[Congressional Record (Bound Edition), Volume 146 (2000), Part 18]
[House]
[Pages 25995-25996]
[From the U.S. Government Publishing Office, www.gpo.gov]



WHICH CANDIDATE WOULD ENSURE THE CONTINUED SOLVENCY OF SOCIAL SECURITY?

  The SPEAKER pro tempore. Under a previous order of the House, the 
gentleman from Michigan (Mr. Smith) is recognized for 5 minutes.
  Mr. SMITH of Michigan. Mr. Speaker, I was just on an interview with 
the Wall Street Journal asking me what I thought would happen after the 
election of the President, and which person might move ahead to make 
sure that we save social security.

[[Page 25996]]

  Working on this problem of keeping social security solvent, and 
having introduced four bills on social security, I made my comment that 
the greatest risk is doing nothing at all and simply saying, look, we 
are going to keep your benefits coming. Do not worry about it. Because 
the greatest problem is that if we keep putting off a solution, then 
what we are doing is ensuring that our kids and our grandkids are going 
to have an enormous tax burden to keep social security solvent.
  Social security has a total unfunded liability, according to Alan 
Greenspan of the Federal Reserve, of $9 trillion. That means we have to 
put $9 trillion in right now and have that start drawing a real return 
of at least 6.7 percent interest to keep social security solvent over 
the next 5 years. The social security trust fund contains nothing but 
IOUs on a ledger down in Maryland where every time the government 
borrows that money, either to pay back debt or expand social programs, 
just another figure is written on that ledger.
  The challenge is coming up with the money to keep paying the benefits 
for social security that we have promised the American people.

                              {time}  1145

  To keep paying promised Social Security benefits, if we do nothing, 
the payroll tax is going to have to be increased by nearly 50 percent 
or benefits will have to be cut by 30 percent.
  This is the problem. We have surpluses coming in after the big tax 
increase in 1983. Those surpluses are going to run out. We are going to 
have to start coming up with additional funds from someplace starting 
in 2015. That red portion on the bottom left of that chart is the taxes 
that our kids are going to have to pay in addition to current taxes, $9 
trillion today in tomorrow's dollars, it is $120 trillion over the next 
75 years.
  This is what we have done on tax increases so far. That is why the 
evidence is there that probably if we keep putting it off, we are 
simply going to increase taxes on our kids and American workers even 
again.
  In 1940, it was 1 percent for the employee and the employer for a 
maximum of $60 a year; 1960, 3 percent on employee/employer total of 6, 
on the first $4,800 to be $288. Today, in the year 2000, since the 1983 
tax increases, it is 12.4 percent on the first $76,200 for a total of 
$9,440 a year for each worker. And that is part of the problem. We have 
gone from 38 workers for each 1 retiree in 1940; today we have three 
workers paying in their Social Security tax immediately sent out in 
benefits. And the estimate is that in 25 years, it is just going to be 
two workers working.
  Mr. Speaker, it has to be changed. I think that Governor Bush has 
been willing to step up to the plate saying look, we cannot just talk 
about it. We have to do something about it. He has been criticized by 
Vice President Gore. And Vice President Gore's plan is to take the 
interest savings on the debt held by the public, the interest savings 
on the debt held by the public, the debt held by the public right now 
is $3.4 trillion. The interest savings are $260 billion a year.
  It is not going to accommodate the $46 trillion that we are going to 
need between now and 2054. It is just another way of examining the Vice 
President's suggestion that we use the blue part, or $260 billion a 
year, to accommodate the $46 trillion that is going to be needed in 
addition to Social Security taxes.
  It still leaves a $35 trillion deficit. I just urge everyone, as they 
size up their candidates, try to pick the candidate that is willing to 
step forward on this issue. Next year is our best chance to solve 
Social Security. Let us do it.

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