[Congressional Record Volume 151, Number 18 (Thursday, February 17, 2005)]
[Senate]
[Pages S1589-S1590]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




                            SOCIAL SECURITY

  Mr. DURBIN. Mr. President, I rise to speak in morning business and 
address the issue which has become central to our debate about the 
domestic agenda for America. There is a lot of time being spent by the 
President and Members of Congress talking about the privatization of 
Social Security. Social Security is a very important program for 
millions of Americans. It brought dignity to senior citizens and gave 
them a chance in their retirement years to live with enough money to 
get by.
  Before Social Security, if a person were fortunate enough to save 
enough money during their lifetime, they were OK. If they happened to 
have a generous family, the family would bring their mother and father 
to live with them in their later years. That was one of the outcomes. 
But if things went poorly, a lot of senior citizens before Social 
Security ended up in county poorhouses. They are still sitting around 
out there. They are not used for that purpose anymore, but you can find 
them across America. That is where you went when there was no place 
else to go, no money to take care of yourself, and no children to take 
care of you.
  Along came Franklin Roosevelt back in the 1930s, who said: I think we 
have learned a lesson here. We need to create a program that gives 
everybody a chance during their lifetime to pay into Social Security 
with the guarantee that when you retire, there will always be some 
money there to help you. Nobody is going to get rich on Social 
Security. I don't think they ever could. But the idea was there would 
be this thing they could count on, kind of a bedrock savings plan for 
Americans--more of an insurance policy than a savings plan. It worked.

  For the 60 years or more we have had Social Security, it has made 
every single payment with cost-of-living adjustments, and seniors in 
America, many of them, lead comfortable lives because Social Security 
helps. You cannot live on it alone--I guess you could, but you would 
barely scrape by--but with Social Security you have something to count 
on.
  You do not care if the corporation you worked for for 30 or 40 years 
goes bankrupt and takes away your retirement benefits. You do not care 
in this respect: You know Social Security will still pay you. If you 
get bad news about that pension plan you invested in for a long time 
taking a bad turn and not having enough money to pay you what you 
expected, at least there is Social Security.
  Over time, things change in America. We live longer. Thanks to good 
health habits, good medicine, people are living longer lives. A Social 
Security Program anticipated to pay out for a few years pays for many 
years, so we have adjusted for many years. The amount of money paid 
into it, the benefits paid out, and the eligibility age for retirement 
have all changed, but Social Security is still there. It keeps on 
ticking because we count on it so much.
  Along comes President Bush who says we have a problem with Social 
Security. We have to do something. Some call it a crisis. Some call it 
a challenge. Some call it a problem. But the argument is, we have to do 
something. You just cannot leave it alone.
  What would happen if we left Social Security alone? What if Congress 
said: We are not going to do a thing to Social Security this year, 
nothing. We are not going to change one word in the law, not going to 
change any of the benefits, any of the contributions, what would happen 
to Social Security? It would make every single promised payment to 
every single retiree in America every single month of every single year 
with a cost-of-living adjustment until at least 2042, 37 years from 
now. The program is strong, and we have to talk about making it 
stronger.
  The President proposes privatizing Social Security, changing the 
concept of Social Security. Instead of paying payroll tax and receiving 
your Social Security benefits, the President suggests taking part of 
that payroll tax and investing it. If you are fortunate, you will do 
better. Your investment has risk, but the President believes by and 
large most people will do better.
  There is nothing wrong with savings and investment. Everyone should 
take that seriously for their own lives and for their families. We do 
in my household. For my wife and me, that is working, saving for 
retirement, for ourselves, for our family. It is a smart thing to do. 
But what we do is over and above what we pay into Social Security. 
Social Security is still there. Members of Congress pay it, 
incidentally. Despite some of the talk radio comments otherwise, 
Members of Congress pay Social Security, as my wife does on her job. 
And we have some savings accounts. It is a smart thing to do. We have 
done pretty well. We are not getting rich, but we will be comfortable.
  Now comes the President and says take the money out of Social 
Security, put it in the stock market. The obvious question is, if you 
take the money out of Social Security and out of the trust fund, how 
will it make its payments?

[[Page S1590]]

The President cannot answer that question.
  There was a suggestion coming from the White House that we would 
change the index for Social Security, we would reduce the amount of 
payments to seniors in years to come. That can get serious. Right now, 
1 out of 10 seniors is in poverty. Without Social Security, half of 
seniors in America would be classified as living in poverty. If we 
start reducing Social Security payments, we move more and more of our 
seniors toward poverty. That is not an outcome that anyone would cheer. 
Yet the President's plan moves America in that direction. It takes 
money out of Social Security with no explanation on how to pay it back, 
it cuts benefits for retirees in the years to come, and it creates a 
greater deficit for America, a deficit increase of $1 trillion to $4 
trillion depending on how many years it is calculated.
  We have to step back and say, if Social Security is strong for 37 
years, why in the world would you want to engage in the President's 
privatization plan which will reduce benefits for retirees and add $2 
trillion or more to or national debt? It is because the President 
cannot answer those basic questions that many people are skeptical 
about his privatization plan. They believe, I believe, President Bush's 
plan to privatize Social Security will weaken Social Security, it will 
not strengthen it.
  There is no one in the White House who suggests that taking money out 
of the Social Security trust fund makes it stronger. It makes it 
weaker. Instead of making every payment for 37 years, the President's 
plan would, frankly, make Social Security unable to make its payment 
sooner. Why would we ever do that? That is moving in the wrong 
direction.
  My colleague, Senator Schumer of New York, has put together a 
calculator to help people estimate what the impact of privatization of 
Social Security will do. Plug in what you think your income is going to 
be, roughly, and this tells the kind of cuts you will take under 
President Bush's proposal. It is harsh. It is unnecessary. It certainly 
does not strengthen Social Security.
  Let me add one footnote. Adding to our national debt means giving 
America's mortgage holders, America's creditors, more power over our 
lives. Who owns America's debt today? Many do who buy bonds and 
securities in government, but most of it is owned by foreign countries. 
Central banks in countries such as China and Japan buy our debt. So 
step back and look at them as you would look at the company, the bank, 
that issues your mortgage. You owe them that payment every month. You 
better make that payment. And if your mortgage comes to a close and 
they do not want to renew your mortgage, go out and look for a new one, 
and you may have to pay higher interest rates. That is roughly what is 
going on in the world today.
  America entices China, Japan, and Korea to be our mortgage holders, 
to be our creditors by paying interest on our debt. What happens should 
the day come in the future when the Chinese or the Japanese say: We do 
not really trust the American dollar; you people have too much debt. 
Why aren't you doing something about your current debt? In fact, we 
have lost so much confidence in the dollar, we think from now on, we 
are going to base our future on the Euro rather than the dollar.
  Hold on tight, because it means that America's dollar is going to be 
threatened in terms of its stability.
  Here comes the President with Social Security privatization adding $2 
trillion to $4 trillion to our debt, depending more on China, Japan, 
and Korea to sustain us, making us more vulnerable.
  There is another issue that troubles me. Why is it the countries you 
mention--China, Japan, and Korea--are the same countries that are 
taking away American jobs and businesses? Why is it that companies are 
moving over there? Sure, lower wage rates--we understand that. But 
there is something else at work. The same countries that hold America's 
debt hold the future of our economy. The fact they hold our debt gives 
them the ability to invest in companies that compete with American 
workers and businesses. The fact we are losing manufacturing jobs has a 
lot to do with our debt being held by the same countries taking those 
manufacturing jobs.
  Alan Greenspan came to Capitol Hill yesterday. Some days I think he 
has great insight, and some days I think he is just plain wrong. I am 
sure he feels the same way about me and my views. Yesterday, he warned 
us about our debt. He said, though he liked privatization, personal 
accounts, be cautious, be careful, he said. Good advice--the same 
advice I wish Mr. Greenspan had given when the President pushed for the 
tax cuts. Unfortunately, the tax cuts now account for half of our debt. 
They go primarily to the wealthiest people in America. We are, 
unfortunately, in a spot where we are cutting back in health care, 
cutting back in education, unable to do what Americans think we should 
do for America. Greenspan said yesterday, when it comes to debt, 
America, be cautious. How can it be cautious to add $2 trillion to $4 
trillion to America's debt as President Bush's Social Security 
privatization plan requires? It is not cautious. It is not sensible. It 
does not help this younger generation appreciate the greatness of 
America.

  I think the President's privatization plan has run into trouble 
because it cannot answer the hard questions. The President did not 
include one penny in his budget for privatizing Social Security. Do you 
know why? He cannot figure out how to pay for it, and he cannot figure 
out how to explain it.
  That is why not just seniors but families across America are 
skeptical. They take a look at what the President proposes, which will 
result in reductions in Social Security benefits. For the average wage 
earner, born in 1970, who retires in 2035, there will be a 3-percent 
risk adjusted rate of return on their personal account under the 
President. Under the current law benefits, that person would receive 
annually $17,700. Then along comes the President's proposal to change 
the index for Social Security, and that payment goes down to $12,841. 
Then comes the privatization tax on top of that, and that same retiree 
would receive less than half of what he would receive under Social 
Security today.
  President Bush argues that this plan makes Social Security stronger. 
Tell that to the retiree whose benefit has been cut in half by 
President Bush's proposal. You may say: Well, you Democrats, you are 
going to exaggerate this. You just want to get on the floor of the 
Senate and criticize the President.
  Well, let me tell you where these numbers come from.
  The Boston College Economics Department just did their own analysis. 
They came to exactly the same conclusion. They are not in this for any 
political gain. They are just trying to analyze what the President 
proposed.
  So if that is what we face--cutting benefits under Social Security, 
adding $2 trillion to $4 trillion to our national debt--is it any 
wonder a lot of us here say it is time to move on? It is time to find a 
Social Security answer that is truly bipartisan and makes common sense. 
The privatization plan of President Bush does not.
  Mr. President, I yield the floor and suggest the absence of a quorum.
  The PRESIDING OFFICER (Mr. Sununu). The clerk will call the roll.
  The assistant legislative clerk proceeded to call the roll.
  Mr. MARTINEZ. 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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