[Congressional Record Volume 151, Number 17 (Wednesday, February 16, 2005)]
[House]
[Page H691]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




                LET US KEEP SECURITY IN SOCIAL SECURITY

  The SPEAKER pro tempore. Under a previous order of the House, the 
gentlewoman from Ohio (Ms. Kaptur) is recognized for 5 minutes.
  Ms. KAPTUR. Mr. Speaker, Social Security, our Nation's largest 
retirement insurance program, is supposed to be one leg of a three-
legged stool of retirement security for all Americans.
  The other two legs are private savings, private savings like 
certificates of deposit, for example, and private pensions like IRAs 
and 401(k)s, or defined benefit and contribution plans. However, in an 
age when personal savings are virtually nonexistent, and company 
pensions are being scaled back or often stripped away, Social Security 
has become the basic retirement insurance plan for most Americans, and 
surely for women.
  That is one reason why we have to protect it from those who would 
harm it. Unfortunately, President Bush wants to dismantle the one 
guaranteed element of retirement income that Americans have, by 
privatizing Social Security, by making retirement security a gamble.
  In fact, he is borrowing down the Social Security trust fund to mask 
huge shortfalls in other places in his budget. So he is creating the 
real problem in the Social Security trust fund, because it will not be 
able to meet future obligations.
  I ask, how can the President defend his plan in the face of the 
statistics regarding the diminishment of personal savings by most 
Americans and numerous recent news reports regarding the collapse of 
pension plans?
  Over the past 3\1/2\ decades, personal savings, as a percentage of 
disposable income, has trended downward in our country. During the 
1970s, the average rate of savings was about 10 percent. Then it kept 
going down, downward to the last first three quarters of last year; it 
was less than 1 percent per family.
  Meanwhile, consumer credit card debt is going through the roof and 
has up-trended from an average of $41.8 billion in 1955 to $2 trillion 
in November of 2003.
  Even as the savings rate has plummeted, pension plans too are 
becoming less reliable. In Southern California, Abbott Labs recently 
spun off a division and cut the retirement benefits for employees of 
the so-called new company.
  Shortly after the spin-off, employees were told that Hospira would be 
freezing their accrual of pension benefits and eliminating retiree 
health care for many of them. Several of those employees are now suing 
the companies in an attempt to get back their promised benefits, 
accusing the companies of plotting the spin-off specifically to deprive 
the oldest workers of their benefits.
  In my own district, Owens-Illinois, one of the world's leading 
producers of glass and plastics packaging, recently announced that it 
would be cutting prescription drug coverage for its retirees in favor 
of forcing the retirees to participate in the Medicare prescription 
drug plan. The company will cover the $35 premium for this plan, but 
will not guarantee that the dollar amount will increase should the plan 
premium change.
  Another local company, Doehler-Jarvis, was a manufacturer of aluminum 
die cast automotive parts that had two plants in Toledo. The company 
went through many takeovers such as Harvard Industries, which then 
filed for reorganizational bankruptcy. At that time, the company 
canceled retirees' health benefits, but did not tell them. They just 
stopped paying claims over the weekend. Finally, they filed liquidation 
bankruptcy and were unable to continue paying pension benefits, so the 
Pension Benefit Guaranty Corporation, the Federal insurer of the 
Nation's private defined benefit pension plans, had to step in.
  While this helped the situation somewhat, it was by no means perfect. 
Only actual retirees get benefits under the PBGC, not their survivors; 
and those who chose early retirement options previously offered by the 
company were unable to collect benefits at all until their regular 
retirement ages under the reorganization.
  In addition, given the flood of recent companies that have 
experienced pension problems or breakdowns, the Pension Benefit 
Guaranty Corporation is no longer failsafe as it once was. In fact, the 
General Accounting Office recently placed it on the watch list of high-
risk Federal agencies for the second year in a row. In fact, the 
Pension Benefit Guaranty Corporation went from having an $11 billion 
surplus in fiscal year 2002 to a record deficit in 2003 of $11 billion 
and a $23 billion deficit in 2004.
  Unfortunately, the President's fiscal year 2006 Federal budget will 
only put more pressure on already-struggling pension plans under the 
PBGC. Buried under the fine print of his budget is a multi-billion 
dollar premium hike for the Nation's underfunded defined pension plans. 
The weakest pension plans will be forced to pay almost $2 billion in 
new premiums next year and $3.3 billion for fiscal year 2007.
  The premium hike is in addition to billions more in make-up payments 
that companies with weaker pension plans must pay to become adequately 
funded.
  Yet through all of these turbulent times with private pension plans, 
retirees have known that they had one guaranteed source of income that 
they earned as insurance against old age, one monthly check that would 
be coming into them called Social Security.
  We must continue to ensure that the fundamental security of Social 
Security remains in this vital and successful program. There should be 
no gamble with the Social Security guarantee, no roulette of our 
retirement earned benefits. Let us keep security in Social Security. 
Our people have earned it.

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