[Congressional Record (Bound Edition), Volume 157 (2011), Part 12]
[Senate]
[Pages 17357-17358]
[From the U.S. Government Publishing Office, www.gpo.gov]




                              CHAINED CPI

  Ms. MIKULSKI. Madam President, I wish to address one of the most 
important issues facing the supercommittee; that is: Where does Social 
Security fit into their plans? The Chair knows because she is very 
close to the people of New Hampshire, she knows all over her great 
State, and mine in Maryland, people are getting ready for Thanksgiving. 
As they get ready, they first of all give gratitude for living in the 
United States of America, the land of the free and the brave. But they 
are also wondering what kind of country are we living in right now 
because the Chair and I know they are worried about paying their bills. 
As they get ready for their holiday dinner and the family gathering and 
all the wonderful traditions that go into this very special holiday 
they are saying: Where are we? Have we lost our way? Are we so mired in 
partisanship we cannot seem to find a path forward?
  They think we are the turkeys. They want us to stuff it. They want us 
to get on and start worrying about the table, worry about their kitchen 
table, and bring everybody to the table here and begin to solve 
national problems and to do it in a way that brings the country 
together. What do they want us to do? While maybe at the kitchen table 
the children will argue over who gets the wishbone, they want us to 
have backbone to make the tough decisions that these times call for but 
not to be tough on one another.
  As I think about this, I think about Social Security. We say 
everything should be on the table. I think everything should be on the 
table that caused our deficit. I think everything should be on the 
table that caused our debt. Social Security did not cause our deficit. 
Social Security did not cause our debt. Do we need to take a look at 
Social Security to ensure its safety and solvency for the rest of the 
century--or certainly well beyond 2050 or 2070? Absolutely. But I say 
this: While the supercommittee is charged with looking at a more frugal 
government, we must maintain the social contract. The social contract 
in the United States of America is the contract that the U.S. 
Government made with its people. It said, if a person went by the rules 
and they paid their dues, al la the payroll tax, there will be a 
benefit for them. It will be a defined benefit. It is called Social 
Security. It will be undeniable, it will be reliable, and it will be 
inflation-proof.
  Every President has agreed there is a social contract. Every 
President has taken a look at how to provide for that. Some ways we 
have agreed with, some we have disagreed with. Where we agreed was the 
great, wonderful way we worked in the 1980s when Social Security was 
facing challenges and President Reagan reached out to Tip O'Neil, Bob 
Dole, Bob Byrd, Howard Baker, and we made Social Security solvent for 
30 or 40 years. We did the same under President Bill Clinton.
  President George Bush, the No. 2 Bush, ``W,'' wanted to privatize 
Social Security. We stopped that. We do not believe in the 
privatization of Social Security. We did not want to turn Social 
Security over to Wall Street. We believed Wall Street got enough, they 
didn't have to get Social Security. If a person were older or sick, we 
didn't want them to rely on the bull of political promises or the bear 
of a market.
  Social Security affects so many people. There are 50 million 
Americans who rely on Social Security: retired workers, their spouses, 
people with disabilities. For two-thirds of the people on Social 
Security, their benefit is between $14,000 and $15,000 a year. It makes 
up all or more than half their income. In my own State, 500,000 workers 
are on Social Security, so protecting the social contract is clearly in 
our national interest.
  What brings me to the floor today? Two things. No. 1, I don't think 
Social Security should be in the debate about how to reduce our debt or 
our deficit. I do think Social Security should be discussed in a 
rational, calm, nonpartisan way to ensure safety and solvency and 
reliability.
  The other issue that brings me to the floor is how do we put our arms 
around the cost-of-living problem? It is indeed vexing. How do we meet 
the needs of the people but not exacerbate the drawdown in the trust 
fund? These are valid conversations. Wise people should talk about it. 
But one thing I am opposed to is called the chained CPI--isn't that a 
terrible word, ``chained'' CPI? In our country, the very word 
``chains'' has such a negative connotation.
  What I worry about is that its Draconian effect will have a chain 
reaction on seniors that will cause a tremendous crash. I am concerned 
we are about to shred the social contract. Let me tell you what the 
chained CPI is. It would actually cut Social Security by over $100 
billion over the next 10 years. It does it by changing the cost of 
living as calculated. It is based on a theory. It is based on social 
engineering, some kind of abstract concepts about human behavior, that 
invisible hand that Adam Smith talks about. I worry that this invisible 
hand will actually pinch Social Security. It assumes consumers will 
substitute lower cost items for what they normally purchase; that is, 
if the price of apples increases, they will go buy oranges. I am afraid 
what we are doing is we are going to buy lemons.
  The chained CPI is inappropriate because actually seniors have a 
fixed market basket. They not only have a fixed income, but they have a 
fixed market basket. Their primary expenditure is health care, over 
which they have little control. The cost of health care continues to 
rise. Their next one is energy, then food, and then housing. For 
seniors, this is not like giving up opera tickets for movie tickets. It 
is not like giving up a latte for Dunkin' Donuts. For them, it is not 
giving up Whole Foods, it is having no food. We have to get real about 
the market basket of seniors.
  I wish to make three points about the myths. No. 1, the chained CPI 
is not a technical fix. Despite popular notions, op-eds, editorial 
boards, it is not just a technical corrective. It would actually 
fundamentally restructure Social Security. It could very well have a 
chain reaction, pushing old people into poverty. Under the way the CPI 
is calculated, if a person is now getting $15,000 a year when they are 
65, when they are 75, they will have $5,000 less, and if they live to 
85, it will be reduced by $1,000.
  I have this in this chart. The numbers I am giving do not come from 
Barb Mikulski. They don't come from some wonky, lefty think tank, this 
comes from the Social Security Actuary, the keeper of the books and the 
projections for Social Security. For a single woman on Social Security 
under the chained CPI, from the time she is 65 until the time she is 
80, she could lose as much as $6,000. In other words, the older we get, 
the worse it will get. Remember, under chained CPI, the older we get, 
the less we will get; the older we get, the worse it will get.
  Myth No. 2 is, this is not an immediate cut. Oh, it is going to go 
into future beneficiaries. Oh, it is a long way off. Whomever it hits, 
it will hit hard. Remember the chain reaction. But it is a myth. 
According to the Social Security Actuary, the chained CPI will affect 
everyone, and if we pass it as part of the supercommittee, it will go 
into effect December 2012. It will go into effect immediately, December 
2012. That is a pretty big deal.
  The third myth is, this change would mirror people's behavior, but it 
doesn't take into account health care costs, the cost of prescription 
drugs, copays, and premiums. Remember, one way or the other we are 
going to change Medicare.
  What I want to do at this time is sound the alert. I want to ring the 
bell. I am at my battle station. I am at my

[[Page 17358]]

duty station. I want every Senator, when they vote on this, to have 
informed consent. I want people to read about it and know about it and 
make up their own minds. I oppose the chained CPI. I oppose Social 
Security being in the supercommittee. I am not drawing a line in the 
sand today. I want to say for the supercommittee, God bless them in 
their work, they are truly pursuing this in a duly diligent way, and we 
hope we can come to a great resolution where we can reduce our debt, 
reduce our deficit, and do it in a way that is a balanced approach but 
does not balance all this on the backs of senior citizens.
  FDR signed this bill 75 years ago. Every President, regardless of 
party, said we will keep the social contract, pay your dues through 
this payroll tax, Social Security is going to be there for you. We want 
Social Security to be there for the seniors, and we need to be there 
for the Social Security Program.
  I hope my colleagues put due diligence into understanding this 
policy.
  I yield the floor and note the absence of a quorum.
  The ACTING PRESIDENT pro tempore. The clerk will call the roll.
  The legislative clerk proceeded to call the roll.
  The ACTING PRESIDENT pro tempore. The Senator from Oklahoma.
  Mr. COBURN. Madam President, I ask unanimous consent that the order 
for the quorum call be rescinded.
  The ACTING PRESIDENT pro tempore. Without objection, it is so 
ordered.
  Mr. COBURN. It is my understanding we have until 11 a.m.
  The ACTING PRESIDENT pro tempore. The Senator is correct.

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