[Congressional Record Volume 151, Number 17 (Wednesday, February 16, 2005)]
[Senate]
[Pages S1439-S1442]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]
SOCIAL SECURITY
Mr. COLEMAN. Mr. President, much of the discussion of Social Security
has been dominated by the politics of fear, scaring seniors into
believing their benefits will be cut or taken away.
Let me be clear. Discussions about Social Security are not about the
retirement security of those Americans who are 55 or older; the Social
Security system for folks 55 and older is fine. It is not going to be
changed. I will be one of those. If you were born before 1950, you are
OK. There is nothing to worry about. In fact, I urge those 55 or older,
talk to your kids; Talk to your grandkids; Start thinking a little bit
about their future.
Social Security is a sacred trust. Many Minnesotan seniors depend on
Social Security each month to buy food and medicine. Those checks are
going to continue regardless of what happens in the discussion today.
The reality is we face a challenge, the challenge that the President
of the United States talked about in the State of the Union, a
challenge to work in a bipartisan way to fix the problems we all know
Social Security faces today.
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Society is changing. We are living longer. We are healthier, more
productive. This places greater pressures on America's retirement
system.
When Social Security was started, there were 41 workers for every
retiree. By 1960, there were 16 workers per retiree. Today there are 3
workers per retiree. When the baby boomers start to retire in only 3
years, there will be a point where there are 2 workers for every
retiree. That is the challenge we face.
As we start to retire, right now we have a surplus. In 13 years, we
will be paying more out of Social Security than is coming in as more
and more baby boomers retire. Congress will be faced in a little over a
decade and beyond with a decision of how to make up the hundreds of
billions of dollars going out of a system, than is coming in. That will
have an impact on many other things we need to do for the country.
The challenge is, do we sit and wait? Three years comes quickly. In
13 years, the system pays out more than comes in. What do we do before
we reach that point? It is not bankrupt but it means it does not have
enough money to pay its obligations. Two-thirds of the folks working
today every day have 12 percent from their paycheck taken out for
Social Security every week. At a certain point they will not have that.
That is a reality. It is not political rhetoric. It is a reflection of
demographics.
The question is, What do we do? I offer personal experience on an
issue like this to my colleagues to reflect upon. When I was elected
mayor of St. Paul in 1993, there was a contract settled before I became
mayor. My budget director then walked in, and said: Mr. Mayor, we will
have $200 million of unfunded liability retiree health benefits based
on their contract unless we do something. The good news is it is 15
years away. My advisers said, 15 years away, that is not your problem;
that is someone else's problem down the road.
I had a son who was 8 years old and my daughter was 4. I thought that
8 years was a blink of the eye. Fifteen years is two blinks of the eye.
It comes quickly. Any parent knows if your kid today is 3 years old, 5
years old, they will start college in 13 years. It is a blink of the
eye.
The reality is I got sued and picketed, but we worked out a solution.
We rejected a contract and worked out a solution that did not impact
those in the program today, not unlike what the President is saying,
that we are not going to impact those who are 55 or older today, but
for younger people coming in we are going to look at their future and
figure out what we are going to do. And we did. That was a little over
a decade, 12 years ago. I don't see discussion today in St. Paul, the
capital city, about unfunded liability. We had the courage to address
the situation.
The challenge is to fix Social Security permanently in an open,
candid, and bipartisan approach to reviewing the option. Any proposal
must be fashioned in a bipartisan way. On this score, the President
highlighted a number of proposals that friends on the other side of the
aisle in the past have offered.
For example, President Clinton spoke of increasing the retirement age
when he was in office. Former Congressman Tim Penny from my home State
of Minnesota has raised the possibility of indexing benefits to prices
rather than wages. Former Senator John Breaux suggested discouraging
the early collection of Social Security benefits. The late Senator
Daniel Patrick Moynihan recommended changing the way benefits are
calculated.
I am hopeful my Democratic colleagues today will have the wisdom of
their predecessors to recognize a problem is on the horizon and will
have the willingness to work with us to find a solution. Again, some
will tie this discussion to a national scare campaign to exploit fears
for political gain. Don't. Talking about the future of our kids is way
too important. Today's discussion about Social Security is about giving
the younger generation, in part, a higher rate of return on the paltry
1.6 percent they earn from Social Security today, a 1.6-percent return
on their investment.
There is a discussion we are having about allowing younger workers
the opportunity to build their own nest egg, to give them a sense of
ownership that they do not have over the money they themselves earn and
pay into Social Security. It is their money and they are working for
it. They should have the right to generate a return on that investment
in a way that is not subject to speculation, not subject to rolling the
dice. We can set up a system that gives younger workers an opportunity
to have a nest egg that will grow. That is not the entire solution, but
it is part of the solution.
Let us have the willingness to work together to give young people
that opportunity to have a piece of the rock for themselves and, at the
same time, have the courage to deal with some of the broader issues.
The question is, Will we in Congress make a political decision and do
what is easy and push a $10.4 trillion gap in Social Security to
another generation and another Congress or will we make the responsible
decision and try to find a way to make sure America's retirement system
is there for future generations? I sincerely hope we choose not to pass
along to our children and grandchildren a decision which may be
difficult today but devastating tomorrow.
It has been said that necessity is the mother of invention. There is
a real opportunity right now as parents and grandparents to come up
with a plan that leaves our kids with something better than we have;
that is, an opportunity to own, build, and grow a nest egg of their
own.
In conclusion, as President Clinton declared in 1998 about Social
Security reform:
We all know a demographic crisis is looming. If we act now,
it will be easier and less painful than if we wait until
later.
It is 2005. It is time to do something. I hope my colleagues on both
sides of the aisle come together and get it done.
I yield the floor.
The PRESIDING OFFICER (Mr. Vitter). The Senator from Wyoming.
Mr. THOMAS. Mr. President, I will continue discussing the issue
before the Senate, Social Security, which in the last several weeks has
been talked about in Washington, DC, and throughout the country.
Reactions have been interesting--many without much information about
the alternatives, the needs. I suspect the most important thing we can
do is to talk about the situation as it exists, the situation as it
will exist if we do nothing, what the options are and what the impacts
will be.
It has become, right or wrong, the principal issue. I don't think
anything will happen too quickly because there needs to be time taken
to explore the issue, to get people to understand the issues. Everyone
is meeting at home with their constituents.
I met last weekend in Cheyenne, WY, with the AARP and exchanged some
ideas. We have to continue that.
In my view, the President has properly brought forth the issue. He
has indicated, if we do not do something now it will be even more
difficult to do it in the future years. I don't think anyone argues the
idea that our prime purpose is to maintain Social Security so it
fulfills what has been laid out for people in the future, so it does
not affect those in retirement on Social Security or affect those
closer to that age.
It is naive to imagine a program put into place in the 1930s will go
on for another 100 years without having some changes. Changes have
taken place certainly in this country and will continue to take place.
I am hopeful we can explore the situation, that we can become more
familiar with the impact if we do nothing, become more familiar with
potential problems that will exist, and then, of course, take a look at
potential changes.
It is important to understand what the administration and the
President has laid out. As the President has said a number of times, he
is willing to take a look at different solutions. That is where we are.
We had a meeting in the Finance Committee yesterday and went over
interesting ideas, primarily, the so-called trust fund that exists. You
can predict what will happen in that in terms of the cashflow, in terms
of the interest.
Everyone does not recognize that when the Social Security moneys come
in they go into the Federal fund with all other incomes and then they
are sent over with a bond to the trust fund
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and interest is earned on that trust fund from the Federal Government
basic incomes. Those are bonds that come over and, of course, will,
over time, like about 2009 when the income does not equal the outgo,
these trust funds will have to be turned into cash so they can then be
used to pay benefits.
My goals are to protect the promised benefits to retirees and
potential retirees, to create a system for future generations, so the
benefits of financial security that have been enjoyed by others will
continue to be enjoyed for our kids as time goes by.
I believe strongly in the idea of incentives for people to create
their own retirement program. Social Security was designed to be a
supplement. I am hopeful--whether it is in the Social Security Program
or whether it is outside of that program--that we continue to provide
incentives for people to put aside their own money for retirement. Of
course, in order to make that successful, the earlier you start putting
aside some money, the more likely you are to have some when you need it
later.
That is one of the issues before the Congress, whether the personal
accounts should be made part of Social Security so there would be an
opportunity for the kind of growth that can take place in the private
sector.
However, those are two different issues. They are both very
important. We can talk about them both, some of the things that need to
be done for the Social Security Program as it exists and some of the
things that can be done in the area of personal accounts.
There are difficult choices to be made. Obviously, some talk about
increasing the payroll taxes. I don't think anyone is enthusiastic
about that idea. There are ideas of going over the limits that are now
there for the people who pay into, over a certain amount. That could be
increased, I suppose. That is one of the options.
The idea of doing something about benefits, of course, is also an
option. I do not know quite what specifically could be done, but I
suppose there is talk about having benefits somewhat tied to the
person's own resources and providing more benefits to people who have
less resources than those who have more. That is a possibility.
I mentioned increasing the cap on the wages taxed. That has been
talked about. Now the limit is $90,000. Some say it might be able to go
above that.
There certainly are opportunities to talk about raising the age
limit. One of the things that has changed so much, of course, is the
fact that when the Social Security Program started, there were maybe as
many as 20-some people working for every person drawing benefits. Now
that has changed dramatically. It is my understanding that now there
are about three working people for every person drawing benefits. So
that is quite a different situation.
At the start of Social Security I think life expectancy was probably
in the lower sixties. If you retired at age 65, quite a number of
people did not enjoy the benefits of Social Security. Now, fortunately,
life expectancy is much longer than that. So some have talked about
perhaps over time raising the age for retirement.
There will be other options, of course, as to how these things might
be done. I guess my real strong feeling is, No. 1, we have to do
something because the system cannot go on as it has. No. 2, we ought to
get as knowledgeable as we possibly can--all of us--about what the
impacts are, what the situation is, what the alternatives are that
could be used.
I think another idea is that it does not need to be done next week.
This is something we can work on for a while. I do not mean 5 years,
but maybe towards the end of the year we would be in a better position
to do something. But the changes are not an option. We have to do some
of those kinds of things, and we have to do them fairly quickly.
I was a little disappointed that, as this issue came out, we found
some kind of immediate reaction: We are not going to do anything with
that; We don't want to touch it.
Well, that is not an option, in our view. I suppose you could argue
about critical timing, but it is very clear the longer we wait, the
more difficult it will be to find solutions, and the more impact those
solutions will have on what we are talking about.
Another idea, of course, is that we ought to look at other ways to do
it. As a matter of fact, we have some bills, and the administration is
looking at doing some things to encourage more tax-free investments for
people's retirement years. I think that is one of the great ideas.
There are two ways to do that, of course. No. 1, you can allow those
moneys to go into an account before taxes, or the alternative is to go
ahead and pay taxes on it now, and when it comes out, there would be no
taxes on it.
For people who are in their retirement years, to be able to take
their money out without taxing it is probably one of the most
attractive alternatives. I have been working with the administration,
and we intend to have a bill soon that will make it a little simpler.
We have quite a number of different kinds of retirement programs now,
and they are a little difficult to keep up with, and a little
confusing, so we will soon, hopefully, make those a little bit
different.
I am very pleased the President has undertaken this effort and has
spent a good deal of time on it. He has basically handed the Congress a
blueprint. Some are saying: Well, where is the plan? I think it is good
the President has laid out the problem, laid out some of the
alternatives, but has, in fact, said--and our committee met with him
some time ago in the White House, and he indicated that, no, he is not
sending out a specific proposal but is giving us ideas and a broader
concept of where he would like to see us go.
So looking to the future, for all of us, as citizens--for the
country, for ourselves--is something we must do.
Mr. President, I see my friend from Pennsylvania in the Chamber. I
yield the floor.
The PRESIDING OFFICER. The majority's 30 minutes is now expired.
Mr. SANTORUM. Mr. President, since I do not see anybody on the other
side, I ask unanimous consent for 5 minutes.
The PRESIDING OFFICER. Without objection, it is so ordered.
The Senator from Pennsylvania is recognized.
Mr. SANTORUM. Mr. President, first I thank and congratulate the
Senator from Wyoming for his comments and also for his steadfast duty
in coming here to make the case on a variety of different issues. This
issue, in particular, Social Security, is a passion of mine, something
I have worked on since I came to the Senate back in 1995. To me, this,
as the Senator from Wyoming just said, is about a social compact from
one generation to the next.
What we are in danger of doing is breaking that compact. We are in
danger of telling the next generation of Americans who are entering the
workforce that if we do nothing now, they, as a generation, will not
get a positive return on their money. In other words, they will not get
out of the system money they put in. To me, that is breaking this
compact.
Every generation of seniors that has retired--in fact, those who are
at or near retirement now--will, in fact, be able to get some measure
of return on their money. Some earlier generations got very high rates
of return. This generation's retirees will get a relatively low rate of
return, but they will have invested money or paid into the program for
people in the system while they were working and at least be able to
get their money out of the system they paid in when they retire.
If we do nothing, which some have suggested we should do, which I
think is irresponsible, but if we do nothing and simply wait for this
generation that is in their twenties and thirties right now to retire,
then they will be hit with one of two things. Either in the next few
years--10 to 15 years--they will be hit with payroll taxes which will
take their rate of return, if you will, from a bare positive to a
negative or they will be hit with benefit cuts which, again, will take
their rate of return--to get out of the system what they put in--and
turn that into a negative.
That, in my mind, is breaking the compact. That is saying we have now
turned Social Security into somewhat of just simply a tax from one
generation and transferring it to another in an ever-increasing
severity of tax. I think we can do better than that. That is what the
President has suggested. He has come forward on an issue that he
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did not have to. This problem is not going to hit America until
probably the midteens when we begin to go negative into the Social
Security system. In other words, we will not have the amount of money
coming in to pay for benefits. Borrowing will have to start to occur
from the Government side to pay off these bonds that are in the Social
Security trust fund in order to pay benefits. We will do something at
that point in time because the deficit impact will be huge on the
United States of America.
Social Security, instead of running $100 billion surpluses, will be
running $200 billion deficits. Compound that with the growth of
Medicare and other things we are seeing, and we will be in a huge
deficit situation, which will cause either income taxes to go up,
spending on the Government side to go down--which I think is highly
unlikely--benefit cuts in Medicare and Social Security, or tax
increases for Medicare and Social Security. Any one of those situations
puts a burden on future generations either through benefit reductions
or tax increases, which I think is breaking the compact that we have
had since 1936 with our seniors.
I am hopeful we can find some bipartisan cooperation to look at the
problem that is confronting us and say: We have an opportunity to give
people hope, to give younger people hope that we can have a better
system for them than currently is promised. What is promised for people
in their twenties right now is basically 70 cents on the dollar of the
benefits that are promised under the system. We can only pay for 70
cents on the dollar. That is what this current system provides.
So when you hear, ``We will keep these promises,'' I understand what
keeping the promises means. It means higher taxes for future workers or
lower benefits for future retirees. That is what happens if we wait.
So the idea that says there is no problem, understand what that
means. That means future generations--whether it is 5 years from now,
10 years from now, 15 years from now--will be hit with higher taxes and
lower benefits or some combination of them or maybe one exclusive of
the other. But the bottom line is, it is going to impact adversely that
generation of workers and that generation of seniors.
We can avoid this problem right now if we allow younger workers the
opportunity to put some money away, invest in the American economy, the
strength of the American economy, with broad-based index funds that
invest in the growth and future of the American economy, which I think
we all have high hopes for and believe will be strong going into the
future. We believe that is the most responsible way of avoiding this
breaking of the compact with future generations, of saying to future
generations they will not do as well as other generations of Americans
have done under the current system.
So with that, Mr. President, I thank the other side for their
indulgence and for the 5 minutes, and I yield the floor.
The PRESIDING OFFICER. The next 30 minutes is controlled by the
Democratic leader or his designee.
Mrs. MURRAY. Mr. President, I ask unanimous consent for an additional
5 minutes on the Democratic side as well.
The PRESIDING OFFICER. Is there objection?
Without objection, it is so ordered.
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