[Congressional Record (Bound Edition), Volume 146 (2000), Part 6]
[House]
[Pages 8561-8563]
[From the U.S. Government Publishing Office, www.gpo.gov]



   THE SOLVENCY OF SOCIAL SECURITY AND THE ISSUE OF HEALTH CARE AND 
                           PRESCRIPTION DRUGS

  The SPEAKER pro tempore (Mr. Walden of Oregon). Under the Speaker's 
announced policy of January 6, 1999, the gentleman from Iowa (Mr. 
Ganske) is recognized for 60 minutes as the designee of the majority 
leader.
  Mr. GANSKE. Mr. Speaker, I wonder if the gentlewoman from Connecticut 
(Ms. DeLauro) would like to enter into a discussion, if she has some 
time for a little bit.
  I yield to the gentlewoman from Connecticut.
  Ms. DeLAURO. I would be happy to, Mr. Speaker.
  Mr. GANSKE. I think we could have a very unusual discussion tonight.
  I had originally thought about talking about a case of HMO abuse that 
was highlighted today in the Los Angeles Times about a 74-year-old 
woman who died of a ruptured aortic aneurysm, and maybe if I have some 
time after a while I will do that.
  I was very moved by your presentation on social security. I think it 
is a very, very important issue. There is no doubt about it, that 
elderly women depend on social security in order to stay out of 
poverty. The statistics of the gentlewoman from Connecticut are very 
similar to Iowa, and maybe even more so in Iowa, because Iowa has the 
largest number of people over the age of 85 percentage-wise of any 
State in the country, and the majority of those people are women and 
widows.
  Some of them have to choose. They live on that social security check, 
and they are now in the situation where they have to choose between 
their rent and some of their medications, so prescription drugs are 
involved in this. I think we could agree on some facts, and so I would 
like to get the gentlewoman's feedback on some of this.
  The Social Security Advisory Committee's report says that as the baby 
boomers move into retirement in about 25 years, or the baby boomers 
start to retire about the year 2011, at which time my group and the 
gentlewoman's group will be retiring at one every 8 seconds, by about 
the year 2025, the trust funds are empty, and we will be faced with a 
couple of choices based on current projected income from the social 
security tax, which is 12.4 percent combined for individual and from 
their employer.
  That is, we would either need to reduce benefits by about 25 percent 
at that time, because of such a large number of baby boomers in 
retirement, or, because, as the gentlewoman pointed out I think very 
correctly, we will have significantly reduced numbers of workers, maybe 
even at the point of two workers for every retiree, then another option 
would be to raise the withholding, their work tax, their payroll tax. 
We might have to do that by as much as 50 percent.
  The third option that the Social Security Advisory Committee talked 
about, and about a year ago offered three different scenarios, was 
whether in fact we could increase the rate of return on the funds that 
are going in.
  Senator Kerry and Senator Moynihan have proposed, and I have gone 
around my district for the last couple of years talking about Senator 
Kerry's proposal and actually utilizing some of his computer programs, 
they have proposed essentially a payroll tax cut of 2 percent of that 
12.4 percent, so that would be about a 16 to 18 percent payroll tax 
cut.
  Part of the reason that they have done that is because, for the 
average working person, not the person who has invested in the tech 
stocks, the most taxes they pay are their payroll tax. The people that 
the gentlewoman and I represent that are the average workers out there, 
they pay more in payroll tax than they do in income tax or any other 
taxes.
  So there is an appeal, I think a bipartisan appeal if we are looking 
at a tax cut, in order to direct that toward those who need it the 
most, and those who need it the most are the ones where the biggest 
part of their taxes are coming from their payroll tax.
  I am just interested if the gentlewoman from Connecticut is in 
agreement with me so far.
  Ms. DeLAURO. Mr. Speaker, the gentleman's assertions at the outset 
about where we are going and what is important about when the baby 
boomers retire is accurate. I agree with that.
  What I think we have to deal with is how in fact we use the issue of, 
again, the surplus to assist this process. And we cannot count on this, 
but the fact of the matter is if we continue the rate of growth that we 
have been at in the last several years, which has been pretty 
sustained, and I understand that we cannot totally rely on that, one 
could project that in fact that rate of growth over the next number of 
years could allow us to really correct the social security problem that 
we have with the baby boomers moving into retirement.
  So there are a number of scenarios, without talking about cutting 
people's benefits or raising the eligible age. I think there is merit 
to thinking and talking about the payroll tax and cutting that back. It 
is up for discussion.

[[Page 8562]]

Maybe we are in the same mode. This notion of this 2 percent that we 
put in these retirement accounts, my view ultimately, this winds up 
increasing a deficit situation that we have. It also means that at some 
point we have to draw on general revenues and so forth.

                              {time}  2115

  So the current proposal that is being made I find to be troubling in 
this sense that I have expressed on that, and I think that there is 
room to have a discussion on what we want to do and where we want to go 
on this issue.
  Mr. GANSKE. I agree with the gentlewoman, let us say that you did set 
up personal accounts, and how you do that is open to debate, but let us 
say that you did that, you reduced the average payroll tax for a 
worker; let us, say, number one that we are not going to change the 
benefits for anyone over the age of 50 or 55, but let us say you set up 
personal accounts with 2 percent, with that 2 percent of the 12.4 
percent, my point would be that that is in their name, and as Senator 
Kerrey says, my goal is to help everyone in this country become richer.
  That is an automatic increase in wealth for them, but the gentlewoman 
is absolutely correct. If you take 2 percent out of that 12.4 percent, 
that is about $1 in $6 of current revenues going into Social Security 
that is not in that trust fund.
  Ms. DeLAURO. That is right.
  Mr. GANSKE. And we are in agreement on that. I think that there is a 
way to do a compromise on this issue, because I think Members of the 
Democratic side, your side and my side, would both like to see all 
Americans be wealthier. We probably both would like to see especially 
the people who are paying the most portion of their taxes in the 
payroll tax have some tax abatement.
  The question then becomes, and this is where you are talking about 
the transition costs on this, and this is the $1 out of $6, that if you 
did this 2 percent, where would you make that up? I would suggest that 
the compromise on this between the parties, and we are certainly not 
going to work out this issue tonight, but it is something I think for 
people to think about, is if the economy continues to do so well and we 
have the surplus, then I would use part of that surplus to cover that 
transition costs of the payroll tax cut, so that for every dollar that 
you are providing for a payroll out of the $6, to go into a personal 
account, you replace in that trust fund with part of the surplus.
  I am just curious as to what the gentlewoman would think about that.
  Ms. DeLAURO. Again, you can, over a certain period of time, deal with 
funding the credit with the budget surplus, and the gentleman could get 
it. There are reports out there about that, the gentleman could 
probably get yourself between now and 2015 where the gentleman might be 
able to do that, and again, the Center for Budget Priorities talks 
about 2015 to 2030 where the credit would be financed through spending 
cuts or larger deficits.
  And, again, this is a proposal, a similar kind of a proposal that 
Martin Feldstein has made in terms of partially privatizing Social 
Security; by his own, estimate, the credit would be financed with 
higher tax revenues, which would have to be generated by higher tax 
rates of national savings and investment translated in terms of 
corporate profits, so that you are then dealing with a situation, if 
you will, in what we call the outyears here of either dealing with 
higher tax revenues or, again, some rate of national savings which 
there is not a guarantee of.
  Mr. GANSKE. As the gentlewoman I think rightly pointed out, those 
outyears, the farther we get out, a lot of that will depend on exactly 
whether our economy continues to be as strong, what kind of economic 
growth, what, in essence, I am suggesting is that if we are, I think 
the gentlewoman, as she said, is in favor of some tax cuts, if we are 
looking at devoting some funds for tax cuts, why do we not devote those 
tax cut funds or a large portion of it to relief on the payroll tax, 
which is the tax which hits the average American the hardest?
  I am not speaking for anyone else on the Republican side.
  Ms. DeLAURO. I understand that.
  Mr. GANSKE. This is just purely an idea I have been tossing around in 
my mind and how do you do this.
  Ms. DeLAURO. Well, if you are going to deal with cutting back, where 
does the gentleman continue to be able to finance the effort, which is 
what is ultimately, in my mind, and when we start to talk about other 
proposals on Social Security, is that if the gentleman then looks at 
the utilization of the surplus, or the gentleman wants to do it in one 
way by bringing down the payroll tax.
  Mr. GANSKE. I would use part of the surplus for a payroll tax.
  Ms. DeLAURO. That is right. But if the gentleman utilizes this in 
terms of where is the greater gain, I do not know, because I do not 
know the intricacies and where it comes out with what the gentleman is 
suggesting. But if you are paying down the debt and thereby reducing 
interest rates and costs and then utilizing, I mean, it just seems to 
me that in terms of overall fiscal policy, I am not an economist, that 
the gentleman is then dealing with a much greater financial stability 
by being able to pay down that debt over a period of time which has a 
whole variety of different ripple effects in the economy when that 
interest rate comes down and what people can do and what business can 
do, et cetera, and the whole litany of the multiplier effect on all of 
that. So that seems to me to be a better direction for us to head than 
to look at personal accounts, which, again, I think leaves people at 
the mercy of a stock market and whether or not they are proficient in 
being able to invest.
  I cannot imagine, I do not know what the percentage is, but I do not 
know that there is a very large percentage of people who are so 
familiar with the stock market that they can do that, and there are 
those that do and those that cannot, and those that cannot will wind up 
dragging down those that can in terms of what they will have to make up 
in terms of lost dollars.
  The gentleman is suggesting another alternative here, which I think 
reasonable people can take a look at and sort out and begin to ask some 
questions about.
  Mr. GANSKE. My constituents back in Iowa tell me that as we look at 
the surplus, the number 1 thing that they want us to do with it right 
now is to pay down the debt, number one; number 2, to secure Medicare 
and Social Security; and number 3, in the context of the surplus, to do 
some tax relief. And I am just suggesting tonight that there might be a 
solution between the Republicans and the Democrats that could come 
about on Social Security, too, where we focus on trying to increase the 
net worth of every American by letting them keep a little bit of that 
payroll tax, making up the difference from the surplus, as part of a 
tax cut, or focused on a payroll tax cut.
  This, I think, gets around a lot of the debate that we have seen on 
where do you put that tax cut, and how the numbers exactly would work 
out neither the gentlewoman nor I have that data right now, because 
there are lots of variables that the Congressional Budget Office and 
others would have to look at in terms of projections for economic 
growth, and exactly what the dollars would be coming into the Social 
Security trust fund or not be there if you had that 2 percent 
reduction.
  I am just saying that I think that Republicans and Democrats on both 
sides of the aisle that have some shared goals, and the number one 
shared goal I think is Social Security solvency; number 2, maintaining 
the safety net for those elderly women; number 3, helping every 
American become richer. I would like to see every American become a lot 
more wealthy; and number 4, making sure that the younger people who are 
coming up, the two out of which we will be supporting every one retiree 
in about 25 years, that we somehow or another figure this out so that 
we do not leave them with an overwhelming payroll tax to be supporting 
the gentlewoman from Connecticut and me when we are in our retirement.
  I very much appreciate the gentlewoman from Connecticut for just 
entering into a brief colloquy with me on

[[Page 8563]]

this. And I would be happy to yield again to the gentlewoman if she has 
any further remarks.
  Ms. DeLAURO. Well, I am pleased as well that the gentleman asked to 
be able to do this, because I think that there is room for discussion 
of the issues. Again, it is worrisome that we are, again, in two 
proposals that have been made in the last several days, which have 
captured the national attention that I think it is well worth pointing 
out, and again, in my view, I think one is terribly risky in this 
sense, as I started out my commentary, is that to somehow turn on its 
head the notion of this guaranteed annual income, which has been so 
important to people in their lives. It was not meant to be just that, 
the only income, but for some people, about a third of the 
beneficiaries of Social Security, that is the only income that they 
have, and to somehow tamper with that seems to be moving away from that 
guarantee that people have believed in.
  Then the notion of the savings accounts deals with increasing 
individual risk, which I think, again, threatens the system. Now, are 
there alternate proposals that we might consider to get where we want 
to go in order to make sure that there is that guarantee that does not 
put people at risk, in which case then you can try to look at how, in 
fact, we can as the gentleman pointed out increase people's financial 
wherewithal; certainly, we ought to take a look at that.
  I will tell the gentleman that in all of this, in terms of its effect 
on women and older women in our society, and if we do not go down this 
road in a very careful way about the unique situation that women find 
themselves in, then we are going to compound their vulnerability and 
increase their rate of poverty, and that is not where we want to go and 
what I see at the moment, in terms of a public policy direction, which 
has been espoused by Governor Bush, is that that, in fact, is where it 
leads. And I am not suggesting that is where you are and that there is 
not room for conversation and debate and discussion on this issue in a 
way that the gentleman has proposed, and there may be other ways, but 
it scares me.
  Mr. GANSKE. I agree with the gentlewoman that we need to be very 
careful. And I think it will be, I hope that our parties' respective 
presidential candidates have a chance to be as civil to each other 
during a presidential debate on this important issue as we have been.
  I also want to thank the gentlewoman for working so vigorously on the 
children's clothing issue as it relates to whether clothing can catch 
on fire. She has worked very diligently on trying to make sure that we 
have safe standards for children's clothing, and I look forward to 
joining the gentlewoman on this.
  I would just close with this, and that is, that I think it is going 
to be important to talk in a reasoned fashion about where does Social 
Security go, with the baby boomers coming down the line, I think it is 
also true, though, that we will need to seek solutions and not just be 
reactionary and say that no change is the only way to go.
  Ms. DeLAURO. There has to be change.
  Mr. GANSKE. I know the gentlewoman is not proposing that.
  Ms. DeLAURO. I thank the gentleman from Iowa, and I thank the 
gentleman, if I just might for one second, and I do not want to take 
any more of the gentleman's time, is for the gentleman's diligence, 
your commitment to the health of people in our country and in our 
society, both in your own profession as a doctor in which the gentleman 
has really made his own personal commitment, but the role that the 
gentleman has played in trying to bring us to some understanding and 
conclusion about patients and the decisions, medical decisions that 
affect their lives and your hard work on the patients' bill of rights. 
And I thank the gentleman.

                              {time}  2130

  Mr. GANSKE. I thank the gentlewoman from Connecticut.
  Mr. Speaker, I am going to save my comments on HMOs for another 
night, because I am going to yield the balance of my time to my 
colleague from Colorado, who has important things to say, as he usually 
does, and so I will yield to the gentleman from Colorado.

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