[Congressional Record (Bound Edition), Volume 146 (2000), Part 16]
[Senate]
[Page 23878]
[From the U.S. Government Publishing Office, www.gpo.gov]


[[Page 23878]]

        CREDIBILITY IN THE PRESIDENTIAL RACE AND SOCIAL SECURITY

  Mr. DORGAN. Mr. President, I wish to comment today on this issue of 
credibility with respect to the Presidential race in our country. I 
know there has been a lot of discussion about credibility on one side 
or another. I wish to talk about the issue of credibility with respect 
to Social Security.
  Some while ago, Governor Bush of Texas, who is running for President, 
suggested we should take about $1 trillion--about one-sixth of the tax 
moneys that are coming into the Social Security system--and invest it 
in private individual accounts in the stock market.
  On May 30th, Senator Schumer and I were joined by twenty of our 
colleagues in sending a letter to Governor Bush asking how that added 
up and how he would replace the $1 trillion that would be a shortfall 
in the Social Security trust fund used to pay the Social Security 
benefits of those who are retired. We have not yet received a reply in 
the intervening months. And the Presidential debates did nothing to 
illuminate what might or might not be on the mind of the Governor with 
respect to that $1 trillion.
  But this is not a case of double-entry bookkeeping, as understood by 
politicians, where you can use the same money twice. You cannot use the 
same money twice. If you take $1 trillion--or one-sixth of the tax 
money that would go into the Social Security trust fund--and say, we 
are going to take that money and invest it in private accounts in the 
stock market, then you have $1 trillion less in the Social Security 
trust fund with which to pay benefits for those who are retired. The 
question is, How do you make up that difference?
  A great many studies have been done on this issue. Let me cite one. 
Last week, a distinguished group of Social Security experts--one of my 
favorites, Henry Aaron, at the Brookings Institution, who I think is a 
remarkable and wonderful economist, Alan Blinder, Alicia Munnell, and 
Peter Orszag--released an update to their report about what this plan 
would mean of diverting Social Security trust fund money into private 
accounts.
  They point out that it could very well mean less in Social Security 
benefits for those who have the private accounts later, and that some 
$1 trillion in the Social Security system, that would be expected to be 
available, would no longer be available because that $1 trillion was 
moved.
  There is an interesting comment from Governor Bush about this 
proposal. This is not a question of whether he proposes to do this. He 
says:

       . . . and one of my promises is going to be Social Security 
     reform. And you bet we need to take a trillion dollars --a 
     trillion dollars out of that $2.4 trillion surplus.

  So he says he is going to take $1 trillion out of the Social Security 
trust fund and use that to establish private accounts for current 
workers.
  Now, Allan Sloan had an article in today's Washington Post which I 
thought was interesting. He said:

       If you ever wanted living proof of what a fool you would be 
     to entrust your personal financial fate--or the nation's--to 
     the stock market, you sure got it last week. On Wednesday the 
     Dow plummeted more than 400 points before you could finish 
     your first cup of coffee.

  He said:

       Sorry to disappoint you, but if you're looking for 
     rationality, don't look at the stock market. At least not on 
     a day-to-day basis. And don't look to the markets to bail out 
     the Social Security ``trust fund'' or to make everyone in the 
     United States rich.

  He says:

       If we put a big chunk of the Social Security trust fund 
     into stocks, as many people suggest, the national budget will 
     be hostage to short-term stock movements.

  Aside from the issue of the credibility of saying to our senior 
citizens, ``It is going to be in the Social Security trust fund'' and 
then saying to the younger workers, ``I will take the same $1 trillion 
and allow you to have private accounts in the stock market with it''--
aside from the credibility of having $1 trillion that is missing and no 
one forcing Governor Bush to answer the questions: What are you going 
to do with the $1 trillion? What is it going to be? How are you going 
to fill a hole that exists in Social Security if you take the $1 
trillion and allow private accounts to be invested in the stock 
market?--aside from that question, which I think is very important, the 
other point is this: If you look at 20-year periods in this country, 
there have been 108 20-year periods in which one can calculate a rate 
of return on a dollar invested in U.S. securities. In six of those 
periods, the return was less than 2 percent; and in only eight of those 
periods, the return was 11 percent or more.
  The point is, instead of having a Social Security plan that provides 
some security of income when you retire, you might find--with Governor 
Bush's plan, assuming that the $1 trillion was made up someplace, 
assuming you did not have a $1 trillion hole, which now exists in the 
Governor's proposal--you might still find yourself having retired and 
having private accounts in your name and having much less money than 
you ever expected or ever would have received under the Social Security 
system because you don't retire on an average date, you retire on an 
actual date. You retire on a specific day. Who knows what the stock 
market is going to be doing in that particular period. It is not the 
case, as economists have demonstrated, that there will always be good 
news for everyone with respect to these private accounts.
  But let me, again, go back to the central question: What about the $1 
trillion? If someone in this Chamber said they would like to take $1 
trillion out of this trust fund and use it for something else, 
logically someone would stand on the floor of the Senate and say, but 
if you are going to take it out of this trust fund and use it for 
something else, what are you going to do for this trust fund where the 
money is needed? That is the logical question to ask Governor Bush. And 
we did. And there has been no answer. Because the $1 trillion will be 
gone from the trust fund. He knows it. We know it.
  So if there is a question of credibility on these issues, it seems to 
me it would be wise to at least question the credibility of someone who 
wants to take $1 trillion out of the Social Security trust fund and use 
it for private accounts and then say: Oh, by the way, it all adds up. 
It does not add up.
  I went to a high school with only nine seniors in my senior class. We 
did not necessarily take advanced mathematics, but we took enough math 
to understand how to add these numbers. We did not discuss 
``trillions'' in my school, but we discussed it enough to understand 
that if you take one-something here and move it over here, it is gone 
in the first location.
  Politics, apparently, these days does not require one to reconcile; 
it does not require one to add and subtract in a traditional way. I 
think the American people will want to know the consequences of that. 
You cannot do both. You cannot promise that which you promised to 
senior citizens for their retirement and then say: By the way, that 
money is going to be promised to workers for private accounts in the 
stock market under your name. You cannot promise both. To those who do 
so, I would say, retake your accounting exam, and remember double-entry 
bookkeeping does not mean you can use the same money twice. That's a 
pretty simple lesson, it seems to me, for political dialog in this 
country.
  Mr. President, I yield the floor and suggest the absence of a quorum.
  The PRESIDING OFFICER. The clerk will call the roll.
  The legislative clerk proceeded to call the roll.
  Mr. DORGAN. Mr. President, I ask unanimous consent that the order for 
the quorum call be rescinded.
  The PRESIDING OFFICER. Without objection, it is so ordered.




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