Benefits of Social Security and the Need to Make It Stronger
Mr. President, I rise to speak in morning
business and address the issue which has become central to our debate
about the domestic agenda for America. There is a lot of time being
spent by the President and Members of Congress talking about the
privatization of Social Security. Social Security is a very important
program for millions of Americans. It brought dignity to senior
citizens and gave them a chance in their retirement years to live with
enough money to get by.
Before Social Security, if a
person were fortunate enough to save enough money during their
lifetime, they were OK. If they happened to have a generous family, the
family would bring their mother and father to live with them in their
later years. That was one of the outcomes. But if things went poorly, a
lot of senior citizens before Social Security ended up in county
poorhouses. They are still sitting around out there. They are not used
for that purpose anymore, but you can find them across America. That is
where you went when there was no place else to go, no money to take
care of yourself, and no children to take care of you.
Along came Franklin Roosevelt back in the 1930s, who said: I think we
have learned a lesson here. We need to create a program that gives
everybody a chance during their lifetime to pay into Social Security
with the guarantee that when you retire, there will always be some
money there to help you. Nobody is going to get rich on Social
Security. I don't think they ever could. But the idea was there would
be this thing they could count on, kind of a bedrock savings plan for
Americans--more of an insurance policy than a savings plan.
It worked.
For the 60 years or more we have had Social Security, it has made
every single payment with cost-of-living adjustments, and seniors in
America, many of them, lead comfortable lives because Social Security
helps. You cannot live on it alone--I guess you could, but you would
barely scrape by--but with Social Security you have something to count
on.
You do not care if the corporation you worked for 30
or 40 years goes bankrupt and takes away your retirement benefits. You
do not care in this respect: You know Social Security still pay you. If
you get bad news about that pension plan you invested in for a long
time taking a bad turn and not having enough money to pay you what you
expected, at least there is Social Security.
Over time,
things change in America. We live longer. Thanks to good health habits,
good medicine, people are living longer lives. A Social Security
Program anticipated to pay out for a few years pays for many years, so
we have adjusted for many years. The amount of money paid into it, the
benefits paid out, and the eligibility age for retirement have all
changed, but Social Security is still there. It keeps on ticking
because we count on it so much.
Along comes President Bush
who says we have a problem with Social Security. We have to do
something. Some call it a crisis. Some call it a challenge. Some call
it a problem. But the argument is, we have to do something. You just
cannot leave it alone.
What would happen if we left Social
Security alone? What if Congress said: We are not going to do a thing
to Social Security this year, nothing. We are not going to change one
word in the law, not going to change any of the benefits, any of the
contributions, what would happen to Social Security? It would make
every single promised payment to every single retiree in America every
single month of every single year with a cost-of-living adjustment
until at least 2042, 37 years from now. The program is strong, and we
have to talk about making it stronger.
The President
proposes privatizing Social Security, changing the concept of Social
Security. Instead of paying payroll tax and receiving your Social
Security benefits, the President suggests taking part of that payroll
tax and investing it. If you are fortunate, you will do better. Your
investment has risk, but the President believes by and large most
people will do better.
There is nothing wrong with savings
and investment. Everyone should take that seriously for their own lives
and for their families. We do in my household. For my wife and me, that
is working, saving for retirement, for ourselves, for our family. It is
a smart thing to do. But what we do is over and above what we pay into
Social Security. Social Security is still there. Members of Congress
pay it, incidentally. Despite some of the talk radio comments
otherwise, Members of Congress pay Social Security, as my wife does on
her job. And we have some savings accounts. It is a smart thing to do.
We have done pretty well. We are not getting rich, but we will be
comfortable.
Now comes the President and says take the
money out of Social Security , put it in the stock market. The obvious
question is, if you take the money out of Social Security and out of
the trust fund, how will it make its payments?
The President cannot answer that question.
There was a suggestion coming from the White House that we would
change the index for Social Security, we would reduce the amount of
payments to seniors in years to come. That can get serious. Right now,
1 out of 10 seniors is in poverty. Without Social Security, half of
seniors in America would be classified as living in poverty. If we
start reducing Social Security payments, we move more and more of our
seniors toward poverty. That is not an outcome that anyone would cheer.
Yet the President's plan moves America in that direction. It takes
money out of Social Security with no explanation on how to pay it back,
it cuts benefits for retirees in the years to come, and it creates a
greater deficit for America, a deficit increase of $1 trillion to $4
trillion depending on how many years it is calculated.
We
have to step back and say, if Social Security is strong for 37 years,
why in the world would you want to engage in the President's
privatization plan which will reduce benefits for retirees and add $2
trillion or more to or national debt? It is because the President
cannot answer those basic questions that many people are skeptical
about his privatization plan. They believe, I believe, President Bush's
plan to privatize Social Security will weaken Social Security, it will
not strengthen it.
There is no one in the White House who
suggests that taking money out of the Social Security trust fund makes
it stronger. It makes it weaker. Instead of making every payment for 37
years, the President's plan would, frankly, make Social Security unable
to make its payment sooner. Why would we ever do that? That is moving
in the wrong direction.
My colleague, Senator Schumer of
New York, has put together a calculator to help people estimate what
the impact of privatization of Social Security will do. Plug in what
you think your income is going to be, roughly, and this tells the kind
of cuts you will take under President Bush's proposal. It is harsh. It
is unnecessary. It certainly does not strengthen Social Security.
Let me add one footnote. Adding to our national debt means giving
America's mortgage holders, America's creditors, more power over our
lives. Who owns America's debt today? Many do who buy bonds and
securities in government, but most of it is owned by foreign countries.
Central banks in countries such as China and Japan buy our debt. So
step back and look at them as you would look at the company, the bank,
that issues your mortgage. You owe them that payment every month. You
better make that payment. And if your mortgage comes to a close and
they do not want to renew your mortgage, go out and look for a new one,
and you may have to pay higher interest rates. That is roughly what is
going on in the world today.
America entices China, Japan,
and Korea to be our mortgage holders, to be our creditors by paying
interest on our debt. What happens should the day come in the future
when the Chinese or the Japanese say: We do not really trust the
American dollar; you people have too much debt. Why aren't you doing
something about your current debt? In fact, we have lost so much
confidence in the dollar, we think from now on, we are going to base
our future on the Euro rather than the dollar.
Hold on tight, because it means that America's dollar is going to be threatened in terms of its stability.
Here comes the President with Social Security privatization adding
$2 trillion to $4 trillion to our debt, depending more on China, Japan,
and Korea to sustain us, making us more vulnerable.
There
is another issue that troubles me. Why is it the countries you
mention--China, Japan, and Korea--are the same countries that are
taking away American jobs and businesses? Why is it that companies are
moving over there? Sure, lower wage rates--we understand that. But
there is something else at work. The same countries that hold America's
debt hold the future of our economy. The fact they hold our debt gives
them the ability to invest in companies that compete with American
workers and businesses. The fact we are losing manufacturing jobs has a
lot to do with our debt being held by the same countries taking those
manufacturing jobs.
Alan Greenspan came to Capitol Hill
yesterday. Some days I think he has great insight, and some days I
think he is just plain wrong. I am sure he feels the same way about me
and my views. Yesterday, he warned us about our debt. He said, though
he liked privatization, personal accounts, be cautious, be careful, he
said. Good advice--the same advice I wish Mr. Greenspan had given when
the President pushed for the tax cuts. Unfortunately, the tax cuts now
account for half of our debt. They go primarily to the wealthiest
people in America. We are, unfortunately, in a spot where we are
cutting back in health care, cutting back in education, unable to do
what Americans think we should do for America. Greenspan said
yesterday, when it comes to debt, America, be cautious. How can it be
cautious to add $2 trillion to $4 trillion to America's debt as
President Bush’s Social Security privatization plan requires? It is not
cautious. It is not sensible.
It does not help this younger generation appreciate the greatness of America.
I think the President's privatization plan has run into trouble
because it cannot answer the hard questions. The President did not
include one penny in his budget for privatizing Social Security Do you
know why? He cannot figure out how to pay for it, and he cannot figure
out how to explain it.
That is why not just seniors but
families across America are skeptical. They take a look at what the
President proposes, which will result in reductions in Social Security
benefits. For the average wage earner, born in 1970, who retires in
2035, there will be a 3-percent risk adjusted rate of return on their
personal account under the President. Under the current law benefits,
that person would receive annually $17,700. Then along comes the
President's proposal to change the index for Social Security , and that
payment goes down to $12,841. Then comes the privatization tax on top
of that, and that same retiree would receive less than half of what he
would receive under Social Security today.
President Bush
argues that this plan makes Social Security stronger. Tell that to the
retiree whose benefit has been cut in half by President Bush's
proposal. You may say: Well, you Democrats, you are going to exaggerate
this. You just want to get on the floor of the Senate and criticize the
President.
Well, let me tell you where these numbers come from.
The Boston College Economics Department just did their own analysis.
They came to exactly the same conclusion. They are not in this for any
political gain. They are just trying to analyze what the President
proposed.
So if that is what we face--cutting benefits
under Social Security, adding $2 trillion to $4 trillion to our
national debt--is it any wonder a lot of us here say it is time to move
on? It is time to find a Social Security answer that is truly
bipartisan and makes common sense. The privatization plan of President
Bush does not.
Mr. President, I yield the floor and suggest the absence of a quorum.