about that a moment ago. When the outgo gets higher than the
income, then what they are going to rely on is not cash in the lockbox,
it is IOUs that have been getting stuck in there ever since 1935. That
is serious. It creates a major problem looking at us right now, here in
the face, and we need to deal with it.
Some say that even though the proposal will not affect seniors, will
not affect those the way it is proposed, it would not even affect those
over 55 at all, but it would just allow some young people to put some
of their own money in their own retirement account, that that would dry
up capital and hurt the economy.
But, Mr. Speaker, that argument flies in the face of the facts. If
young people start investing some of their money in a personalized
Social Security savings account, and that is not happening right now,
then what it does is it creates capital to help the economy. There will
be savings that are there as capital that will help the economy and
drive it, as the President's tax cut has been doing the last couple of
years.
Young people overall are not saving right now. But if they begin now,
by their very act of saving, they will create capital and help the
economy.
There are some very important principles. First of all, Social
Security is in trouble. Second, every day we delay, the naysayers are
denying young people the compound interest on a conservative investment
that they could be making if the opposing Democrats would get out of
the way, would come together with us, let us reason together, come up
with a good plan, save Social Security and yet plan for future
generations.
Do you think that conservative investment could do much better? Well,
there are a bunch of folks that did. In 2001, they signed a letter to
that effect, sent out a press release to that effect.
Some real live examples we checked on, got input from these systems.
Galveston, Texas, has its own retirement system. If you work until age
65 with an average income of approximately $35,000, then you will
receive over $2,600 per month. If you did the same thing under the
Texas Employee's Retirement System that I was under as a judge, you
would be getting nearly $2,700 a month. Using that same scenario, but
under Social Security, you receive less than $1,300 per month. Mr.
Speaker, it is not hard for folks to figure out what would be a good
system to plan for the future.
There is apparently a letter, a press release regarding that letter
that was signed by a host of Senators regarding Social Security back in
2001. At that time, there were some people that wanted to make those
workers that had State and local retirement systems pay into Social
Security. These Senators signed this letter in December of 2001, and
they were adamant that such personalized accounts outside of Social
Security were a far better deal for those workers.
Senators, and you may recognize some of the names, Mr. Speaker, like
John Kerry, Harry Reid, Edward Kennedy, Chris Dodd, Joe Lieberman, they
indicated, according to the copy of the release we obtained, ``Millions
of our constituents will receive higher retirement benefits from their
current public pensions than they would under
[[Page H504]]
Social Security.'' Those Senators call those retirement funds outside
Social Security ``well-managed'' and ``well-funded.''
Additional evidence that such personalized accounts are a good idea
is that AARP has its own mutual fund and encourages its members to join
the fund, even though its investments are outside Social Security.
Apparently they do not consider such a fund to be too risky. It would
certainly seem that either such a fund is a good thing to invest in, as
AARP is telling some of its members, or AARP is misleading its members
and encouraging them to invest in something outside Social Security. If
it is a good thing for AARP members, how much better would such a
personalized retirement fund be for young people with plenty of time to
build a future?
For years I have gotten e-mails saying Congress must be forced to
live on Social Security, and we needed to do that. Well, I got elected
and guess what I found out when I got here? We are on Social Security.
We pay into Social Security. We are going to be part of the Social
Security system when we retire.
So we are in it. The only addition is, we are allowed to invest some
of our income in retirement accounts, and some of us believe that
others besides Congressmen and certain State and local employees ought
to have that same right. That is what we are talking about.
I campaigned that we should fix Social Security, but do so without
reducing benefits or adding taxes. Mr. Speaker, I cannot tell you how
pleased I was to come to Washington and find that the President and so
many others, Republicans here, all agree.
{time} 1930
I also personally believe we really ought to eliminate that terribly
abusive tax that was added on to Social Security benefits that
President Clinton and the Democrat-controlled Congress piled on to the
poor Social Security receivers back in 1993. In fact, the Republicans,
and even some Democrats back then, were so opposed to taxing that
income on Social Security that the Vice President of the United States
at that time, Al Gore, had to come to Capitol Hill, cast the tie-
breaking vote, just to hammer our good seniors with that brutal tax.
There have been so many inequities in Social Security. One woman
reported that though she and her husband both worked their entire
lives, that when her husband died, she was getting exactly the same
thing that another woman was getting who had never worked or put into
Social Security in her whole life. It is easy to understand her
frustration at paying into Social Security her whole life, for no
benefit whatsoever to her. If she and her husband had been allowed to
own their own personalized Social Security savings account, she would
have received the benefit of both her and her husband's hard work and
investment.
We can do this. We can save Social Security for those that are on it
and for those that are paying into it, those over 55, as the President
is talking about, and for future generations and, at the same time,
create these great personalized Social Security savings accounts for
young people so they cannot only survive during their senior years;
they can thrive. It would be good for everyone except those wanting the
government to keep people enslaved to the Big Brother in Washington.
I applaud those Senators, including Senator Kerry, Senator Kennedy,
and Senator Reid, among others, that signed it for their courage and
their vision as it was back in December of 2001, when they knew and
believed in a retirement system like the President is proposing, that
that would be the best thing for folks to invest in.
Now, if their view has apparently flip-flopped since 2001, then,
hopefully, we will not have to wait until the year 2020 before their
vision returns to being 20/20.
Mr. Speaker, I appreciate so much the efforts of the gentleman from
Florida (Mr. Shaw) on behalf of all of us, for senior citizens, to save
Social Security, not just for everybody on it now, but for future
generations.
Mr. SHAW. Mr. Speaker, I thank the gentleman for a most insightful
commentary and also the research that the gentleman did, which I think
is terribly important, when we try to show that we do need and we can
get and we have got thinking on the other side of the aisle that we
need to bring aboard.
I am now proud to yield to a new Member, the gentleman from Georgia
(Mr. Price).
Mr. PRICE of Georgia. Mr. Speaker, what a pleasure it is to join my
colleagues who have spoken this evening about this incredibly important
topic. The gentleman mentioned that I am a physician. Mr. Speaker, we
are all prisoners of our education and our training; and as a medical
doctor, I know that you cannot treat the right disease unless you make
the right diagnosis, and public policy should not be any different. We
should not be making policy here in Washington without a specific aim,
and this is especially true for the big challenges that we have before
us, and Social Security is indeed one of those.
Mr. Speaker, my colleague talked about principles, and I think it is
extremely important to outline what those principles are. I would just
like to kind of review those, because this is not about Social
Security; it really is about retirement security, retirement security
for every one of us. We all want to be sure that our golden years are
golden, that a secure retirement is available to all Americans.
Now, what should those principles be? What kind of principles should
we keep in mind? Well, first and foremost, I think it is important that
we say that it is a promise and we recognize that it is a promise. I
believe that Social Security is not just a government-run program, or a
government program; that it is more of a safety net. And it is more
than a safety net; it is a solemn promise. It is a solemn promise by
the United States, by all of us, to generations of hard-working
Americans. Washington took money from your paycheck your entire life,
and they made a promise to return that money to you upon your
retirement. It is a promise.
The second principle is peace of mind. Current retirees and those
nearing retirement deserve peace of mind, knowing that they will
receive full benefits for their entire retirement. There should be no
change for those currently retired. They need that peace of mind.
Third, we have heard mention tonight about generational fairness. It
is imperative that we save and secure Social Security so that our
children and our grandchildren receive the same benefits we have
enjoyed. Generational fairness is imperative.
Another principle: it should not be partisan. When it comes to the
retirement of tens of millions of Americans, there are not any
Democrats and there are not any Republicans; there are only Americans.
And those Americans, they are counting on us to work together and do
what is right for the current generation now receiving benefits, for
the next generation who are paying those benefits, and for future
generations who are now just entering the workforce.
Finally, all Americans, we have to remember here that it is your
money, that it is your future, and that it is your life.
So it is a promise. We all deserve peace of mind; there ought to be
generational fairness. It should not be partisan, and it is your money.
We all ought to agree on those principles.
Now, with these principles in place, what are the facts? What is that
correct diagnosis that I talked about earlier? There are those who
believe that Social Security is not broken and that we can continue
down this path with only a few minor adjustments. Now, most of us who
are interested in honest solutions to the challenges before us do not
believe that. In fact, as we have heard tonight, even President Bill
Clinton in an address in February of 1998 talked about ``the looming
fiscal crisis in Social Security.'' So it is very real, and we cannot
ignore it.
Now, that correct diagnosis, the correct diagnosis is that Social
Security is broken and must be fixed. Social Security is broken and
must be fixed.
Now, our current situation is the product, I believe, of two things,
two things: inertia and our changing demographics. There is an inherent
inertia in government at any level. Once a program begins, it is tough
to change it. We know that. It occurs at all levels of government, from
local all the way up. Social Security is no different. It is
[[Page H505]]
now 70 years old, and there has been a little tinkering, but no
fundamental update or modernization. And boy, the world has changed in
the past 70 years, has it not? Remarkably, too.
Seventy years ago, we were in the midst of the Great Depression. FDR
was President; Babe Ruth hit his last three home runs in one game to
set his career record; Elvis Presley was born 70 years ago. Seventy
years ago Parker Brothers released the board game Monopoly, nylon was
discovered, and the construction of the Hoover Dam was just completed.
Seventy years was a long time ago.
Now, what about our demographics? What about our population? How have
they changed? I think it is clear that when Social Security began, when
it was first designed, it was for a different generation and a
different America. There are at least four specific facts that have me
convinced that that old system is no longer workable for our society.
It is no longer secure.
First, our Nation has matured from a time when men were the majority
of the workforce and the life expectancy was about 60 years old. I have
always found that it is curious that when the Social Security program
began, the benefits would begin for individuals at a point in time when
the average individual would not even live to that date. Only
Washington can institute a program like that and have folks continue to
praise it.
Now, today, in the majority of households, both men and women are
working, and our life expectancy is significantly over 70 years, so we
are living longer, healthier lives, and that trend is only going to
increase. Now, this is very good for all of us, but it is not good for
our outdated Social Security system.
Second, when the system began 70 years ago, and we have heard this
this evening as well, there were 41 workers for every retiree. I would
like to have my colleagues think about these numbers: 41, 16, 3, and 2.
When Social Security began, there were 41 workers for every retiree. In
1950, there were 16 workers for every retiree. Now, there are about
three workers for every person who has retired and in the not-too-
distant future that number will be down to two. Now, those numbers just
do not work. This is clearly unsustainable, and we cannot have our
children and grandchildren punished, and that is what will happen if we
do not act now.
Third, the baby boom generation is about to begin retiring; and when
that happens, the program starts to have real problems. Now, when will
they retire? Well, the average age of retirement is 62 years old, and
the baby boomers began in 1946, so you do the math. Mr. Speaker, 1946
plus 62 adds up to 2008. That is 3 years away. 2008 is when the baby
boomers begin to retire. Mr. Speaker, 2008. A child born today will not
even be in kindergarten yet. So the problem is right around the corner.
Fourth, the return on your Social Security dollars that we have had
today is frankly an embarrassment. A mere 2 percent and for many, even
less than that, less than 2 percent. That is not enough to retire with
a nest egg; that is not enough to retire with security. To me, the
current system looks like a greater risk than trying an alternative
approach. More retirees, fewer workers, less money.
Now, all of these are facts, and facts are the same regardless of
whether you are a Republican or a Democrat. So the picture that we
paint is not a very pretty picture. We must put the ``security'' back
in Social Security.
I think it has been mentioned this evening but, Mr. Speaker, we know
that with each passing year, each year that goes by where we do not fix
Social Security, the bill to our children and our grandchildren
increases by $600 billion. That is right; $600 billion for each year we
do not do anything. Fixing Social Security is a matter of fairness,
fairness for the current generation of retirees and fairness for
generations to come.
So we ought to act now. The Social Security trustees, the Comptroller
General of the United States, and the chairman of the Federal Reserve
Board all agree that the sooner we address the problem, the smaller and
less abrupt the changes will be for all individuals and their families.
So I talked about those principles: promise, peace of mind,
nonpartisan, generational fairness, and your money. These ought to be
our principles. We should focus on the facts, study the issues and
alternatives, vigorously debate it, and then act. Social Security has
worked for decades and for generations, but this current system is
outdated, and it does not meet the needs of you or of our society. It
is not secure.
So I ask my colleagues on both sides of the aisle to take the time
now; let us get to work. I look forward to this discussion; and I urge
all of us, all of us to make a commitment to themselves, to our
children, and to our grandchildren to solve the current situation. Not
acting now would be irresponsible, as would saying that there is no
problem or that little needs to be done.
So, Mr. Speaker, I urge this House, I urge the Senate, and I urge the
President to work together to find a responsible and a secure solution.
I thank the gentleman so much for allowing me to take part in this
discussion this evening.
Mr. SHAW. Mr. Speaker, I thank the gentleman for a very well-prepared
and well-documented statement.
I would like to close with a couple of quotes. The first is I would
like to quote President Clinton at Georgetown University on February 9
of 1998. This is an exact quote. He said, ``So that all of these
achievements, the economic achievements, our increasing social
coherence and cohesion, our increasing efforts to reduce poverty among
our youngest children, all of them are threatened by the looming fiscal
crisis in Social Security.'' The looming fiscal crisis in Social
Security. I could not express it better.
President Bush, in this hall on February 2, just a couple of weeks
ago said, ``One of America's most important institutions, a symbol of
the trust between generations, is also in need of wise and effective
reform. Social Security was a great moral success of the 20th century,
and we must honor its great purposes in this new century. The system,
however, on its current path is headed towards bankruptcy. And so we
must join together to strengthen and save Social Security.'' We must
join together to strengthen and save Social Security.
We have been made a steward of this great country, the greatest
country that has ever been on the face of this Earth, in keeping the
promise of Social Security far into the future and giving millions of
seniors the dignity, the peace that they so richly deserve.
Mr. Speaker, I am grateful for this time in which we can present this
most important message, this message that crosses generations, the
Greatest Generation to the youngest generation. It is time for this
Congress to come together. I am disappointed that we have not seen
participation in this effort from the other side of the aisle. Perhaps
it will be coming, because Americans deserve nothing less from their
elected representatives, Democrats and Republicans, than to save this
most important program to keep our kids and our grandkids in their
senior years, and make it so that they can live in dignity and not in
poverty.
Mr. CAMP. Mr. Speaker, I want to thank Chairman Shaw for leading this
important effort to highlight the problems facing the current Social
Security system.
Since the creation of the Social Security program, older Americans
continue to count on guaranteed benefits to support them in their
retirement. Social Security benefits must be there for every American
who pays into the system. The President and the Republican Congress are
committed to making sure Social Security is there for the worker who
retires, is there for the widow who needs that extra source of income,
and is there for the disabled who need that helping hand each month. I
want to make sure these benefits continue for future generations of
Americans.
To ensure the continued solvency of the Social Security program
Congress and the President must fact the facts that by 2018--less than
15 years from now the program will begin to pay out more in benefits
than it currently collects. The outlays will be more than the revenues
coming in. How can my Democratic friends ignore this reality? Fifty-
five years ago, there were 16 workers for every one Social Security
beneficiary. Today, there are three workers for every one beneficiary.
The numbers don't improve from here on out. If we postpone the
inevitable and do nothing to reform the current system, today's worker
will be left with a Social Security program that has nothing to pay
out. While some policymakers
[[Page H506]]
may hope that a magic wand miraculously rescues the current system from
future bankruptcy, the reality is that Congress and the President must
work together now, make necessary reforms, and save Social Security.
That is what we were elected to do--make decisions and implement
policies that help Americans now and in the future. To not do so is
frankly irresponsible.
My Democratic colleagues argue that we don't need to do anything to
reform Social Security. Many suggest that the magic elixir for Social
Security is repealing the sensible tax cuts Congress and the President
signed into law over the past four years and stashing the money in the
Social Security Trust Fund. Tax increases will not rescue Social
Security. This approach, which they have used to fund every one of
their policy proposals, will restrain the economic growth we have
experienced over the past several years. Since the Republican Congress
passed the 2001 Jobs and Growth Tax Relief Act, the U.S. economy has
rebounded, millions of new jobs have been created, and business
investment is the best its been in seven years. Repealing these tax
cuts will hurt the U.S. economy and in turn, do nothing to save Social
Security.
I urge my colleagues on both sides of the aisle to put every idea and
all the options on the table so we can begin to examine how to preserve
and protect Social Security for today's seniors and future
beneficiaries.
____________________