[Congressional Record (Bound Edition), Volume 151 (2005), Part 4]
[House]
[Pages 5573-5574]
[From the U.S. Government Publishing Office, www.gpo.gov]




    THE MORE WE KNOW ABOUT THE PRESIDENT'S PLAN, THE LESS WE LIKE IT

  The SPEAKER pro tempore. Under a previous order of the House, the 
gentleman from Texas (Mr. Gene Green) is recognized for 5 minutes.
  Mr. GENE GREEN of Texas. Mr. Speaker, during the Easter recess, our 
office sponsored a town hall meeting for constituents to voice their 
opinions on the administration's plan to partially privatize Social 
Security. It was actually held at a community college, at Houston 
Community College Northeast, that is in our district; and we had both 
college students and senior citizens there.
  One of the things that came out of that town hall meeting is the 
concern that Social Security is not broke; that sure, $1.7 trillion of 
our national debt is, as the President says, IOUs from Social Security, 
and my constituents' concern is that if we are going to pay back the 40 
percent of our national debt, about $7 trillion, to the many citizens 
of foreign countries who loan money to the United States, why on this 
Earth would we not pay back the Social Security trust fund that $1.7 
trillion.
  One thing that came out of that town hall meeting is that the more 
details they learned about the President's plan, the less they favor 
it. That might be why the administration has released so few details 
about their plan. What we know is the plan includes a proposal to allow 
taxpayers 4 percent or up to $1,000 in private savings accounts that 
theoretically would yield a greater return than the government bonds on 
which Social Security is now invested. That proposal sounds all well 
and good until the American people, in our district particularly, 
realized that the private accounts would not alleviate any of Social 
Security's financial challenges.
  The recent Social Security Trustees Report estimated the Social 
Security shortfall to be $3.7 trillion over the next 75 years. But the 
proposal to create these private accounts or personal accounts will not 
help the bottom line at all. Even the President, before we broke for 
our Easter recess, admitted that ``personal accounts do not solve the 
issue.''
  What the President needed to add at the end of that sentence is that 
the private accounts actually make the problem worse.
  In the first 20 years of the President's plan, the Federal Government 
will have to borrow $5 trillion to make up for the additional shortfall 
created by these private or special accounts. And, even worse, if you 
use the Social Security Administration's assumption, the 
administration's privatization plan would exhaust the trust fund 
actually 11 years earlier than currently projected.

[[Page 5574]]

  Through this particular concern, several of my constituents pointed 
out that the creation of private accounts is voluntary, and that is 
true. That is, if the folks think that the market is too risky, they do 
not have to open that private account, and that is true. Private 
accounts are 100 percent voluntary.
  But what folks have often heard is that the plan also includes the 
proposal to change the way the benefits are calculated. This element of 
that plan, called price indexing, would help pay for the private 
accounts and reduce the Social Security shortfall. But at the end of 
the day, the price indexing would result in a cut of guaranteed 
benefits for all beneficiaries, regardless of whether they choose to 
enroll in a private or personal account. It would cut everyone's.
  So under the administration's plan, the private account is voluntary, 
but the cut in guaranteed benefits is mandatory.
  Here is how price indexing works. Currently, benefits are tied to 
wages, which rise higher than prices, giving us an increased standard 
of living each year. Under the administration's plan, the benefit 
calculation would be tied to prices and not wages. Under this 
calculation, Social Security benefits that seniors would receive would 
replace a smaller portion of their paycheck before retirement. 
Currently, Social Security benefits make up 42 percent of the average 
wage earner's salary. Under price indexing, however, Social Security 
will only replace 27 percent of wages for someone retiring in 2042.
  The picture is even worse for our children and grandchildren. I am 
proud to have a granddaughter who was born on February 1 of this year. 
In 2075 when she is 70 years old, her Social Security benefits would 
only be 20 percent of her wages if we allow this element of the 
administration's plan to take effect.
  So in other words, price indexing lowers what our seniors get in 
their cost-of-living increase, and they already get so little compared 
to the cost increases with Medicare that they are having to pay. It is 
extremely important that the younger generation gets the straight story 
about how this plan will affect them. According to a poll commissioned 
by Rock the Vote, once young people learn about the trade-offs that 
come from private accounts, they will overwhelmingly oppose this risky 
proposal.
  Among 18- to 39-year-olds, 63 percent oppose private accounts if it 
means that the Federal debt will have to increase to pay current 
benefits.

                              {time}  1945

  Seventy percent of 18- to 39-year-olds oppose private accounts if 
they mean cuts in guaranteed benefits the private accounts will not 
cover.
  Sixty-five percent of those 18- to 39-year-olds oppose private 
accounts if it means cuts in guaranteed benefits for all beneficiaries 
regardless of their participation in the private accounts.
  With the effect of the administration's plan being a $5 trillion 
addition to our national debt, a 46 percent cut in guaranteed benefits 
for all, this proposal does not sound like a good one for anyone, 
including the constituents that I represent.

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