[Congressional Record (Bound Edition), Volume 145 (1999), Part 5]
[Senate]
[Pages 7366-7367]
[From the U.S. Government Publishing Office, www.gpo.gov]




                            SOCIAL SECURITY

  Mr. THOMAS. Mr. President, clearly the discussions on Kosovo are 
dominating the day and should. But I hope that we don't forget that we 
do have an agenda that we need to go forward with as well. So I want to 
talk a few minutes today about Social Security.
  Specifically, I would like to talk a little bit about our efforts to 
protect and strengthen the Social Security system. We have talked about 
it for a very long time.
  It is not a surprise that without some changes, the Social Security 
program will not be able to accomplish what it is designed to 
accomplish. Nearly everyone recognizes that we have to do something 
different than we have been doing. I will, in fact, say that there is 
not a consensus as to what that ``something different'' ought to be.
  But the goal surely can be shared by most everyone. The goal is to be 
able to know that we can continue to provide benefits for the 
beneficiaries and those that are close to being beneficiaries, and at 
the same time be able to provide benefits in the long run for young 
people who are now just beginning to have deducted from their salary 
Social Security payments. I suspect all of us want to do that.
  I have a mother who I am concerned about who has Social Security. I 
have 5-year-old twin grandchildren and I am anxious about their 
security. That is the kind of issue we have.
  I notice today's newspaper expresses relief that we will go forward 
with Social Security. There was some discussion last week that it would 
not move.
  I will talk a little bit about the lockbox legislation. We are 
seeking to push through a Social Security lockbox. What does that mean? 
It means we take that amount of money which comes in as Social Security 
now and set it aside so that it will be used for Social Security.
  Over the years, we have had what is called a unified budget, and all 
the money that comes in--whether from Social Security, income tax, 
highway funds, or whatever--goes into the unified budget.
  This year, for the first time in 25 years, we have had a balanced 
budget, but it is a unified budget. If you took Social Security out of 
that balanced budget, it would not be balanced. Indeed, it would be 
somewhat in deficit.
  We need to understand what that is. Now that we are close to having a 
unified budget in balance and close to having it without Social 
Security, now we have an opportunity to do the things with Social 
Security dollars that I believe we need to do.
  The lockbox is designed to guarantee that all Social Security surplus 
funds will be reserved for Social Security alone. This, of course, has 
not been the case. It is difficult to do, frankly. We have never had a 
place to put it. When we have a life insurance program or an annuity 
program, there has to be somewhere to put those funds so they draw 
interest. Of course, under the law, the only place they can be invested 
is in government securities.
  They are set aside here, but they are spent. Of course the President 
is suggesting he would raid the Social Security to the tune of about 
$158 billion, after having talked for 2 years about saving Social 
Security.
  I am concerned that the current debate is going to become very 
difficult: How do we pay for Kosovo? How do we pay for increasing the 
support of the military? How do we pay for the emergency funds that are 
in the process of being provided for Central America?
  We have budget spending limits which I think are key to keeping a 
smaller Government, to keeping a responsible Government. When we go 
outside of those spending limits with emergency spending, it goes from 
Social Security. Last year, for example, the President insisted, with 
the threat of closing down Government, that we had to spend $20 billion 
in emergency funding. I suppose no one would argue if emergency funds 
are a genuine emergency, such as weather disasters or taking care of 
our troops in Kosovo, we are going to do that, by all means. When we 
start talking about how we build up the Armed Forces, I think we ought 
to take a look at whether that comes as an emergency or, in fact, comes 
out of our budget.

[[Page 7367]]

  We are trying to move to some kind of financially sound lockbox. In 
2014, Social Security begins to run in a deficit. Social Security 
started about 60 years ago, I think--in the 1930s. People paid 1 
percent of $3,000--$30--into Social Security. There were 31 people 
working for every beneficiary. Of course, now that has changed. Now we 
all pay 12.5 percent of our earnings up to $70,000 or more, moving up. 
There are, I think, fewer than three people working for each one 
drawing benefits. In the near future, it will be fewer than two. That 
is the sort of dilemma with which we are faced.
  I suppose there are many considerations to look at, but there are 
three that are obvious.
  One, you could reduce benefits. Not many are prepared to do that; 
even though Social Security, of course, is not a retirement program, it 
is a supplementary program. For a high percentage of people, that is, 
indeed, their largest income requirement.
  Two, you could increase taxes. I don't think there is a great deal of 
excitement about that. I do not think it is a great idea. Social 
Security taxes are the largest tax that most Americans pay.
  Three, increase the rate of return on the money that is in the trust 
fund. That is one of the things we are talking about doing, trying to 
put together a personal account--not to take all of the 12 percent but 
to take, say, 3 or 4 percent out of the 12, about a third of the money. 
Let it be your account, your personal account. If, unfortunately, you 
were not able to live long enough to get all of your money out of it, 
it would go to your estate.
  How is it invested? By private investors, similar to the Federal 
savings program. Once a year, members get a sheet of paper asking how 
they would like this invested. The choice would be in equities, bonds, 
or in a combination of the two. So members would choose one of those 
options. It is invested for you--not invested, as the President has 
suggested, where he takes trillions of dollars and has the Government 
invest it. Then the Government would basically control the marketplace. 
None of us want that.
  Personal ownership, it seems to me, ensures that the Federal 
Government can't come back later and reduce your benefits. That is a 
way to secure those dollars. They are not then in the Government ready 
to be spent for some other reason.
  Depending on your view about the size of government--and there is a 
legitimate difference between those who are more conservative and those 
who are more liberal. There are always ways to spend more money. To 
control the size of government, as has been our goal over the last 
number of years, you can't have a lot of surplus money lying around or 
else it is simply spent and government grows. We have to do something 
to secure Social Security. Then, hopefully, when there is excess money, 
we can look for some kind of tax relief.
  It has been a long time since we started on this. Quite frankly, I 
think the sooner we make a change, the less abrupt that change will 
have to be. I am hopeful we do get back. We started out this year 
wanting to do this. Now the President is reluctant to take any 
leadership. Some of the leaders in the Congress were saying we ought to 
set it aside. I don't agree.
  Certainly, we need to focus on Kosovo, but it doesn't mean we don't 
do the other things that are before the Senate. It is time to design a 
first-class system that fulfills the needs of everyone--our older 
citizens, our younger citizens. We need a permanent fix, not just 
tinkering around the edges. People have thought for years that Social 
Security was the holy grail of politics--touch it and you are dead. I 
think it has changed, because people understand if it is not changed, 
Social Security will be dead.
  I hope we move forward.

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