Mr. Speaker, first of all, I would like to thank the gentleman from New Jersey (Mr. Pallone) and the gentlewoman from California (Ms. Woolsey) for helping to organize this Special Order with me. I would like to thank and recognize my…
Mr. Speaker, first of all, I would like to thank the gentleman from New Jersey (Mr. Pallone) and the gentlewoman from California (Ms. Woolsey) for helping to organize this Special Order with me.
I would like to thank and recognize my colleagues who have agreed to participate in this Democratic hour of discussion. Those who are here tonight to speak are from the Democratic Women's Caucus, from the Congressional Black Caucus, from the Hispanic Caucus, and we have many other like-minded Members here tonight to speak.
Tomorrow night, we will listen to the President describe his domestic agenda for the next 4 years. He has already told us what he will spend most of his time talking about. He will not be talking about paying down the staggering national deficit or addressing the international crisis over the falling American dollar or getting Americans back to work after we have lost over 2 million jobs.
He will be talking about Social Security. He is going to spend his first annual address to the Nation trying to sell us on his plan to cut Social Security in half. Of course, that is not what he is going to call it, but that is exactly what it is.
I suggest that we listen carefully tomorrow night not to what the President says as much to what he does not say. In fact, the White House admitted today to the Washington Post that the President will not talk about the size of the benefit cuts his plan requires or about how the size of the proposed private accounts compare to the benefits retirees are now getting.
Let us see tomorrow night if the President tells the public that his plan will raise the deficit by over $2 trillion or put in jeopardy the trust fund that guarantees retired American workers financial dignity in their old age.
Let us call it like it is. The President wants to privatize Social Security, although I am sure he will not use that word, because they know that Americans do not like gambling in the stock market with the Social Security Trust Fund. Democrats will make clear that his plan means putting at risk the Social Security Trust Fund that guarantees working Americans an old age with financial dignity.
The President wants to cut benefits drastically. He has to make his plan work, but he will not say that. Democrats will tell Americans the Bush plan means each of you will get less than you get now and less than you would get if you did nothing at all.
The President wants to increase the deficit by $2 trillion to pay for his plan, additional debt that would most likely be held by a foreign country such as China or Japan, but he will not mention that his reckless deficit increase lets other nations control America's economy and perhaps even our future.
Democrats are standing up for our economic security and for that of our children. Enough American debt is already in the hands of other countries.
If that is not bad enough, the gentleman from California (Mr. Thomas) wants to calculate monthly benefits based on race and gender. For example, women get less each month in his proposal than men because they tend to live longer.
Democrats are saying we will not accept a Social Security formula based on race or gender. It raises serious constitutional questions and is just plain wrong and unfair.
Let us just call this plan what it is. It is a bad plan with bad results for American workers, especially women and minorities, and here are the facts: The White House is pushing a proposal that would cut in half the amount of income replaced by Social Security for the average retired American worker. Unlike the present system which allows benefits to grow with the economy and wages, the Bush plan would fix benefits to current living standards. That means that retirees would have to live on an amount that is not keeping pace with the cost of living but effectively shrinking each year. An average worker retiring today would have 42 percent of his or her lifetime average income replaced by Social Security, and that is the green line right here.
Under the current system, the workers would get 40 percent of it and the lower income workers on this side would get more than the higher income workers.
Under the Bush plan, in 70 years this benefit would fall to 18 percent. That is a dramatic fall. In other words, workers are denied roughly half of the benefits they have earned over a lifetime of work.
As my colleagues can see from this chart, and this chart was prepared by the nonpartisan, independent Economic Policy Institute, the President's
plan is particularly bad for lower-income workers, those who earn less than the average; and this includes many women and minorities, lower income here. So we can tell that there is more of an impact on lower- income workers. Everybody loses but the lower-income earners. The people who need it most lose the most.
To add insult to injury, under the President's plan, at retirement, workers would effectively lose about half of their so-called private account, since about 50 cents on the dollar is deducted from their guaranteed benefits that they would otherwise get. Even a good investor loses half of what he or she made.
So far, the White House has been silent on that feature, but they need it in order to make their plan add up; and we will not be able to avoid that by opting out of the private account system. The President has been calling the plan, quote, voluntary; but under his plan, workers who do not want to gamble with part of their Social Security money lose the corresponding portion of their guaranteed benefits anyway. So how voluntary is that?
We have not even mentioned the risk to the trust fund, to the taxpayers and to individual retirees that comes from letting individuals play the stock market with Social Security money. What about those who take money out of the trust fund under the President's plan to invest in stocks that go belly up? Who takes care of them? The taxpayers, of course. So the system really ends up paying twice.
Today, in contrast, the trust fund provides guaranteed benefits for older Americans, backed by the full faith and credit of the United States Government. That is a better investment for Social Security and for the American people.
If the President told the whole truth to the Nation, Americans would see clearly that his plan is a lousy deal for the American people. Women and minorities are particularly hurt by the Bush plan.
Let me spend a moment on just how bad the plan is for women. Women still earn less than men on average, about 79 cents to the dollar; and that wage differential translates to an even greater pension disparity. In addition, many Social Security recipients are not retired workers but receive benefit as the spouse, child, or widowed spouse of a worker or a disabled worker. Most of these recipients are women and children. So women depend on Social Security more than men do. Women are 70 percent of Social Security recipients at age 65 and over 75 percent at age 85 and above. Social Security benefits are particularly important to keeping women and minorities out of poverty.
This chart that was prepared from the Joint Economic Committee shows that for nonmarried women over 65 Social Security cuts the poverty rate from almost 60 percent to 16 percent, and we can see that the figures for African Americans and Hispanics are comparable. It is 21 percent for blacks and 15 percent for Hispanics. In New York, for example, my home State, 55 percent of elderly women would live in poverty without Social Security.
The President's plan affects women and minorities even worse than men. Women and minorities tend to be at the lower end of the income area, whereas, as we saw in the first chart, benefits drop even more under the Bush plan than on average. Also, the fact that the Bush plan fixes benefits to current living standards cuts benefits to spouses, children, and surviving spouses even more drastically than it does to retirees. Once again, the administration is hurting those who are most vulnerable.
This effect is so obvious that even the White House suddenly feels it has to have some sort of Band-Aid to paste over it; but since the cuts under the Republican plan become larger over time, the temporary increase in benefits the President is rumored to favor will not make up for the cuts for a very long period.
On top of this, the gentleman from California (Mr. Thomas) suggests that we reduce women's benefits because they live longer than men. This proposal is just absolutely wrong. It is at odds with the moral values of our society. Since the chairman seems to be taking it seriously, let me note that it also raises serious constitutional and legal issues.
Under well-established Supreme Court decisions, city and State pension plans are barred by title VII from using the fact that women live longer as a reason to pay them less each year. Surely, the Federal Government should hold itself to the same standard.
This proposal should be off the table. Together with 40 of my colleagues we have asked the President to make it clear that he rejects the gentleman from California's (Mr. Thomas) proposal, and we will be listening to his comments tomorrow night.
Let me add that I have a great deal more to say, but I have many distinguished colleagues with me; and I would like to call upon the gentlewoman from California (Ms. Watson) who is one of the representatives from the Congressional Black Caucus.
Before that, I would like to place in the Record at this point an article by Paul Krugman which points out that his plan is particularly harmful to minorities.
Social Security privatization really is like tax cuts, or the Iraq war: the administration keeps on coming up with new rationales, but the plan remains the same. President Bush's claim that we must privatize Social Security to avert an imminent crisis has evidently fallen flat. So now he's playing the race card.
This week, in a closed meeting with African-Americans, Mr. Bush asserted that Social Security was a bad deal for their race, repeating his earlier claim that ``African-American males die sooner than other males do, which means the system is inherently unfair to a certain group of people.'' In other words, blacks don't live long enough to collect their fair share of benefits.
This isn't a new argument; privatizers have been making it for years. But the claim that blacks get a bad deal from Social Security is false. And Mr. Bush's use of that false argument is doubly shameful, because he's exploiting the tragedy of high mortality for political gain instead of treating it as a problem we should solve.
Let's start with the facts. Mr. Bush's argument goes back at least seven years, to a report issued by the Heritage Foundation--a report so badly misleading that the deputy chief actuary (now the chief actuary) of the Social Security Administration wrote a memo pointing out ``major errors in the methodology.'' That's actuary-speak for ``damned lies.''
In fact, the actuary said, ``careful research reflecting actual work histories for workers by race indicate that the nonwhite population actually enjoys the same or better expected rates of return from Social Security'' as whites.
Here's why. First, Mr. Bush's remarks on African-Americans perpetuate a crude misunderstanding about what life expectancy means. It's true that the current life expectancy for black males at birth is only 68.8 years--but that doesn't mean that a black man who has worked all his life can expect to die after collecting only a few years' worth of Social Security benefits. Black's low life expectancy is largely due to high death rates in childhood and young adulthood. African-American men who make it to age 65 can expect to live, and collect benefits, for an additional 14.6 years--not that far short of the 16.6-year figure for white men.
Second, the formula determining Social Security benefits is progressive: it provides more benefits, as a percentage of earnings, to low-income workers than to high-income workers. Since African-Americans are paid much less, on average, than whites, this works to their advantage.
Finally, Social Security isn't just a retirement program; it's also a disability insurance program. And blacks are much more likely than whites to receive disability benefits.
Put it all together, and the deal African-Americans get from Social Security turns out, according to various calculations, to be either about the same as that for whites or somewhat better. Hispanics, by the way, clearly do better than either.
So the claim that Social Security is unfair to blacks is just false. And the fact that privatizers keep making that claim, after their calculations have repeatedly been shown to be wrong, is yet another indicator of the fundamental dishonesty of their sales pitch.
What's really shameful about Mr. Bush's exploitation of the black death
rate, however, is what it takes for granted.
The persistent gap in life expectancy between African-Americans and whites is one measure of the deep inequalities that remain in our society--including highly unequal access to good-quality health care. We ought to be trying to diminish that gap, especially given the fact that black infants are two and a half times as likely as white babies to die in their first year.
Now nobody can expect instant progress in reducing health inequalities. But the benefits of Social Security privatization, if any, won't materialize for many decades. By using blacks' low life expectancy as an argument for privatization, Mr. Bush is in effect taking it as a given that 40 or 50 years from now, large numbers of African-Americans will still be dying before their time.
Is this an example of what Mr. Bush famously called ``the soft bigotry of low expectations?'' Maybe not: it isn't particularly soft to treat premature black deaths not as a tragedy we must end but as just another way to push your ideological agenda. But bigotry--yes, that sounds like the right word.
Mr. Speaker, I thank the gentlewoman for her comments, and I would place in the Record at this point a letter that was signed by 40 of my colleagues asking him to make it absolutely clear that he rejects the gentleman from California's (Mr. Thomas) notion, and I hope that we hear that tomorrow night.
Hon. George W. Bush,
President,
Washington, DC
Dear Mr. President, We were appalled to hear Ways & Means
Chairman Bill Thomas propose Sunday on ``Meet the Press''
that Social Security benefits should be based on race and
gender. Chairman Thomas said that Congress ``needs to
consider how many years of retirement you get based on your
race'' and that women should receive fewer benefits each year
because they tend to live longer than men. Asked if Congress
would accept such an idea, Chairman Thomas didn't seem to
know the answer.
The answer is ``No,'' Mr. President. We, the undersigned
members of Congress, will not accept a Social Security
formula that is based on race or gender. This idea is unfair,
it is unjust, it is profoundly anti-American. We call on you
to repudiate it. We request a meeting with you to give you
our views in person and receive your response.
Cutting benefits to those who need them most is counter to
the core principles on which Social Security was founded.
That great program is the financial safety net for all
working Americans in their old age. All workers have earned
their benefits and are entitled to them regardless of gender
or race. Social Security's formulas are race and gender
neutral and must remain so. To propose that women should
receive fewer benefits because they tend to live longer
denies benefits to retired women workers who depend on them
to survive and is fundamentally wrong. To advocate that
minorities should receive different benefits on the basis of
their race is repugnant in a society that has renounced
racial discrimination and where all persons are equal before
the law.
Chairman Thomas' proposal attacks the most vulnerable among
us. Retired women workers are twice as likely as men to live
below the poverty line and to depend on Social Security as
their sole means of support. For African-Americans, Social
Security cuts the poverty rate from 59 percent to 21 percent.
Sunday was not the first time Chairman Thomas has proposed
basing Social Security on race and gender, but it was the
first he made clear on national TV that he will advance this
outrageous agenda in the Congress. It is time to make clear
that Congress will not accept it. Nor should you or your
administration. Chairman Thomas' proposal goes against
everything for this great nation stands, and it is counter to
our deepest moral values. We call on you to renounce clearly
and unambiguously any change to Social Security benefits
premised on race or gender.
Sincerely,
Carolyn Maloney; Frank Pallone, Jr.;Nancy Pelosi; Tammy
Baldwin;William Jefferson; Alcee Hastings; Dale Kildee;
Diane Watson; Michael Michaud; Gene Green; Steve
Israel; Maxine Waters; Lynn Woolsey; Joe Baca; Sheila
Jackson-Lee; Chris Van Hollen; Jerrold Nadler; Gary
Ackerman; Raul Grijalva; Barbara Lee; Gwen Moore; Luis
Gutierrez; Sam Farr; Bobby Rush; Marty Meehan; Mike
Honda; Ed Markey; Tim Bishop; Robert Menendez; Donald
M. Payne; Tom Lantos; Eddie Bernice Johnson; Al Green;
Loretta Sanchez; Henry Waxman; Julia Carson; Maurice
Hinchey; Elijah Cummings; Linda Sanchez; Artur Davis;
and Major R. Owens; Members of Congress.
Mr. Speaker, I would like to read briefly a letter that came into my office on this issue from one of my constituents, and she wrote:
``I want to thank you for standing up on the Congress floor and speaking out against the appalling recommendation made by the gentleman from California (Mr. Thomas) on Meet the Press. No decisions regarding Social Security should be based on a recipient's gender or race. To this day, women and often minorities still earn less on average
than men. This has placed an unfair burden on women who often are the sole providers for their children to have the means in which to save for their retirement. Shall we further ensure their poverty in their final years? Please do not allow the gender gap to become acceptable and government-controlled.''
Another person who has spoken out strongly on this issue is the gentlewoman from Wisconsin (Ms. Baldwin), and I thank her for joining us.
Mr. Speaker, I thank the gentlewoman from Wisconsin. I was not aware of Wisconsin's important role in the development of this program.
Mr. Speaker, I wish to yield to my colleague, the gentleman from the great State of New York (Mr. Owens), and to thank him for speaking out and being with us here tonight.
(Mr. OWENS asked and was given permission to revise and extend his remarks.)
Mr. Speaker, I thank the gentleman for his truly moving presentation today.
I had very much the same reaction he did. I was home during the snowstorm watching Meet the Press, when the chairman of the Committee on Ways and Means, the gentleman from California (Mr. Thomas), suggested that we reduce women's benefits because they live longer than men. I truly almost fell out of my chair. I could not believe it.
And many of the sentiments that the gentleman has expressed on the floor were in Paul Krugman's op-ed piece on January 28 that showed how the program is particularly harmful to minorities. One of the things we need to work on is improved health care and medicine and hospital care for minorities so they live longer, not manipulating the Social Security System in a way that does not help minorities, women or men or anyone.
It was astonishing, absolutely astonishing.
Mr. Speaker, I now yield to one of the organizers of this Special Order, the gentlewoman from California (Ms. Woolsey). I thank her very much for her hard work on putting this together and for her leadership on Social Security and so many other issues.
Mr. Speaker, I thank the gentlewoman for her wonderful presentation. She raised a very important point. Democrats wants to preserve the safety net of Social Security, but we also support any plan that encourages savings for individuals. But let us not undermine this whole system. I believe the gentlewoman pointed that out very well.
Mr. Speaker, I yield to the gentlewoman from California (Ms. Waters), a former chair of the Congressional Black Caucus and an important leader on this issue and many others.
Mr. Speaker, I thank the gentlewoman for her statement. She made many strong points, particularly on health disparities. The gentlewoman pointed out that health disparities are not caused by Social Security. There are health disparities in our country, and we should address that with better health care. The fact that some people do not have good health care is no reason to undermine the entire system of Social Security, but we should focus on that area of need to help people in this country. I thank the gentlewoman for her time.
Mr. Speaker, I yield to the gentlewoman from the District of Columbia (Ms. Norton), who has worked very hard on many equality issues and, in fact, used to run the office of economic equality in the Carter administration, I believe.
I thank the gentlewoman for her leadership on so many constitutional issues and equality issues. She has always been out there really leading the way. We thank her for being with us tonight.
I yield to the gentleman from the Show-me State of Missouri (Mr. Carnahan). I thank him for being here. Welcome.
I thank the gentleman.
I yield to one of the organizers, the gentleman from New Jersey (Mr. Pallone). I thank him for his leadership on putting together this Special
Order and his leadership on so many important issues before this body.
I thank the gentleman for his statement. I would suggest that the gentleman from New Jersey and others listen very carefully to the State of the Union tomorrow night, ask some serious questions and demand some answers.
Mr. Speaker, I submit the following article for the Record.
[From the Washington Post, Feb. 1, 2005]
Bush May Back Curbs on Accounts--President Courts Critics of Social
Security Plan
(By Jim VandeHei and Jonathan Weisman)
President Bush is privately expressing support for limits
on the cost and risk of partially privatizing Social
Security, in an effort to mollify nervous Republicans and win
over dubious Democrats, according to White House aides and
congressional Republicans.
Bush, who plans to make Social Security the centerpiece of
tomorrow's State of the Union address, has privately told GOP
lawmakers and aides that he would support phasing in changes
to the system to keep deficits under control over the next
several years and push individuals who opt for private
accounts into more conservative investments, such as bonds,
as they near retirement to mitigate long-term risks, the
sources said.
In addition, Bush has expressed strong support for
protecting lower-income workers from the brunt of any future
reductions in benefits, a chief concern of Democrats. The
Treasury Department is doing a budget analysis to determine
how many lower-income Americans could be shielded from
benefit cuts necessary to offset the overall cost of creating
private accounts, the officials said.
``The administration as a whole is committed to an
unprecedented effort to better communicate the proposal,''
especially its limits on cost and risk, said Rep. Rob Portman
(R-Ohio), a top White House adviser.
The president wants to allow younger Americans to divert a
third or more of their Social Security payroll taxes into
private investment accounts, which would take billions of
dollars from the trust fund that finances the nearly 70-year-
old retirement and disability program. In order to close that
funding gap between benefits promised future retirees and
taxes expected to be collected, the president would reduce
future Social Security benefits, at least for those who
choose to set up private investment accounts.
As a result, the president is scrambling to assure
lawmakers--and voters--that private accounts can be created
without putting the federal budget and people's retirement
nest eggs at risk.
With most Democrats opposed to the president's proposal,
Bush intends to use the State of the Union speech to begin to
detail these ideas, and to argue that new Social Security
accounts will be highly regulated and voluntary--and
necessary to keep the system from going bankrupt decades from
now.
In his speech, the president will not detail the size of
new private accounts or the benefit cuts needed to help
offset the revenue losses, according to an administration
official briefed on the speech. But Bush will talk more
specifically about how the proposed accounts would offer only
a few, regulated investments options, much like the Thrift
Savings Plan for government employees.
The speech will focus on the policy, but its aim is highly
political, Republicans say. After surveying roughly half a
dozen Senate Democrats whom the White House considers
potential converts to Bush's plan, the president and his
congressional allies realize they must limit the budget
impact of creating a new system and protect lower-income
workers, who rely heavily on Social Security for their
retirement income.
One way of holding down short-term costs would be to allow
Americans to shift gradually part of their payroll taxes into
private accounts. Critics say this would do little to reduce
the overall transition cost, which experts say could cost $1
trillion to $2 trillion over the next two decades.
Bush plans to target Senate Democrats facing reelection
with speeches and town hall meetings on Thursday and Friday.
He suffered a minor political blow yesterday, when the
Congressional Budget Office released new projections for
Social Security's financial health, pushing forward the year
when Social Security benefits begin to exceed Social Security
taxes. The CBO now projects that date for 2020, a year later
than its earlier assessment and two years earlier than the
Social Security Administration's projection.
The new forecast, by Congress's nonpartisan, official
budget scorekeeper, highlights the uncertainty about the
system's future.
CBO officials attributed the slight improvement to small
economic revisions, but CBO Director Douglas Holtz-Eakin was
quick to say the changes are economically insignificant.
``Anyone who's making policy based on what they think is a
change in these numbers would be making a mistake,'' he said.
But what is economically significant and what is
politically significant are two very different things.
Democrats who contend that Bush is exaggerating the need to
act and the benefits of his plan pounced on the latest
report.
``Today's numbers from the Congressional Budget Office
provide further confirmation that Social Security is on solid
financial footing for decades to come,'' said Senate Minority
Leader Harry Reid (D-Nev.). ``While we do face a long-term
challenge that should be addressed, there is no reason to
rush to privatize Social Security while making deep cuts in
benefits and exploding our national debt.''
Indeed, the politics of Social Security are playing a
prominent role in shaping the debate. Even before Bush has
detailed his plan, almost every Democrat has vowed to oppose
it, and a large number of Republicans have expressed deep
concerns. This has forced Bush to rethink his strategy and
rework his proposal.
MoveOn.org, a liberal group that was highly critical of
Bush throughout the 2004 presidential campaign, today will
begin airing television ads warning three House members not
to ``privatize'' Social Security: Reps. Allen Boyd Jr. (D-
Fla.), Chris Chocola (R-Ind.), and Jim Gerlach (R-Pa.).
The 2006 elections are nearly two years away, and Chocola
is already facing MoveOn.org's ads and a flurry of automated
phone calls to his constituents from an unidentified group
condemning plans to change the system. Chocola, a second-term
lawmaker likely to face a tough reelection in 2006, said the
offensive will prove futile.
At the same time, Republican-leaning groups are readying
their own ad campaigns. The Business Roundtable, which
represents large corporations, is planning to spend $15
million to $20 million on ads and other lobbying efforts in
support of Bush's plan, according to spokeswoman Johanna
Schneider.
And Progress for America, a group with close ties to the
White House, will spend $250,000 next week on national cable
ads to support the president's efforts.