[Congressional Record Volume 151, Number 99 (Wednesday, July 20, 2005)]
[House]
[Pages H6190-H6196]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




                     STRENGTHENING SOCIAL SECURITY

  The SPEAKER pro tempore (Mr. Poe). Under the Speaker's announced 
policy of January 4, 2005, the gentlewoman from Kentucky (Mrs. Northup) 
is recognized for 60 minutes as the designee of the majority leader.


                             General Leave

  Mrs. NORTHUP. Mr. Speaker, I ask unanimous consent that all Members 
may have 5 legislative days within which to revise and extend their 
remarks and include extraneous material on the subject of this special 
order, which is Social Security.
  The SPEAKER pro tempore. Is there objection to the request of the 
gentlewoman from Kentucky?
  There was no objection.
  Mrs. NORTHUP. Mr. Speaker, I am so delighted to be here with my 
friends and colleagues who also are very committed to strengthening 
Social Security to make sure that it not only is strong and a viable 
program for current seniors and for those of us that are the baby 
boomers and about to retire, but also that it is a program that is 
sustainable and solvent for our children and our grandchildren.
  That is a big challenge for us and it is easy today to put off 
problems that look like they are going to be 2 years in the distance, 4 
years in the distance, 10 years in the distance, 25 years in the 
distance, to take up just what is the most pressing challenge today; 
but that is a wrong strategy. That strategy leaves our country 
vulnerable. In this case it gets worst the longer we fail to act.
  I am pleased our President has discussed this with the American 
people. He has been very forthright on what the challenges are, and he 
has shared with the American people that doing nothing is the most 
dangerous thing we can do when it comes to Social Security. We all know 
Social Security is a pay-as-you-go. Those that are currently working 
are paying for those that are currently retired.
  It used to be that there were 16 workers in the workforce for every 
retiree. Later there were 10 workers in the workforce for every 
retiree. Today there are 3, and so that means that considerable 
resources, considerable dollars that current workers make have to go to 
sustain each retiree.
  It is wonderful that we can anticipate longer lives than those who 
designed Social Security. In fact, it used to be that life expectancy 
was 62 years, and you could retire when you were 65 years. So when 
Social Security was first proposed and first passed, there were far 
more people that paid into the system than would ever think that they 
would get actual Social Security benefits because of the life 
expectancy.
  To our benefit and to the quality of our life, Americans are living 
far longer. So we need to modernize Social Security so that we do not 
have two or three workers in the system supporting every retiree as 
they also have to support their families. We need to make sure that 
those in the workforce that actually make sure that Social Security is 
solvent, that when they retire, it is there for them. We need to act 
sooner rather than later because today it is still possible to deal 
with the Social Security surplus, to put dollars aside, to build a 
system that will help make the system solvent and sustainable in later 
years.
  I have with me today one of my colleagues, the gentleman from Florida 
(Mr. Miller), who is very knowledgeable about Social Security and in 
particular about the GROW accounts, the proposal before us right now as 
we consider whether we take big steps or small steps towards personal 
accounts that can help us bridge the gap between a system that is not 
sustainable and not solvent to a system that is there for our children 
and grandchildren.
  I yield to the gentleman from Florida (Mr. Miller) and am eager to 
hear what he has to say.
  Mr. MILLER of Florida. Mr. Speaker, I am sure it is no surprise to 
many of you that some of my constituents do oppose personal retirement 
accounts, so when they do I ask them this very question: Would you 
agree or disagree Congress should have, when it created Social 
Security, set up a really true lockbox that earned interest on their 
FICA contributions?
  Of course they eagerly agree that the money should have been set 
aside and used only for Social Security benefits.
  I then follow up with the question: Then why in the world would you 
be opposed to a personal lockbox, if you will?

[[Page H6191]]

  It is not secret here in Congress we have not had the discipline in 
many instances to keep our hands out of the cookie jar of Social 
Security. Now to stop this I propose that in the future that Congress 
cannot get its hands on the money in the first place. As soon as 
workers can start to save part of their Social Security money in a 
personal retirement account, with their very name on it, this Congress 
will have to find its money elsewhere.
  Growing Real Ownership for Workers legislation is something that our 
colleague, the gentleman from Louisiana (Mr. McCrery) introduced, that 
would strictly use Social Security dollars for Social Security 
benefits. Now these GROW accounts mandate that Social Security taxes be 
used for benefit payments to those people who have worked hard, who 
have followed the rules and have earned the right to a secure 
retirement. The accounts would be created for workers under the age of 
55 unless they choose not to participate.

                              {time}  2115

  The current Social Security surplus would be dedicated to individual 
GROW accounts where it would be invested in guaranteed marketable 
Treasury securities, real assets that workers themselves would own and 
on which account balances would, in fact, be inheritable. Workers age 
55 and older will continue to participate in the Social Security system 
that we know today. Nothing changes. People should have the right if 
they wish to invest their Social Security taxes in safe, diversified 
funds like a Thrift Savings Plan that Federal employees and Members of 
Congress have. The return, in fact, has been proven to be better than 
the government's 1.6 percent return on Social Security.
  Younger workers should have the opportunity to receive a higher 
retirement income than the current system will be able to pay by the 
time that they can retire themselves. Workers between the ages of 22 
and 55 should have the option of joining the personal account system, 
and people younger than 22 could, in fact, be required to join that 
system. Those retiring after about 2042 can really expect to receive 
only about 73 percent or less of what they are being promised today. A 
reasonable reform would allow them the opportunity to improve their 
retirement incomes by investing a portion of their current payroll 
taxes.
  The current system owes some $10.4 trillion more in promised benefits 
than it can afford to pay, and each passing year adds an additional 
$600 million to the cost of permanently fixing the Social Security 
system. Benefits will be reduced and taxes may have to be raised.
  As I have been visiting high school seniors in my district over the 
last few months, I have entered into a dialogue with many of the 
students over the future of Social Security, and I have asked some 
students if they believe that Social Security will be around for them 
to collect when they retire. Out of the five classrooms, only one hand 
was raised. That is one out of approximately 175 young adults around 
the age of 18 who actually have faith in our current Social Security 
system.
  Young adults are supportive of personal accounts because they 
understand that they will be better off during their retirement years. 
And they also realize that they will not have to worry about placing a 
financial burden on their children and grandchildren who would 
otherwise have to act as a financial caretaker in their retirement 
years.
  I have received correspondence from my constituents 50 years and 
older eagerly opposing the accounts due to a very common misconception. 
The middle-aged and elderly residents in my area have a fear of not 
receiving the benefits that they have been promised in the system. To 
them I say this: they will receive their benefits just as promised. For 
them the Social Security system will not change in any way.
  However, I think it would be a disgrace to deny our younger 
generation and generations to come the opportunity to build a nest egg, 
if you will, and prepare adequately for their future. Many people ask 
what safeguards will the government have to protect these personal 
accounts if someone invests poorly or recklessly. Clearly, not everyone 
is comfortable in investing. So Social Security reform will have to 
include some type of safeguard for its participants in the personal 
account system. Aside from the strong performance of financial markets 
over the long term, as well as the fact that a majority of your account 
will remain in the Social Security trust fund as a safety net, the 
personal accounts that will be offered will be fully diversified.
  Another idea that has been talked about is having participants 
purchase an inflation-adjusted annuity that is at least equal to 100 
percent of the poverty level for their retirement. Democrats have said 
this: they think that we should eliminate the $90,000 cap on income. 
Even completely eliminating the cap on taxable wages would only 
postpone permanent deficits by 6 years, from 2018 to 2024. A temporary 
fix would likely require future generations to raise taxes over and 
over, and I think that our constituents deserve better than that.
  Now more than ever, those of us here in Congress have a 
responsibility to make the tough decision while not making the 
financial burden any harder on the American people. Voluntary personal 
retirement accounts are very beneficial for the workers and retirees of 
the future. They would be accumulating money in their own account 
throughout their working life. And that money would grow through 
investment over the years. Because their dollars are growing over the 
course of decades, they would be able to have a more comfortable 
retirement without relying entirely on the next generation of workers 
coming after them.
  Mr. Speaker, I think we all agree that we need to move towards change 
now. Let us pass legislation that includes some type of personal 
retirement accounts. And as we talk about this issue tonight, again I 
want to thank the gentlewoman from Kentucky (Mrs. Northup) for bringing 
this issue forward. I look forward to the opportunity of conversing 
with my other colleagues on the this very important issue.
  Mrs. NORTHUP. Mr. Speaker, reclaiming my time, I thank the gentleman 
from Florida (Mr. Miller) for all the hard work he is doing on this 
issue. It takes people who are very dedicated to talk about the issue.
  We know that there have been a lot of groups that have tried to scare 
the American people. They have tried to scare our parents and current 
retirees that somehow this jeopardizes the check that they currently 
get. And they try to scare younger workers that this is going to be 
something that is risky. And his courageous and understanding 
leadership in this to delve into an issue and to explain it in a way 
that the high school students that he talked to understood and had 
confidence in it is so important.
  And I know it will not surprise him to know that the gentleman from 
Indiana (Mr. Chocola) has people that are scaring seniors, the young 
people in his district, throwing out misinformation, trying to dissuade 
them from supporting these GROW accounts.
  I invited him here tonight to talk about maybe some of the 
information, some of the fears, some of the criticisms, maybe some of 
the rhetoric that he is hearing and to share with us what his answers 
are to the people in his community and make sure that people that are 
listening at home tonight that maybe are hearing some of these same 
things, either recorded phone calls or posters around town, that they 
will identify with this tactic and understand that they could be 
reassured that this is a good plan for them.
  Mr. Speaker, I yield to the gentleman from Indiana.
  Mr. CHOCOLA. Mr. Speaker, I thank the gentlewoman for yielding to me, 
and I thank her for her leadership on this issue.
  This is one of many times she has come to the floor and spoken on 
this very important issue that I think is important to generation of 
Americans, and it is important that we focus on the facts and how we 
can strengthen Social Security for the long term. And the gentleman 
from Florida did a tremendous job in talking about a first step, I 
think a very appropriate step, in making sure that we preserve the 
Social Security surplus for Social Security reasons and benefits.
  I did 15 or 20 town hall meetings so far this year on Social 
Security; and if there was one message I heard loud and clear, Mr. 
Speaker, from the people of

[[Page H6192]]

the Second District of Indiana it is: let us stop raiding the Social 
Security surplus. Let us stop spending it on everything from the 
Cowgirl Hall of Fame to the war in Iraq. Let us use that surplus for 
what it is there for, and that is simply to provide the benefits for 
Social Security beneficiaries in the future. And that is exactly what 
GROW accounts do. They simply stop the raid. I think facts matter, and 
with anything I think that we should understand the facts before we 
make decisions.
  And I learned recently that there is going to be a group of people in 
my district office in South Bend, Indiana tomorrow, and they are going 
to demand that I take my name off as a cosponsor of the bill that 
creates GROW accounts. I am not going to take my name off of that bill 
because I think that their request is based on a misunderstanding of 
the facts, and I know that because they sent me a letter, or they are 
going to deliver to me a letter tomorrow, I think, but we got an 
advance copy, and some of the things they have stated in this letter 
are gross misstatements of the fact and I think mislead people as to 
what GROW accounts do and how they start to solve our Social Security 
problem.
  The first misunderstanding is they say that ``rather than ensuring 
that American workers receive the benefits they have earned, this bill 
would divert payroll contributions to create private accounts and would 
fund these private accounts using the `surplus,' money which has 
already been earmarked to pay the baby boomers' Social Security 
benefits.''
  Mr. Speaker, it is true that this bill would create personal accounts 
and those personal accounts will be funded by surplus Social Security 
money that goes into the system that is not needed for current 
beneficiaries. What is not true is that the surplus has been earmarked 
for baby boomers in the future. In fact, the opposite is true. The 
surplus is simply spent on everything that the government needs that is 
outside of Social Security benefits. So I think it is very important 
that we understand that the GROW account simply makes sure that we 
spend Social Security surplus money on Social Security purposes.
  The second misunderstanding is they say: ``This plan would cut 
guaranteed benefits.'' There are two things wrong with that statement. 
One, there are no guaranteed benefits under Social Security as it is 
currently implemented. The Supreme Court has said that no one has a 
property right, no one has a right to your benefits. Congress can 
change the Social Security system at any time in the future and no one 
can make a claim for their benefits. So under the current Social 
Security plan, there are no guaranteed benefits.
  But if we have GROW accounts, there is a guaranteed benefit because 
that becomes a personal asset. That becomes an asset with their name on 
it. It becomes a part of their estate. It becomes inheritable if they 
die before they can collect their benefits, and currently Social 
Security has none of those aspects and none of those benefits.
  The third misunderstanding is: ``This plan would finance risky 
private accounts.'' Again, Mr. Speaker, it does fund personal accounts. 
It is a personal asset for individuals who are in the Social Security 
system. But they are not risky because these accounts would simply have 
one asset in them when they are created, and that is government-backed 
securities, government bonds, the safest investment in the world, and 
these are tradeable and marketable bonds that can be sold at a later 
time when people have their retirement needs, and they can use that for 
their retirement benefits.
  So, Mr. Speaker, I do think that facts really matter in this debate 
because the consequences are very important to every generation of 
Americans.
  We can talk more about these accounts and more about the Social 
Security situation overall, but again I want to thank my colleagues for 
being here tonight talking about this very important issue. And one of 
the things that I always want to encourage people to do is to share 
with us what they are for. The people coming to my office tomorrow are 
going to tell me what they are against. I would love to hear what their 
ideas on saving Social Security are. I would love to hear what they are 
for. I know that their colleagues are open minded and that we are 
willing to listen to any good idea to make sure that we permanently 
solve the problems that Social Security faces. So I hope that we can 
have some positive input from both sides of the aisle and all the 
American people because we need that to solve this problem.
  Mrs. NORTHUP. Mr. Speaker, reclaiming my time, I would just like to 
ask my friend from Indiana specifically about the concern that the 
people coming to his office have about any sort of risk as though 
current benefits are guaranteed and they are in place. As he said, they 
are not guaranteed. The fact is the Supreme Court has recognized that. 
More importantly, we hear people on the floor every day talking about 
everything is fine until 2042 and then there would be a 25 percent cut 
in benefits, as though that is perfectly okay for our children and 
grandchildren.
  But I would just like to ask the gentleman what he thinks of the 1993 
tax bill that raised taxes on Social Security, both the percentage that 
people pay, the percentage of tax, and the baseline that caused them to 
have to start paying this tax, if he would not call that a reduction in 
benefits. If previously those Social Security dollars that people got 
were not taxed and the portion that was, was taxed at a lower rate, in 
1993 in one day, Congress changed the law to start taxing more of 
people's Social Security dollars at a higher rate, if that was not the 
government reducing their benefit.
  Mr. CHOCOLA. Mr. Speaker, will the gentlewoman yield?
  Mrs. NORTHUP. I yield to the gentleman from Indiana.
  Mr. CHOCOLA. Mr. Speaker, the gentlewoman is exactly right. Congress 
has changed the Social Security system over time, and over 20 times in 
the past Congress has raised taxes on Social Security in payroll taxes 
into the system. And that has never solved the problem. And if we 
include raising the amount of payroll that is subject to the tax, it is 
something like 38 or 39 times we have raised the contribution to the 
system.
  What we have to do is find a way to permanently solve the Social 
Security challenges that are really undeniable. As she said, the only 
thing guaranteed is a significant cut in benefits in 2041 or 2042 if we 
do nothing. So I think it is time that we find a way to permanently 
solve this problem. The GROW accounts are a great idea as a first step. 
They are not the total answer, but they are a first step to give people 
an ownership stake in Social Security, make sure that we use the 
surplus for what it is intended for, and that is Social Security 
benefits, stop raiding the surplus and begin to strengthen Social 
Security for the long term.
  Mrs. NORTHUP. Mr. Speaker, reclaiming my time, I thank the gentleman 
for his comments.
  And I know he shares with me an eagerness to hear from the 
gentlewoman from Pennsylvania (Ms. Hart), who is so knowledgeable about 
this issue and works on it every day and has been a remarkable 
spokesperson for the personal accounts, what they mean to Americans.

                              {time}  2130

  I am eager to hear her thoughts tonight on this also.
  Ms. HART. Mr. Speaker, I thank the gentlewoman for yielding to me, 
and I appreciate the opportunity to have this discussion tonight, 
because, unfortunately, the American people are hearing a lot of 
diatribe that really has no basis in fact regarding Social Security.
  The gentlewoman mentioned earlier a point that needs to be stressed, 
and that is that people believe that Social Security is just fine, that 
their benefits that they expect are going to be paid, and that nothing 
is going to change. Unfortunately, that is just not the case.
  As was mentioned also earlier, in 1983 there was a significant change 
in the law, and the reason they had to do that was because Social 
Security was not going to have enough money to pay out the benefits. So 
the taxes did increase.
  Now we are at another point where we are having a very serious change 
in our demographics, and that means that there are a lot more people 
who are going to be receiving Social Security benefits in the coming 
years. The good news is they are going to live a lot longer than they 
used to, but the bad news is that the Social Security money

[[Page H6193]]

is not going to be enough to fund the benefits they expect.
  Of course, another problem that Social Security has had for years and 
one that the GROW Act of 2005, which several of my colleagues have 
mentioned, will help us fix, is that the money that comes into Social 
Security now is not even being spent on Social Security to a 
significant degree.
  There is a surplus in the Social Security account for the next 
several years and that money should actually be saved for Social 
Security benefits. But right now it is not being saved for Social 
Security benefits. That money is being spent on general government 
operations, as my colleague from Indiana mentioned. It could be 
anything from some crazy museum or the war. But that money has been 
collected for Social Security, so it should be spent there.
  We need to stop the raid on Social Security. We need to stop spending 
the surplus on things other than Social Security. One of the best 
proposals I have seen to do that is the GROW Act of 2005. It would not 
only stop the raid, but it would give Social Security a different 
dimension that I think is important to Americans, especially in this 
day and age, and that is that it would set up personal accounts for 
each American in the Social Security system. That money would actually 
have their name on it.
  A lot of people think that the Social Security money they pay in goes 
into an account with their name on it. But that is not the case. It 
goes into the trust fund and gets spent on a number of things.
  What the GROW Act would do is set up personal retirement accounts for 
each person in the Social Security system. Everybody who is paying in 
taxes would have this account, and that money could no longer be spent 
on other government operations. It would stay in Social Security. It 
would be our money. It would have our name on it. It would be 
inheritable. It is not today, so if you die at 64 and you still have 
not begun receiving your Social Security benefits, those benefits are 
lost and your family does not have any claim on those benefits.
  So the GROW accounts would be created for anybody under 55, unless 
they choose not to participate. Then they can stay in traditional 
Social Security. So that Social Security surplus would be dedicated to 
these GROW accounts and they would be invested in guaranteed, 
marketable Treasury securities.
  Another concern and some of the demagoguery we have heard is that you 
can invest this money in something and lose it in the stock market. 
That is what you hear, it is a risky investment.
  These are marketable Treasury securities, not risky investments. They 
are real assets that are very conservative, in fact. Upon retirement, 
these account balances would be used to help pay Social Security 
benefits.
  I mentioned that they are inheritable. I think this is worth 
stressing over and over again, because most people understand that they 
do not have an ownership right in Social Security. But under the GROW 
Act, they would.
  So I think there are a lot of things that are an advantage to people 
that these proposals would really bring that they are not aware of; and 
as long as some of these groups, such as the ones in the district of 
the gentleman from Indiana (Mr. Chocola), are out there, we really need 
to clear the record, to make it clear.
  I serve on the Committee on Ways and Means. We have been looking at 
ways to basically shore up Social Security, to make sure that the 
American public will have an investment that they can depend upon for 
their retirement; something that will be real; something that will give 
them a real ``bang for their buck'' as they invest it through their 
entire lives. And we know that investing it this way is just much 
smarter. Every person who pays those taxes certainly wants to get the 
most out of them that they can.
  Mr. Speaker, I would say to the gentlewoman from Kentucky (Mrs. 
Northup), I really appreciate the opportunity to join you tonight.
  Mrs. NORTHUP. Mr. Speaker, reclaiming my time, I think it is really 
important that we talk about not only the benefits, but some of the 
misinformation out there, because we know that our constituents are 
hearing it. They are eager to figure out for themselves what the best 
course is, and it is important that we both not only talk about the 
benefits, but also the misinformation and what the answer is to that.
  One of the things I wanted to ask my colleague, the gentleman from 
Indiana (Mr. Chocola), about, he was talking about some of the 
questions or misinformation that were raised in his district with his 
constituents who he expects to be in his office.
  One of the things I hear all the time is that these GROW accounts, 
they are going to increase the deficit for our country and that is 
going to jeopardize sort of the solvency of the country. Can the 
gentleman discuss that, whether or not these accounts are going to 
specifically make the deficit worse.
  Mr. CHOCOLA. Mr. Speaker, I appreciate the gentlewoman bringing up 
that point. That is a consistent criticism of the GROW accounts, that 
they would increase the debt or the deficit; but in fact what they do 
is unmask or reveal the true budget deficit.
  Today we have a Social Security surplus, which we have talked about. 
That money is used to pay for general government needs, and it reduces 
or masks the amount of money we really need to run government, because 
we are taking Social Security money and using it for general government 
purposes.
  With GROW accounts implemented and enacted, we would stop doing that. 
We would stop using Social Security surplus money for anything except 
Social Security. The problem with that, the critics would say, is that 
we have to go find the money to fund general government somewhere else. 
So on paper it increases the deficit, when in fact it unmasks the 
deficit.
  It is simply a matter of truth in accounting. It is being honest with 
the American people how much money we spend as a government and where 
the money comes from. Then we will be more accountable to the American 
people by not spending their Social Security money on things other than 
Social Security and being honest as to how much we need to spend or 
borrow to fund the general government needs.
  Mr. Speaker, it is simply a matter of transparency and truth in 
accounting. Frankly, we need more of that in other parts of government, 
which we could spend several hours talking about. It is being honest 
with the American people, and I think it is one of the great benefits 
of GROW accounts.
  Mrs. NORTHUP. Reclaiming my time, in fact, for years Congress has 
spent the Social Security surplus on other things, and it looked as 
though those things were all affordable because in fact it did not look 
like deficit spending, when in fact it was taking the Social Security 
surplus and diverting it to other things.
  Sometimes people ask me why Congress did that. I always say, you 
know, if we could bring back the Congresses, if we could get Roosevelt 
to come back or the ghost of Roosevelt to come back, if we could bring 
back the Congresses in those days, or even the Congresses in the 50s 
and the 60s, we could ask them that question. I will bet if they looked 
at things through our eyes, they would think that maybe they should 
have put these dollars away into accounts that the American people 
would own and keep them away from Congress.
  But all we can do is act as good stewards of the Social Security 
dollars that are coming in today. None of us can reach back and change 
what happened in the 60s and the 70s and the 80s. I think the American 
people understand that. They realize that it is not today's Congress 
that spent the Social Security surplus in the 60s, but they do expect 
us to do what we ought to do to make it solvent for the future.
  Mr. CHOCOLA. Mr. Speaker, if the gentlewoman would yield further, 
just to put this into context, between 2006 and 2015, it is estimated 
that the surplus will be $790 billion that we would put into personal 
accounts for retirement needs for Social Security benefits versus 
spending it on general government purposes. So this is a lot of money 
that can be put aside now for Social Security benefits in the future. I 
think it is high time we start.
  Mrs. NORTHUP. Reclaiming my time, it is a huge amount of money. It 
would be a great investment in the long-term solvency of the program.
  I did not know whether the gentlewoman from Pennsylvania (Ms. Hart)

[[Page H6194]]

might want to talk a little bit about the deficit too, because I do 
think that is something we are hearing a lot about, and it is very 
reassuring to Americans when they understand this is not more debt.
  Ms. HART. Mr. Speaker, I thank the gentlewoman for yielding. I would 
like to discuss that a bit.
  I think it was mentioned, the large amounts of money that are 
involved in Social Security, because everybody who is working is paying 
into their Social Security fund. In fact, I think a lot of people do 
not really realize how much they are paying in. They are paying this 
tax and their employer is paying the tax for them, as well, and it 
totals 12 percent-plus of their income that is going into the Social 
Security fund. That is a lot of money.
  If people could actually have control of that money, they could 
certainly earn more on it through these investments, even in Treasury 
bills, but especially in different kinds of securities.
  But the deficit, people talk about how we spend too much money. One 
of the ways, certainly, to prevent the Congress from spending too much 
money is to not give the Congress this extra money to spend. Because 
what has happened over the years is it has just become sort of an 
assumption that that money that is sitting there in the Social Security 
surplus can be spent on whatever we want to spend it on. Unfortunately, 
that creates a serious problem for us down the road, because we are not 
investing that money, because we are not getting a return on that money 
that is going to help us pay Social Security benefits down the read.
  So the idea of the GROW accounts, which would prevents us from 
spending that money, I think has a double benefit. It would tell the 
Congress, hey, this is not your money to spend, and you need to find 
ways to get your spending in order; you need to get ahold of that and 
review the programs and cut the programs that are not really doing 
anything for the American people. In fact, right now I am pleased to 
say there have been well over 100 programs cut in this year's 
Republican budget, which is very important.
  We need to continue along that track. One of the ways to push us to 
continue along that track is to take the Social Security surplus and 
put it in a bunch of personal lockboxes like the GROW accounts would 
set up, so that every American will have confidence that there will be 
money there for them in Social Security, with their name on it, so we 
will have that money for them when they need it when they retire.
  Mrs. NORTHUP. Reclaiming my time, it is really a matter of restoring 
the confidence of the American people that we are going to act in the 
best long-term interests, fiscal interests, of this country. So I thank 
the gentlewoman very much for her thoughts on that.
  I see that now my good friend, the gentleman from Georgia (Mr. 
Gingrey), is here. He has spent a lot of time talking about and 
studying the issue of Social Security, is very knowledgeable about it; 
and I am eager to hear his thoughts on this issue tonight.
  Mr. GINGREY. Mr. Speaker, I thank the gentlewoman from Kentucky for 
not only recognizing me for a few minutes, but for putting together 
this special hour to discuss something that is so important.
  As I went across my district, and I know my colleagues did the same 
thing, talking about Social Security when the President first rolled 
out his suggestion of having an individual personal account, it was not 
just his idea, but I think a very good idea, to carve out up to 4 
percent of the 12.4 percent payroll tax in an optional way for those 
workers under 55, and to let that part of their Social Security account 
be an account that they actually own, they actually have ownership of, 
and it could enjoy the miracle of compound interest. Einstein said that 
was the greatest power in the world, even more powerful than atomic 
fission. But clearly that was a good idea. I think it is still a good 
idea.
  But as I talked about that in my town hall meetings across the 
Eleventh District of Georgia, Mr. Speaker, the one recurring theme that 
I heard from folks, mostly seniors in the audience, but a lot of times 
they were younger workers, they said, Congressman, we are not sure 
about this individual personal account thing.
  I think people are afraid of change, and they would express a little 
bit of hesitation and doubt about it. But one thing that seemed 
consistent almost every time I did a town hall meeting, and I think I 
probably have done at least 15 on this subject, was whatever you do, 
Congressman, please, go back to Washington and tell your colleagues on 
both sides of the aisle that this business of robbing, of raiding that 
trust fund has got to stop. If you do not do anything else, just solve 
that problem, because nothing else really matters if you continue to 
take this excess money that has been coming in since 1935 when we had 
15 workers for every beneficiary and people died before they reached 
the age at which they could earn a benefit at age 65. Life expectancy 
was 64 on average, and we did not have any problem.

                              {time}  2145

  But we have time over these coming years. I say ``we,'' and my 
colleague pointed out just a little earlier, we were not around, not 
many of us, I think I was 3 years old when Franklin Delano Roosevelt 
died. But Congresses have been spending that excess money in the so-
called trust fund to the point that $1.7 trillion is missing.
  But I think it is important for us, my colleagues, to let the 
American people know that that money was not squandered, it was not 
wasted. We are not talking about fraud and abuse; we are talking about 
spending money on things like K through 12 education, Head Start 
programs, benefits for our veterans, which they so richly deserve, in 
times like we are now when we are in a shooting war and we have to 
equip our troops to make sure that we give them every opportunity to 
win. That is where the money has gone.
  I think Members of Congress on both sides of the aisle are, by their 
very nature, compassionate. And when these folks come to us and say, we 
need just a little bit more, Mr. Congressman and Mrs. Congresswoman, we 
need just a little bit more, we have little children that have needs, 
we have disabled people that have needs, that is where the trust fund 
has gone.
  So I think it is understandable. We can play this blame game and 
finger point and say, well, the Democrats did this, or President 
Clinton, or the Republicans have spent the money, or President Bush is 
spending the money to wage a war in Iraq and Afghanistan. But what we 
are talking about now with this idea of the GROW account is to answer 
the complaint of the people in the 11th district of Georgia, and I am 
sure my colleagues' districts as well, let us do finally put a lockbox 
on the Social Security Trust Fund.
  So I really commend the members of the Committee on Ways and Means, 
the gentleman from Louisiana (Mr. McCrery), the gentleman from Florida 
(Mr. Shaw), the gentleman from Texas (Mr. Sam Johnson), the gentleman 
from Wisconsin (Mr. Ryan), the gentleman from Arizona (Mr. Shadegg), 
and my colleagues here tonight, the gentlewoman from Pennsylvania (Ms. 
Hart) and, before that, the gentleman from Indiana (Mr. Chocola) was 
with us. I think the Committee on Ways and Means has really come up 
with a novel idea. I hope we will not abandon the thought of individual 
personal accounts coming out of the payroll tax, and I think at some 
point we will do that, and we need to continue to work on the solvency 
of Social Security.
  But this is a great way, these GROW accounts, to say that we are 
going to take the excess, and there will be, Mr. Speaker, an excess of 
revenue coming in over benefits being paid out from now until 2017. I 
do not think anybody disagrees with that. I think one of my colleagues 
tonight said that we are talking about maybe as much as $700 billion 
over that period of time before we reach that cross-over where the 
amount coming in is the same as the amount going out. But we have got 
that window of opportunity, we are talking about 12 years, where we can 
allocate that money, that excess money to individuals younger than age 
55, unless they opt out, and then in 2009, as I understand the GROW 
accounts, we will actually not only have the opportunity to invest that 
into government bonds, but put it in a well-managed Thrift Savings Plan 
so that our beneficiaries can then enjoy the miracle of compound.
  So I am really glad to be here tonight to lend my thoughts to it. I 
think it is

[[Page H6195]]

a great idea. I commend the committee. I look forward to having the 
opportunity to go back home during the August recess and tell my 
colleagues that yes, we are finally going to respond to the best 
suggestion that I have heard, and it was from the folks back home; let 
us finally put a lockbox on the excess dollars coming in.
  With that, I will yield back to the gentlewoman from Kentucky and 
thank her for letting me participate this evening.
  Mrs. NORTHUP. Mr. Speaker, I thank the gentleman, and I think he 
raises a point that is important.
  Many nights we have talked about personal savings accounts and how 
many of us believe that in the long run they are the best answer to 
solvency, to making sure that our younger workers have a system that is 
there for them, that gives them a good return on investment, a system 
where as Americans live longer they can count on these dollars in their 
retirement.
  But that is not possible today. It is not possible for a variety of 
reasons. Part of it is politics, part of it is all of the scare tactics 
that are being used. But, more importantly, sometimes, when you have a 
very big, complicated problem, it is easier if you solve it in steps, 
and the first step that Americans seem to be asking us to do is stop 
making the problem worse by spending the Social Security surplus on 
other things other than Social Security.
  I think that is very exciting. When we do that, and I am convinced we 
will do that, we are going to see that seniors are going to keep 
getting their Social Security check just like they always have; we are 
going to see that younger workers are going to find out each year what 
they have in a personal account for themselves that is going to grow. 
Many families, especially young families that are trying to balance 
children and new jobs and so forth, this may be the only savings that 
they have from one year to the next, and that will be reassuring. And 
as people understand how that works, I am convinced that the support 
and the interest in growing that to truly solving the Social Security 
system will be there.
  I know that my friend, the gentlewoman from Pennsylvania (Ms. Hart) 
also has talked before about the hole we are in, if we do nothing, and 
why we have to deal with this problem now. I think it is important that 
the gentlewoman add that to the record of our discussion tonight.
  Ms. HART. Mr. Speaker, I thank the gentlewoman for yielding. I will 
be brief. I think it is important for us to understand the absolute 
size of this problem if we do not do anything. Because again, GROW 
accounts are the beginning of a solution to the problem of making sure 
that there are benefits that are going to be able to be paid to people 
who are expecting Social Security.
  Right now we just cannot make that statement. We cannot tell people 
we are going to make sure all of your benefits are paid because, in 
fact, in 2041, the trust funds will be gone. At that point, the payroll 
taxes will be paid out as they come in and will only cover 74 percent 
of the benefits. A couple of years later, it declines to a much lower 
percentage, in the 60 percent range, and lower and lower. Obviously, 
people do not want to receive less in their Social Security check.
  So we are in a position where we need to identify and really realize 
that we have a serious unfunded liability, the gap between program 
revenues, things that are coming in, and the costs that we know that we 
will have to pay. It is like a pension plan that is going bankrupt.
  After considering the trust fund's current balance of about $1.7 
trillion, which is the unfunded liability, the cost of the program 
would be $4 trillion in present value. That is $300 billion more than 
last year's report. So the longer we wait to try to change the system, 
the more it is going to cost to change the system and find a way to 
GROW accounts, and this GROW account bill will help us find a way to 
fill in that unfunded liability.
  So the promise to maintain those benefits for people is really an 
empty promise until we make a change.
  We have an opportunity from now until 2017 to start real accounts 
with real money in them for the American public.
  I really thank the gentlewoman from Kentucky (Mrs. Northup) for 
bringing this to the attention of the American people, because they 
need to spend some time and understand this issue so that they can 
support these good proposals that are out there. I commend the 
gentlewoman for what she is doing and I thank her for allowing me to 
join her tonight.
  Mrs. NORTHUP. Well, I am so excited. I know that the gentlewoman is 
on the committee that is heading this up. It is an enormous challenge 
and you all are doing a fabulous job. As the rest of us worry about 
this and study it and provide ideas, we are so grateful that the 
gentlewoman's committee is committed to making this happen.
  Mr. Speaker, I see now that the gentleman from Texas (Mr. Hensarling) 
has joined us. It is the end of a very long day, and I am so 
appreciative that the gentleman came down, because I know that he has 
worked hard on these proposals and has been committed to them. He has 
been here with us on other evenings as we have talked about Social 
Security, and we are eager to have the gentleman join us tonight.
  Mr. HENSARLING. Mr. Speaker, I thank the gentlewoman for yielding, 
and I especially thank her for her leadership.
  Retirement security and saving Social Security is truly a critical 
issue in America. To me, this is much more than a simple congressional 
debate; this is a debate that I take very personally. Mr. Speaker, my 
parents are in their seventies. Social Security is part of their 
retirement, a very important part of their retirement security, and not 
only as a United States Congressman, but as a son, I am committed to 
ensuring that they receive every single dollar that Social Security 
says that they will receive. I have a moral obligation to my parents, 
and I know everybody in Congress feels that same obligation.
  But not only do I feel I have a moral obligation to my parents, I am 
also a father. I have a 3\1/2\-year-old daughter. I have a 22-month-old 
son. Social Security as we know it will not be there for them unless we 
act.
  I can understand how different people in this body can have different 
solutions to the problems that we are facing in Social Security, but I 
cannot believe those who would simply deny the existence of the 
problem.
  Mr. Speaker, I guess the challenge is, because too often in this town 
we are looking to the next election and we are not looking to the next 
generation. I guess there is some good news, and we are talking about 
it tonight. Social Security is still running a surplus today. That is 
good news. Those who are on Social Security, those who will soon be on 
Social Security, they are going to be in fine shape, Mr. Speaker. But 
it is those future generations, it is for everybody in America who may 
have that 3\1/2\-year-old daughter, that 22-month-old son, for whom we 
have to do something.
  Now, as much as we would like in Congress to repeal the laws of 
demographics, we simply cannot do it. We cannot deny the fact that when 
Social Security was first created, you had almost 50 workers paying 
into the system for every one person taking out of the system. Now, Mr. 
Speaker, we are down to only 3 and a third workers, 3 and a third 
workers paying into a system for every one that is taking out. Very 
soon, we are going to be down to 2 workers paying into the system for 
every one.
  Another demographic trend that we cannot outlaw, it is great for 
seniors, not too good for Social Security, is the average life span in 
America is increasing. When Social Security was first created, the 
average life span of an American was 60 years of age. I mean, their 
name was called on the roll up yonder before they ever saw one penny of 
their retirement. That is what many Americans faced. Well, thanks to 
the marvels of modern medicine, which my colleague, the gentleman from 
Georgia (Dr. Gingrey) knows a lot about, the average life span of an 
American today is 77 years of age.
  So we have more and more retirees, we have fewer and fewer workers, 
and those retirees are living longer and longer and longer, and the 
system simply cannot handle that. I mean, right now the cost of doing 
nothing is tremendous. We are looking right now at a shortfall in 
Social Security of $10.4 trillion.

[[Page H6196]]

  Now, I am not sure if anybody in America can really conceptualize or 
grasp this figure of $10.4 trillion, trillion with a T. But I did a 
little math and what that means, Mr. Speaker, is if we wanted to try to 
solve the problem of Social Security for future generations and solve 
it today, every American would have to write a check out for $34,000; a 
family of four over $125,000, to try to solve the problem today.
  Now, what happens if we do nothing? And unfortunately, many of our 
colleagues on the other side of the aisle are part of the school of 
thought that we should do nothing. Well, if you look very closely at 
what the Social Security law says today, what current law says, what it 
really says is that my children are going to face an automatic benefit 
cut of probably over a third. Now, when I go to town hall meetings in 
my congressional district back in Texas and ask how many people are on 
Social Security and maybe half of them raise their hands, I ask, how 
many of you would be willing to take a third cut of our Social Security 
benefits? Not one hand goes up. And then I ask, well, how about your 
grandchildren? Do you mind if they have their benefits cut by a third? 
Not a single hand goes up.
  Current law says, when the trust fund is exhausted, there will be an 
automatic benefit cut, and it can approach one-third. Mr. Speaker, that 
is just not fair. I mean, this is an issue of generational fairness.
  I would love for us to solve the problem of Social Security tonight. 
Every day we put it off, it is costing the American people an extra 
$200 million. We are kicking that can down the road, because too many 
people are looking at that next election and not the next generation. 
So as much as I would like to solve the problem tonight, I know perhaps 
that is not realistic.

                              {time}  2200

  But surely, Mr. Speaker, surely we can agree that the trust funds in 
Social Security ought to be dedicated to Social Security. But that is 
not the case. Forty-nine different times Congress has taken that money, 
and they spend it for something else.
  Now, sometimes they spend it for really good things. They spend it on 
Kevlar vests for our troops in Iraq. Maybe they spend it to help 
guarantee a student loan. Maybe they help a low-income person get into 
their first home.
  But more often than not, they also spend it on wheelchairs for 
Medicare that cost five times as much as those in the VA. They spend it 
on $800,000 outhouses in Iowa, and the toilet does not even flush. They 
spend it on studies of how and why college students decorate their 
dorm, and the list goes on and on and on.
  There is a spending problem in Washington, D.C., Mr. Speaker, and we 
need to make sure that the Social Security trust funds are solely 
dedicated to Social Security. And so, fortunately, a number of our 
colleagues came up with an idea.
  They call them GROW accounts, and it is a very, very simple idea. It 
says, take the remaining Social Security surpluses, and we think maybe 
we have about 12 years left before Social Security begins to go 
bankrupt. If the tidal wave of red ink only gets larger and larger and 
larger, let us at least save the surpluses we have and let us get it 
out of Washington because Washington has been taking that money and 
spending it on something else.
  Let us get it into your account, an account with your name on it, 
something that you own. And, Mr. Speaker, a lot of people in America do 
not realize that they do not own their own Social Security. Several 
Supreme Court cases have ruled you do not own your own Social Security. 
So this is a very simple idea. Surely, we in Congress can at least 
agree on this one small baby step, to try to keep the security in 
Social Security. Let us take these remaining surpluses, let us put them 
into an account that you own, that Congress cannot spend, that 
bureaucrats cannot take away. You own it, something that you can leave 
to your family. Put it in a very safe investment, put it into a T-Bill.
  Now, I do not know how anybody, Mr. Speaker, can call this a risky 
proposition, but they do. Let me tell you what is really risky. What is 
really risky is Americans leaving their retirement security here in 
Washington, D.C. when the trust fund has been raided 49 different 
times.
  Mr. Speaker, there have been 20 different tax increases on Social 
Security, 20 different tax increases. And every time that the taxes are 
increased, your rate of return goes down. And that is important because 
we are losing the security out of Social Security.
  Now, my grandparents, who are deceased, who were born about 1900, 
they got about a 12 percent rate of return on their Social Security. 
That was a great rate of return. My parents, who I alluded to earlier 
this evening, they were born in roughly 1930. They are getting about a 
4\1/2\ percent rate of return on their Social Security, and that is not 
bad. My generation, represented by those born roughly 1960, we are 
going to get about 2\1/2\ percent rate of return on our Social 
Security. That is barely keeping pace with inflation. And my children, 
my children, my 3\1/2\-year-old daughter, my 22-month-old son, Mr. 
Speaker, they are going to get a negative rate of return. They are 
going to put more money into Social Security than they take out.
  Mr. Speaker, that is not fair. That is where the risk is. The risk is 
doing nothing. The risk is leaving our Social Security here. There have 
been multiple benefit cuts in Social Security. We cannot have the trust 
fund raided. The tax increases, the benefit cuts, the declining rates 
of return, the no ownership rights. Surely we can agree on this modest 
step forward of setting up these GROW accounts so that Americans can 
count on that Social Security so the trust fund cannot be raided and we 
can have personal accounts with your name on it. And, Mr. Speaker, that 
would be one positive step that we could take in this body to help save 
Social Security for future generations.
  Mrs. NORTHUP. I thank the gentleman from Texas (Mr. Hensarling), who 
is a good friend. I also thank the gentleman from Georgia (Mr. Gingrey) 
and the other Members that joined us tonight to talk about this very, 
very important issue.
  You talk so much about the different generations. It is amazing how 
many people that are concerned about Social Security solvency think 
about this in terms of all the different generations. I often picture 
the generations sort of lined up, my mom and dad, my dad passed this 
year, but my mom. She is 82, and she is sort of up at the front of the 
line. And then you get back, as people age, and I am 57 and so I am 
back still on this side of the line of retirement, eight steps away 
from retirement. My children in their 30s and 20s are further behind me 
in the line.
  And the way Social Security works is everybody in the back of the 
line, before they get to retirement, helps pay the retirement for those 
at the front of the line. The problem is the line in the back is 
getting shorter as the line in the front is getting longer. What GROW 
accounts do is allow younger workers in a sense to throw over the line 
some savings that will be there when they get there. It saves the 
people behind them in the line from having to fully fund their 
retirement, and it gives them the confidence that there will be a 
retirement savings for them.
  It begins to change from of a pay-as-you-go system to a long-term 
funded solvent system that will take care of Americans today, Americans 
tomorrow, and Americans in the future, so that our whole country will 
be solvent and able to address the emerging challenges that are bound 
to emerge with each generation. It is the right thing to do. It is the 
fair thing to do. It is a good idea for a transition to go through the 
GROW accounts so that we can set up a system that helps us transform 
Social Security from a pay-as-you-go to an invested solvent system.
  I would like to thank my friends and colleagues who joined us late 
tonight to discuss this important issue. I look forward to working with 
you, and I know you do also with all the Members the Congress so that 
we can serve the American people in a responsible way.
  Mrs. NORTHUP. Mr. Speaker, I yield back the balance of my time.

                          ____________________