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.
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
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.