[Congressional Record (Bound Edition), Volume 147 (2001), Part 10]
[Extensions of Remarks]
[Pages 14914-14915]
[From the U.S. Government Publishing Office, www.gpo.gov]



        TREASURY AND GENERAL GOVERNMENT APPROPRIATIONS ACT, 2002

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                               speech of

                           HON. MAXINE WATERS

                             of california

                    in the house of representatives

                        Wednesday July 25, 2001

       The House in Committee of the Whole House on the State of 
     the Union had under consideration the bill (H.R. 2590) making 
     appropriations for the Treasury Department, the United States 
     Postal Service, the Executive Office of the President, and 
     certain Independent Agencies, for the fiscal year ending 
     September 30, 2002, and for other purposes:

  Ms. WATERS. Mr. Chairman, I rise today to support the amendment 
sponsored by Representative Kucinich which would create a commission to 
oppose the privatization of Social Security.
  Individuals may question why we would create a commission whose 
outcome is already known. Well, I would pose that question to the 
President.
  On May second, when the White House Commission on Social Security was 
announced, the President said that when reforms are made, benefits must 
be maintained at their current level, payroll taxes cannot be raised, 
reforms must restore Social Security to ``sound financial footing,'' 
and young workers must be allowed to invest part of their earnings in 
private accounts. So we knew what the Commission was going to recommend 
privatization.
  But if we do privatize there is no way that we can satisfy the other 
requirements of President Bush. Privatizing will result in reduction of 
benefits and it will surely wreck the financial stability of the 
program.
  First, advocates of privatization suggest diverting part of the 
payroll tax, which funds Social Security, into the private accounts. 
However, by doing this we actually put the program in greater jeopardy. 
Studies have shown that by diverting just 2 percent of the payroll tax 
to private accounts, we bring the solvency rate closer. The President's 
very plan to restore stability to the program actually bankrupts Social 
Security sooner than if we do nothing at all.
  In addition, privatization does not guarantee financial security. As 
an Economic Policy Institute study shows, ``a bursting of the stock 
market bubble has meant the largest absolute decline in household 
wealth since World War II, even after adjusting for inflation. In 
relative terms, the market's drop represents the sharpest decline in 
household wealth in 25 years.'' So it is very possible that this kind 
of market volatility could happen throughout a worker's lifetime, 
jeopardizing his or her retirement savings.
  From the end of 1999 to the end of 2000, the total financial assets 
of American households declined 5% or $1.7 trillion. Therefore, the 
money some were planning on retiring with is not there any longer. 
Those who wanted to retire have to stretch their savings even further 
or continue working. That is a scary and unfair proposition for our 
seniors.
  But what really concerns me is the idea of individuals putting their 
money in the stock market without sound financial advice. Many working 
families do not have the time or the extra money to hire financial 
advisors to make recommendations on where to put their money. The 
President's plan, indirectly, favors wealthy individuals and families 
because they are the only ones who have disposable income to invest, 
hire professionals and the time to meet with them.
  Social Security is the most successful social policy to keep 
individuals out of poverty in the history of the United States. To 
privatize Social Security, especially without any type of

[[Page 14915]]

professional advice, means to put individuals, mostly women and 
minorities, into poverty.
  In 1997, 9 percent of all Social Security beneficiaries aged 65 or 
older were in poverty. Without Social Security, that number would have 
risen to 49 percent. In addition, without Social Security, nearly 60 
percent of blacks, native Americans and Hispanics would have been in 
poverty. Privatization is not the solution to provide financial 
security for retirees.
  What my colleagues and the public should be concerned about, though, 
is that the members of the commission had no alternative but to support 
privatization. In fact, as a condition of being named to the group, you 
had to support the idea of privatization.
  It has been said many times that this is another way for President 
Bush to pay back his supporters who helped him into office. By 
supporting privatization, President Bush will put millions, probably 
billions, of dollars in the pockets of Wall Street firms and their 
CEOs. In fact, Wall Street firms are starting a multi-million dollar 
advertising campaign to win public support of the plan.
  As the Wall Street Journal reported:

       ``. . . a range of financial-service firms are pooling 
     their efforts, and millions of dollars for advertising, to 
     assist him in raising public concern about the retirement 
     program's woes. But the ad dollars are a pittance compared 
     with the billions at stake for Wall Street should Mr. Bush 
     achieve his goal of carving private accounts out of Social 
     Security.''
       The group's name? It is ironically called ``Coalition for 
     American Financial Security.'' The only financial security 
     they ensure is their own.
       So by adopting this amendment, sponsored by Mr. Kucinich, 
     we will be able to provide a report to the President and to 
     the public to show why privatization is a bad choice. Only 
     then, when we can see both sides of the story, can we make an 
     informed and sound decision.

     

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