[Congressional Record Volume 151, Number 27 (Wednesday, March 9, 2005)]
[House]
[Pages H1206-H1207]
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 Oregon (Mr. DeFazio) is recognized for 5 minutes.
  Mr. DeFAZIO. Mr. Speaker, I read from a story today in The Washington 
Post, page A8, ``Senator Lindsey Graham, Republican, South Carolina, 
who has spent weeks attempting to recruit Democratic support for a plan 
to restructure Social Security, said yesterday that Republicans `made a 
strategic mistake' by initially focusing on a proposal to create 
individual investment accounts,'' and, as he says, ``We've now got this 
huge fight over a sideshow. It's always been a sideshow, but we sold it 
as the main event.''
  What he is talking about is that, as the President himself has 
admitted, the privatization of Social Security is and has nothing to do 
with fixing potential future financing problems in Social Security. It 
is a battle, in fact, if it was won under the President's terms, that 
would divert income from Social Security and, in fact, accelerate its 
financial problems from 40 years in the future to a mere 10 or 20 years 
in the future.
  Senator Graham, Republican from South Carolina, has come to the 
conclusion that, as many of us have been saying on this side of the 
aisle, we should fix Social Security first, then engage in a debate 
over how best to encourage or assist Americans in having more private 
resources through IRAs, 401(k)s or other sorts of devices for their 
retirement.
  The basic vision of the founders of Social Security still holds: 
President Roosevelt said that he wanted to have a program that was not 
a dole; that had its own source of funding that would be guaranteed, 
and it would be

[[Page H1207]]

earned. Earned. And that is what Social Security is, an earned 
guaranteed benefit that not only covers people in retirement as long as 
they might live, unlike many other plans and programs out there, like 
the privatized accounts, but it also provides for survivor benefits in 
case of untimely death to a spouse and/or surviving children. It also 
provides for a disability benefit.
  The proponents of privatization, in addition to not fixing potential 
financing problems for Social Security, have not dealt with the issues 
of survivor benefits or disability benefits. They cannot. There is no 
way to do it under privatized accounts.
  You opt into a private, so-called opt, because people would be 
coerced into these because otherwise they would see dramatically 
reduced benefits and they would try to bet money to win back under this 
plan, but they would, say, at age 18, you opt in and you do really well 
for 6 years. You are working as hard as you can. You put away the 
maximum amount per year. Then you become totally disabled at age 24, 
and you have $12,000, if you did really, really, really well in your 
investments in your privatized account. There it is, $12,000, you are 
totally disabled, have a good life.
  That is not going to work. So they have not dealt with that issue. 
They say, oh, those people would still get their regular benefits. 
Well, if they are still going to get their regular benefits, but you 
are diverting all this money from the program, then the problems of 
Social Security become yet worse again.
  So Senator Graham has finally hit on something, and hopefully other 
Republicans will come to the same realization. We have not just been 
saying, no, we do not want to improve the lot of people in their 
retirement years; and, no, we do not want to help facilitate people to 
save more toward their retirement. Because FDR envisioned the one 
guaranteed leg, the earned benefit of Social Security in addition to 
private pensions in a different savings. Private pensions are going 
away, so we need to help people save more, invest more and have more to 
supplement a guaranteed earned benefit of Social Security that is 
secure.
  That is what this debate has been about. Finally, there is some 
realization on that side of the aisle that private accounts, in 
addition to taking the future financing of Social Security and putting 
it more in jeopardy, are a sideshow, as Senator Graham, Republican from 
South Carolina, has said, to the real issue of, are we going to take 
steps to guarantee that Social Security will be there not only for this 
generation and the near generation of retirees, as the President would 
do, but for all future generations.
  We can do that easily. There are a number of ways to get there, one 
which I have proposed in past Congresses is to lift the cap on 
earnings. We say, look, if someone earns $25 million a year, they 
should pay the same percent of their income into Social Security as 
someone who earns $40,000 a year. If a person earns $40,000 a year, who 
works for wages and salary, pays 6.2 percent into Social Security; the 
person who earns $25,000 a year pays about a thousandth of one percent 
of their income into Social Security; they finish paying social 
security taxes on the second or third day of the year at that wage 
rate. That is not fair. It is not right. If they paid on all of their 
earnings, and their employer, some big multinational corporation paid 
on all their earnings, Social Security would be secure forever. In 
fact, we could lower the tax rate on everybody who earns less than 
$94,000 a year.

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