[Congressional Record Volume 151, Number 43 (Wednesday, April 13, 2005)]
[House]
[Pages H1952-H1958]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




                         SOCIAL SECURITY REFORM

  The SPEAKER pro tempore. Under the Speaker's announced policy of 
January 4, 2005, the gentleman from North Carolina (Mr. McHenry) is 
recognized for 60 minutes as the designee of the majority leader.
  Mr. McHENRY. Mr. Speaker, this evening I have requested an hour to 
speak about a pertinent issue for our Nation and a large issue for all 
generations in our country, and that is Social Security. As a Nation, 
we have to recognize that we have a problem that we

[[Page H1953]]

are facing with a system that we have had in place for 70 years. It is 
a problem that we must address, and it is an issue that we must ensure 
that we fix for future generations while at the same time maintaining 
our commitment to those that are at or near retirement age.
  This is a large issue that we need to take on as a Congress. It is a 
large issue that we need to take on here in Washington, D.C. so that 
all Americans in all walks of life have the safety and security of 
their retirement savings.
  So this evening many of my colleagues will join me to speak about the 
need for reform of Social Security and to maintain our commitment to 
those that are at or near retirement age while allowing younger workers 
a better opportunity and system to operate in.
  To that end, the gentlewoman from Florida (Ms. Ginny Brown-Waite) is 
in her second term here in Washington, D.C. representing her 
constituents of Florida very well. We both serve on two committees 
together, Committee on Government Reform as well as the Committee on 
Financial Services. I am proud to call her a colleague. She also shares 
another distinction: she goes home every weekend, just as I do. She 
does that in order to maintain her sanity, just as I do.
  Mr. Speaker, I yield to the gentlewoman from Florida (Ms. Ginny 
Brown-Waite).
  Ms. GINNY BROWN-WAITE of Florida. Mr. Speaker, another day in the 
Fifth Congressional District means that again my seniors received calls 
trying to frighten them about Social Security. This is the sixth set of 
calls that have gone into my district. The majority of the responses I 
receive is stop, stop, stop those calls. We trust you; we know you will 
do what is right.
  As the American public knows, the long-term future of Social Security 
is problematic at best. We have all heard the facts that in the year 
2017 the Social Security trust fund will begin paying out more than 
what it takes in and that if Congress does nothing, the program will 
face at least a 25 percent guaranteed cut in benefits in 2041. So if we 
do nothing, there will be future cuts. These are the facts, and they 
are indisputable.
  What I am here to share with Members this evening is about the 
dangerous double talk from the opponents of any kind of reform of 
Social Security. I would like to read some interesting quotes from 
Washington politicians about Social Security. The first one is: ``If 
you do not do anything, one of two things will happen: Either it will 
go broke and you won't ever get it. Or if we wait too long to fix it, 
the burden on society of taking care of our generation's Social 
Security obligations will lower your income and lower your ability to 
take care of your children.''
  Or how about the following: ``This fiscal crisis in Social Security 
affects every generation.''
  Or how about this gem of a quote: ``This is the time to straighten 
Social Security for the future. We can and must accomplish this 
critical goal for the American people.''
  Members may be asking themselves what right wing Member of Congress 
said that Social Security was in a crisis and which reformer said the 
program would go broke if we do nothing to fix the problem. Guess what, 
these are quotes from none other than former Democrat President Bill 
Clinton. Leaders of our country from both parties have known that 
Social Security needs reform. What bothers me today is when we finally 
have a President and a Congress that is brave enough to grab what is 
often termed the third rail of politics, partisan obstructionists are 
unwilling to even come to the table and debate reform honestly and with 
some substance.
  I represent the congressional district with the most Social Security 
recipients, 47 percent of my voting age population receives Social 
Security, a quarter of a million people on Social Security. Politically 
the easiest thing for me to do is to throw up my hands and oppose 
reform. But instead of sticking my head in the sand like the Democrats 
are doing and refusing to admit we have a problem, even though their 
former President did, I am working to find a permanent solution.
  If Democrats, the AARP, and the unaccountable 527 groups would be 
honest with themselves and with the American public, they would 
acknowledge the truth of President Clinton's statement that ``this 
fiscal crisis in Social Security affects every generation.''
  Instead, what do we hear? We hear scare tactics from the liberal left 
about Republican efforts to privatize the system, to force our parents 
to eat dog food, and take away the only future our seniors have.
  Mr. Speaker, the time has come for them to come to the table and do 
what President Clinton suggested. It is time to engage intellectually 
dishonest partisan politicians who refuse to debate the issue on its 
merits.
  How, the American public should ask, can Congress expect to solve a 
substantive policy matter like Social Security when one side refuses to 
debate seriously.
  If the Democrats want to have any relevance in the lives of our 
seniors, it clearly is time for them to come to the table. The 
discussion should begin with the simple question: Does Social Security 
face a problem?
  I believe every American believes that Social Security does face a 
problem.
  ``Legislators whose answer to that problem is `no' should probably go 
ahead and cosponsor a bipartisan bill to do nothing in the 109th 
Congress and go on to other issues.'' Who said that? Well, how about 
former Democrat Congressmen Tim Penny and Charlie Stenholm. Congressmen 
Penny and Stenholm know something needs to be done. Why will they not 
bring their former colleagues to the table.
  Let me tell a story about one of the town hall meetings I had in my 
district. Before I began a discussion with my constituents and 
listening to their suggestions, I held up a 10-page packet of questions 
and talking points that were sent out by MoveOn.org. I told my 
constituents that I was there to listen to their genuine concerns and 
questions, not to hear canned questions from a bussed in MoveOn.org 
member or to read off their cheat sheet. What do you know, about 2 
minutes into the question and answer period, I got question number 3 
right off the MoveOn.org cheat sheet. This is a perfect example of the 
left wing partisans stacking events at town hall meetings that are 
intended to benefit our constituents. I am sure other Members 
experienced the same phenomenon.
  Getting back to the obstructionism of Washington politicians, here is 
another quote: ``Because of the retirement of the baby boomers by the 
year 2013, the surpluses built up in Social Security start to dwindle 
down, and sometime around the year 2032, Social Security faces a 
serious crisis.'' Guess who said that? It was actually former Vice 
President Al Gore.
  So the American public clearly can see that Washington Democrats are 
very good about talking out of both sides of their mouth if it furthers 
their partisan goals.

                              {time}  1900

  Al Gore talked a good game, but where is he today when it comes to 
presenting a plan or encouraging his members to guarantee the solvency 
of Social Security for future generations?
  We have all read news accounts where President Clinton proposed that 
government directly invest a portion of Social Security money in the 
financial markets to capture a higher rate of return, rather than the 
dismal rate that it receives now.
  Where, the public has to ask, were the liberal opposition groups back 
then? They supported a Democrat President who proposed this, but they 
oppose a Republican one. President Bush has proposed allowing workers 
to invest 4 percent of their payroll taxes into personal, safe and 
secure accounts. To many, this is a safer route than putting our Social 
Security taxes straight into the stock market like President Clinton 
wanted.
  Where is the AARP with a plan of their own? We met with them in our 
office; and, quite honestly, all they said was, no, no, no. They did 
not have a plan of their own. All I have seen from them so far is a 
statement that personal accounts are unacceptable to their leadership.
  But if you think about it, Social Security is already somewhat 
personalized. When you get home, I challenge people to check their 
yearly statement from the Social Security Administration. Your future 
benefits are there

[[Page H1954]]

calculated for you, not for the general public but for you. It already 
is somewhat personalized. Why do you not ask AARP why their leadership 
promotes stock and bond investing by selling mutual funds to its 
members or why they offer risky investment choices like a Latin 
American stock fund and even a junk bond fund? I personally find it 
very appalling the AARP sponsors trips to casinos where seniors 
literally gamble away their retirement.
  Why do we not change the subject slightly and talk about the unions 
that are opposed to any change? They also said, no, sir, no way, to 
personal accounts. But when you ask union leaders where they invest 
their union pension funds, once again we hear double talk. They invest 
them, guess where, in the stock market. Why is it good enough for union 
leadership but not their members? I guess so much for risky schemes. 
The unions, AARP and others on the liberal left already have them.
  Tonight I hope that I have made clear that there is one side and one 
side only that is honestly engaged in the debate over the future of 
Social Security. All the other side has thus far is fear, fear, and 
another hearty helping of fear. Quit trying to scare our seniors. The 
527s are the ones making the calls as well as the opposition party. I 
want to speak to any senior listening tonight and I want to make it 
perfectly clear, I will not change your Social Security benefits in any 
way. The President has clearly said those who are 55 and above will be 
under the traditional plan as we know it.
  So I challenge the opposition to join us, and I challenge the people 
who may be watching this evening, help us save Social Security for your 
children and grandchildren. We have stepped up to the plate and made it 
clear that we are willing to work toward a permanent solution that 
benefits all Americans.
  Mr. Speaker, I hope that as we continue to debate this issue on the 
floor, back in our districts and around the kitchen table, we will all 
remember that it is our constituency we are working for and it is not 
partisan political groups.
  Mr. McHENRY. I certainly appreciate the sentiments of the gentlewoman 
from Florida. I am certain that her constituents appreciate her passion 
on this issue to ensure that Social Security does not harm those that 
are at or near retirement age. I appreciate her boldness on this issue 
and telling many of us things that we do not want to hear oftentimes. 
Her independence of mind, the independence of her agenda, it is 
certainly respected here in the halls of Congress. I am proud to call 
her a colleague.
  Mr. Speaker, I am here to talk about Social Security, which in my 
mind is the most important domestic issue facing America today, not 
just for seniors but for those seniors' children and grandchildren. It 
is a vital program that we need to reform to ensure that we can 
continue with this program for generations to come. I am so grateful to 
be part of a political party that is taking this problem on. We in the 
majority in the House, we in the majority in the Senate, along with our 
President, and I am so thankful we have a great President, are taking 
on this issue. Whether you like President Bush or not, he has guts and 
you have to respect that.
  They called Social Security the third rail of American politics. If 
you touched it, you got fried. Well, things have changed. This is an 
issue that Americans are beginning to realize needs to be fixed in 
order to make sure it can be vibrant for future generations. And George 
Bush showed us all that we can and should tackle this issue, for our 
seniors and for our grandchildren. We in Congress are serious about 
taking this on. We are serious about a bipartisan approach, and we are 
serious about transforming this system into one that will thrive 
throughout the 21st century and beyond.
  We want to transform it with three principles in mind, and these are 
important.
  First, no reform that will pass this House will dare change the 
benefits of those that are at or near retirement age. For those that 
are currently drawing Social Security checks right now, none of the 
plans we debate will affect your Social Security check. But it will 
affect your children and grandchildren. So it is definitely important 
to you to consider those things.
  Number two, no reform should raise taxes. You will hear a lot about 
raising taxes or raising the tax cap and say that that will fix the 
system. It will not. Tax hikes just postpone the problems we will face 
with Social Security, and tax hikes are not real reform.
  The third issue is that we must make sure that these are voluntary 
personal accounts.
  I will further talk about these issues as my time goes on, but I am 
proud at this point to recognize one of my favorite colleagues, my 
majority leader, our Republican leader in this U.S. House, a leader 
that not only shares our values but works and fights every day to see 
that we not only just talk about these values but we enact them into 
law, a man who has won close vote after close vote to even the ire and 
fire and fury of the minority but a man who has led our House in a 
great direction over the 10 years we have been in the majority, a man I 
am proud to call my Republican leader and will continue to call my 
Republican leader, Mr. Tom DeLay from Texas.

  Mr. DeLAY. I thank the gentleman from North Carolina for yielding to 
me, and I appreciate those words more than you know. I really 
appreciate you having this Special Order on an incredibly important 
issue that is important to all of us. You are fighting along with the 
gentleman from Texas (Mr. Hensarling) the fight that makes sure that we 
have retirement security for our seniors, for all of us, for our young 
today, providing retirement security for them.
  Mr. Speaker, for all the rhetoric being thrown at the Social Security 
debate these days, four facts rise above the opinions.
  Fact number one: The ratio of workers to retirees is shrinking. In 
1945, there were 42 workers for every retiree. Today, there are three. 
And when my daughter retires, there will only be two.
  Fact number two: The average rate of return for Social Security money 
is 1.6 percent. In other words, Americans could do better just putting 
their money into a simple savings account.
  Fact number three: In just 3 years, the first of the baby boomers 
will start to retire, and in just over a decade, the Social Security 
system will start to pay out more money than it takes in.
  Fact number four: Seniors are living longer and living more active 
lives than they were when Social Security was first created. Average 
life expectancy has increased 15 years since the 1930s, yet the system 
is still making 20th century assumptions.
  These facts are not in dispute. Social Security is in trouble. The 
trouble is not as bad as it will be 10 years down the road if we do 
nothing, but it is serious trouble nonetheless. The question is not 
whether Social Security needs fixing. The question is when, how and by 
whom.
  When? As soon as possible, Mr. Speaker. With each passing day, fewer 
and fewer workers are paying more and more benefits to support an ever-
increasing population of retirees. The four facts I mentioned before 
all lead to a fifth fact, that every year that we wait to strengthen 
and improve Social Security, the problem gets $600 billion bigger. If 
we wait until after the next election, that is $1.2 trillion more we 
will eventually have to come up with. We have an opportunity to act 
this year, and we must seize it.
  How? Permanently and comprehensively, Mr. Speaker. Every 15 years or 
so since its creation, Congress has gone in and treated a symptom of 
Social Security's more fundamental fiscal problems. But this time, 
thanks to the leadership of President Bush, we are committed to solving 
the problem itself, permanently. We need a solution to the fundamental 
challenges facing Americans' retirement security beyond just altering a 
formula here or there. We need a solution that goes beyond mere tax 
increases or benefit tweaks. We need to acknowledge 21st century 
realities and develop solutions around them.
  One of those solutions, or, rather, a part of any such solution, is 
the establishment of personal retirement accounts within the Social 
Security system that will enable younger workers to build their own 
retirement nest eggs that they can pass on to their children and that 
the government can never

[[Page H1955]]

take away. Personal retirement accounts are an exciting, innovative and 
secure way for younger workers to save for their retirements and 
prepare for their own futures their own way.
  Finally, Mr. Speaker, by whom? By us, Mr. Speaker. The fiscal crisis 
that now threatens the Social Security system has been looming since 
the baby boom exploded after the end of World War II.
  Mr. Speaker, we are running out of time. Regrettable as it is that 
national Democrats have decided to put their heads in the sand and 
pretend that Social Security is perfectly sound, action still needs 
taking. Seniors are living longer, more independent lives; the boomers, 
the most affluent generation in history, are preparing for retirement; 
and younger workers who have their own families to raise and needs to 
meet are counting on us to protect Social Security not only for current 
and near retirees but for themselves and their children, too. We have a 
chance this year with the leadership and vision of President Bush to 
come together to strengthen and preserve Social Security.
  Mr. Speaker, if our oaths of office mean anything, it is a chance 
that we must take. I thank the gentleman from North Carolina for 
bringing this Special Order, and I appreciate the commitment and the 
willingness to constantly talk about this issue so eventually the 
American people know, number one, there is a problem and, number two, 
there are solutions out there to fix that problem.
  Mr. McHENRY. I thank the majority leader for taking time out of his 
busy schedule in order to be a part of this special order. I certainly 
appreciate the passion he brings to his service in the House and his 
effectiveness as well.
  Mr. Speaker, as I said, we have three issues that we need to make 
central to this reform of Social Security. First, no benefit cuts for 
those that are at or near retirement age. No changes. Second, no 
reforms should raise taxes. No reforms should raise taxes. And, number 
three, we must have voluntary personal retirement accounts that allow 
individual ownership. We want to move to a modern system that is tied 
to a better approach, with people having ownership and actually having 
control over their investments and having control over their 
retirement.

                              {time}  1915

  So the gentleman from the great State of Texas (Mr. Hensarling), 
another one of my good colleagues, represents the Dallas area. He is in 
his second term here in the Congress; and from the get-go in 2003, when 
he first entered this place, he was recognized as a leader. And he is, 
indeed, a leader. He has led the fight for conservative budgets. He is 
a man who is passionate about representing his constituents in Texas 
well, including his wife and two kids; and he is a man who wants to 
talk about the family budget, not just about our Federal budget, 
because politicians oftentimes come to Washington and want to represent 
government rather than absolutely representing the people that they 
were elected to represent, and that is the families, those families 
across America who have to live within their budget in order to make 
ends meet.
  So with that, Mr. Speaker, I yield to the gentleman from Texas (Mr. 
Hensarling), whom I am proud to call a leader and proud to call a 
friend.
  Mr. HENSARLING. Mr. Speaker, I thank the gentleman for yielding to 
me, and I certainly appreciate his leadership on this vital issue to 
the future of many Americans, not only seniors but younger Americans. 
So I think it is especially apt that the youngest Member of the House 
of Representatives would help bring this issue to the national 
consciousness tonight.
  I am also especially honored that I could follow the esteemed 
majority leader to the floor. But for his leadership we would not be 
having this discussion now. And due to his leadership and his courage 
and his commitment to principle, this House is trying to make a stand, 
not just for the next election but for the next generation, because I 
think as more Americans become familiar with the challenges in Social 
Security, they will soon realize that if this House does not act and 
act now that Social Security as we know it will not be there for future 
generations. And, Mr. Speaker, we cannot look ourselves in the mirror 
and let that happen.
  And I not only speak for myself tonight, but I probably speak for 
many other Members of this body in saying that Social Security is more 
than just a run-of-the-mill congressional debate. It is something that 
is very personal to me because, Mr. Speaker, I have two parents who are 
in their 70s. Social Security is part of their retirement. My father 
worked all of his life paying into the system, and I feel a moral 
obligation not just as a Member of Congress but as a son to make sure 
that my parents receive every single penny of Social Security benefits 
that they paid for.
  So as we have this discussion about what can we do for future 
generations, every Member of this Congress I believe is committed to 
the proposition that for anybody who is receiving Social Security 
today, or will soon be receiving Social Security, nothing in the system 
is going to change. That is a matter of fairness. That is a matter of 
commitment that this Nation has made to its seniors. But not only do I 
feel a moral commitment to my parents; I have a moral commitment to two 
other people. And that happens to be my daughter, Claire, who is 3 
years old; and my son, Travis, who is 18 months old. And again my wife, 
Melissa, and I realize that if this body does not do something that the 
retirement security that my parents enjoy will not be there for our 
children; and that is simply not fair, Mr. Speaker.
  Let me say that Social Security has indeed been a very important 
program in the history of America, and it has helped alleviate poverty 
for a number of seniors. It has given a lot of seniors peace of mind, 
but it is not a system that is based upon savings and investment. It is 
a system that takes funds from current workers to transfer to current 
retirees. That is a system that works well if we have a whole lot of 
workers and only a few retirees. And when Social Security was first 
created back in the 1930s, we had over 40 workers paying into a system 
to benefit every one retiree. As recently as 1950, that figure was down 
to only 16 workers paying into a system to benefit every one retiree. 
Today we are down to only 3.3 workers paying into a system for every 
one retiree. And today's younger workers are quickly on a road to see 
only two, two workers paying into a system for every one retiree. That 
presents incredible financial challenges to our Social Security system.
  And there is another challenge we have. There is another demographic 
trend that is great for seniors, but not so great for the Social 
Security system, and that is when Social Security was first created, 
the life span of an average American worker was 60 years of age. Due to 
the marvels of modern medicine and better technology, today the average 
life span of a worker has increased to 77. So again we have fewer and 
fewer workers supporting more and more retirees, and these retirees are 
living longer and longer. The system cannot keep pace.
  So what has Congress done in the past? In many respects it has 
started to take the security out of Social Security. As time has gone 
by, taxes have increased. Many benefits have been cut. So as time goes 
by, we start to lose the security in Social Security. Social Security 
was a great deal for my grandparents, who were born in roughly 1900. 
When we look at what they put into the system versus what they took 
out, they received a 12 percent rate of return on their Social 
Security. That is great retirement security, Mr. Speaker. That is great 
retirement security.
  My parents who were born, my dad in the late 1920s, my mother in the 
early 1930s, they are receiving roughly a 4 percent rate of return on 
their Social Security. Not good, but not bad.
  My generation, represented by those born around 1960, we are going to 
receive only about a 2.5 percent rate of return. That is barely keeping 
pace with inflation, Mr. Speaker. And my children, represented by those 
who were born approximately in the year 2000, they could receive a 
negative rate of return. In other words, they may be putting more money 
into the system than they take out. That, Mr. Speaker, is when we lose 
the security that is in Social Security.
  So all of these financial pressures, where is this leading us? 
Unfortunately, it is soon going to lead us to a sea of red ink.

[[Page H1956]]

  There is some good news. The good news is as of today, Social 
Security is still running a surplus. But for those who can see the top 
of this chart here, just 3 years away, the surpluses in Social Security 
begin to decline. And in just 12 years, in the year 2017, we go from 
having surpluses to having deficits. In other words, in the year 2017, 
Social Security begins to go bankrupt. And as the years go by, the sea 
of red ink only gets larger and larger and larger and larger. And, Mr. 
Speaker, that is indeed a large sea of red ink.
  How large? The trustees of the Social Security trust fund tell us 
that is a $10.4 trillion sea of red ink that will simply drown the 
system, drown our children and grandchildren, if we do not act today.
  Mr. Speaker, we often hear large numbers tossed around in the 
Nation's capital and $10.4 trillion is a very large number. But let me 
try to relate that to a number that we can all understand. In other 
words, what the Social Security trustees are telling us is that if we 
wanted to balance the system and ensure that our children and 
grandchildren have the same retirement security that current retirees 
have, every man, woman, and child in America would have to write a 
check today to the Federal Government for over $34,000. That is almost 
a $150,000 check from a family of four to try to balance this system. 
Mr. Speaker, my guess is not many Americans would want to write out 
that $34,000 check tonight. So we are going to look at some other 
options.
  What are the options if we do not write out that check tonight to 
balance the system since we know we have fewer workers, more retirees, 
and they are living longer? If we do nothing, younger workers today who 
have just recently entered the workforce, those in their 20s, by the 
time they retire, they will have their Social Security benefits cut by 
a full third. How many seniors today could afford to have their Social 
Security benefits cut by a full third? So many seniors rely upon that 
Social Security. It is unconscionable. Is that the future we are going 
to leave our children and grandchildren?
  Mr. McHENRY. Mr. Speaker, reclaiming my time, how much is that per 
year that we delay reform? The numbers I have are that it is about $600 
billion a year.
  Mr. HENSARLING. Mr. Speaker, indeed, I appreciate the gentleman for 
bringing up that point because not only do we have a huge dollar amount 
to solve the problem today, every year that we turn our backs on this 
as a Congress, as a Nation, that mountain gets $600 billion higher each 
year of inaction. So, indeed, the cost of inaction is great.
  Mr. McHENRY. Absolutely. And reclaiming my time, Mr. Speaker, the 
numbers are about $4,500 for every American in the workforce; $9,000 
for a married couple. These numbers are so staggering, and so I think 
it is a moral imperative for Congress to act.
  And with that, Mr. Speaker, I further yield to the gentleman.
  Mr. HENSARLING. Mr. Speaker, if for whatever reason we choose not to 
reduce benefits when we can use the least creative approach that has 
ever come out of Washington, D.C., and that is increase taxes, if we 
decide to try to solve this sea of red ink by raising taxes again, 
younger workers today will see their payroll taxes increase by 43 
percent. I mean 43 percent, what a staggering tax increase on young 
families. I mean, what is that going to do for people who are trying to 
buy a home or start a family, and what is that going to do to job 
creation in America? It would be a crushing tax burden.
  But at the end of the day, there are only three options if we are 
going to save Social Security as we know it for future generations. We 
are either looking at a massive tax increase, we are looking at a 
massive benefit cut, or we are looking at something else that the 
President is leading on, and that is having something called a personal 
retirement account, something that is going to have real assets in it 
that people own, that families can create a nest egg with, their own 
nest egg that will grow over time, and using something that Albert 
Einstein once called the greatest discovery he ever made in his life, 
and that was compound interest. And I believe that that is the option 
that we should begin to look at as a Nation, personal saving accounts.
  And again I want to reiterate a couple of principles. No one is 
talking about changing Social Security. For those who are on Social 
Security tonight, those who are about to be on Social Security, we have 
a moral commitment to make sure that the system they worked on is 
there. But I hope, Mr. Speaker, that as time goes by and more Americans 
will listen to this debate, I do not know of any grandparent in America 
who wants to deny their grandchildren equal retirement security and 
equal retirement opportunity that they have enjoyed.
  So I think it is critical that we turn to personal accounts so that 
younger workers on a voluntary basis, a total voluntary basis, will be 
able to put some money aside in an account that can grow over time. And 
I think what we are doing, Mr. Speaker, is we are adding the best 
elements of Social Security to the best elements of a company pension 
plan. We are going to keep the government backing. Nobody is ever going 
to lose all their retirement security. The government backing, the 
social safety net, will always be there. We are going to have 
guaranteed lifetime benefits. We are going to have progressive benefits 
for lower-income workers. But to that we are going to add worker 
ownership so that workers can actually own a part of their Social 
Security. They will be invested in the length and breadth of the 
American economy, not in their brother-in-law's real estate deal or in 
100 shares of Enron, but we are talking about pension-grade investments 
that over time have proven to be safe and yield a retirement security 
better than Social Security promises and cannot deliver.
  Some tonight would say, That sounds great but it sounds a little 
risky to me. The real risk is leaving one's retirement security in 
Washington because already Washington has raided the Social Security 
trust fund over 59 times, and they have spent that money for $75 
million indoor rain forests, and they have spent it on $800,000 
outhouses that do not even work and studies about how college students 
decorate their dorms. They spend it on a lot of things besides 
retirement security. There have been over 20 tax increases. And we 
started out taking 1 out of $50 for Social Security, now 1 out of 8. 
There have been multiple benefit cuts, declining rates of return, and 
no ownership rights.

                              {time}  1930

  Mr. Speaker, the real risk in Social Security is leaving America's 
seniors' retirement security in the hands of Washington. Because of 
that, I want to applaud my colleague from North Carolina, who has made 
a great impact as a freshman Member, I want to applaud him for his 
leadership and speaking out not only for the current generation of 
retirees but future generations of retirees, represented by my 
children.
  Mr. McHENRY. Mr. Speaker, reclaiming my time, I thank the gentleman. 
I certainly appreciate his passion on this issue and his devotion to 
our conservative philosophy and to our great Nation.
  Mr. Speaker, if I may, I think with the earlier speakers you have 
heard there is a problem with Social Security. It is a problem we must 
tackle. I believe we have a moral obligation to step forward and to 
solve this problem before it results in a doubling or tripling of taxes 
or 30 percent cuts in benefits, these massive, devastating changes that 
can really hurt our Nation and hurt communities and hurt seniors. So we 
have a moral obligation to step forward and come up with a better plan.
  I want to tell you, the longer we wait, the tougher it becomes to fix 
the problem and the more expensive it becomes. As I said earlier, $600 
billion a year we waste by not fixing the problem. That roughly equates 
to about $4,500 per person, per working person.
  Some would say, why do we not just tax more? And there is this 
concept of raising the Social Security tax cap. I want to tell you, it 
is not that simple. When you are talking about a $600 billion a year 
payment we have to make in order to not solve the problem, it is hard 
to tax enough in order to meet that obligation. Beyond that, even if 
you take the cap off of the income subject to Social Security, that 
would only buy about 2 years, about 2 years, of further solvency in the 
system.
  So it is not a fix. It is delaying the problem, delaying the pain. 
And because our Nation is changing, because

[[Page H1957]]

of the demographics of our Nation and the fact that we are going to 
have fewer people working per each retiree, we have to change the 
system in order to make it solvent for future generations.
  With the baby boomers beginning to retire in 2008 and 2009, baby 
boomers were born between 1946 and 1964, so the first half of the baby 
boomers will begin to retire in 2008 and 2009. As they begin to retire, 
we are going to have to pay out more and more and more in the Social 
Security system. Certainly we have made that obligation as a great 
Nation, but I think we need to take on this problem of our change in 
population and the giant bubble that the baby boomers represent in 
terms of the population of our Nation and take on this issue to fix it.
  So the problem is clear. Our demographics have changed in this Nation 
over the 70 years of the Social Security program, and Social Security 
is broken. It was designed in 1935 before television, before commercial 
aviation, before computers, and it needs to be redesigned. We do not 
drive 1935 automobiles anymore, do we? So what we need is a vehicle for 
retirement savings that is in keeping with our times.
  That solution, Mr. Speaker, is personal accounts, personal retirement 
savings accounts. Personal accounts will eliminate the long-term 
liabilities of the Social Security system, that long-term liability 
that the gentleman from Texas (Mr. Hensarling) spoke of, that $11 
trillion unfunded liability.
  We as a Congress need to take on this challenge. But why is that? Why 
is it that Social Security retirement accounts, personal savings 
accounts, fix the system? It is because when workers put their own 
money into personal accounts for Social Security instead of the old 
system of Social Security, they lessen their own future pull on the 
system.
  You see, by having your own accounts, just like IRAs, they accumulate 
money, they accumulate interest, and interest upon interest, interest 
upon interest upon interest. That is the power of investments, and that 
is what is going to allow personal retirement savings accounts to give 
a better rate of return than our current Social Security system.
  Money into personal accounts means less of a pull on the system 
later. Remember, these accounts, as the President has spoken of, these 
personal retirement accounts, they are voluntary, so there will be no 
changes if you are at or near retirement age. For those 55 and older, 
no changes. For those that are younger, they will have the option, the 
opportunity to choose a personal retirement account for their own 
Social Security benefits. No effects on seniors currently. They are 
voluntary for younger workers. It is a wonderful opportunity for us to 
have this debate about personal ownership.
  Beyond that, some say, how does this work? How do personal retirement 
accounts work?
  Well, first of all, you cannot take the money to Las Vegas. You 
cannot go and bet your money. You cannot throw it in your brother-in-
law's business. You would have to use widely diversified securities, 
savings accounts, certificates of deposit, bond funds, municipal bonds, 
bond and stock fund mix, these type of options, well-regulated, very 
diversified.
  Some say, well, this seems sort of foreign to me. Currently, in 
America we have personal retirement accounts all across this Nation.
  It brings about a story that occurred to me back in my district in 
Western North Carolina, Mr. Speaker, in the Tenth District of North 
Carolina. I went out and was out at church one day, at a new church 
visiting, and I met a fellow there named Dave Roland. Dave Roland works 
for the Foothills Area Mental Health Developmental Disabilities and 
Substance Abuse Authority located in Western North Carolina, in Burke 
and Caldwell Counties.
  These folks that are out there serving those with mental health 
issues, they have personal accounts. Wait a second. How does that 
happen, some are saying. This seems very odd to me. But they have 
personal accounts.
  I will not get into the arcane nature of tax law changes and 
everything else, but between 1935 and 1983 different entities had the 
ability to opt out of Social Security. They had the ability to provide 
their own type of retirement plans, many personal savings accounts like 
we are trying to implement. So some of these governmental entities 
still have them today.
  Unfortunately, that option was closed in 1983. Since then, no 
organization can opt out of Social Security, no governmental entity can 
opt out of Social Security. But for the groups who opted out 
beforehand, before 1983, if they wanted to remain outside the system, 
they could, and many still remain outside the system.
  Fully 4 percent of the American workforce is outside of the Social 
Security system. They have some type of personal savings accounts. That 
is over 5 million people. They work for organizations that have opted 
out over the preceding years.
  Just so you know, there is a big myth out there, Congress has not 
opted out of the system. We are still in the Social Security system. I, 
along with my staff and all Members here in Congress and on Capitol 
Hill, pay into Social Security. So we have a good interest in making 
sure this program continues, because we do pay in.
  Now, not all the opted-out plans are the same. They are very 
different. But I found out about the Foothills program because I was 
lucky enough to meet David Roland. He works at the Foothills Mental 
Health Authority, as I said, and is one of my constituents.
  I am trying to find out about other programs like David has, so I ask 
those, Mr. Speaker, those that hear my voice or see my face to shoot me 
an e-mail if you know of anyone who has an opted-out system, whether 
they work for a governmental entity, in any State in the Nation, not 
just my own constituents in North Carolina. So they can e-mail me at 
[email protected]. That is [email protected]. 
Please let me know. I want to know your story about a system where you 
have opted out. I want to know the kind of returns you have gotten, 
whether you like them or not.
  But everyone I have talked to loves their personal retirement 
accounts, including David Roland. They are optional at Foothills Mental 
Health Authority. They are optional. An employee can make the choice to 
stay in the current Social Security system or have this system of 
personal retirement accounts.
  At Foothills, they have the option of paying their portion of Social 
Security, their 6.2 percent of FICA tax, into a 403(b) annuity plan. It 
is just like an IRA, very similar to that.
  Dave Roland told me this. He lives in Morganton, and he is one of the 
folks that opted out. He has been working at Foothills for 7 years, 
since March of 1998. He is 34 years old. He is responsible for all the 
yearly regulatory training at Foothills for all these mental health 
service providers.
  He could not be happier with the system. He is not a slick Wall 
Street investor. No, he is a man that likes spending time with his 
children, is devoted to his church and works hard every day. He is a 
regular guy, just like you and me. I want to tell you what he says. I 
want to quote from him right now.
  ``I am a common worker. I have the benefit of a plan along the lines 
of what the President has proposed. In 7 years I have accumulated over 
$50,000. I control the amount of risk that I want, and it is far better 
than what I could have gotten from the Social Security plan. I cannot 
imagine that I would have the same amount had I been in Social 
Security.''
  I am not going to tell you what Dave makes. In fact, I would not ask 
that question of him. But he is a man that is much like millions of 
Americans across this Nation. In 7 short years, he has a personal 
retirement account like we are proposing here in Congress, and in 7 
short years he has accumulated over $50,000 of retirement savings.
  Now that is an amazing feat, if you consider the fact that he began 
investing in the late nineties and there were ups and downs in the 
stock market just in the last 7 years, and he has $50,000 in savings. 
That is a staggering number in a short period of time.
  But those are the type of benefits that we are talking about. He 
could buy an annuity when he retires. If he continues to get a similar 
rate of return, he could buy an annuity and get far more than what the 
Social Security system could give him. Benefits for Social Security are 
capped at about $2,000 a month.

[[Page H1958]]

  So a regular guy from my district has a personal retirement account. 
That is why I am so optimistic about what we are trying to do here in 
Congress, the type of reforms that we are trying to achieve, with 
personal ownership, a new retirement system that enables people 
personal ownership and allows them to pass on to their heirs if they do 
not spend all the money, to pass on to their heirs if they do not make 
the retirement age. These are wonderful opportunities for us to give to 
all Americans, all walks of life.
  Mr. Speaker, do you know what? When Dave Roland makes his money and 
gets his check at the end of the week or the end of the month, it is 
his money. It is his money. Thankfully, he has a personal retirement 
account that he still controls and still owns, because it is his money.
  That is what we are trying to do with personal retirement accounts, 
to give personal ownership, that level of inheritability to pass onto 
your heirs, that personal freedom, while at the same time having it 
well-regulated, operating very similar to the way Social Security does 
today, meaning the money is taken out of your check, you are obligated 
to be a part of the Social Security system, and that the investments 
will be well-regulated, the risks minimized.
  What is fascinating, though, is there have been studies done on the 
stock market. There are some left-wing liberals that will tell you we 
should not invest in the stock market. I think we have gotten great 
rates of return in the stock market. We have gotten a better rate of 
return certainly than any government program can give.
  Certainly I would like to be concerned about the rising tide in our 
Nation, to make sure that all Americans have that same ability to 
improve their life, to have personal ownership, personal savings and be 
a part of our marketplace, be a part of our marketplace.
  I will tell you this: Some say the stock market is risky.

                              {time}  1945

  Over the last 200 years, the average rate of return in the stock 
market has been 7 percent. Now, that is over three times the best rate 
of return for Social Security. In any 20-year period in American 
history, the stock market has never gone down. Even during the Great 
Depression in the 1930s and the 1940s, the stock market did not go 
down. It had a positive return.
  So we want to give all Americans, Mr. Speaker, that opportunity. We 
have a moral obligation as a Congress to take on this issue, to solve 
this problem, not just for a few years, not just push the problem back 
to another Congress another day; but we have a moral obligation to do 
what is right for our constituents and do what is right for all 
Americans, and allow them to have a better system to operate for their 
retirement savings, not just for the next couple of years, but for 
generations to come. And with personal accounts, without raising taxes, 
and while maintaining our commitment to those who are at or near 
retirement age, we can do this as Americans.
  We are not going to let those on the other side of the aisle just 
deny that there is a problem. That, in fact, is denying reality. And do 
not believe, Mr. Speaker, and do not allow the American people to 
believe that there is not a problem. This is an issue we have to take 
on as a Nation, and we are going to take it on. It is going to be the 
Republican Congress that takes this on. We are hopeful that some 
Democrats will come to the reality that there is a problem and that the 
right thing to do is to tackle it now instead of pushing it off to 
another day.
  I appreciate this time to speak about this need for Social Security 
reform.

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