[Congressional Record Volume 159, Number 57 (Wednesday, April 24, 2013)]
[Senate]
[Pages S2967-S2970]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]


SENATE CONCURRENT RESOLUTION 15--EXPRESSING THE SENSE OF CONGRESS THAT 
 THE CHAINED CONSUMER PRICE INDEX SHOULD NOT BE USED TO CALCULATE COST-
 OF-LIVING ADJUSTMENTS FOR SOCIAL SECURITY OR VETERANS BENEFITS, OR TO 
      INCREASE THE TAX BURDEN ON LOW- AND MIDDLE-INCOME TAXPAYERS

  Mr. HARKIN (for himself, Mr. Whitehouse, Mr. Sanders, Ms. Warren, Ms. 
Mikulski, Mr. Brown, Mr. Lautenberg, Mr. Franken, Mrs. Gillibrand, Ms. 
Hirono, Mrs. Hagan, Mr. Schatz, Mr. Merkley, Mr. Reed of Rhode Island, 
and Mr. Begich) submitted the following concurrent resolution; which 
was referred to the Committee on Finance:

                            S. Con. Res. 15

       Whereas the Social Security program was established more 
     than 77 years before the date of agreement to this resolution 
     and has provided economic security to generations of 
     Americans through benefits earned based on contributions made 
     over the lifetime of the worker;
       Whereas the Social Security program continues to provide 
     modest benefits, averaging approximately $1,156 per month, to 
     more than 57,000,000 individuals, including 37,000,000 
     retired workers in March 2013;
       Whereas the Social Security program has no borrowing 
     authority, has accumulated assets of $2,700,000,000,000, and, 
     therefore, does not contribute to the Federal budget deficit;
       Whereas the Board of Trustees of the Federal Old-Age and 
     Survivors Insurance Trust Fund projects that the Trust Fund 
     can pay full benefits through 2032;
       Whereas the Social Security program is designed to ensure 
     that benefits keep pace with inflation through cost-of-living 
     adjustments (referred to in this preamble as ``COLAs'') that 
     are based upon the measured changes in prices of goods and 
     services purchased by consumers that is currently published 
     by the Bureau of Labor Statistics as the Consumer Price Index 
     for Urban Wage Earners and Clerical Workers (CPI-W);
       Whereas the Bureau of Labor Statistics publishes a 
     supplemental measure of inflation, the Chained Consumer Price 
     Index for all Urban Consumers (C-CPI-U), or ``Chained CPI'', 
     which adjusts for projected changes in consumer behavior 
     resulting from price fluctuations known as the ``substitution 
     effect'';
       Whereas the substitution effect occurs when consumers buy 
     more goods and services with prices that are rising slower 
     than average and fewer goods and services with prices that 
     are rising faster than average;
       Whereas studies indicate that typical Social Security 
     beneficiaries spend a significantly higher percentage of 
     their budget than other consumers on health care, health care 
     prices have increased at higher than average rates, and 
     consumers, including seniors, may not be able to substitute 
     health care easily;
       Whereas the current COLAs, based on the CPI-W, fail to 
     reflect that Social Security beneficiaries spend more of 
     their income proportionally on expenses such as health care 
     as compared to a regular wage earner, and therefore 
     underestimate increases in the cost of living of Social 
     Security beneficiaries;
       Whereas the Congressional Budget Office has estimated that 
     using the Chained CPI to calculate Social Security COLAs 
     would reduce Social Security benefits by 0.25 percent per 
     year, resulting in a reduction in outlays of $127,000,000,000 
     over the first decade;
       Whereas reductions in Social Security benefits from using 
     the Chained CPI to calculate Social Security COLAs would 
     continue to compound over time, and the AARP Public Policy 
     Institute estimates that the reductions would grow to 3 
     percent after 10 years and 8.5 percent after 30 years;
       Whereas Social Security Works estimates that using the 
     Chained CPI to calculate Social Security COLAs would reduce 
     annual Social Security benefits of the average earner by $658 
     at age 75, $1,147 at age 85, and $1,622 at age 95;
       Whereas reductions in Social Security benefits would harm 
     some of the most vulnerable populations in the United States;
       Whereas adopting the Chained CPI would cause tax brackets 
     and the standard deduction to rise more slowly, 
     disproportionately raising the tax burden on low- and middle-
     income taxpayers;
  Mr. HARKIN. Mr. President, I come to the floor today along with my 
colleague from Vermont to introduce a concurrent resolution expressing 
the sense of Congress that the so-called chained CPI should not be used 
for the purpose of calculating Social Security benefits or benefits for 
disabled veterans.
  As we work to reduce the deficit in a balanced and responsible 
manner, many have discussed changing the measure of inflation used to 
calculate the cost-of-living allowances to a measure of inflation 
called the chained CPI.
  Now, some claim that the chained CPI is a more accurate measure of 
inflation because it takes into account the fact that consumers may 
change their spending behavior and substitute items with lower priced 
increases for items with higher priced increases. As a result of this 
feature, the chained CPI results in a lower measure of inflation.
  All of this may seem very technical, but the impact of requiring 
Social Security or veterans disability COLAS--cost-of-living 
adjustments--to be based on the chained CPI is anything but technical. 
It will have real and negative impacts on our seniors and those who 
become disabled as a result of service in the Armed Forces. In fact, 
the most adversely impacted would be the oldest and the poorest. I do 
not think anything could be more unfair or inappropriate or 
unnecessary.
  As this first chart shows, the chained CPI is a real cut in Social 
Security benefits. According to Social Security Works, this policy 
would reduce annual Social Security benefits for the average worker at 
age 75 by $658 a year, by age 85 by $1,147 a year, and by age 95 by 
$1,622 a year. Over on this side of the chart we see the cumulative 
cut; in other words, what would happen over the years. From age 65 to 
75 people would lose about $4,600, by age 85 they would lose $13,900, 
and by age 95 they would lose $28,000.
  I think a couple things this chart shows is that people are penalized 
for living longer--the longer they live, the more they are penalized.
  Now, one might say: Well, $658 a year by the time you are age 75, 
that does not sound like a lot. Yes, not to some of us, not to us with 
our incomes. Look at the kind of retirement programs we have. If you 
are in the upper quintile, of course, that does not seem like much. 
But, again, if we look at a second chart I have, we will see who really 
kind of gets hurt, and it is the poorer you are.
  Let's put it this way: Let's say you are 65, and your total income is 
less than $12,554 a year. That puts you below the poverty line. The 
total amount of your income that comes from Social Security is 84.3 
percent. Well, you might think, if you are making less than that, 
wouldn't all your money come from Social Security? Well, the answer is 
yes, but--and I question people about this--if you are making that 
little amount of money, and you are over 65, you are probably working 
at some part-time job. Maybe you are baby-sitting, maybe you are 
cleaning houses, maybe you are a greeter at a store. You are probably 
doing something to add to your income, but it would only amount to 
about 16 percent. Most of it comes from Social Security.
  We can see from this chart, even after you get up to $20,000 a year, 
it is about the same. About 84 percent of your money comes from Social 
Security. So if you take a cut in Social Security, and you are lower 
income, that is where you get whacked the most.
  Of course, when you get up here to the fifth quintile, you are making 
more than $57,957 a year. Only 17 percent of your income comes from 
Social Security. So you say, well, if you took $600-some a year from 
that, yes, you can probably afford it. But even if you look at up to 
$57,000 a year in the fourth quintile, almost half--43.5 percent--of 
your total income comes from Social Security. So even if you are making 
$30,000, $35,000 a year, after age 65 half of your income comes from 
Social Security.
  So, again, when you start making these kinds of cuts in the chained 
CPI, you might say: Well, it is only $658 a year. For someone in the 
lower quintiles, that is like a month's worth of food, perhaps 6 weeks' 
worth of food. Tell me that does not have an effect. Of course it has 
an effect.
  If you are in the upper income, you probably do not have that much to 
worry about. That is why the pernicious effect of chained CPI is that 
the longer you live, the more you are penalized; and the lower your 
income, the bigger whack you are taking out of your total income. So, 
again, as people get older, they are more likely to have depleted all 
their sources of retirement income, assuming they have any to begin 
with.
  So a couple of facts I think are pertinent: First, today only one in 
five Americans has a defined benefit pension that will last until the 
day they die--one in five. When I first came to Congress it was one in 
two. One out of every two Americans had a defined

[[Page S2968]]

benefit pension that would last them until the day they died. Now it is 
one in five, and it is getting less all the time.
  Second--and this startles a lot of people--50 percent of the American 
populace have less than $10,000 in savings--less than $10,000. One out 
of every two Americans has less than $10,000 in savings. Well, you can 
see, if you have that when you retire, that is going to be gone pretty 
soon, so then you are going to rely, again, strictly on Social 
Security.
  So when you put those two facts together--four out of five have no 
pension, and half have less than $10,000 in savings--then you see that 
soon after you retire, the only thing you have left is Social Security.
  So it is already hard enough now for millions of people hoping to 
retire, but then you put chained CPI in there, and you really are 
hitting the oldest and the poorest.
  So, again, I know people are saying: Well, we have to do something to 
save Social Security for those in the future. Well, I agree with that. 
That is why whenever I see an honest assessment of Social Security for 
the future, an honest assessment that says Social Security cannot 
continue to exist as it is, well, I agree with that--as it is. But then 
there are two approaches. Do you whack the benefits or do you increase 
the revenues that come into Social Security?
  Two different approaches. You do not have to cut the benefits. In 
fact, I would say that by talking about chained CPI, the signal you are 
sending to the younger generation is: Well, maybe when you get there we 
will whack it some more.
  A lot of young people are saying, I do not know if Social Security is 
going to be there for me when I get that age. When they hear people 
talking about chained CPI and cutting this, they are right to be 
worried whether we are going to keep our promise to this next 
generation that we will have a Social Security system they can rely on 
and count on.
  So what is to be done? Well, last year I introduced legislation that 
would basically extend the life of the Social Security trust fund to 
2050 and give a $65-a-month increase to every Social Security 
recipient, and yet extend the life of it for over 18 more years.
  How do we do that? Very simply. We raise the wage cap for people who 
pay into Social Security from $113,000 a year, which it is now. Over 10 
years we raise it and do away with it after 10 years.
  There is another approach too. The National Academy of Social 
Insurance, NASI, did a poll earlier this year. They asked: Would you be 
willing to go from 6.2 percent paying into Social Security to 7.2 
percent, a 1-percent increase over 20 years, if that would help secure 
Social Security? Seventy percent of Republicans and Democrats said yes. 
Over 20 years, a 1-percent increase, that is nothing.
  But if you were to take that and raise the wage cap, you could 
increase Social Security payments by $65 a month and secure Social 
Security for up to 75 years. It seems to me if you want to send a 
message to the young people about the sanctity and stability of Social 
Security, you would say that rather than we are going to cut, we are 
going to have this so-called chained CPI.
  As I said, I know it sounds technical. But it is not technical at 
all. I once likened chained CPI to an anchor chain. If you are standing 
on the boat and the anchor chain gets around your ankle and someone 
throws the anchor overboard, where are you going? You are going down. 
That is what chained CPI does. The older you get, the more you get hit 
on. The poorer you are, the more you get hit.
  So, again, this idea that we have got to somehow cut benefits, have 
this chained CPI in order to save Social Security is wrong. It is 
wrong. There are other ways of doing it that would be widely, broadly 
supported by the American people. Go out and ask any group, ask any 
group of seniors, do you think we ought to raise the wage cap so 
someone who is making $500,000 a year pays in at the same rate as 
someone who is making $50,000 a year? Well, of course. That is not the 
case now. You make $50,000 a year, you pay into Social Security on 
every dime you make. If you make $500,000 a year, you are only paying 
in on the first about 20 cents of every dollar you make. After that you 
do not pay into Social Security.
  I think the average American would say, that is not fair. What is 
good for someone making $100,000 a year ought to be the same for 
someone making $1 million a year. So there are other ways of securing 
Social Security. This chained CPI sends the wrong message to young 
people. It exacerbates the concern young people have, is Social 
Security going to be there when I retire?
  I always tell them: Do you believe the U.S. Government will exist 
when you retire? They say: Well, yes. I say: If that is the case, 
Social Security will be there, because it is backed by the full faith 
and credit of the U.S. Government.
  What are we supposed to do? Are we supposed to cut that full faith 
and credit, and tell the young people, it will be there but we may take 
cuts here and there may be cuts there? What is a young person to think? 
Am I going to have what I think I am going to be able to have and count 
on Social Security?
  This is a trust. My friend from Vermont is always talking about this 
is a trust fund. It is a trust. It does not add to the deficit. Think 
about the word trust. Social Security trust fund. You have got to be 
able to trust it. Young people need to be able to trust it, that it 
will be there for them. The best way to undermine that is to go to this 
chained CPI.
  With that, I yield to my good friend who knows this issue better than 
just about anybody I know and who has fought so hard on behalf of 
Social Security and keeping that trust fund and keeping the trust in 
Social Security.
  I yield the floor to Senator Sanders.
  The PRESIDING OFFICER. The Senator from Vermont.
  Mr. SANDERS. I want to thank my colleague Senator Harkin not only for 
his fight for seniors and disabled vets on this issue but for his long 
career in fighting for those people who often do not have a voice here 
in Washington. The time has come for the Senate to send a very loud and 
clear message to the American people. It is the message Senator Harkin 
has just articulated, that is, we are not going to balance the budget 
on the backs of the elderly, on the backs of disabled veterans, on the 
backs of those people who are already, in the midst of this terrible 
recession, hurting so much.
  As chairman of the Senate Veterans Affairs Committee, let me make it 
very clear that I will do everything I can to make sure we are not 
balancing the budget on the backs of disabled veterans, men and women 
who have lost their arms, their legs, and their eyesight defending this 
country. That is morally unacceptable.
  The chained CPI--and this is an important point to make. Sometimes 
you hear the crescendo inside the beltway, and all of the lobbyists 
talking: This is the right way to go. But as Senator Harkin mentioned, 
go across America, from Iowa to Vermont, California to Maine, the 
American people are saying in poll after poll: No, do not cut Social 
Security. Do not cut benefits for disabled vets.
  The organizations that represent tens of millions of people are 
saying the same thing. The American Legion, the Veterans of Foreign 
Wars, the Disabled American Veterans, the Iraq and Afghanistan Veterans 
of America, the Gold Star Wives, the Disabled American Veterans, they 
are on record--and I have submitted their testimony into the 
Congressional Record--they are in opposition to this chained CPI.
  But it is not just veterans organizations. The chained CPI is opposed 
by every major senior citizens group in this country--the AARP, the 
National Committee to Preserve Social Security and Medicare, the 
Alliance of Retired Americans, and other groups. The chained CPI is 
opposed by every major trade union in America, including the AFL-CIO. 
The chained CPI is opposed by every major disability group in the 
country. It is opposed by the National Organization for Women because 
they understand that cutting Social Security impacts women more than it 
does men.
  Maybe once in a while the Senate might want to listen to ordinary 
Americans, people who do not have well-paid lobbyists, people who do 
not own the local newspapers, and do what is right for the American 
people. There are

[[Page S2969]]

some who believe that lowering cost-of-living adjustments, COLAs, 
through the adoption of a so-called chained CPI would be a minor tweak 
in benefits, hardly worth discussing.
  But let's be clear. For millions of disabled veterans and seniors 
living on fixed incomes, the chained CPI is not a minor tweak. It is a 
significant benefit cut that will make it harder for permanently 
disabled veterans and the elderly to feed their families, heat their 
homes, pay for their prescription drugs, and make ends meet. This 
misguided proposal must be vigorously opposed.
  What I find truly disturbing is that folks such as Treasury Secretary 
Jack Lew and my Republican colleagues who refer to the chained CPI as 
``a more accurate measure of inflation.'' That is their argument.
  Senator Harkin, when I speak to seniors in Vermont and I tell them 
there are some people in Washington who think the current COLAs are too 
generous, do you know what invariably happens? They start laughing. 
They should laugh. Two out of the last 4 years they got zero. I think 
the last COLA was 1.7 percent. There are some in Washington who think 
that is too generous.
  I ask unanimous consent to have printed in the Record a statement 
from 250 Ph.D. economists and 50 social insurance experts who wrote:

       No empirical basis for reducing the Social Security COLA.

  No empirical basis.
  There being no objection, the material was ordered to be printed in 
the Record, as follows:

Economist and Social Insurance Expert Statement on Social Security COLA


        No empirical basis for reducing the Social Security COLA

       November 20, 2012--250 Ph.D. economists and more than 50 
     social insurance experts with doctorates in related fields 
     oppose proposals to reduce the Social Security cost-of-living 
     adjustment by tying it to an index (the chained CPI-U) that 
     does not reflect the spending patterns of beneficiaries.
       As economists and social insurance experts, we agree that 
     the annual Social Security cost-of-living adjustment (COLA) 
     should be based on the most accurate measure possible of the 
     impact of inflation on beneficiaries. For this reason, we 
     oppose proposals to reduce the Social Security COLA by tying 
     it to a chained consumer price index that does not directly 
     measure the actual expenditures of beneficiaries. Such a move 
     would lower the COLA by an estimated 0.3 percentage points 
     per year, translating into a 3 percent benefit cut after 10 
     years and a 6 percent cut after 20 years. The oldest 
     beneficiaries, who are often the poorest beneficiaries, and 
     persons receiving disability benefits for more than 20 years 
     would see even larger cuts over time.
       Arguments in favor of reducing the COLA are premised on the 
     assumption that the current COLA overcorrects for inflation. 
     However, it is just as likely that the current COLA fails to 
     keep up with rising costs confronting elderly and disabled 
     beneficiaries. For historical reasons, the current COLA is 
     based on a consumer price index for workers, excluding 
     retirees and other Social Security recipients who are not in 
     the labor force. It and other indices based on the spending 
     patterns of workers or the general population likely 
     understate the impact of cost increases faced by Social 
     Security beneficiaries because seniors and disabled people 
     spend a greater share of their incomes on out-of-pocket 
     medical expenses than do other consumers, and health costs 
     have risen faster than overall inflation in recent decades.
       A chained price index is supposed to more fully reflect the 
     ability of consumers to substitute cheaper goods and services 
     in response to price changes. Whether or not such 
     substitution preserves consumers' standards of living, 
     different consumers have varying ability to make such 
     adjustments. Since elderly and disabled people spend a 
     greater share of their incomes on necessities such as health 
     care, rent, and utilities, and since this population is also 
     less mobile, a chained COLA based on the spending patterns of 
     workers or the general population may overestimate the 
     ability of Social Security beneficiaries to take advantage of 
     cheaper substitutes.
       The actual spending patterns of Social Security 
     beneficiaries have not been comprehensively studied. However, 
     an experimental index computed by the Bureau of Labor 
     Statistics suggests that the current COLA may not keep up 
     with seniors' costs of living. Until direct evidence is 
     gathered, there is no empirical basis for reducing the Social 
     Security COLA, which could exacerbate, rather than correct, 
     an existing problem.

  MR. SANDERS. This is what these 250 economists write:
  As economists and social insurance experts, we agree that the annual 
Social Security cost of living adjustment should be based on the most 
accurate measure possible of the impact of inflation on beneficiaries. 
For this reason, we oppose proposals to reduce the Social Security COLA 
by tying it to a chained consumer price index. Arguments in favor of 
reducing the COLA are premised on the assumption that current COLA 
overcorrects for inflation. However, it is just as likely that the 
current COLA fails to keep up with rising costs confronting elderly and 
disabled beneficiaries.
  The reason for that is pretty clear. If you are a senior citizen or 
disabled vet, the likelihood is you are not buying iPads or flat-screen 
TVs or other types of things such as that. What are you buying? You are 
buying health care, you are buying prescription drugs, you are trying 
to heat your home. For seniors' purchasing habits, in many ways 
inflation has been higher, not lower, than general inflation. Senator 
Harkin made reference to this.
  Let's be very clear. There are millions and millions of seniors who 
are economically struggling, struggling to keep their heads above water 
to buy the prescription drugs they need, to pay for the health care 
costs they need, to keep their homes warm in States such as Vermont or 
Iowa in the winter.
  Nearly one-quarter of seniors depend on Social Security benefits for 
100 percent of their income. Two-thirds depend on Social Security for a 
majority of their income. We are talking, and I hear from the White 
House and elsewhere, they are going to protect the poorest of the poor. 
Well, to my mind, when someone in Vermont is trying to get by on 
$15,000 a year, that person needs protection. Anyone who thinks that is 
a lot of money clearly does not have any sense of what is going on in 
the real world.
  According to the Social Security Administration, under the 
administration's chained CPI proposal, average 65-year-old retirees 
would lose $658 a year in Social Security benefits by their 75th 
birthday, a cumulative loss of over $4,500. Once again, I understand 
that people here go for lunch, take a few friends out, you can spend 
$600. But for senior citizens struggling on $14,000 or $15,000 a year, 
$658 dollars is a lot of money and means the loss, if you do not have 
that money, of a very basic need.
  For veterans, if we go in the route of the chained CPI, disability 
benefits for veterans at age 30, they would have their benefits reduced 
by $1,425 a year; at age 45, $2,300 a year; at age 55, $3,200 a year; 
at age 65, benefits for surviving spouses, the wives who lost their 
husbands in Iraq and Afghanistan, and their kids would also be cut.
  I think as a Senate, as a Congress, we should take a deep, deep 
breath, if we think we should be balancing the budget on those people 
who have already given so much to this country.
  Let me conclude by again making the point Senator Harkin so ably 
made. Many of us want to make sure Social Security is strong not just 
for the next 20 years in which it can pay out all benefits but for the 
next 75 years. The way to do that is not to cut benefits; the way to do 
that is exactly as Senator Harkin and I and many other people have 
suggested--that is, understanding that there is something absurd when 
somebody who makes $5 million a year contributes the same exact amount 
of money into the Social Security trust fund as somebody who makes 
$113,000 a year.
  There are different ways to approach that issue, but by lifting the 
cap--and do it one way or the other--we can make Social Security 
solvent for the next 75 years for our kids and for our grandchildren.
  The last point--and Senator Harkin has been a leader on this issue--
pointing out about how many Americans have lost their pensions. We are 
probably in worse shape than at any time in modern history for the 
average person to go into retirement. Social Security is and has been 
the pillar for those people. They have lost their pensions, and their 
401(k)s have also been troubled. Social Security has been there for the 
last 75-plus years in good times and bad times. It paid out every 
nickel owed to every eligible American.
  People are nervous about their retirements. Let's stand united and 
say we are not going to cut Social Security benefits for seniors or 
disabled vets. There are other ways to go forward and make sure Social 
Security is strong for the next 75 years.

[[Page S2970]]

  I yield to the Senator from Iowa.
  Mr. HARKIN. Would the Senator yield for a question?
  First of all, I thank my colleague from Vermont for being a strong 
voice on this issue and on so many issues that affect the elderly and 
especially our veterans. The Senator is the chair of that committee.
  I am always curious as to why it is that so many of the dark suits 
here in Washington are always after Social Security. I don't say there 
is some ill spirit there, although I will say I think the Senator might 
agree that there are some who would like to privatize Social Security. 
We know that. They have said that in the past--or partially privatize 
it.
  It seems to me that so many people who get involved in this think it 
is just a little nick.
  I saw a cartoon of a barber cutting somebody's hair. They had this 
huge ball of hair, and they were snipping just a couple of little hairs 
off and saying: That is all we are doing with chained CPI.
  They think it is such a small thing. It always occurred to me that 
those people making the decisions, the dark suits, those are all people 
who probably have good pensions, good retirement systems. They are 
never going to want for anything. Yet somehow they just think, well, 
$658 bucks--that is not a big deal, up to 75. But, as the Senator 
pointed out, $658 in 1 year to someone whose income is $15,000--that 
could be a month's worth of food, 6 weeks' worth of food.
  Mr. SANDERS. That is right.
  Mr. HARKIN. That is a big whack. I would ask the Senator, again, if 
he has any thoughts----
  Mr. SANDERS. I do.
  Mr. HARKIN. On why is it that we can't listen to people and come up 
with another approach on this rather than this chained CPI?
  Mr. SANDERS. That is a very important question, and let me answer it 
in several ways. First thought: let's be clear, we have some colleagues 
in the House and Senate who believe not just that you should privatize 
Social Security, not just that you should cut Social Security, they 
believe the concept of government assistance in terms of retirement or 
government programs in terms of health care, they believe they are 
unconstitutional. They don't believe the government should be there. If 
you are elderly and you have no health care, sorry, you are on your 
own. That is No. 1.
  There is a philosophical belief on the part of some that what 
government does should be very limited and that we should not be there 
to make sure that when the elderly people reach retirement age, they 
have security.
  The second point is about the consistently--and this has gone on for 
years--the long-term opposition to Social Security. Does the Senator 
know what it is about? It is because Social Security has worked so 
well. If you hold the belief that the government is terrible, the 
government is awful, and the government can't do anything, and if there 
is a program that for 77 years has paid every nickel owed to every 
eligible American, has very modest administrative costs, and is very 
popular among the American people, and you don't believe in government, 
that is a bad thing. They have to start cutting it and doing away with 
it.
  The third point I would make--again, no secret here--is that we have 
a significant deficit, and we have choices to make as to how we deal 
with the deficit.
  When we lose $100 billion every single year because corporations 
stash their money in the Cayman Islands and in other tax havens, maybe 
we might want to ask them to start paying their fair share of taxes 
rather than cutting Social Security. But we have colleagues who are 
much more interested in the well-being and the profits of large 
corporations than they are in the needs of seniors.
  Those are some of my answers.
  Mr. HARKIN. I have a couple of thoughts. I would say to my friend 
from Vermont, to those who say it is unconstitutional to do those 
things, I wonder if they ever read the preamble to the Constitution, 
which is, by the way, part of the Constitution of the United States?

       We the People of the United States, in Order to form a more 
     perfect Union, establish Justice, insure domestic 
     Tranquility, provide for the common defence, promote the 
     general Welfare.

  That is part of the Constitution of the United States.
  Mr. SANDERS. Of course.
  Mr. HARKIN. How we do that obviously can vary from time to time, 
generation to generation, but the idea that we are here to promote the 
general welfare as a Federal Government is clearly in the Constitution 
of the United States.
  Secondly, the Senator pointed out the idea that Social Security--that 
this is really a trust fund. People pay into it, and they take out. 
Now, it has had its problems.
  But I ask the Senator, if unemployment today were down to less than 5 
percent--say, 4 percent--what would the Social Security trust fund look 
like?
  Mr. SANDERS. It would be much larger than it is right now because 
more people would be paying into it.
  Mr. HARKIN. So the 2033 date--if we make no changes, they say Social 
Security will pay 100 percent out up until 2033. But if, in fact, we 
reduce unemployment to less than 5 percent, the Trust Fund will be able 
to pay full benefits for a longer period of time.
  Mr. SANDERS. That is right. I think the point has to be made--and I 
see Senator Durbin on the floor as well, and he has made this point--
that we can argue about how we go forward on Social Security, but we 
should be clear: Social Security hasn't contributed a nickel to the 
deficit because it is funded by the independent payroll tax.
  So it is a reasonable question as to how we make Social Security 
solvent for 75 years rather than just the next 20 years. That is a good 
debate. The Senator and I have similar ideas on how we should tackle 
that issue. But it should not be considered as part of the deficit 
reduction effort. And it disturbs me very much because the 
administration has acknowledged that reality and we have heard them 
over the years say: Yes, we want to deal with Social Security but not 
part of deficit reduction. It bothers me that they have now injected 
Social Security into the deficit reduction debate.
  Mr. HARKIN. There is one last thing I would say. The Senator 
mentioned that we have a deficit. We do. We have to address it. We all 
agree with that. The Senator pointed out that the offshore haven 
businesses are not paying their fair share of taxes.
  I would like to ask Senator Sanders one other question. Isn't it a 
fact--well, the estimates vary; $1 trillion is not stretching the 
truth--to say that the war in Iraq cost us somewhere close to $1 
trillion?
  Mr. SANDERS. I would say that most estimates suggest that. If you 
look at both Iraq and Afghanistan, it may be three times that number.
  Mr. HARKIN. I don't know, but I have seen estimates up to $1 trillion 
for Iraq only. That was all borrowed money, so that has to be paid 
back.
  Mr. SANDERS. Yes.
  Mr. HARKIN. So are we going to make the elderly, the poor, the 
students, and the veterans pay for that?
  Mr. SANDERS. I would say the Senator makes a very good point. And I 
often point out to my Republican friends that I think you are looking 
at yourself and me as some of the major deficit hawks.
  Our friends today who want to cut Social Security in the name of 
deficit reduction apparently didn't have a problem with the deficit 
when they went to war in Iraq and Afghanistan without paying for those 
wars and when they gave huge tax breaks to the wealthiest people in 
this country without offsetting those tax breaks.
  The Senator's point is very well taken.
  Mr. HARKIN. I thank the Senator.
  Mr. SANDERS. I yield the floor.

                          ____________________