[Congressional Record (Bound Edition), Volume 150 (2004), Part 3]
[House]
[Pages 3417-3421]
[From the U.S. Government Publishing Office, www.gpo.gov]




                            SOCIAL SECURITY

  The SPEAKER pro tempore (Mrs. Blackburn). Under the Speaker's 
announced policy of January 7, 2003, the gentleman from Michigan (Mr. 
Smith) is recognized for 60 minutes.
  Mr. SMITH of Michigan. Madam Speaker, I am going to give a short 
tutorial on Social Security tonight, and this is going to be somewhat 
bipartisan because I am going to criticize both parties a little bit 
for not acting on one of the most serious problems I think is facing 
our country, and that is unfunded liabilities. In other words, the kind 
of promises that Congress has made to make themselves more popular back 
home and yet not having any way to pay for it.
  The estimated unfunded liabilities in today's dollars of the promises 
that we have made that we do not know where the money is coming from is 
estimated now at $53 trillion. In other words, we would have to come up 
with $53 trillion and put it in a savings account that is going to 
return at least inflation and the time value of money in order to pay 
for these kind of future benefits. Even at this time, when Republicans 
are talking about the diligence that we must have in reducing spending, 
and my guess is we are going to reduce spending even less than what the 
President has suggested, there still is the problem of dealing with 
Social Security.
  I asked the pages a little earlier to listen up to my comments 
tonight on Social Security because our pages, who are 16- and 17-year-
olds and in high school, are the generation at risk that are going to 
have to put up with our nonaction to solve this serious problem. And as 
long as the pages are listening, let me just say it is a tremendous 
service that they provide to America, giving up their time, getting up 
at 5:30 in the morning, eating quickly and doing all the work we put 
before them.
  Okay, here goes the roughly 30, 35-minute tutorial on Social 
Security. First, I am going to start out with how we divide up 
government spending. If you look at this pie chart, we see that the 
expense for Social Security is the largest piece of this pie.

                              {time}  1615

  Let me remind everyone that Social Security is a pay-as-you-go 
program where the taxes, FICA taxes that come out of your paycheck 
immediately, once it gets to the Department of Treasury, is either sent 
out in benefits to current retirees, or where there is a surplus it is 
spent for other government programs. Social Security even

[[Page 3418]]

exceeds the 20 percent increase in cost of defense. Interest is 14 
percent, but to continue to borrow this money and pretend that our 
problems today are so serious that it justifies taking money away from 
our kids and grandkids that cannot defend themselves I think is 
unconscionable.
  Here is briefly how Social Security works. Benefits are highly 
progressive and based on earnings. Some people have said if the economy 
improves it will satisfy the problems that we are facing with Social 
Security. That is not true because as the economy improves and wages go 
up, that means future benefits, because they are directly related to 
the wages that you are making, future benefits are also going to go up. 
It might solve the problem in the short run, but in the long run it 
does not solve the problem.
  The second is at retirement all of a worker's wages up to the tax 
ceiling are indexed to present value using wage inflation. In other 
words, if you made $20,000 a year 15 to 18 years ago, the wage 
inflation would credit you on the way your benefits are calculated up 
to what that $20,000 is worth today. In other words, it would be 
written down someplace around $40,000. The third blip, the best 35 
years of earnings are averaged. So if you only work 20 years, 15 years 
go as a zero for your average earnings in terms of defining your 
benefits.
  The annual benefit for those retiring in 2004 equals, and this is how 
it is progressive, it equals 90 percent of the earnings up to 7 
percent. These are the benefits you are going to get or are getting. It 
equals 90 percent up to the first $73,440; 32 percent of the earnings 
between that figure $73,440 and $44,000; and 15 percent of the earnings 
above the $44,286. In other words, if you are a very low-income person, 
you can receive back on our average Social Security check 90 percent of 
what you averaged during the 35 years. If you are a very high income 
recipient, you are going to get 15 percent of the earnings up to the 
maximum of what is now $89,000. We have capped your earnings in terms 
of defining Social Security benefits up to $89,000, and that is geared 
to inflation in future earnings.
  Early retirees receive adjusted benefits. If you retire at 62, they 
figure out how long you are going to live and reduce your benefits 
accordingly. However, if you decide to put off retirement, maybe until 
you are 70, then your retirement benefits are indexed to a higher 
calculation in your monthly payment. So if you are in good health, keep 
exercising and eat right, sometimes it is going to be to your advantage 
to put off receiving those Social Security benefits for a few years.
  What a lot of people come to me and ask, what about all this cheating 
on SSI? These people are getting my Social Security benefits. That is 
not true. SSI comes out of the general fund. It does not come out of 
Social Security.
  Well, Social Security started in 1934 with President Franklin 
Roosevelt. When President Roosevelt created the Social Security program 
over 6 decades ago, he wanted it to feature a private sector component 
to build retirement income. Social Security was supposed to be one leg 
of a three-legged stool to support retirees. It was supposed to go 
hand-in-hand with personal savings accounts.
  Researching the archives, and if you have never looked at the 
archives and the history of this country, it is very interesting. 
Looking at the archives when Social Security was passed, the Senate 
actually said there should be personal retirement savings accounts 
owned by the individual worker. The House said no, let us have 
government take all of the money and the government can invest it. That 
way we can be sure no snake oil salesman comes in and tries to convince 
individuals to invest their money some place where it might be risky.
  In conference committee the House won out, the government won, and 
from then on every time Social Security gets into a little trouble in 
terms of income, enough income coming in to pay benefits, it does one 
of three things: It increases taxes; it reduces benefits; or a 
combination of those two. Most often it is a combination of the two.
  Social Security is, what I wrote on this chart, is a system stretched 
to its limit. There are 78 million baby boomers that begin retiring in 
4 years in 2008. This is part of the problem. With a pay-as-you-go 
program with more and more retirees and a lower birth rate, you end up 
with fewer and fewer workers paying for the benefits of that increasing 
number of retirees. Social Security spending exceeds tax revenue in 
2017. That is the current estimate. Later this month the Social 
Security Administration is going to come out with their new projections 
of how big a problem we have for Social Security.
  Chairman Greenspan at a House Budget Committee hearing said a couple 
weeks ago that Congress has got to do something about Social Security. 
It is going broke. He suggested that we have a few changes in Social 
Security that slows down the increase in benefits over and above 
inflation. We had both Republicans and Democrats saying well, boy, we 
do not want to touch Social Security. As most people know, Social 
Security is easy to demagogue. We have so many people that are so 
dependent on Social Security, when somebody says this other guy running 
for Congress, he wants to ruin your Social Security, and if you do not 
understand how Social Security works, if you do not understand how 
great the predicament is going to be and how underfunded Social 
Security is going to be in the future if we do not make some changes, 
it is easy to say I better vote for the person that says my Social 
Security is never going to be touched.
  There are only three ways to fix Social Security: You either reduce 
benefits; you increase taxes; or you make a change in the program to 
get a better return on the money that is being sent in by American 
workers. What I am suggesting and I put into my bill 10 years ago, and 
I was the first to say that we should consider private savings accounts 
in order to get a better return than the 1.7 percent that the average 
retiree gets from the money that is paid in, that they pay into Social 
Security.
  The third bullet on this chart, Social Security trust funds go broke 
in 2037. But in 2017 or 2018 is when there is not enough money coming 
in from taxes to pay benefits, and so then you have to increase taxes 
on somebody else. What Congress has done in the past, they say let us 
just reduce benefits a little bit.
  When I introduced my first bill over 10 years, and I have introduced 
a bill scored by the administration every session of Congress that I 
have been here since 1992, it was easy to fix the program because there 
were a lot of surpluses coming in. The point I am trying to make is 
that those surpluses are going to go away every year.
  Back to the pie chart, guess how much we take in from Social Security 
now? We take in from Social Security taxes $540 billion a year, and 
what we pay out is $450 billion a year. So right now because of the 
huge tax increase on Social Security that we imposed with a Greenspan 
commission in 1983, for a short time period at least we are bringing in 
more revenues than we need. And part of the problem is that this 
Congress, both sides of the aisle, have said here is some free money so 
we are going to spend that Social Security extra money and then we are 
going to write out an IOU to the Social Security Trust Fund.
  Very briefly, solvency is certain. We know how many people there are, 
and we know when they are going to retire. We know people will live 
longer in retirement, we know how much they will pay in and how much 
they will take out, and we know that payroll taxes will not cover the 
benefits starting in 2017. What do we do? And the shortfalls are going 
to add up to $120 trillion between 2017 and 2075. That is in future 
dollars. So if you count how many dollars every year between 2017 and 
2075, $120 trillion, compare that to our $2 trillion, a little over, we 
are running maybe $2.4 trillion this year, that is our annual budget, a 
little over $2 trillion, $120 trillion we have to come up with in 
future dollars. If we had $12 trillion in today's dollars and put it 
into that savings account, we could accommodate benefits; but that is 
$12

[[Page 3419]]

trillion. Where is it going to come from?
  This chart represents the demographic problems. The pay-as-you-go 
retirement system is not going to meet the challenges of a reduced 
birth rate and an increased longevity for people to live. Back in 1940 
there were 37 workers paying in their Social Security tax for every one 
retiree. By the year 2000, it got down to three workers paying in their 
Social Security tax for every retiree. Of course we are estimating in 
2025 it is going to be down to two.
  In addition to those demographic considerations, what we are also 
facing is the fact that we have increased benefits along the way. And 
so the fewer workers you have to pay that increased benefit, the 
greater the burden is on those individuals. But more than that, what is 
it going to do to our economy? Do you know what is happening in France? 
France has a payroll tax to accommodate their senior population of over 
50 percent. No wonder France has such a high unemployment rate. No 
wonder France is having a difficult time competing with world trade in 
their production, because a business only has two chances when they 
have that kind of increased tax: You either have to pay the employees 
less or you have to charge more for your product. And if charging more 
for your product makes you less competitive, then your economy is 
weakened.
  Guess what the payroll tax in Germany is? Now the payroll tax in 
Germany is 42 percent. Ours is 15.2 percent, but if we do not do 
something and we say look, we will deal with this problem later, then 
the consequences are increasing taxes on American workers. That is a 
problem for those individual workers, and it is a problem for our 
economy if we start having to charge business the extra tax to pay 
those kinds of benefits.
  That means that the United States Government, Federal Government, has 
to start considering doing something that almost every State in the 
Nation has done now, and that is instead of having a fixed-benefit 
program, you have a fixed-contribution program, and it is going to take 
20-30 years to make the transition to that kind of a program. But look, 
the longer we put it off, the more drastic the solution is going to be.
  I know I get a little emotional about this issue. Many of us have 
shouted and pulled our hair and got on our soapbox saying these are 
real problems, the unfunded liability of our promises. And of course it 
has been the tendency that politicians that take home pork projects, 
that start new programs, that make promises, and the needs out there 
are unlimited, but those kinds of extra promises that are put into law 
tend to increase the chance that that individual politician is going to 
be elected to office.

                              {time}  1630

  They get on the front page of the newspapers, their picture is on 
television cutting the ribbon, and they end up increasing the 
likelihood that they will be reelected. Part of that is because now 
over 50 percent of the adult population gets much more from government 
services than they pay in in taxes. With 50 percent of the people now 
paying about 1 percent of the total income tax in this country, it is 
easy to understand why some say, look, I've got problems, give me a 
little more government, give me a Representative that's willing to 
spend a little more money. But for the sake of our kids and our 
grandkids, we have got to face up, I think, to the real problems that 
we have today in the unfunded liabilities and the overspending.
  This is simply a chart that says, starting in 2017, we go from the 
surpluses of the high taxes that we passed back in 1983 and we go into 
a future of huge deficit spending.
  What I think it is good to remind people about is there is no Social 
Security account. That is the same as saying it is a pay-as-you-go 
program. The Supreme Court on two decisions now has said just because 
you pay Social Security taxes all your life there is no obligation on 
the part of the Federal Government to pay Social Security benefits. 
That is what the Supreme Court has said. They said Social Security 
taxes are a law that has been passed by Congress and signed by the 
President for increased taxes and that benefits are simply a benefit 
provision passed by Congress and they are not connected as far as an 
entitlement.
  These so-called trust fund balances in Social Security are available 
to finance future benefit payments and other trust fund expenditures, 
but only in a bookkeeping sense. This was the Office of Management and 
Budget that said this, just to hopefully emphasize the fact that there 
is no entitlement program. I am introducing legislation to say that in 
future budgets of both the OMB, that is the President's budget people 
and CBO, the Congressional Budget Office, which is the congressional 
budget office, they have got to include projections on unfunded 
liabilities; and I think maybe it will help us better realize the 
predicament that we are facing. Generally, it is a little easier to put 
off the solutions until the disaster is right there upon you. It is 
easier in terms of politics. It is not easier in terms of finding a 
good solution to keep Social Security solvent.
  As I go around, since it was used against me in my first three 
reelections that Nick Smith is trying to ruin Social Security, I have 
probably given maybe between 250 and 300 speeches in my district to my 
constituents presenting the problem of the dilemma of Social Security. 
My district is starting to understand better that something needs to be 
done. Luckily, I have been reelected in spite of the demagoguery. But 
what a lot of the people say, if government would just keep their 
cotton-picking hands off of the extra Social Security money coming into 
the trust fund, it would be okay. This chart represents that it would 
not be okay. What government has borrowed and spent because of the 
annual surpluses is now in IOUs down in Virginia and it amounts to $1.4 
trillion. The unfunded liability is $12.2 trillion in today's dollars, 
$120 trillion if you include the future dollar cost of what is going to 
be unfunded if we stay with the current tax structure.
  I think I mentioned a little bit, so just briefly, economic growth 
will not fix Social Security. Social Security benefits are indexed to 
wage growth. When the economy grows, workers pay more in taxes but also 
will earn more in benefits when they retire. And so growth makes the 
numbers better now, but worse in the future.
  The biggest risk is doing nothing at all. Social Security has a total 
unfunded liability, this is an old figure, of $9 trillion. It is closer 
to $12 trillion. The Social Security trust fund contains nothing but 
IOUs. 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. Let us make sure we do not make that happen.
  This is a chart that shows what the average retiree gets on the money 
they send in for Social Security taxes from their paycheck. The real 
return on Social Security is less than 2 percent for most workers and 
shows a negative return for some, compared to over 7 percent for the 
market. If you happen to be a minority whose life span is less, you 
actually are a loser and you do not get the money that you send in in 
Social Security taxes. If you are an average, you end up at about 1.7 
percent return on your Social Security benefits. I just put this number 
down in terms of what has happened to the 5,000 stocks in the Wilshire 
5,000, the index fund. This is what it has earned after inflation over 
the decade ending January 31, 2004. So it includes the down years, the 
low-income years. That is 11.86 percent. If we had government invest it 
and say, look, you cannot spend it anyplace else, but you have got to 
invest it, if we were to have individuals own it and say, look, 
government is going to say that you cannot take it out until you 
retire, government is going to limit the investment funds that you are 
allowed to invest in, in safe investments, the possibilities are that 
you could double, triple, quadruple and even more what you are getting 
now in terms of returns on the money you pay in for Social Security.
  This is another way of saying it in my little bar chart, that if you 
retired in 1940 when there were so many workers and the program was 
just starting,

[[Page 3420]]

it took 2 months to get back everything you and your employer had paid 
in. If you retire in 2005, it is going to take you 23 years after 
retirement to break even. And as you see, in 2015 it goes up to 26 
years that you are going to have to live after you retire to break even 
on the money that was sent in for Social Security.
  This chart shows what Congress and the President have done in the 
past to solve the Social Security problem, as there are more retirees 
and fewer workers. We have increased taxes, this chart does not show 
how we have reduced benefits, but what we did in 1983 is we increased 
the age that you receive the maximum benefits. So we are now indexing 
that age upward from 65, but it only goes up to 67 and then levels off 
again. Probably what we should do is somehow instead of indexing it to 
inflation, maybe index that retirement age for maximum benefits to the 
mortality tables.
  I chaired the bipartisan task force on Social Security, Democrats and 
Republicans. After we spent about a year, both Republicans and 
Democrats on that task force agreed that something has to be done and 
the sooner the better. We had testimony from futurists, medical 
futurists that suggested that within 20 years, anybody that wanted to 
live to be 100 years old would have that opportunity. Within 30 to 35 
years, probably, with our medical technology, anybody that had the 
desire and the money could live to be 120 years old. So medical 
technology is making the life span greater. Just let me give Members a 
short comparison. When we started Social Security back in 1935, the 
average age of death was 62. That meant most people paid into Social 
Security most of their lives but died before they were eligible for 
those retirement benefits. Now the average age of death for a male is 
78 and the average age of death for a female in America is about 81\1/
2\, almost 82 years old.
  Very briefly, what we have done on tax increases, in 1940 our rate 
was 2 percent of the first $3,000. In 1960 we raised it threefold, 6 
percent of the first $4,800. In 1980 we raised it to 10.16 percent of 
the first $25,900. In 2000 we raised it to 12.4 percent of the first 
$76,200. Now in 2004, because it is indexed for inflation, it is 12.4 
percent of the first $87,900. The danger again is increasing taxes or 
reducing benefits.
  Let us deal with some structural changes to Social Security, and I am 
just going to get into what I think is reasonable as far as some 
suggestions. I think it is important that we have raised Social 
Security taxes so much that now 78 percent of working families in the 
United States pay more in the Social Security tax than they do the 
income tax.
  There are six principles of Social Security that I think are 
important: protect current and near-term retirees, allow freedom of 
choice, preserve the safety net, make Americans better off. On the 
principle of preserving the safety net, nobody's proposal for Social 
Security makes any change to the insurance part of that program, the 
disability part. If you get hurt on the job, you are going to be 
covered under Social Security for some payments. Nobody is suggesting 
any change in the government running that disability insurance part of 
the program. Make Americans better off and not worse off, and hopefully 
the economy in America better off; create a fully funded system; and no 
tax increases. Those are what I think should be our six guiding 
principles.
  The U.S. trails other countries saving its retirement system. In the 
18 years since Chile offered personal retirement accounts, 95 percent 
of the Chilean workers have created accounts and their average rate of 
return has been 11.3 percent. Of course, there is Australia, Britain, 
Switzerland, other countries. Even England allows 50 percent of their 
FICA tax, so-called, to go into personal retirement accounts.
  Here are some of the highlights of my proposal. People choosing to 
participate in the voluntary account program would continue to receive 
benefits directly from the government. In other words, they have the 
option of going into a personal retirement savings account as part of 
the money that they pay in in Social Security taxes, or they can stay 
in the current system. Those benefits would be offset based on the 
amount of money deposited into their accounts, not on the amount of 
money earned in their accounts. In other words, if you earn more money, 
then you are better off than if you would be sticking with Social 
Security. If you can find a rate of return that is better than Social 
Security, you end up with higher retirement incomes.
  In our Social Security legislation that we passed back in 1934, we 
said that municipalities did not have to go into this program; they 
could devise their own program as long as they had required saving 
investments. That is what a lot of counties in the United States have 
done. Some Texas counties are now paying $40,000 a year in retirement 
benefits compared to a much lower rate in Social Security. Those 
benefits would be offset based on the amount of money in accounts. This 
means that workers could expect to earn more for their account than the 
offset. What we do in our legislation, because it is so absolute, 
because we can have some companies that will guarantee a better return 
than Social Security, we have guaranteed in my bill that your 
retirement income will be at least as high if you stayed in the Social 
Security system. We start out, into Social Security you pay 6.2 
percent, your employer pays 6.2 percent. In reality it all comes out of 
the worker's pocket. But we are saying that out of that 12.4 percent, 
we are going to start letting you set aside 2.5 percent of your 
earnings in your own personal retirement savings account.

                              {time}  1645

  And there are several provisions where we divide it.
  All worker accounts would be owned by the worker and invested through 
pools supervised by the government. Regulations would be instituted to 
prevent people from taking undue risks. I know this is all coming hard 
and strong, but if I give this special order maybe 100 times, people 
can tune in to pick up some of the leftover pieces.
  Until an account balance reaches $2,500 in their personal retirement 
account, we restrict what they can invest in. It would be limited to 
choosing one of three funds: an 80 percent bond, a 20 percent index 
stock or a 60/40 fund or a 40/60 fund. So what we are saying is until 
one reaches that minimum, that they are going to be limited on the kind 
of investments they can make. But we also say when one can buy an 
annuity account that will give them as much money as Social Security 
would in their retirement, then they can do anything they want to with 
their money. After the balance reaches $2,500, workers would have 
access to additional safe funds.
  The bill would increase contribution limits for IRAs, 401(k)s, and 
pension plans because we need to increase our savings in this country. 
The United States has one of the lowest savings rates in the world 
right now. That means it is tougher for our business and industry to 
come up with the funds that they use for research and growth and 
eventually jobs. It would create a 33 percent tax credit for the 
purchase of long-term care insurance up to $1,000, $2,000 for a couple. 
The long-term care insurance is one of the highest costs for Medicaid, 
a little bit different but still dealing with the huge problem of 
unfunded liabilities that we are facing with the Medicaid program. The 
Medicare program is the health care program for seniors. The Medicaid 
program is the health care program for low income.
  It would create a tax credit to make it easier for low-income seniors 
to live at home or with a family rather than going to retirement care. 
Low-income seniors would be eligible for $1,000 for expense related to 
living in their own home, and households caring for dependent parents 
would also be eligible for a $1,000 credit for expenses.
  Here is an issue that has bothered me in Social Security, and I call 
it ``fairness to women.'' Sometimes it would be the man that is the 
spouse, but in my proposal I say for married couples, account 
contributions would be pooled and then divided equally between husband 
and wife. In other words, if one

[[Page 3421]]

spouse was making twice as much as the other spouse, they pool what 
they are making together in terms of what can go into their personally 
owned private investment account and divide it in two so each husband 
and wife would have the identical amount of money in their savings 
account. Certainly, it is going to simplify divorce settlements. It 
would increase surviving spouse benefits for up to 110 percent of the 
higher earning spouse's benefit. And stay-at-home mothers with kids 
under 5 would receive retirement credit. My wife has got me convinced, 
my daughters have me convinced that stay-at-home moms really work hard, 
and we should not discourage it. We should encourage it. So I am 
suggesting in my bill for a mom staying home with those young kids, 
they can get extra credit in terms of assigning an average earning for 
those later years of what they might have made if they had been in the 
working environment. So it averages their highest income for those 
years they stay at home with those young kids up to 5 years.
  Briefly, and let me wind this up pretty quickly, the Social Security 
Solvency Retirement Security Act has been scored by the Social Security 
actuaries to restore long-term solvency to Social Security. There would 
be no increases in the retirement age, changes in benefits for seniors 
or near seniors or changes in the Social Security COLA. The COLA is the 
cost of living index that is calculated every year to increase Social 
Security benefits. Solvency would be achieved by recouping a portion of 
the higher returns from workers' accounts and slowing the increase in 
benefits for the highest-earning retirees. Remember that chart back a 
while ago, if people have been watching this whole show, where the 
progressivity of the Social Security system ends up with receiving 5 
percent if one is of very high income? I add one more bend point, is 
what I call it, what economists call it, and say if one is of very high 
income, it is going down to be 5 percent of that very high-income 
earning. What this does in effect is it slows down the increase in 
benefits, slows down the increase in benefits for very high-income 
retirees. That is where we make up some of the money.
  The bill would also call for a loan of $900 billion from the general 
fund to Social Security to help ease the transition. The loan would be 
repaid when the program regains solvency. My early bills that I 
introduced in 1993, 1995, 1997 in other sessions did not require that 
loan to help make the transition, and the transition is a problem 
because if we are going to have personal retirement savings accounts, 
somehow we have got to come up with that extra money because of the 
consideration that it is a pay-as-you-go. As soon as the money comes 
in, we are paying it out. And in 2017, the current estimate, that we 
are not going to have enough money to pay benefits. So starting in 
2017, we need more money to continue those personal savings accounts.
  I think I am down to my last chart, Madam Speaker. The trust fund 
continues; so I do not deplete the trust fund. I leave at least half of 
the trust fund in place in case of contingencies, emergencies, or 
anything else. The Retirement Security Act would allow workers to 
create, on a voluntary basis, accounts funded from their payroll taxes. 
The accounts would start at 2.5 percent of income and would reach 8 
percent of income by 2075, a very gradual process, but, again, the 
longer we put it out, the more drastic the solution it is going to be. 
So we need to do it quickly. We need to quit demagoging. If one is a 
Republican, do not demagogue the Democrats' suggestions. If one is a 
Democrat, do not demagogue the Republicans' suggestions on how to fix 
Social Security. If one is a voter in the United States, then I think 
they should be asking everybody running for office what is their 
solution to make sure that Social Security stays solvent? Are they 
going to simply borrow more money and let our grandkids pay for it? Are 
they going to increase taxes? Are they going to reduce benefits? What 
is their proposal? And do not let them give some fast talk and say, 
``Boy, I am not going to let anybody touch your Social Security 
benefits.'' That is what has been done too long. Pin them down. What 
bills have they introduced? What bills are they signing on to and 
cosponsoring to make sure we save Social Security?
  The Retirement Social Security Act accounts start at 2.5 percent. 
They go up. Workers would own the money in their accounts. And that 
means right now if one dies at an early age, they might get burial 
expense but the money is not theirs; so that is how the Social Security 
system has gained some money with people that die before they are 
eligible for retirement benefits. In their personal retirement account 
the money is theirs. It goes to their heirs if they die before they 
reach age 65.
  Investments would be limited, widely diversified, and investment 
providers would be subject to government oversight. The government 
would supplement the accounts of low-income workers making less than 
$35,000 a year to ensure that they build up significant savings. 
Actually, I sort of stole this idea from President Clinton. That was 
one of his proposals that was just part of a proposal that we have an 
American savings account. But let us make sure, to the best we can, 
that every worker ends up better in their retirement, that the system 
helps the economy by having the kind of savings account that, rather 
than being spent by government for more government programs, ends up 
being invested in equities, in bonds, in stocks, in the kinds of 
investments and savings that are going to help our country.
  In conclusion let me just say that I was in Libya yesterday meeting 
with Colonel Khadafi. We have a system and a Constitution in the United 
States that provided that those people that work hard and save, that 
study and learn and use it, end up better off than those who do not, 
the kind of motivation that has helped us have the strongest economy in 
the world. It was interesting that Khadafi told us that what he thinks 
is they need less government in Libya, that if they work 4 hours, they 
get paid for 4 hours; if they work 8 hours, they should get paid for 8 
hours, and if they do not like what their employer is doing, changes 
jobs, and they do not want somebody speaking for them. In fact, also, 
and I made a decision early on not to take special interest PAC money 
for my campaigns, he said we do not want political parties in Libya 
because with political parties they are both going to be trying to get 
a majority. To get a majority, they spend money. And the first thing 
one knows, countries like Egypt would be coming in, financing one 
political party. Somebody else might be coming in with a different 
interest, financing another political party. And they would be tending 
to push laws that were good for their interests and not good for the 
country of Libya. That is a very interesting change of mood for an 
individual that has supported terrorist regimes in the past in how he 
thinks the future of Libya should be restructured.

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