[Congressional Record (Bound Edition), Volume 145 (1999), Part 5]
[House]
[Pages 6936-6937]
[From the U.S. Government Publishing Office, www.gpo.gov]




                       SOCIAL SECURITY DEBT LIMIT

  The SPEAKER pro tempore. Under the Speaker's announced policy of 
January 19, 1999, the gentleman from Michigan (Mr. Smith) is recognized

[[Page 6937]]

during morning hour debates for 5 minutes.
  Mr. SMITH of Michigan. Mr. Speaker, there is good news in terms of 
this Congress, this President, acknowledging that we must solve the 
Social Security problem.
  Social Security was started back in 1935 with the anticipation that 
there would be a continuing growth in the labor force. What has 
happened with this pay-as-you-go program where existing workers are 
paying in their Social Security taxes, and that tax is immediately sent 
out to existing retirees, is the demographic changes. The number of 
individuals working and paying in that tax in relation to the 
increasing number of retirees is creating a situation where Social 
Security is becoming insolvent. It cannot be sustained.
  Let me just give a couple of examples. In 1940 we had 41 individual 
workers paying in their tax for every one retiree. By 1950, it went 
down to 17 workers paying in their Social Security tax for every one 
retiree. Guess what it is today. Today there are three workers paying 
in their Social Security tax to pay the benefits for every one retiree.
  The estimate is that by the year 2030 there will only be two people 
working. So we can see a huge problem in continuing to ask the fewer 
and fewer number of workers to pay in a higher and higher tax to 
accommodate every retiree. Taxes have already significantly increased 
over the last several years.
  Since 1971, Social Security taxes have been increased 36 times. More 
often than once a year, we have increased the rate of the base for 
Social Security taxes to accommodate the increased requirement to pay 
benefits for existing retirees from a fewer number of workers.
  So the question that we are now faced with is how do we change the 
Social Security system to keep it solvent? How do we either increase 
revenues coming into the system or reduce benefits so that the Social 
Security system can last for tomorrow's retirees and not put a huge 
burden on future generations to pay more and more taxes for Social 
Security?
  I think the President suggesting that we have to put Social Security 
first has increased the awareness that something has to be done. In the 
next several days and weeks, I will be introducing my Social Security 
bill. It will be the third Social Security bill I have introduced that 
will keep Social Security solvent. Other Members, such as the gentleman 
from Arizona (Mr. Kolbe) and the gentleman from Texas (Mr. Stenholm), 
will be introducing the bill that they worked up to keep Social 
Security solvent. Some are suggesting only temporary solutions.
  I see problems in temporary solutions. I see even greater problems in 
solutions such as those proposed by some Democrats, the President, that 
have suggested that we simply add a new giant IOU to the Social 
Security Trust Fund and therefore somehow it is calculated that that is 
going to keep Social Security solvent without any changes in the 
program. It cannot happen. It will not work. Simply adding another IOU 
to the Social Security Trust Fund, in effect mandates that taxes will 
be increased on our kids and our grandkids to pay future benefits.
  Mr. Speaker, we can only raise taxes so high, and right now taxes in 
this country are the highest in history. Partial solutions divert 
attention for long term solutions and also increase the likelihood of 
future tax increases.
  Both Republicans and Democrats have suggested that until we come up 
with a long term solution, the Social Security Trust Fund surplus be 
used to pay down the public debt. However, some people in Washington 
want to replace the current public debt limit with two debt limits, one 
for Treasury securities held by the public, and one for IOUs held by 
the Social Security Trust Fund. This is a bad idea that would send a 
message that debt owed to the trust fund is less important than the 
debt owed to Wall Street.
  Some want the new statistics so that they can brag about reducing the 
debt held by the public. That is true, but it does not matter because 
the total government debt would continue to increase. Others suggest 
that we could consider writing off the debt owed to the trust fund 
because really that is just what government owes itself. That is wrong 
and dangerous.
  Mr. Speaker, I ask my colleagues to fight against any proposal that 
simply adds a new giant IOU to the trust fund but does not change the 
system to keep it solvent. I ask my colleagues to oppose temporary 
solutions which again just demand a tax increase in some future years. 
Let us step up to the plate, let us do what is necessary to solve 
Social Security now and keep it solvent for future generations.

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