[Congressional Record (Bound Edition), Volume 145 (1999), Part 3]
[Senate]
[Pages 4393-4394]
[From the U.S. Government Publishing Office, www.gpo.gov]




                  SOCIAL SECURITY FOR THE 21ST CENTURY

  Mr. BUNNING. Mr. President, I rise today to make my maiden speech on 
the floor of the Senate. It is about a subject near and dear to me, 
protecting and strengthening Social Security for this generation and 
the next.
  In the other body, I served on the Social Security Subcommittee for 8 
years. Over the last 4 years, I had the privilege of being the 
chairman. It was the most satisfying task I have had since coming to 
the Congress. In the subcommittee, we held numerous hearings over the 
past several years on Social Security reform and how to tackle the 
looming problem that will be facing us in the next century.
  I have already introduced my own personal Social Security reform 
bill. It is called The Social Security for the 21st Century Act. 
Basically, Social Security reform is a two-sided coin. The first side 
of the coin is that we must guarantee the benefits that have been 
promised our older workers, workers who have paid into the program for 
years. We must assure them that their investment is safe and their 
benefits will always be there when they are needed.
  The second side of the coin is that we have to find a way to give 
younger workers a reason to believe in the program, a reason to believe 
that they will get a reasonable rate of return on the money they invest 
in Social Security taxes throughout their working careers.
  My bill focuses primarily on the second side of the coin. It gives 
taxpayers a one-time, voluntary option to set aside a small portion of 
their income that they have to pay into FICA taxes, and to invest this 
money in their own retirement security account.
  The Social Security for the 21st Century Act enables them to begin by 
investing just 2.5 percent of their FICA taxes each year, and slowly 
increasing this amount by 2.5 percent annually over 20 years until 
eventually taxpayers can invest one-half of all of their FICA taxes in 
their own personal retirement security account. In return for choosing 
to set up a retirement security account, a taxpayer would agree to a 
50-percent reduction in Social Security benefits.
  The most important point about my bill is that it is voluntary, not 
mandatory. It gives people a choice, and it does not force them to do 
anything they do not want to do. If they are satisfied with what they 
have now, they can keep their benefits simply by doing nothing. But, if 
taxpayer-investors elect to set up a retirement security account, they 
would be able to manage their investment just like the Government 
workers do today in the successful Federal employee Thrift Savings 
Plan. Investors would have the additional choice to stop investing, but 
they could not do it again later on. They couldn't choose to come back.
  They would have at least five options for investing their money. They 
could elect to put their money into a number of investments: stocks, 
fixed income, Government securities--whatever best meets their needs. 
There would be an annual open season so they could adjust their 
portfolios. In short, this would give Americans more control over their 
futures, and enable them to harness the power of markets and the 
miracle of compound interest.
  Now, I know that many Americans, especially older taxpayers, might 
not want to make any changes at all to Social Security. We should 
respect that. They have been promised their benefits for years and they 
have relied on that in good faith. That is the second side of the coin. 
To protect these folks, and our most vulnerable citizens, my 
legislation guarantees the Social Security safety net. It does not 
raise the retirement age, it does not cut benefits, and it does not cut 
COLAs.
  But I think that many workers, if given a choice, would opt to set 
aside some of their money and invest it in a

[[Page 4394]]

retirement security account. Based on our experience with the Thrift 
Savings Plan, I think it would be a significant step towards stronger 
financial security for all Americans.
  The TSP has been a great success for Federal workers. Over the past 
10 years, the three investment choices available to workers in the TSP 
have average annual rates of return of 17.5 percent, 8.5 percent, and 
7.6 percent.
  That means the worst performing of these three funds, the G fund, 
which invests strictly in Government securities, has returned over 7 
percent annually to investors. That compares very, very well to the 2 
to 3 percent annual return that most Americans get for their money that 
they pay into Social Security. Compounded over decades, the differences 
in the rates of return are staggering.
  Under my bill, taxpayers will own their own retirement secured 
accounts, and they, not the Federal Government, can control how their 
money is invested. My legislation follows the scrupulous conflict of 
interest rules that have worked well for the TSP to make sure that 
Government cannot vote shares of stock or manipulate markets. Best of 
all, withdrawals from this retirement secured account will be tax free, 
because we should not need to penalize Americans who successfully plan 
for their retirement.
  Congress has wisely moved in recent years to help retirees keep more 
of their own money. Social Security reform must continue that trend. I 
believe Social Security reform must be voluntary. It should give 
taxpayers more, not fewer, investment choices, and it must protect the 
most vulnerable Americans who are counting on these benefits. It is 
important to bring as many ideas to the table as possible as part of a 
national dialogue about Social Security reform. These are the 
principles I have tried to follow in writing this bill, and I will work 
with anyone on my legislation and on any other proposals to improve the 
Social Security system.
  Mr. President, we have a golden window of opportunity now to reform 
Social Security. Our economy is the strongest it has been in decades. 
We have a budget surplus to give us some flexibility in making 
difficult decisions. Now we have to find the political will. It is a 
challenge we must meet.
  I yield the floor.
  The PRESIDING OFFICER. The Senator from Nevada.
  Mr. REID. Mr. President, on behalf of Senator Durbin, I yield myself 
such time as I may consume.
  The PRESIDING OFFICER. Without objection, it is so ordered.

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