[Congressional Record (Bound Edition), Volume 148 (2002), Part 8]
[House]
[Pages 10249-10256]
[From the U.S. Government Publishing Office, www.gpo.gov]




                            SOCIAL SECURITY

  The SPEAKER pro tempore. Under the Speaker's announced policy of 
January 3, 2001, the gentleman from Florida (Mr. Foley) is recognized 
for 60 minutes as the designee of the majority leader.
  Mr. FOLEY. Mr. Speaker, let me first indicate Florida's pride in the 
gentleman's being in the chair today. We are delighted to see the 
gentleman from Florida (Mr. Keller) as Chair of the House and Speaker 
pro tempore.
  We are also delighted to have a conversation today in calm and 
measured tones about an issue that is vitally, vitally important, to 
every American. That topic is Social Security. Typically, when we 
mention Social Security, people 65 and older are all ears and stay 
tuned to the debate. What we hope to do today is spend some time on 
this very valuable program, this important program, this safety net, if 
you will, for all Americans 65 and above and those yet to reach that 
wonderful age.
  We would also like to put to rest some of the demagoguery relative to 
this issue. We find so often that people, particularly the minority 
party, regrettably, have sought to use Social Security as a political 
issue to try and divide people and suggest that they had better vote 
for their side if they want to see Social Security preserved.
  Let me start with a personal anecdote, if you will. My grandmother 
came from Poland. She came to the United States of America. Her husband 
died, and she raised my mother and her sister on her own. She was a 
maid in the Travelodge Motel, and she cleaned 28 rooms a day. It was a 
job she was proud of, and a job she did well.
  But in her later years, the one thing was certain, she depended 
desperately on that Social Security check, and she depended on 
Medicare. She died with but $10,000 in the bank, her life's savings, 
all a woman of her means could afford to save in her lifetime while she 
cared for her two dependent children, paid her taxes, contributed to 
the church, did volunteer work, and helped the community in many ways.
  I remember her waiting anxiously for that check every month. She 
could have counted on us, but she wanted to be self-sufficient, and 
Social Security provided that self-sufficiency. So it is in her memory 
that I stand today as a

[[Page 10250]]

proud Member of the Republican Party talking about ways to correct and 
strengthen and improve Social Security.
  Now, they use tag lines on the other side of the aisle like 
``privatize'' and ``take away'' and ``diminish'' and ``raid'' and 
``abscond''; and it is amazing, rather than constructive rhetoric, 
like, let us see if we can work together to fix a problem, they simply 
say, let us be in charge, and we will make certain Social Security is 
fully protected.
  Well, we have had that experiment. In fact, since 1935, when Social 
Security was created, they ran this place for 40 years. They ran this 
place into looming and growing deficits. So if we look at the facts of 
the matter, we will see that our stewardship of Social Security has 
actually been more on the point of making certain that it not only is 
fundamentally and financially secure, but that it also has long-term 
potential for future generations.
  We have to think more than just the current voting age population of 
65 and above. We have to think of those born today in this country. We 
have to think of those who are just entering the workforce at 17, 
whether they are in Orlando or Palm Beach or Fort Lauderdale. The three 
Members here on Florida Day right now are Floridians. I am from the 
district with the largest population of seniors in all 435 districts in 
America. Seniors matter to me. Social Security matters to me. My legacy 
that I hope that I can leave in this process to my grandmother's memory 
matters to me.
  I do not want to try and convince people to vote for our party by 
scaring people. I would like them to have a chance to look at the 
record and say, this group of individuals, hopefully including some 
fair-minded Democrats, came to this great city in this great Nation and 
endeavored to fix a growing problem.
  Now, I am joined, fortunately, today, by the chairman of the 
Subcommittee on Social Security who happens to adjoin me in the 
neighboring congressional district in Florida, a person who knows not 
only full well of Social Security's importance, but some of the 
remedies that we have prescribed to make it financially secure.
  He represents an equally large number of senior citizens; and every 
day he comes to work he considers and reflects on that same awesome 
responsibility, that it is not just about getting elected and 
reelected, it is about doing something while we are here to earn the 
confidence of the voters. He has been here since 1980, I might add, in 
a largely Democratic district; so I think he has proven to Members of 
all political stripes that he has the best interests of seniors, not 
Democratic seniors or Republican seniors or Independent seniors or 
nonaffiliated seniors, but of all seniors, at heart.
  Mr. Speaker, I yield to the gentleman from Fort Lauderdale, Florida 
(Mr. Shaw), chairman of the Subcommittee on Social Security.
  Mr. SHAW. Mr. Speaker, I thank the gentleman for yielding to me. I 
would like to congratulate him for reserving this time, because what we 
do need is some time for some quiet reflection so that we can examine 
the problem, look at it in a very rational way, no yelling and 
screaming, no talking about scare tactics about privatizing, which is 
ridiculous, no talking about cutting benefits and all of these things. 
But it is time that this Congress and the American people really 
reflect upon exactly what the problem is and why are we trying to do 
something about it.
  I am going to refer to four charts during the few moments that I will 
be here. I think they certainly graphically show what the problem is.
  Social Security is one of the greatest anti-poverty programs that we 
have ever had in this country. It is not a welfare program; it is a 
program in which we pay in all of our working years, and then if we 
become disabled or retire, it is there for us. It is exactly the right 
thing to do.
  Now, it has been a pay-as-you-go system ever since it has been put in 
place. In 1945, there were 42 workers for every retiree. As we can see 
from this graph, it is a great system as a pay-as-you-go system. There 
was no need to forward-fund on Social Security. The system was working 
beautifully.
  Now we are at 2002. We find that there are only three workers for 
every retiree. We still have a pay-as-you-go system; and as we know by 
listening to many of the speeches on the floor of this House and 
reading in the news media, we see that we still have a surplus in 
Social Security, so it is still working as a pay-as-you-go system.
  But then we also look ahead, and we know that by 2035 there will only 
be two workers per retiree. Now, every working American or most working 
Americans pay in 1\1/2\ months of wages per year to take care of the 
Social Security program. That is a lot of money, particularly to our 
low- and middle-income people; and probably for many of our low-wage 
workers, it is the biggest tax and maybe in some instances the only tax 
they pay; but 1\1/2\ months working for this retirement system is a 
lot. It is up to this Congress to look ahead and see what can we do for 
today's workers to be sure that the system is going to be there for 
them.
  There is no reason to change it for the older workers, people in 
retirement. There is no reason to invade the trust fund. There is no 
reason to sidetrack any of those taxes. Those taxes are there and that 
program is there for them. They have paid into it their whole working 
life, and I do not know any Member of Congress that would take anything 
away from them.
  But let us see where we are going to go and what is going to happen. 
By the way, all of the figures that I am using here this afternoon are 
from the Social Security Administration. This is the same under both 
the Bush, as well as the Clinton, administration, so there are no 
partisan figures that are being used here. These are factual figures 
which no Member of Congress or no person in the government or elsewhere 
can refute.
  What happens if we do nothing? If we do nothing, we find that in 2041 
there could be as much as a 27 percent reduction in benefits. Now, 
those of us who know or have talked to or worked with people that are 
at the lower-income level, we know this would be devastating. It is 
really unthinkable. But then when we look ahead to 2076, we see a 33 
percent reduction in benefits if Congress does nothing.

                              {time}  1515

  But Congress can, as we know, and as Congress sometimes does, they 
could raise the taxes. And if they were to raise the taxes, we see 
right now where 12.4 percent of the wages go into the Social Security 
system. To keep the benefits the way they are, Congress would have to 
raise the taxes in 2041 to an amount equal to almost 17 percent of the 
workers' wages, and in 2076 you are getting over 18, almost 19 percent 
increase in the taxes. Now, this is something that is totally 
unacceptable.
  We cannot go to American workers and say we are going to give you 
this tremendous increase in your taxes. We will literally be taking 
food out of the mouths of the children. We will be taking rent money. 
This is unacceptable. Likewise, this is an unacceptable, the cut in 
benefits. But we do not have to do it. But if Congress does nothing, 
which is the only plan that I have heard from Members, many of the 
Members on the other side of the aisle when they say we do not have to 
do anything, we are looking at a $25 trillion deficit in the Social 
Security trust fund.
  We see here that we are going to have surpluses up to about 2017, and 
then beginning in 2017, we are going into a shortfall and we are going 
to have a $25 trillion deficit. This would be shattering to the economy 
of the United States. The biggest economy in the world cannot sustain 
that.
  This is not only a problem in the United States, it is all over the 
industrialized world. People are living longer and they are having 
fewer kids and this is the problem that we have. So we have got a 
workforce as it applies to the amount of seniors, the workforce is 
decreasing, the numbers of seniors is increasing, and the system is 
definitely stressed. And the Congress needs to do something.
  Mr. FOLEY. Mr. Speaker, if the gentleman would go back to the chart, 
I

[[Page 10251]]

think it is very telling about the tax increases, but I think it is 
more telling about the time required for a person to work in a given 
12-month period in order to pay those taxes. Can the gentleman 
illuminate that for us?
  Mr. SHAW. Mr. Speaker, I was speaking to a reporter the other day. I 
could tell from her voice that she was certainly a lot younger than I 
am. We were talking about the Social Security and what was happening to 
it. And I said, Would you go to work for this newspaper if during the 
interview they said you are going to work about one and a half months a 
year to pay into the retirement funds but yet it is not going to be 
there for you? And she said no.
  Then I asked her the question, Do you think Social Security is going 
to be there for you? She said no. That does not have to be the answer.
  The problem that we have today is that the young people are just not 
focusing. I am looking at some of the pages sitting here on the floor 
this afternoon. Retirement is the furthest thing from their minds. But 
when you start explaining to them that you are going to work a month 
and a half a year to pay for my retirement, then they say, well, wait a 
minute, what about mine? And this is what we have to think about. If we 
care about our kids, if we care about our grandkids, if we care about 
the legacy that this Congress is going to leave to the United States, 
it is time that we start focusing on this problem. And the idea of 
doing nothing and bringing up these terrible deficits, this is 
unthinkable because this is an economy that cannot sustain itself with 
this type of a, with a deficit. But this is the answer for doing 
nothing.
  Now, I am not suggesting, I have got on here under the Democrats Do 
Nothing Plan, cash flow deficit starts in 2017, and this chart would 
indicate that their plan would build up to $25 trillion deficit. I do 
not believe what they say, when they simply say, oh, we will do nothing 
and the money that we are going to save from the interest that we are 
not going to have to pay on the borrowed revenue will take care of the 
problem.
  I beg your pardon? Going to take care of a $25 trillion problem? Come 
on. Even the newest math cannot get you there. I mean, we always talked 
about voodoo economics, but this is beyond this. This is post-post 
graduate voodoo economics.
  This is what the facts are and these facts are reported by the Social 
Security Administration.
  Mr. FOLEY. Mr. Speaker, if the gentleman would also explain the 
Social Security trust fund because that is a misnomer. There has been a 
lot of debate today, in fact, about raiding the fund, borrowing the 
fund, stealing from the fund, which we know is false, patent rhetoric. 
But if the gentleman would explain the fundamentals of the trust fund 
for us.
  Mr. SHAW. Mr. Speaker, I am glad the gentleman suggested that.
  The way the Social Security trust fund works, the way Social Security 
works, your FICA and payroll taxes are paid into the Social Security 
Administration. The money is paid out of the trust funds in order to 
pay the benefits, the survey benefits, disability benefits, pension 
benefits. The benefits that come out of Social Security are paid out of 
the trust fund. The monies that are left then go into the general fund. 
That is what we call the surplus. This is money that is over and above 
what is necessary to pay the benefits under Social Security.
  Surpluses by law are replaced by Treasury bills. These treasury bills 
are nonnegotiable Treasury bills which are IOUs by the government to 
the government.
  Mr. Greenspan testified before the Committee on Ways and Means and 
said these are really not economic assets. And you can compare them to 
writing yourself an IOU and declaring that as an asset. It is not an 
asset. It is simply an IOU by the government to the government.
  So we will continue to have surpluses, according to the Social 
Security Administration, until the year 2017. But beginning in 2017, 
the Congress is going to have to find the money to pay the benefits, 
whether it increases taxes, whether it cuts benefits, or whether it 
just simply goes into the red and produces this type of shortfall for 
the next 60 years. This is what we are facing and this is what future 
Congresses are facing.
  Now there is a number of plans that are out there that do address 
this dilemma that we find ourselves in, and there are some very good 
plans. The plan that I have developed adds something to Social Security 
without touching the trust fund, without touching any of the FICA taxes 
that are going into the Social Security trust fund. And I believe that 
this is the best way to go. And I have demonstrated through the Social 
Security Administration that if we were to enact this Social Security 
Plus Plan that we would not only be able to avoid all of this red ink, 
we would keep benefits every bit, if not better, than they are today; 
we could add to it a retirement bonus which would be paid out of these 
added funds that are being put into the Social Security Administration. 
It assumes that every dime that goes into this would have to be 
borrowed and paid back, and not only would they be paid back over the 
between now and 2075, but it would create a surplus of $1 trillion.
  Now, this is what we need to leave to our kids; and this is what we 
need to be able to try to do.
  Now, you have heard a lot on this floor, they are saying the Bush 
administration or the Republicans have a secret plan to privatize 
Social Security. How are you going to privatize something that is 
looking down the barrel of a $25 trillion deficit? The private sector 
would not take this unfunded liability over, so that is absolutely 
ridiculous.
  The Social Security Administration needs to stay in place exactly as 
it is today. The American seniors, when they were young workers, they 
paid into this system their whole working life, and it is not up to 
this Congress or any Congress to dismantle the Social Security trust 
fund. It needs to be kept in place exactly as it is today. But we need 
to add to it, add to it as an add-on, as an addition. And my particular 
plan, which we have looked at and which I know you have carefully 
examined, it would take money actually out of the Treasury. No more 
taxes. But it would take it out of the Treasury under monies that could 
be borrowed as a bridge and put into individual retirement accounts, 
not all in one stock as you would hear. As soon as you start talking 
about individual accounts, everyone starts yelling Enron.
  Well, if you had one Enron in your portfolio, that would be a danger 
but this would not allow that. They would be widespread like index 
funds. And it would only be 60 percent in corporate stocks and it would 
be 40 percent in corporate bonds.
  Now, what the Social Security Administration, they did a lookback 
over the last 75 years which encompasses a depression, a Great 
Depression, and they said these individual retirement accounts would 
grow at a rate that would create over 75 years, which would create a $1 
trillion surplus.
  Now, we do not have to adopt this plan. There are other plans out 
there. But it is time that the Congress quit talking about doing 
nothing. They say the sky is falling and then they think that is some 
kind of a joke. This is no joke. This is 2017 which is right around the 
corner. And we need to start planning for it, whether we use the plan 
that I have developed or whether they have come forward with another 
plan. I would be delighted to hear their plan. But this is the only 
plan that they have put forward among their leadership.
  Now, I will quickly say that there are a few Members on the other 
side of the aisle that have developed plans. One of the Members has 
developed a plan, one of the Democrat Members has joined with a 
Republican Member in developing a plan which I think you may hear about 
yet within the next few minutes, and I congratulate him for doing that. 
But Social Security, and I am thinking of what the gentleman from 
Florida (Mr. Foley) was talking about with his grandmother, and in

[[Page 10252]]

there cleaning all of those rooms every day and paying into a Social 
Security fund that kept her out of poverty.
  I am reminded of a statement that was made here on the floor that 
life was to be enjoyed, not endured. And that is what we need to work 
with. And all of us know that today's seniors are going to be just 
fine. Nobody is even thinking about cutting the benefits. But I am also 
saying we do not have to cut the benefits of tomorrow's seniors either 
if we start planning ahead today. If you start building on top of the 
existing plan, not substituting, not taking anything away from it.
  Mr. FOLEY. Mr. Speaker, if the gentleman would tell us about his 
vested interest in this program. How many grandchildren and children 
does the gentleman have?
  Mr. SHAW. Mr. Speaker, I am doing my part to increase the number of 
workers per retiree with 4 children and 13 grandchildren. But those are 
the kids I am worried about because I know, particularly when these 
grandchildren retire, they are going to be in deep trouble. They will 
be up to their eyebrows in this red ink. And we can avoid it, and we 
must avoid it, and we must work together and quit all of this junk 
about raiding the trust fund. I have just explained there is no money 
in the trust fund. How can you raid the trust fund? The trust fund has 
nothing but Treasury bills. But beginning in 2017, there is no surplus. 
You cannot send the seniors Treasury bills. You have got to send them 
cash. So the Social Security Administration is going to have to be 
looking towards the Treasury of the United States to get the money 
because there will not be enough FICA taxes coming in beginning in 2017 
in order to pay the benefits.
  We must not get in a situation where we are thinking about reducing 
the benefits. That would be grossly unfair. People paying into this 
system, relying on it, and then just before they come into retirement, 
the Congress decides to decrease the benefits. The next generations of 
workers, they get in under the workforce, Congress talks about raising 
their taxes. That is not fair, particularly when you do not have to do 
it. But the problem is getting the politics out of this.
  I will be so glad when this next election gets behind us because I 
have a feeling that the Democrats will no longer say this is what they 
support, because this makes absolutely no sense. It makes no sense. And 
I am sure that once we get the politics out of this that we will be 
able to work with the minority party and reform the Social Security 
system.
  To do otherwise, I will tell you tomorrow's generation will turn our 
pictures to the wall and that is where they should be put if we do not 
step forward and do something for future generations.
  This is not only important for today's seniors, it is not only 
important for those who are about to go into retirement, but it is our 
kids and our grandkids, too. This is tremendously important. It would 
be absolutely sinful and pitiful for this Congress to do less than to 
save Social Security for this generation and the next generation.
  Mr. Speaker, I thank the gentleman and, again, I compliment him for 
taking this time. I think that the more we can get this word out, the 
more the American people will demand that their Congress, that their 
representatives, the people who work for them, come here to Washington 
and not play politics with this great retirement system, but to fix it 
and be sure that it is going to be at least as good for the next 
generation as it is for this generation. We can do it, but we need to 
do it on a bipartisan basis.

                              {time}  1530

  We need to do it by everybody down on the playing field and not 
having half the team or the opponents up in the bleachers throwing 
rocks at us that are down there on the field that are trying to do 
something. That is grossly unfair. So when people start talking about 
people wanting to privatize Social Security, we should laugh at them. 
There is no one in this House that has ever talked about privatizing 
Social Security; and when they start talking about raiding the trust 
fund, we should laugh then because we know that there is no money in 
the trust fund. There is only nonnegotiable Treasury bills.
  Now is the time to really move forward, lay the groundwork, so that 
we can, within hopefully next year, come together in a bipartisan way 
and solve this problem. That is what the American people sent us here 
for, and I compliment my colleague again, and I know that he and I both 
have a tremendous number of wonderful seniors in our shared districts, 
and I know that is what they want us to do.
  Mr. FOLEY. Mr. Speaker, let me compliment the chairman of the 
Subcommittee on Social Security again, and let me also emphasize that 
the gentleman from Florida (Mr. Shaw) took his plan, the plan that I 
have cosponsored, down to the editorial boards of our newspapers in 
Florida, and let me mention one in particular, the Palm Beach Post, 
that is known for a rather liberal look, for the agenda of America; and 
they looked at the gentleman from Florida's (Mr. Shaw) plan very 
thoroughly, in fact, complimented the gentleman on the authorship of 
the plan and willing to take the debate forward to the American public 
on the importance of saving this valuable program. Sun Sentinel, as 
well part of a large chain of newspapers throughout the country, also 
opined that they felt it was not only a very good plan but an excellent 
starting point to begin the bipartisan debate on this valuable program.
  This is not just two Members of Congress talking to ourselves, 
wanting to hear our own voices. We have actually taken these ideas, as 
the gentleman from Arizona (Mr. Kolbe) is going to share with us soon 
his, he has been working with the gentleman from Texas (Mr. Stenholm), 
a noted Democrat, who has been very engaged in this constructive, 
bipartisan debate; but this is not just our voices in an echo chamber. 
People have actually reviewed the fine points of this document and 
suggested it was a great opportunity to not only enhance Social 
Security for today's recipients but for generations to come.
  I want to thank the gentleman for spending time. Now it is indeed my 
pleasure and privilege to introduce the gentleman from Arizona (Mr. 
Kolbe), another State that shares a large population of seniors, but 
also who has a tremendous amount of young, innovative working families 
trying to earn a living and go to college and working to make a better 
economy for the great State of Arizona; and the gentleman has been long 
endeavoring on Social Security, not just timely this week or this 
month, but my colleague has been working on it for a significant length 
of time, another true patriot in the effort to preserve and protect 
Social Security. I yield to the gentleman.
  Mr. KOLBE. Mr. Speaker, I thank the gentleman for yielding to me, and 
I really want to commend both my colleagues from south Florida for 
their efforts today to talk to the American people about an issue that 
I think is so vitally important. In fact, I do not think there is 
anything long run, long term that is more important for us to be 
talking about than how we are going to preserve and protect and save 
Social Security, which I think is undeniably the most important, the 
most successful anti-poverty program we have ever had for senior 
citizens in this country.
  The gentleman from Florida, the chairman of the subcommittee, has 
pointed out very well exactly the problems that we face; and we see 
them on these charts that are here. Several of us in this body have 
recognized this problem for several years now and have been working to 
try to make sure that we can find solutions to the problem.
  Since 1995 when I formed the Public Pension Reform Caucus here in 
Congress with my colleague, the gentleman from Texas (Mr. Stenholm), we 
then began the process of slowly working through different options. 
Since 1999 we have had two bills that we have proposed in the Congress 
of the United States that I believe go a long way towards dealing in a 
very rational, sensible way with the problems that Social Security 
faces.
  So I think it is clear that there are Members of Congress that 
understand

[[Page 10253]]

the fiscal and demographic pressures that are facing Social Security 
and that want to engage in a constructive dialogue on reform.
  Again, some of the charts that we saw here from the gentleman from 
Florida (Mr. Shaw) show very clearly what the demographics show us and 
the problem that we have, the fiscal shortfall that we are going to 
have with Social Security. Unfortunately, there are some Members who 
want to use Social Security for their own partisan political advantage 
in an election year.
  Scaring seniors about Social Security might do wonders in the polls 
for some Members, but I do not think the politics of fear should be 
acceptable to the American people; and frankly, I do not think it is 
acceptable. I think instinctively the American people do sense, do 
understand that Social Security is in trouble today. If we ask young 
people, and by overwhelming majorities, younger people know that Social 
Security, as it is currently constituted, cannot be there for them when 
they get ready to retire; and so simply doing nothing is really not an 
option.
  There are legitimate differences of opinion on how best to tackle the 
looming financial deficit in Social Security. There are a number of 
different ways that we might fix Social Security, and I think we need 
to honestly debate all of the different approaches that are out there. 
We heard one of them described by the gentleman from Florida (Mr. 
Shaw). There is the Kolbe-Stenholm plan. But one thing for certain is 
not an option and that is complete inaction.
  Let me just review again a little bit of what the gentleman from 
Florida (Mr. Shaw) laid out for us here today, and that is, some of the 
financial problems that the Social Security trust fund faces in the 
coming years.
  The trust fund, as my colleague correctly pointed out, it is a trust 
fund in name only. It has in it only the IOUs of the government, that 
is, the IOUs for the trust fund, nonnegotiable government instruments. 
That trust fund faces an enormous unfunded liability under current law. 
It is not because of anybody robbing the trust fund. It is not because 
of anybody taking the money and doing anything with it. It is the very 
simple fact that the demographics of people living longer, growing 
older, a larger older population and a smaller working population, 
people starting their families later, having fewer children, the 
demographics of those who pay the taxes for Social Security to support 
those who receive the Social Security benefits simply do not work in 
the long run.
  The result is that we have promised to pay, as this shows, $25 
trillion more in benefits than we have promised to collect right now in 
payroll taxes. I will repeat that number. We are looking at a $25 
trillion, trillion, not million, not millions, trillion, shortfall in 
the Social Security trust fund in the gap between what we are going to 
collect in taxes and what we have promised to pay out in benefits over 
the next generation or two.
  It is just 15 years from now that Social Security will for the first 
time begin to run annual cash deficits, and as the gentleman from 
Florida (Mr. Shaw) pointed out, since seniors expect not a piece of 
paper but a check that is negotiable, we have to convert these IOUs 
into cash. That means the government has to start to borrow money or we 
raise taxes. We raise taxes or we borrow money in order to pay those 
benefits.
  That is when the deficit, in just 15 short years, becomes a very 
serious problem. Now, 15 years is not that far from now; 15 years 
before was not that long ago. Fifteen years ago we were just at the end 
of Ronald Reagan's administration. I was here in the House of 
Representatives. Fifteen years from now, most of the people that are 
listening to this or here on the floor will still be either retired or 
the young people that we see here on the floor will be in the middle of 
the early part of their working years. They will be paying these taxes 
and wondering what has happened to the Social Security system, why am I 
paying these taxes when it is clear there is not going to be anything 
there to pay the tax for me.
  By the year 2030, the annual deficit in Social Security in one single 
program alone will reach $630 billion; and in that one single program, 
we will be running an annual deficit in Social Security of $630 
billion. That means the government is going to have to borrow $630 
billion in addition to the payroll taxes it is collecting just to pay 
the benefits that it has promised to pay for retirees at that point.
  Between years 2017 and 2041, the Federal Government will need to 
raise almost $4 trillion in new money to redeem the Treasury bills held 
in the Social Security trust fund. Just to give my colleagues an idea 
of the magnitude of what this means, how could we make up that deficit, 
how could we make up that shortfall? Well, we could do so by cutting 
some government programs. If we cut out all the spending, all the 
spending that the Federal Government does on Head Start, the WIC 
program which supports women and infant children; all the money we 
spend in education programs at the Federal level; all the money we 
spend in the Interior Department to support our public lands and parks, 
national parks and monuments here in Washington, D.C.; all the money we 
spend for veterans programs, including health care for veterans; and 
all the money that we spend in commerce, to support NOAA and trade 
promotion, everything else that the Commerce Department does; all the 
money we spend for environmental protection, EPA; and all the money we 
spend on space in NASA, if we cut out all of that, all of that, we 
still would not be making up the shortfall that we would experience 
each year by the time we get to the year 2040 of the deficit that we 
will be experiencing in Social Security.
  So the options are pretty bleak unless we do something now, unless we 
begin to face up to the realities of this problem now. The government 
is going to be forced to increase taxes on American workers or 
businesses, or they are going to have to make deep cutbacks in other 
programs to free up funds to meet our Social Security obligation; or of 
course, there is the option which none of us believe is an option at 
all, and that would be to cut Social Security benefits for the people 
when we have already promised it to them.
  So the choices we can make are some tough ones. We can either make 
the tough choices today to deal honestly with the challenges that the 
Social Security system poses to us, or we can leave a fiscal time bomb 
for future generations and truly put the benefits at risk. That is why, 
Mr. Speaker, bipartisanship and candor have to be at the heart of what 
we are going to do about Social Security.
  This debate, as we have just heard from the previous speaker, is 
often characterized as an either/or choice between two ideological 
poles. Either we have the status quo or we have privatization. 
Defenders, of course, of the status quo argue that any reform that 
includes a market-based component is going to undermine the current 
safety net features and expose workers to dangerous risks; and the 
other side, the advocates of full privatization, suggest that creation 
of a privately managed personal account is painlessly going to solve 
the challenges, but forget that Social Security provides more than just 
retirement income. It provides for disability insurance for the needs 
of other special populations.
  So if we take those two extremes of do absolutely nothing and just 
privatize the whole system, I think we are looking at two extremes that 
really do not solve the problem at all. They may make for good, albeit 
myopic, rhetoric. They may help at election time, but they do not 
acknowledge the virtues that we have of something that is in the 
middle.
  The real solution to Social Security has to be to fuse the best of 
the traditional program with some market- based options, because it is 
possible, it is possible, Mr. Speaker, to establish personal accounts 
for younger Americans, not for people who are already retired, not for 
people like me who are nearing retirement, but for younger people who 
will have time to invest in those personal accounts, who will have time 
to see those accounts grow.

[[Page 10254]]

  It is possible to establish those personal accounts, personal 
accounts of which they have individual ownership, of which they have 
control of the retirement income, of which they have flexibility to 
decide how to invest that and to change it as they get closer to 
retirement. That can strengthen and improve the vital safety net 
protections that the Social Security system has to provide.
  So none of the reform plans that I know about are anything that 
approaches privatization. It is simply the wrong word. It is used as a 
scare word, and when we hear that, just remember that it is being used 
as a scare word. Privatization is the wrong description. It is the 
wrong word; but we ought to frankly stop bickering about the label of 
privatization.
  We are suggesting that workers be given a degree of flex. That is 
what we are really talking about, flexibility with how they invest a 
small portion of their Social Security payroll taxes, giving workers 
some flexibility to make some choices about their investments. We are 
not talking about dismantling Social Security. We are talking about 
investment flexibility. We are talking about ownership. We are talking 
about individuals having some control over their retirement options.
  The directors of the Congressional Budget Office, the General 
Accounting Office, Federal Reserve Chairman Alan Greenspan and many 
other policy experts have all testified in front of various committees 
of Congress and the President that we must make some tough choices to 
return Social Security to solid financial footing.
  So, Mr. Speaker, what needs to happen if we are going to have this 
debate, which is so important to the survival of this program, we need 
to acknowledge there is no magic bullet.

                              {time}  1545

  There is no free lunch, no free lunch solution that is going to allow 
us to provide 100 percent of promised benefits without trade-offs 
somewhere else. But I do say that personal accounts can help make the 
task a lot easier for policymakers, and it can limit the impact that 
the deficit that we are talking about and the problems we see will have 
on future beneficiaries. It would give them some hope by giving them an 
investment that they are going to have some return in their Social 
Security retirement that right now they cannot look forward to seeing 
as we look down the road to the year 2070, to 2050, when people today 
just starting out in the workforce will be retiring.
  Including individual accounts, personal accounts in the reform plan 
does not require deeper benefit reductions than would otherwise be 
required. Let me repeat that. Does not require deeper benefit 
reductions than would otherwise be required. But neither does it mean 
that no changes, no reductions for future beneficiaries is going to be 
unnecessary. The gentleman from Texas (Mr. Stenholm) and I have never 
claimed that the reform plan that we have put on the table is perfect. 
Members can go through the plan that I have introduced with the 
gentleman from Texas (Mr. Stenholm) and select items that they want to 
criticize. We went too far here, not far enough there. However, we need 
to examine plans in their entirety. How would the plans affect the 
future retirement income, the Federal budget, and the health of the 
American economy.
  If Members determine that the acceptability of reform based on 
adherence to simplistic pledges, a pledge of no personal accounts or a 
pledge of no changes to benefit levels, or a pledge of no increase in 
taxes, then we are never going to reach bipartisan consensus on how we 
fix Social Security and how we pass legislation that will actually 
accomplish that.
  Keeping Social Security intact for those who depend on it today, and 
for those young people who are just starting out in life today and have 
some expectation that they should have something from this system, it 
is a commitment that none of us should ignore, and we need to find a 
way to bridge the gap between these generations. But the fact is the 
Social Security system that we have today is vastly underfunded, and it 
will impose staggering financial burdens on younger workers and future 
generations of workers if we leave it completely unchanged.
  Mr. Speaker, it is time to move past the demagoguery which has 
overwhelmed the Social Security debate in the past, and work together 
to provide a secure retirement for all Americans. I believe the 
discussion we are having today that the gentleman from Florida (Mr. 
Foley) has initiated is a good discussion. I believe it is important 
that we begin this discussion today, and I commend the gentleman for 
having this Special Order and giving us an opportunity to talk about 
Social Security, the importance of Social Security, that we attach to 
Social Security for people who are retired today, and the importance of 
Social Security for young people who will depend on this system in the 
future. Both the current retirees and those who are working but will 
retire in the future, need to know that the system holds promise for 
them.
  I hope that this debate, this discussion today, will begin the 
process that we need to have in this country of having a national 
debate on how we fix it; but let us leave no doubt about one thing: 
Social Security does require fixing. Doing nothing is not the option.
  Mr. FOLEY. Mr. Speaker, I thank the gentleman from Arizona (Mr. 
Kolbe), and of course the gentleman from Florida (Mr. Shaw) who spoke 
earlier, on what is a vital, important and outstanding program for 
seniors. The gentleman has worked a long time on this proposal. I 
personally commend the gentleman. We do not call the plans between 
Members competing, we call them complementary for a reason. We are 
looking for solutions to real problems, and I salute the gentleman for 
taking time for this discussion today.
  Mr. Speaker, we have been joined by the gentleman from Ohio (Mr. 
Portman) who has worked tirelessly on pension accounts, which are of 
interest to all Americans who have actually had a chance to build up 
their own portfolios through IRAs and 401(k)s. The gentleman has been 
an important architect in not only emboldening those plans to give more 
financial security, but actually doing something even more meaningful 
for some of the younger generations who may not have been able to 
afford to contribute the $2,000 per year to their IRA by giving a 
catch-up provision that kicks in in later years so they are able to 
actually add to their Social Security account through their IRA plan so 
their retirement plan is more insured and more secure.
  Mr. Speaker, I yield to the gentleman from Ohio (Mr. Portman).
  Mr. PORTMAN. Mr. Speaker, I thank the gentleman for that 
introduction, and for having this Special Order tonight. Nothing is 
more important to the future of this country than addressing the 
retirement security needs of all Americans.
  We have spent a lot of time in this Congress over the past 2 or 3 
years working on ways to increase two of the three legs of the 
retirement security stool. Those two legs are the employer-based 
system, which is expanding 401(k)s and expanding defined benefit plans; 
and we have done a lot in that regard. Next week on this floor we will 
be taking up legislation to ensure that those changes are permanent.
  We have also helped with regard to the second leg of that stool, 
which is private savings. We have expanded from $2,000 to $5,000 the 
amount that someone can put aside in an individual retirement account. 
We have been sure through this process to also focus on the third leg 
of the retirement security stool, and that is the public pension side 
or the Social Security side.
  There we have had less luck in passing legislation because, frankly, 
it has become, unfortunately, a very partisan issue. The reason I 
commend the gentleman from Florida (Mr. Foley) tonight for having this 
Special Order, and commend the President of the United States, and my 
colleagues who spoke earlier, they are talking about this very critical 
third leg. People around this country depend on Social Security. Twenty 
percent of the seniors in my district depend exclusively on it, and 
that roughly $900 a month is

[[Page 10255]]

critical to their being able to live their life with a little dignity 
after years and years of hard work.
  Mr. FOLEY. Mr. Speaker, if the gentleman will yield, it is the 
security of seniors we are here protecting. We are here protecting that 
valuable program. We are not changing their benefits; is that correct?
  Mr. PORTMAN. Mr. Speaker, the gentleman is correct. What we are doing 
through these other two means, one, increasing what can be saved for 
retirement through a 401(k) or defined benefit plan; and, second, 
improving what you can save individually through your personal savings. 
We are helping everyone to have a more secure retirement. We are going 
to continue to work on that.
  With regard to the third leg, Social Security, we are suggesting that 
the program needs to be strengthened and improved. Here are the 
alternatives. We can raise payroll taxes dramatically, and already 
payroll taxes are the most regressive tax out there, already too high. 
Most people around America pay more in payroll taxes than they do in 
Federal income taxes. Or, we can reduce benefits. We do not think that 
benefits ought to be reduced or payroll taxes ought to be increased to 
the substantial level that they would have to be in order to sustain 
the program. Instead, we think we ought to look at more creative ways 
to be absolutely sure that every senior has retirement security.
  The President's principles that he has laid out are ones that most of 
us on the Republican side support, that any plan that changes Social 
Security be voluntary, that it not affect any senior who is retired or 
near retirement in any way at all. Any benefits they get now, they 
would get; but that we come up with creative ways to ensure that this 
program is there in the future.
  I just saw a couple of charts as I was walking up that make this 
point very, very clearly. First, what is the problem. The problem is 
the way Social Security was set up. It was a pay-as-you-go system. When 
FDR started this program in 1945, we had 42 working Americans paying 
for the benefits of every one retiree. Most people did not live until 
age 65. Now the good news is that people are living longer, more 
productive lives. Also, we have this baby boom generation that is 
beginning to retire. That means today there are only three workers for 
every retiree. By the year 2035, which is not too long from now, there 
will only be two people working. This is the demographic problem that 
Social Security faces.
  Again, the other two options that the other side of the aisle wants 
to rely on is to reduce benefits, which would be, for seniors in my 
district and around the country, would be a terrible result. We would 
have to reduce benefits by 27 percent by the year 2041, and this is 
based on data from the trustees of Social Security, a nonpartisan 
group. This is not somebody who has an ax to grind. These are the 
actuaries who do the analysis and look at it from an objective basis.
  By 2076, a 33 percent reduction in benefits. Is that a good result? 
No.
  You could increase payroll taxes. Again, payroll taxes are already 
too high. We would have to have a substantial increase in taxes. By the 
year 2041, 16.9 percent increase, a 37 percent increase over today. 
There would have to be a 16.9 percent payroll tax, which is a 37 
percent increase in payroll taxes by the year 2041.
  By the year 2076, there would be a 52 percent increase in payroll 
taxes. Again, to me these are not solutions that we want to have to 
fall back on. Rather, we want to be proactive and address the program 
so we can be sure that our seniors have peace of mind in retirement 
that they so much deserve.
  Here is the big picture on this chart. Right now we are here, and we 
have a short-term surplus in Social Security, but soon the lines will 
cross. The benefits going out will be greater than the amount of taxes 
coming in. Why? Again, because Americans are living longer. It is a 
good problem, but a problem that we need to deal with; and second, we 
have this large baby boom generation, my generation. Baby boomers ought 
to know that we are beginning to retire, and we are creating a huge 
problem for future generations to be able to fund this problem. That is 
why there is a $25 trillion shortfall over time.
  This is what the President is talking about. It is the right thing to 
do to talk about this issue. It is the wrong thing to do to make this 
political and partisan, to scare seniors. Do not scare my grandmother. 
She is 97, and has worked hard during her life. She deserves to know 
that check is continuing to come. She is one of those people who is 
living longer, and deserves to know that she is going to have security 
in her retirement.
  The opportunity we have is to come together on a bipartisan basis and 
make a huge difference for the future of our country and our seniors. 
If we allow this to become a political football and just toss it back 
and forth across the aisle, or put our head in the sand and say there 
is no problem, we will be doing a great disservice to our future, to 
our seniors and to this great country. This is a challenge that this 
Congress must take on. It is one that I believe we can take on again. 
The leadership of President Bush is very important in this, and I 
commend him for making it one of the primary issues that he took up not 
only in the Presidential campaign, but since being elected has talked 
about increasingly. I hope that we can join hands and come together and 
create a better future for all Americans.
  Mr. FOLEY. Mr. Speaker, as we conclude today, I thank the gentleman 
from Texas (Mr. Armey) for providing this time so Members can discuss 
at great length this important, valuable and vital program for American 
seniors.
  I talked about my grandmother when I opened, and I would like to talk 
about my parents, Ed and Fran Foley of Lake Worth, Florida. My father 
is 81, and I will just leave it at the fact that my mother is younger 
than my dad, and I will not mention her age. I want to go home and eat 
over the weekend, and if I mention her age on the House floor, she may 
be a bit upset.
  I suggest that they are both recipients of Social Security. We want 
to underscore to every senior like my parents, and much like my 
grandparent, we are not changing the benefits of Social Security 
recipients. We are not reducing them. We are not replacing them. We are 
not privatizing them. We are ensuring them. We are ensuring that 
seniors across America can count on that check, whether it is direct-
deposited or comes to a mailbox near their home. We are ensuring that 
every senior who has worked hard building this economy, the greatest 
generation that served us in World War II, are given the confidence by 
this Republican leadership that we stand behind the pledge and promise 
that Social Security would be there in their golden years. That is a 
gold-plated guarantee by this body.
  We are not investing their funds in the stock market. To the 
contrary, we are ensuring their success and survival. I reject the 
claims of the minority and suggest we are working productively to 
ensure the continuation of this valuable program.
  For those who are disabled or survivors, children of people who have 
passed, who count on Social Security, our commitment is stronger than 
ever, and it is a bond we make with those who are frail in our 
community that need Social Security. So if you are disabled or a 
survivor, you can count on the continuation of this valuable program.

                              {time}  1600

  We are also telling current workers that we are not going to tax them 
further in order to ensure a political success formula for us. We are 
going to make certain it works without burdening hard-working young men 
and women who are earning their way and supporting their families.
  Today has been about speaking about a greater point of view of 
protecting a generation who served us in a phenomenal way, many who led 
us out of the Depression and through World War II, through Korea, some 
through Desert Storm, who because of disability are now on Social 
Security. This is a generation that has brought this Nation to

[[Page 10256]]

the greatest place and the greatest time on Earth. This is a generation 
that we should celebrate and support and applaud. Let us not demean the 
debate with the silly rhetoric of scare tactics.
  Again, I mentioned I come from Florida, and each political season I 
get ready for the attacks that run against myself or Mr. Shaw 
suggesting somehow we are going to take away this valuable program. 
Fortunately, the voters are smart enough to reject those election lies. 
They are election lies. I do not like to use the word ``lie'' on the 
floor, but I cannot characterize it any other way because there is no 
factual basis to them. They try to scare seniors. The last candidate 
for President tried to scare seniors in my State of Florida, tried to 
win the election by scaring vulnerable seniors. To have a conversation 
about Social Security should not be about fright or frightening people. 
It should be about uplifting them in this great hall of debate.
  I choose the high road in this debate as does the majority leader and 
the Speaker and the majority whip and every member of our conference. 
We have heard from several today who enunciated our plans for 
continuing and securing America's future. Over the next several weeks 
we will continue to engage in debate and respond to the charges by the 
other side of the aisle. We are not going to sit back and take it 
anymore. I made that comment last week and I make it again. Bring your 
charges to this floor and we are ready. We will answer your rhetoric 
with fact; and we will provide the information so that seniors, as they 
sit in their living rooms, know the truth. The truth is Social Security 
is a vitally important program, and we are here prepared to do our 
duties to ensure the continuation of this great program.
  I want to thank you, Mr. Speaker, today for indulging and for all 
those who participated and again my thanks to the majority leader, the 
gentleman from Texas (Mr. Armey), who recognizes, as he concludes his 
career in the Congress as we adjourn this session, the value of this 
program, the value of seniors, and our commitment to continue on 
leading this Nation in a financially prudent and positive manner.

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