[Congressional Record (Bound Edition), Volume 150 (2004), Part 8]
[House]
[Pages 10027-10031]
[From the U.S. Government Publishing Office, www.gpo.gov]




                         PAYING FUTURE BENEFITS

  The SPEAKER pro tempore (Mr. Mario Diaz-Balart of Florida). Under the 
Speaker's announced policy of January 7, 2003, the gentleman from 
Michigan (Mr. Smith) is recognized for 60 minutes as the designee of 
the majority leader.
  Mr. SMITH of Michigan. Mr. Speaker, the challenge is unending, and 
one thing I am nervous about in terms of Washington sometime in the 
future is paying the Social Security benefits, the Medicare and 
Medicaid benefits that we have promised, because what we have done over 
the last 30 years is promise more than we have money to pay for in 
those promises for Social Security and Medicare and Medicaid.
  In the next 2 days, we are going to take up the budget. There has 
been a compromise reached between the House and the Senate for a budget 
resolution, and that is how we plan to spend our appropriations and 
money for the 2005 fiscal year which starts the end of September 2004 
and goes through 2005.
  We spend most of the year or a lot of the year dealing with the 
appropriations bills that are discretionary, so-called discretionary. A 
little less than half of the appropriations total spending of the 
Federal Government is discretionary spending, a little more than half 
of the total government spending is entitlement spending.
  I started out with a pie chart showing how we are spending money in 
the 2004 year, this year, about $2.2 trillion dollars; and as Members 
see by this pie chart, the largest piece of this pie of Federal 
spending is Social Security. The Federal Government will spend about 
$500 billion on Social Security this year in 2004.
  Interest, as we go around the pie chart, interest is at 14 percent of 
total spending. That is about $300 billion that we are paying in 
interest.
  As we have heard over the last several days, interest rates are going 
up. I suspect Mr. Greenspan and the Federal Reserve are going to decide 
to increase the discount rate, increase the interest rate, and so we 
can expect to see interest rates go up. At the same time, we are 
increasing the total debt that we have to pay interest on, and that 
means that this 14 percent over the next 15 to 20 years can go to 25 
percent, instead of 25 percent of the total budget paid in interest on 
the debt. So it should concern us.
  Actually, what we are doing, and I am a farmer from Michigan, and on 
the farm we try to pay down the mortgage of the farm so our kids will 
have a little better chance and a little better success in their living 
standards maybe than their parents, but in this Chamber and in the 
Senate and in the White House over the last 30-40 years, what we are 
doing is increasing the debt that we are passing on to our kids.
  Defense spending, 19 percent last year and now 20 percent; domestic 
discretionary spending, 16 percent; other entitlement spending, 10 
percent; Medicaid, 6 percent, growing very quickly; Medicare, 12 
percent. Medicare is projected to overtake the size of the total pie in 
the next 20 years.
  Medicare will overtake Social Security in the next 15-20 years. So 
what that means in terms of entitlement

[[Page 10028]]

spending, if you reach a certain age, you are entitled to Medicare 
benefits; if you are at a certain level of poverty, you can get food 
stamps. If you are a certain age, also you get Social Security, if you 
are at a certain poverty level, you can get Medicaid.
  Medicaid is the medical coverage for low income; Medicare is the 
government's health care program for seniors.
  This chart, a very colorful chart, shows what is happening to the 
increase in spending of entitlement programs, increasing at about 5.5 
percent a year. So total Federal Government is growing two and three 
and, in 1 year, almost four times the rate of inflation.
  A lot of that problem is the increased cost of entitlement spending. 
Of course, the question is, will this Chamber have the intestinal 
fortitude, along with the Senate and the White House, will this Chamber 
have the intestinal fortitude to control spending? Will we have the 
willingness to cut down on some of the increase in discretionary 
spending?
  Today in my office, like I suspect in other Members' offices, there 
were people suggesting there was a need for more government spending. 
We heard in the previous hour that government should spend more, and it 
was unfair for the government not to spend more on different programs. 
The situation that this country is facing is an increased demand for 
Federal spending matched with a situation where 50 percent of the adult 
population in this country paid less than 1 percent of the income tax. 
Think about it.
  We have now divided the wealth through government programs and 
taxation to the extent where 50 percent of the adult population in this 
country pay 1 percent of the income tax.

                              {time}  2200

  So we can understand why some people are saying give us more 
government, it does not cost us much.
  Look at this next chart on what we have done in what I call unfunded 
liabilities, the promises that we have made in excess of what money we 
have to pay for them. On the top line we have got Medicare part A as an 
unfunded liability of $21.8 trillion.
  Let me stop here and give my definition of unfunded liability. 
Unfunded liability is today's dollars that we would have to put in a 
savings account that is going to earn the rate of inflation plus the 
time value of money. This is the money we would have to put in an 
account today to accommodate the needs of these programs over the next 
75 years: Medicare part A, $21.8 trillion; Medicare part B, $23.2 
trillion; Medicare part D, the drug program that we just passed 
recently. Will we have the willingness to reduce these other programs? 
We did not have the willingness not to increase the prescription drug 
program. So what we are borrowing from our kids is $16.6 trillion of 
unfunded liabilities, that we have, in effect, decided that our 
problems are so great today that it justifies taking that money away 
from our kids, suggesting that maybe they are not going to have their 
own problems to deal with, but we are leaving them this unfunded 
liability in addition to a huge debt. It totals up to $73.5 trillion, 
unimaginable in terms of what we are leaving as far as a legacy to our 
kids and our grandkids.
  This is another chart that says it in a different way. If we are 
going to accommodate Medicare, Medicaid, and Social Security and take 
the money out of the general fund to pay for the money that is going to 
be needed for these programs over and above what is coming in from the 
FICA tax, what is coming in from the taxes to pay for these programs, 
by 2020, in 16 years, it is going to be 28 percent of the budget that 
is required to make up the difference between the money coming in for 
Social Security and Medicare and Medicaid and the additional money that 
is going to be needed. Simply, by 2030 it is going to take 52 percent 
of the general fund budget to accommodate these programs.
  We know we cannot do that. Is that going to mean a drastic reduction 
of some of these programs? Is it going to mean a drastic increase in 
what we are going to have to borrow in future years? The challenge now 
before us is we are increasing debt at the same time that interest 
rates are going up. So as the Members recall, the pie chart today, 
spending $300 billion a year, 14 percent of the total Federal spending 
on interest costs, that could double in the next 20 years.
  This is a quick snapshot of the red and the green, if you will, of 
what is happening in Social Security. In 1983 the Greenspan Commission 
dramatically increased Social Security taxes and at the same time 
dramatically reduced benefits. But even so, the short-time surplus 
coming in is going to run out in 2017, and then we are looking at a 
future of huge deficits that somehow is going to have to be made up if 
we are going to continue this program.
  As I go around my southern district of Michigan, a lot of people 
wonder more exactly how Social Security works. This is just a very 
brief way of how this highly progressive program started. We started it 
in 1934; and at that time, the provisions were that once people reached 
65, they were entitled to benefits and they would have to pay in all 
those years. But in a pay-as-you-go program, we found out that the 
money coming in from Social Security was very ample and that most 
people died before they reached the age of 65. So another way to say 
that is most people paid in their benefits but never collected much of 
anything and the program worked very well.
  From the beginning program, the benefits have been highly progressive 
and based on earnings. At retirement all of the workers' wages up to 
the tax ceiling are indexed to present value using wage inflation. Let 
me say that a different way. If one had a $20,000 job 15 years ago, 
that $20,000 job today might be $40,000 with wage inflation. So Social 
Security puts down $40,000 income for that $20,000 job they were 
earning maybe 16 years ago. So everything is indexed based on what that 
kind of job would pay today. And then they take the best 35 years of 
earnings and average them together and decide what that person's 
benefits are going to be. So they take the best 35 years. Maybe they 
did not work 5 years. So 5 years would be entered as zero, and then 
they would take the 30 years of pay and divide by 35. So, in effect, if 
they did not have those working years, they would be indexed as zero. 
If someone works 40 years, then they would take the best 35 years.
  The annual benefit for those retiring in 2004, this is where it is 
progressive in terms of the payout: 90 percent of earnings up to 
$7,344; 32 percent of the earnings between that amount, $7,344 and 
$44,268; and then 15 percent of the earnings above $44,268. Early 
retirees receive adjusted benefits.
  A question that is often asked on complaints of abuses for SSI of 
families down the road is that maybe some people think they do not 
deserve the supplemental security income, and people are concerned that 
this comes out of Social Security. Actually it does not come out of 
Social Security. SSI comes out of the general fund even though it is 
administered by the Social Security Administration.
  Going back up to this 15 percent of earnings above $44,268, one way 
that I have structured my legislation that results in solvency for 
Social Security is I add another ben point of 5 percent. That has the 
effect, Mr. Speaker, of slowing down the increase in benefits for high-
income retirees. So it is going to cost money. Either we reduce 
benefits or we increase the income. I do a little of both in my 
legislation. But one way I do it, breaking off from this chart, is I 
add another ben point of 5 percent that has the result of slowing down 
the increase in benefits for the high-income retirees.
  We have talked a lot about personal savings accounts. The Democrats 
and a lot of the news media refer to it as privatization of Social 
Security. Let me just say, Mr. Speaker, that there is no legislation 
that privatizes Social Security. The most that any of the legislation 
that I have seen does is take a portion of what people are paying in 
for Social Security, 12.4 percent of earnings, and my bill is as high I 
think as any legislation I have seen, and what I do in my legislation 
is take 2.5 percent of earnings and allow that amount or

[[Page 10029]]

that percentage of one's earnings to go into one's own individual 
retirement account that becomes their property, that unlike Social 
Security, if one dies, they can pass it on to their heirs. It is part 
of their estate.
  When Franklin Roosevelt created Social Security back in 1933 and 
1934, he wanted to feature a private sector component to build 
retirement income. I mean, this was a time after the Depression with 
people going to the poor house, and the Congress and the White House 
and FDR said, look, there is a better way. Let us have a law that 
forces savings while people are working to make sure they save some of 
that money to increase or guarantee a little bit more of Social 
Security so they do not have to go over the hill to the poor house when 
they retire. So we passed that law and said here is mandated savings. 
But Franklin Roosevelt said let us do it in privately owned accounts 
and simply say they have got to set aside this much of their earnings, 
they cannot take it out until they retire.
  In fact, when the Senate passed their Social Security bill in 1933, 
they said let us do it the way the President suggested and have private 
savings accounts owned by the individual with limitations on where they 
could invest the money, but it was owned by the worker. This House 
passed a bill that said, no, let us have the Federal Government take it 
all in and pay it out when these people retired, and we will have a 
system where people that are working pay in their money today and that 
way we can start paying benefits out right away.
  So we charged workers to pay into the Social Security, and 
immediately we started paying benefits to senior citizens, older 
people. So that was very good for some of those older people to 
immediately receive that benefit, but what it does on this kind of a 
pay-as-you-go program is it depends on more and more workers paying in 
more and more of their earnings into Social Security taxes to 
accommodate a growing senior population.
  Now we are faced with 78 million baby boomers that are going to begin 
retiring in another 4 years. That means 78 million individuals that are 
at the height of their earnings, paying in maximum Social Security 
benefits, and are going to be going on to the system, taking out 
maximum benefits. And that is where the demographics start hitting us.
  The Social Security actuaries last month suggested that we are in a 
very bad situation in terms of the insolvency of Social Security with 
an unfunded liability of $12 trillion for Social Security, that we 
would have to put that $12 trillion in a savings account today to 
accommodate the additional money that is going to be needed over and 
above what is coming in payroll taxes, FICA taxes.
  Social Security spending exceeds tax revenues in 2017, is what the 
actuaries said. The Social Security trust fund goes broke in 2037. That 
is a little bit of a pretend figure because when we really run out of 
money in 2017, this government, this Congress, House and Senate and the 
White House, have already spent all of the extra money coming in from 
Social Security. They spent it on other programs. So there has never 
been a savings account with any individual worker's name on it. In 
fact, Mr. Speaker, what really should concern all of the people, the 
electors in this country, is that they are not entitled to any Social 
Security benefits. The Supreme Court now in two rulings has said that 
Social Security taxes are simply another tax, Social Security benefits 
are simply another benefit, and there is not an entitlement just 
because one pays Social Security taxes all their life.
  Insolvency of Social Security is certain. We know how many people 
there are and when they are going to retire. We know that people will 
live longer in retirement. We know how much they are going to pay in 
and how much they will take out. Payroll taxes will not cover benefits 
starting in 2017, and the shortfalls will add up to $120 trillion 
between 2017 and 2075. $120 trillion between 2017 and 2075, and the one 
way to define unfunded liability is how much money would have to go in 
a savings account today to accommodate that $120 trillion; and what 
that is, is about $12 trillion today in a savings account that is at 
least going to draw the interest at the rate of inflation and a time 
value for the money.

                              {time}  2215

  On the demographics, here is what happened as to how many people are 
working, paying in their Social Security tax. In 1940, there were 28 
people working and paying in their Social Security tax for every one 
retiree. In 2000, three people were working in the United States paying 
in their Social Security tax for every one retiree. The estimate by the 
actuaries at Social Security is that in 2025 there will only be two 
people working paying in their Social Security tax. That means, again, 
we are faced with a dilemma of not having enough money and possibly 
increasing taxes.
  The Social Security trust fund, I was Chairman of the bipartisan 
Social Security Task Force. In fact, when the Democrats and Republicans 
met for about a year hearing witnesses and understanding the dilemma of 
what Social Security is facing, what we found out is we had unanimous 
agreement that we have got to do something to fix Social Security, and 
the longer we put off a decision, the more drastic the solution is 
going to have to be.
  This chart reacts to what a lot of people have asked me, that if 
government would just keep their hands off the surplus coming in for 
Social Security and pay back what we borrowed, everything would be all 
right.
  The little stack on the left represents what is in the trust fund, 
including the interest that has accumulated by IOUs of what government 
has, and I put it in quotes, ``borrowed'' from the trust fund. That is 
$1.4 billion that the government owes the trust fund to pay back what 
it has borrowed and spent on other programs. But the shortfall in 
Social Security, $120 trillion in future dollars, $12 trillion today, 
is what is needed to accommodate and keep Social Security solvent.
  There needs to be a fix. It is unconscionable that we simply tend to 
look the other way and not face up to the problem of Social Security.
  In campaigns, I have been in Congress for the last 12 years and I 
started my first Social Security bill in 1993 when I first came to 
Congress. In that first election, and every election, there has been 
the charge by my opponent that ``Nick Smith wants to take away your 
Social Security.''
  It is sort of effective, because so many of our seniors today depend 
on Social Security for their livelihood that it scares the dickens out 
of them to think that maybe somebody is messing around with the program 
and is going to take away their Social Security benefits. So 
politically, some people call it the third rail of politics, it has 
been difficult for politicians to try to explain the program.
  In the 8 years of the Clinton administration, President Clinton 
originally was dedicated to doing something to fix Social Security. 
Because once you talk to the people that understand the program, that 
know its insolvency and know the hugeness, the dramatic trillions of 
dollars that are needed to fix this program and the importance of this 
program to so many seniors, President Clinton wanted to fix it.
  He had several task forces. I served on those task forces. I went to 
the White House. We talked about the problems with Social Security. But 
it ended up that the President and most of the Members of the House and 
most of the Members of the Senate did not want to talk about it. ``Let 
us put it off until the next election.''
  President Bush was brave in the campaign, and he talked about it. 
Senator Lindsey Graham and others, including myself, every year talked 
about the need to fix Social Security. So we are coming closer. There 
is a greater understanding by more and more people that there needs to 
be something done to save this program.
  So I call, Mr. Speaker, on voters in this election coming up this 
year to size up your Congressional candidate. Ask them which Social 
Security bill that they have cosponsored is going to save Social 
Security. And do not let

[[Page 10030]]

them get by with this rhetoric that, ``Look, I am going to do 
everything necessary to save Social Security.'' You need a plan, you 
need action, you need forward, in-advance thinking. It cannot be a 
crash program. It has to be gradual.
  What I have learned over the last 12 years, and I have introduced 
this Social Security bill every 2-year session over the last six 
sessions, every 2 years it had to be a little more dramatic in terms of 
reaching solvency, because you have lost the surplus over those past 
years that has been coming in.
  As we said, Social Security has a total unfunded liability of over 
$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, and we do not want that to happen.
  Here is another chart that I made up trying to show that Social 
Security is not a good investment. The average retiree gets a return on 
the money that they have sent in for Social Security of 1.7 percent on 
that investment.
  If you happen to be a minority, a young black man that dies on the 
average at age 62, as we originally started back in the 1934-35-36 
period, you did not live quite long enough to draw benefits. So there 
is actually a negative return for minorities.
  The average return is 1.7 percent. I put in this column, it is 
representing the Wilshire 5000, and if you were invested in that index 
of stocks over the last 10 years what you earned is 11.86 percent after 
inflation, over the decade ending January 31, 2004.
  So that is why in my bill we can guarantee if you decide to go into a 
retirement savings account, where 2.5 percent of your earnings is 
transferred by government into an account owned by you and managed by 
the government, with limited investments, we can guarantee, if you 
choose that option, you will get as good or better a return than you 
would staying under the Social Security traditional program. But we 
still leave it optional in my bill, that you can stay with the current 
Social Security program if you want to.
  Another way of saying it is not a good investment, if you retired in 
1980, you had to live 4 years after retirement to break even. If you 
retire next year, in 2005, you have to live 23 years after retirement 
to break even, collecting those Social Security benefits. After that, 
it goes up to 26 years that you have got to live after retirement to 
break even on your Social Security.
  The next charts, please.
  Our pages are so great. They are going to finish up I think in 2 
weeks. These are the full-year pages. They get up about 5:30 every 
morning, if they want to eat something before they go to school, and 
then they are ready to work for Members of Congress and the U.S. House 
of Representatives. There are also pages in the Senate.
  Back to Social Security.
  Mr. Speaker, 76 percent of families pay more in payroll taxes than 
income taxes. I say that and I show that because I think it would be 
very unfair to say that we are going to solve Social Security by again 
raising the payroll tax. Of course, that is what we have done over the 
years.
  Every time we have run out of money, because what we have done over 
the years too is continued to increase benefits. Actually, Medicare in 
1965 was an amendment to the Social Security bill, to add Medicare 
privileges or health care coverage for seniors. So we have continually 
increased the benefits in Social Security, and in so doing we have 
simply increased the taxes to pay for those extra benefits and the 
increased costs.
  In 1940, we increased from 1 percent to 2 percent the rate on the 
first $3,000 as the total maximum payment of taxes. The maximum was $60 
dollars. In 1960, we tripled it and raised it to 6 percent and 
increased the base to the first $4,800. In 1980, it was over 10 percent 
of the first $26,000. By 2000, we raised it to 12.4 percent of the 
first $76,000. Today, in 2004, it is 12.4 percent of actually now 
$89,000.
  So we have continued to increase taxes to cover benefits, in a 
situation where the birth rate has gone down, so there are fewer 
workers in relation to an increased number of seniors, because seniors, 
number one, are living longer.
  In the Social Security Task Force, the bipartisan Social Security 
Task Force that I chaired, we had medical futurists suggesting that 
within 20 years, anybody that wanted to live to be 100 would have the 
medical technology to allow them to be 100 years old, and within the 
next 30 years, anybody that wanted to live to be 120 years old, it was 
their projection that people could live to be 120 years old. Of course, 
that means a tremendous increase in the amount that the would be paid 
out from Social Security compared to the amount coming in to Social 
Security.
  These are six principles that I thought were reasonable in developing 
any Social Security changes to keep it solvent: Protect current and 
future beneficiaries; allow freedom of choice; preserve the safety net.
  What I do in my bill is I leave half of the money in the trust fund 
and only use half of the money in the trust fund to accommodate the 
transition to personal savings accounts.
  What I think we also have to do is make Americans better off, and not 
worse off. That means, to me, in addition to some other provisions of a 
Social Security bill, that we do not solve it by increasing taxes; that 
we do not simply say, well, we will increase taxes on the rich.
  Some people have suggested, well, why not make Social Security into a 
welfare program and only pay out Social Security benefits to people 
that really need it? It is interesting, both Democrats and Republicans, 
labor unions and others have said, well, that is going to take away the 
support for Social Security, because, now in America we have a system 
where you can start out poor and end up one of the richest people in 
the country.
  We have a system where saving a little bit early on and continuously, 
with the magic of compound interest, can make an average-earning 
individual the equivalent of a millionaire when they retire. So my 
suggestion to parents and grandparents and to young people is to 
encourage that savings in young workers, because if they save now, it 
can secure their retirement, and who knows what future Congresses are 
going to do to Social Security in terms of cutting benefits, if we 
continue to put off the solution to this problem?
  Lastly, it creates a fully-funded system and no tax increases.
  I am going to just briefly run through, Mr. Speaker, my Social 
Security bill.
  The Social Security trust fund voluntary accounts would start at 2.5 
percent of your earnings and would reach 8 percent of income by 2075. 
In every case, the benefits you would receive would be more than if you 
stay with the current Social Security system. Investments would be 
safe, widely diversified, and investment providers would be subject to 
government oversight. The government would supplement the accounts of 
workers' earnings that earn less than $35,000.
  Actually, this was a suggestion, I think it was maybe the Golden 
Savings Account that President Clinton suggested, where we start 
putting in a little extra money for low income workers in their savings 
accounts so that the magic of compound interest can increase the 
benefits for them. So that is what I do in my bill. I say that workers 
earning less than $35,000 would have additional money put into their 
personal retirement accounts to ensure that they build up significant 
savings for retirement.
  My bill has been scored by the Social Security Administration 
actuaries to restore long-term solvency to Social Security. As I 
mentioned earlier, all of my bills that I have introduced have been 
scored to make Social Security solvent.
  What I am concerned about, and what I am nervous about, and this is 
my last year in Congress, is that the tendency is going to maybe just 
to go a little ways in terms of solving the problem, and to put off 
what is needed for a long-term solution until later on.

[[Page 10031]]



                              {time}  2230

  And so we mess around with the edges a little bit and we say, well, 
this means that we are not going to face the real dilemma, the real 
problem, the real catastrophe for another 10 years. So let us fix it a 
little bit. I think that would be a huge mistake. In my bill, no 
increases in the retirement age. No changes in the COLA; that is the 
annual increase based on inflation that is given. And no changes in 
benefits for seniors or near-term seniors.
  Solvency is achieved through higher returns from worker accounts and 
slowing the increase in benefits for the highest earning retirees. On 
worker accounts, accounts are voluntary and participants would receive 
benefits directly from the government along with their accounts. So you 
still have Social Security. It is not privatizing Social Security. 
There is still a structure for Social Security. In fact, this bill does 
nothing with the insurance provisions of the Social Security 
legislation. So the disability insurance, the accident insurance is 
still totally a government insurance program ensuring workers that if 
they get hurt on the job and they are eligible under Social Security, 
they will get disability benefits under Social Security until they 
reach the age of 62 or 65.
  Government benefits would be offset based on the money in their 
account, not on the money earned. In other words, if you earn more than 
the 1.7 percent, you can be guaranteed that you are going to have 
benefits that exceed current Social Security. Workers could expect to 
earn more from their accounts than from the traditional Social 
Security. And, again, as I mentioned earlier in my bill, we guarantee 
that the benefits that you earn, if you take the option of a personally 
owned account, the benefits that you earn would be greater than staying 
in the traditional Social Security.
  All workers accounts would be earned by the work and invested through 
pools supervised by the government. Regulations would be instituted to 
prevent people from taking undue risk in investments, and workers have 
to have a choice of three safe indexed funds to start with, with more 
option after their balance reaches $2,500. Not so tough, right? Not so 
tough. We can do it. And this is scored by the Social Security 
Administration to keep Social Security solvent.
  Here is a provision that I call ``fairness for women.'' It might not 
be politically correct. Maybe I should say fairness for spouses, but 
what I provide in my legislation for married couples, account 
contributions would be pooled and then divided equally between husband 
and wife. In other words, Mr. Speaker, the man and the wife each would 
have their separately owned accounts and they would have identical 
amounts of money. So if one spouse is earning 80,000 and the other 
spouse is earning 10,000, you would add those together and each spouse 
would be credited based on 2.5 percent that increases every year of 
that 45,000. So man and wife would have the same money going into their 
each separately owned accounts.
  It would increase surviving spouse benefits to 110 percent of the 
higher earning spouse's benefits. So if your husband dies and he has 
the higher Social Security benefit, my legislation provides that the 
continuing Social Security check would be 110 percent of the highest 
Social Security benefit received by either the husband or wife.
  I do this because a tremendous increase in cost of the government is 
nursing homes. At roughly $50,000 a year for nursing home costs, people 
that assume that they were going to die at 80 or 85 now are living to 
90 or 95. They run out of their savings and when they do that, they 
have no estate and they end up taking the Medicaid provisions that are 
for low income, or in this case non-income, that have now spent all 
their money. But if we can encourage these people to stay in their 
homes longer rather than going into the expensive nursing homes, it is 
going to reduce the overall cost for government. That is why I 
increased the amount from 100 percent to 110 percent to encourage 
staying in your own home after one spouse dies.
  The third provision is stay-at-home mothers with kids under five 
would receive retirement credit. I mean, they are probably working 
harder quite often than maybe their husband's work or the other way 
around, whoever stays home. But to encourage a parent to stay home with 
those young kids, I put a provision in where they are going to earn 
credits for those years that they stay home with kids under five years 
old up to a certain limit.
  Here is some additional provisions that I put in my legislation to 
encourage additional savings. Increased contribution limits for IRAs 
and 401(k)s and pension benefits, so I increased that; a 33 percent tax 
credit for purchases of long-term care insurance up to $1,000 a year, 
$2,000 for a couple; low-income seniors would be eligible for $1,000 
tax credit for expenses related to living in their own home and that is 
in addition to the 110 percent of Social Security benefits, and 
households caring for dependent parents would also be eligible for 
$1,000 credit for expenses.
  Social Security at $12 trillion unfunded liability is what we have 
not been willing to deal with; and yet that is the lowest of the 
insolvency figures. Again, the insolvency of Social Security is $12 
trillion going into an investment fund today; but for the rest of 
Medicare and Medicaid, it is an additional $60 trillion that would have 
to go into a fund.
  So Social Security is what I have been working on, but we are going 
to also have to deal with Medicare and Medicaid provisions to somehow 
encourage logical, good decisions reducing the cost of health care.
  The whole thing of our future in America, we are a country that was 
originally created under our Constitution to have the kind of incentive 
that provides the people that work hard and save hard and go to school 
and use their education are better off than those who do not. But over 
the last 30 years we have sort of evolved into a divide-the-wealth 
philosophy where today 50 percent of the adult population pays about 1 
percent of the income tax and the other 50 percent pays 99 percent of 
the income tax. So more and more people are electing legislators that 
promise them more government benefits and that is the danger.
  This is the 195th birthday of Abraham Lincoln. And he said in his 
famous Gettysburg address, Can a nation of the people and for the 
people long survive. At least he implied that. I think it can, but I 
think it is going to take some leadership, some willingness to face up 
to some of these challenges, less partisanship, more bipartisan 
cooperation in terms of trying to solve and deal with some of these 
problems that are facing this country.
  We have got to have the kind of education, we have got to give 
education the kind of priority it needs. We have got to continue to 
invest in research to make sure that we develop the kinds of products 
and an efficient way to produce products that the world wants to buy to 
make sure that we continue to be competitive in this country.
  We are the greatest country on Earth, militarily, economically; but 
now we are moving into a dangerous situation where we are overspending 
every year, going deeper into debt, where we are making promises that 
our kids and our grandkids are going to find very difficult to pay for. 
And so the challenge is not just in our Republic, with Members of 
Congress. The challenge is also in this election year and every 
election year to size up the candidates that you think are going to be 
willing to make the tough decisions, to solve some challenges that this 
country is facing.
  With that, Mr. Speaker, I would ask all of my colleagues to examine 
the Social Security bills that have been introduced, to consider 
sponsoring some of that legislation or writing their own legislation to 
solve and keep Social Security solvent.

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