[Congressional Record (Bound Edition), Volume 147 (2001), Part 8]
[House]
[Page 10325]
[From the U.S. Government Publishing Office, www.gpo.gov]



                         SAVING SOCIAL SECURITY

  The SPEAKER pro tempore. Under the Speaker's announced policy of 
January 3, 2001, the gentleman from Michigan (Mr. Smith) is recognized 
during morning hour debates for 5 minutes.
  Mr. SMITH of Michigan. Mr. Speaker, yesterday the President's Social 
Security commission met for the first time. Last night I stayed up 
quite late listening to, 10 or 12 of those commission members talk and 
speak about what they saw as their challenge to try to fix the Social 
Security problem. I was disappointed, number one, that some of the 
commissioners apparently were not in attendance; number two, I was 
disappointed that some of the commissioners appeared not to understand 
the complexity of the problem facing Social Security and, therefore, 
facing America.
  Social Security is probably one of our most successful programs to 
help retirees. We are faced with the challenge of keeping Social 
Security solvent. What I would like to stress is what I displayed on 
this first chart, and that is the biggest risk is doing nothing at all. 
Some of the commissioners I heard suggested the dangers of investing 
and do not risk Social Security. The problem is that if we do not do 
something, then we are going to end up increasing payroll taxes and 
probably also reducing benefits.
  The challenge is ahead of us. Social Security has a total unfunded 
liability of over $9 trillion. That means we would have to put $9 
trillion today in an investment account, earning at least 2.7 percent 
interest to accommodate future payments in Social Security. The Social 
Security Trust Fund contains nothing but IOUs. This is an issue often 
overlooked when people suggest, look, the problem is not really going 
to confront us until 2035 or 2036 or 2037 because the trust fund owes 
Social Security some of that money. The problem is where are we going 
to come up with those funds 15 years from now, maybe as soon as 12 
years from now when there is less Federal payroll tax revenues coming 
in for Social Security than is needed to pay the promised benefits? 
That is the challenge.
  And that is the point; if we continue to put off this decision, on 
what I consider the largest financial challenge of this country, we are 
going to end up with doing a disservice not only to workers by 
increasing the payroll tax that they pay but also for retirees as 
future Congresses look to reduce those particular benefits. This will 
be a huge burden on our kids and our grandkids that this Congress 
should not abide.
  I compliment the President for moving ahead to develop a solution. 
One of the challenges of the Social Security commission is going to be 
to inform the American people of the seriousness of this current 
problem and the fact that the longer we put off a solution the more 
drastic that solution must be. To keep paying promised Social Security 
benefits, the payroll tax will have to be increased by nearly 50 
percent or benefits will have to be cut by 30 percent.
  This chart depicts a little temporary surplus, because we have 
increased social security taxes so much, by waiting too long for the 
last Social Security commission in 1983 we have a temporary blip of 
more money coming in from the Social Security tax than is required to 
pay benefits. That surplus is going to be depleted someplace between 
2011 and 2016, and then we go into deficit spending.
  I mentioned $9 trillion that we need today to put in an investment 
account to keep Social Security solvent, if you use tomorrow's dollars, 
what we will need in future dollars over the next 75 years is $120 
trillion to pay benefits, $120 trillion more than is going to be raised 
by the current Social Security tax. A serious problem.
  I urge these commissioners to attend the meetings. I urge these 
commissioners not to send staff, but to understand what the Social 
Security problem is and to give it their all to come up with a 
reasonable solution.
  Personal retirement accounts; a quick comment as I conclude. They do 
not come out of Social Security. They become part of the Social 
Security retirement benefits. A worker will own his or her own 
retirement account, and it is limited to safe investments that will 
earn more than the 1.7, percent that is going to be paid by Social 
Security as a return in the form of benefits on the taxes that the 
employer and the employee paid in.
  And just a final comment. Seventy-five percent of American workers 
today pay more into Social Security tax than they do into income tax. 
Again raising taxes should not be an option.

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