[Congressional Record Volume 151, Number 26 (Tuesday, March 8, 2005)]
[House]
[Pages H1004-H1005]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




                            SOCIAL SECURITY

  The SPEAKER pro tempore. Under a previous order of the House, the 
gentleman from Texas (Mr. Burgess) is recognized for 5 minutes.
  Mr. BURGESS. Mr. Speaker, the American people are hearing a lot of 
information about our Social Security system, and I am sure they have 
got legitimate questions: Is there a crisis or not? If there is a 
crisis, then is there a trust fund or not? If there is not a trust 
fund, where did it go, who took it and when?
  There are, of course, those who say that there is no crisis, that we 
have a system that is awash in cash and can fund all future benefits 
but it needs minor tweaking to ensure solvency.
  Perhaps crisis is the wrong word. Captive may be a better selection 
because certainly we are held captive by our demographics. If our 
current system is to work and work well, we need large numbers of young 
people to pay into the system, and we need retirees to live relatively 
short intervals after their retirement; but in fact, neither of these 
situations reflects reality.
  Birth rates are down in this country, although not to the degree as 
seen in some Western European countries, still resulting in a smaller 
pool of younger workers to support retirees. Life expectancy is up, 
largely because of the unbelievable advances in medical care that have 
occurred in the last 70 years since 1935. Both situations are arguably 
good news, but they do portend a serious situation for our Social 
Security system.
  For example, in the country of Japan there are now four retirees to 
be supported by every new job that is created. It becomes extremely 
difficult to remain competitive in such an environment. Raising taxes 
to deal with the Social Security shortfall arguably has been done 
several times in the past 70 years; but, unfortunately, that makes the 
problem even worse. The old axiom states that you tax what you do not 
want, but surely we want jobs for tomorrow's Americans, but increasing 
the payroll tax may mean ultimately there are fewer such jobs.
  In 1937, the Supreme Court ruled that excess Social Security funds 
were to be placed in the general revenue fund. Mr. Speaker, that is 
what happened to the trust fund. In fact, nonnegotiable government 
instruments housed in a metal filing cabinet in West Virginia represent 
the surplus in Social Security, and that surplus has been spent over 
the last several decades by Congress. Congress spent the money, 
Congress wrote out an IOU for the money, and we continue to write IOUs 
for the interest.
  Mr. Speaker, where is the fairness in a system that holds captive 12 
percent of the country's payroll and pays no interest on the money? 
This, I think, is the heart of the problem. What Albert Einstein 
described as the miracle of compound interest is denied to American 
workers.
  What are the solutions that might be there for us to help with Social 
Security? We could cut benefits. I did not come to Congress to do that. 
We could raise taxes. Not this guy.
  There are, of course, those who feel that growth in the economy will 
help those two workers that are going to have to support every retiree 
into the future; and I will tell my colleagues, Mr. Speaker, I will bet 
on the American economy every time, but I am not sure if we can improve 
productivity to that degree.
  Mr. Speaker, what we can do is take those excess funds being paid 
into Social Security and place them into individual accounts that would 
not be accessible to government spenders and not be accessible to 
congressional appropriators. Allow these accounts to earn interest by 
following a conservative investment strategy, and now perhaps we begin 
to see the opportunity to preserve Social Security and ensure its 
solvency well into the future.
  The question is always asked how to pay for this transition. I have 
already excluded a tax increase or benefit cut as a viable mechanism. 
The money to finance the transition would have to be borrowed; and in 
fact, this does not represent new debt because the obligation has 
already been incurred. The borrowing is only to refinance an obligation 
that already exists, a situation analogous to refinancing a mortgage.
  Mr. Speaker, we should always be for good government. The principle 
of good government would suggest that the current obligation is 
present, but we are not acknowledging its presence. By financing the 
transition, we can convert an unknown obligation into bonded 
indebtedness. It becomes a marketable instrument; and that, in fact, 
would be a commitment to good government.
  Financial markets are not known for their courage. They do not like 
uncertainty; and, clearly, the uncertainty of

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monetizing the Social Security debt in the future is one that they will 
deal with fairly severely. But by making that a known obligation, we 
are giving the markets more comfort into what our intentions are with 
regard to the unfunded Social Security liability.
  Mr. Speaker, I would like to close with a quotation that was 
delivered in this House some years ago: ``Voluntary contributory 
annuities by which individual initiative can increase the annual 
amounts received in old age. It is proposed that the Federal Government 
assume one-half of the cost of the old-age pension plan, which ought 
ultimately to be supplanted by self-supporting annuity plans.''
  These words were spoken in this Chamber 70 years ago by Franklin 
Delano Roosevelt, the father of Social Security.
  Mr. Speaker, it is our obligation to deal with this problem this 
year. I applaud the President for pushing it on the national agenda, 
and I look forward to the debate.

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