Social Security
First, thanks to my colleagues on both sides of the aisle for arranging in this incredibly important debate, Senator Kyl and Senator Dorgan, for bringing us together in this way. Social Security is a great American success story. Senator…
First, thanks to my colleagues on both sides of the aisle for arranging in this incredibly important debate, Senator Kyl and Senator Dorgan, for bringing us together in this way.
Social Security is a great American success story. Senator Durbin and I, while we were not around when it was created, are very proud of the fact that we as Democrats led the way to create a great American success story. Our goal today is to keep the security in Social Security. That is the fundamental issue, I believe, for each American family.
We are very proud of the fact that Social Security is a great American success story because prior to Social Security, half of the seniors in our country, half of older Americans, were in poverty. Today it is about 10 percent. We still need to work on the 10 percent but this is a great American success story. We want to make sure nothing is done to unravel this.
It is important we have this debate, though, and we talk about the fact that Social Security is America's insurance policy. It is our families' insurance policy because it is more than just retirement, which is so critical. But it is also a disability policy. Most of us do not have a private disability policy. In fact, 75 percent of us do not. It is a disability policy; it is a survivors policy.
Heaven forbid if mom or dad lose their life, where they are not there to care for their children. In fact, in my husband's own family, when he was 10 years old, his father died. His mom was older and not well, and he and his mom literally survived on Social Security.
This is a great American success story. Anything we do that pulls dollars out of an insurance policy will cut those who are left. No matter how forcefully the President or our colleagues say that somehow some folks can be protected, when you pull dollars out of an insurance system, it is not possible. I think it is very important for us to understand that as well.
Also, we can each have our own opinions but not our own facts. There are a couple of different numbers floating around, but I would suggest to you that the folks whom we are obligated to look to, the Congressional Budget Office--the folks where nobody is appointed by the President, such as the Social Security trustees--those who are the nonpartisan folks we refer to all the time, they tell us, as has been said, that the trust fund can pay 100 percent of its obligations until 2052, and after that, if nothing was done, it would be about 80 percent, maybe 78, 80 percent the trust fund could pay.
There is no question there is a gap, and we are here to say we want to work with you to address that gap. That is what we ought to be doing.
What we know, and the President has already admitted, as have others, is the privatization scheme proposed does nothing to fix this; nothing. It does not add a day, does not add an hour to 2052. In fact, it makes it worse.
There is a solution. In fact, there are a number of things we can talk about. But 2 weeks ago we had a vote on the floor on the budget resolution. This was a vote based on an amendment that Senator Kent Conrad and I had to put Social Security first. I know people are concerned about Social Security, those who support continuing it. But the reality is, we had a vote 2 weeks ago on an amendment that simply said, before we permanently extend tax cuts predominantly to those most blessed in our country, who are the least worried about Social Security, or before we add new mandatory spending, we should secure Social Security first.
It is staggering when we look at the differences in values and priorities in this Congress and with the administration. Mr. President, $3.7 trillion is a lot of money; $3.7 trillion would secure Social Security for 75 years. That is, what, a third, a third maybe, of what we are going to be asked to vote on later this year and beyond to extend tax breaks predominantly for the wealthiest Americans for 75 years.
What are our values? What are our priorities? What does this say about us as a country? We can easily, by putting Social Security first, fill that gap for 75 years. And I believe we ought to do it.
Specifically, on why privatization is something that does not make sense. Privatization does three things we are concerned about: It increases the national debt drastically; it increases administrative costs; and it adds deep benefit cuts. No matter who says, ``We'll protect this group or that group, these folks will be OK,'' if you take money out of the insurance system, everybody gets cut. That is the reality.
The first thing is the budget deficit, the deficit for the country. When we look at what is happening right now, it is astounding. We have the largest Federal deficit right now in the history of the country. We should all be extremely concerned about it. It is $4.6 trillion, projected. This adds, over 20 years, another $4.9 trillion. It more than doubles the national deficit in order to do privatization.
One of the things I am particularly worried about, both as a member of the Banking Committee and a member of the Budget Committee, is who is buying that debt? Who is buying that debt from us? This is at a time when we are concerned about national security and trade deficits and what is happening around the world.
Well, the top two folks buying it are Japan and China. But can you imagine, South Korea and OPEC own some of our deficit. What happens when we add more to that deficit? And what happens when foreign countries buy more and more of our debt? This is a bad idea to add more to our debt.
Let me add a couple of points.
I will do that later. Thank you.
Mr. President, to follow up on the fact that we are hearing that there is no money in the trust fund, I am quite shocked to hear that because back in the 1980s, when the decision was made to come together, President Reagan, based on Alan Greenspan's commission, with Bob Dole and Tip O'Neill, they came together and on purpose designed a system to create surpluses for all of us baby boomers so there would be more dollars available in a surplus. And, in fact, what the President looks at, of course, just like when you go to a bank, you don't look in and just see dollars because there are investments being made and so on.
In the Social Security trust fund, individuals have been given secured bonds, the equivalent of a secured bond, an IOU, each one of us as individuals, with the full faith and credit of the United States behind it.
My question is this: We are giving those same kinds of assurances to those who buy our foreign debt, that we have the full faith and credit of the United States behind it. Would you suggest that we would pay China back and Japan back and our foreign creditors before we would pay back the people of America who have paid into the Social Security trust fund and have been given a secured IOU?
Mr. President, first I say to my friend and colleague, I am shocked to hear him say the people of America who have paid into the Social Security trust fund, the baby boomers, do not have a secured obligation by all of us. Is the Senator saying whether it is moral or whether it is legal, or is he saying we do not have to pay those benefits? He is actually saying that for the folks who have paid in as baby boomers that we are not obligated to pay those benefits?
I want to make it clear that we Democrats believe with all our hearts and souls we have a responsibility to pay and we will pay those obligations. To somehow say that it is different to pay a foreign country than it is to pay our own people the obligations when they are both secured obligations--this is not something written down on a little piece of paper. This is a secured obligation with the full faith and credit of the United States of America behind it.
So I ask my colleague in return, the simple thing to do here, the very simple thing to do would be to go back and vote again on simply making a policy statement. Why didn't my colleagues, either of my colleagues, vote to say ``put Social Security first,'' let's make sure we secure the obligation, keep it secure for 75 years, and then we can give 70 percent of the tax cuts; to say to those most blessed in this country, will you take 70 percent of $11.6 trillion rather than 100 percent so every single person cannot only have retirement, but have a disability policy, have survivor benefits?
Isn't that based on the great values of America in terms of paying into a system, knowing it is going to be there, working hard all your life and creating a way for people to care about each other and have community? To me this would be the easiest thing, and we could do it tomorrow if we had the votes to do it.
Mr. President, given the fact the President has indicated that the privatized accounts do not solve the solvency problem for Social Security, and given the fact that at this point colleagues have said they are not interested in putting Social Security first before additional tax cuts or new mandatory spending, what would my colleagues' proposals be at this point? Assuming the privatized accounts, as has been said--that is a philosophical difference; folks may or may not wish to privatize Social Security, but it does not add a day to the solvency of the Social Security trust fund.
I ask my colleagues, what would your proposals to protect and secure Social Security be for the future?
With all due respect, I am trying to figure out the new math in my head because the math that the Senator is talking about certainly does not add up to anything that I have seen. I would encourage folks who are watching to go to democrats.gov and use the calculator based on a 6-percent rate of growth that some financial folks put together where they can put in their date of birth and their average yearly earnings and find out for themselves how they would do. So far we have not found anybody who does better under these privatized accounts.
So when one is talking about what we ought to do, we need to start with the reality that the privatized accounts turn Social Security from a guaranteed benefit into a guaranteed gamble, No. 1. Secondly, there is nothing in what the Senator is talking about that has a relationship to what we are hearing about these private accounts.
I said to Secretary Snow in a committee hearing that I understand folks have to pay some of this back, so let me give an example. My daughter is 25. Let us say I give her $1,000. At retirement I tell her I want the $1,000 back, 3-percent interest, plus inflation. Is that what you are talking about? And he basically said yes. He did not disagree with that.
What we are seeing is a lot of hocus-pocus, a lot of where is the pea on the table moving things around. Of course, we have nothing specifically in writing yet from the President, which is one of the problems. But what we are seeing is a lot of talk that does not have a relationship to reality. The reality is that for the first time, in 2017 we begin to dip into the surplus that the Senator and I have been paying into as baby boomers all of our working lives. It is a commitment. It is a secured obligation and we are going to pay that to folks.
So the question is, what happens in 2052 when that surplus is no longer available? And if we can take privatization off the table, the Senator has very willing and able colleagues on this side of the aisle who want to work with the Senator to do those things that will secure it for the future.
I will answer that for my colleague. As Senator Durbin just said to me on the side, it will not be privatization, and that is absolutely true. The American people, American families, can absolutely count on the fact that it will not be privatizing Social Security.
I would argue that the amendment we put up 2 weeks ago that simply says in the overall budget process, which is the value system for our country, the blueprint, is represented in what we do in our Federal checkpoint. The reality is, if we said we were going to take about 30 percent of what is being given over the next 75 years to those most blessed in this country, who are not worried about Social Security or Medicare or other kinds of opportunities, if we just ask them to take a little bit less, we would be able to secure Social Security for 75 years.
The other thing I would say about the issue of asking folks about pensions, we have all been told by our folks that retirement is about a three-legged stool: Social Security, pension, and savings. When it comes to savings, the risk is with us to save. I believe we ought to create more opportunities for that. When it comes to pensions today for workers, it is becoming more of a risk for the worker, not a defined benefit but a defined contribution.
The leg of the stool that has been secure, that we will fight to keep secure, is Social Security. I will never forget people working for Enron who came into my office 2 years ago, men in their fifties who worked all their lives and played by the rules and invested in their company, and one man with tears in his eyes said to me: Thank God for Social Security. It is the only thing I have left, and I never thought I would be in this situation.
Social Security is not a 401(k). It is not meant to be a pension system. It is America's families' life insurance policy, retirement disability, and survivor's benefits. It has worked now for years and years. The issue is how do we keep it going.
Mr. President, I thank you and my colleagues very much. This is an important debate, and I appreciate being able to participate in it.
The President's privatized accounts, we know, will do three things, and that is why my colleagues and I are opposed to the privatized accounts.
First of all, they will greatly increase the national debt. In fact, do you know what folks are going to own with this? Seventeen thousand dollars more in debt for every man, woman, and child in the United States. That is what they are going to own. It is a lot more debt and a lot higher interest rates as a result of this plan. This is a bad idea.
The other thing that doesn't make any sense to me is that right now Social Security, which is retirement--and we do have a secured obligation to make sure that we pay it, but it is retirement, disability, and it is a life insurance policy. For that we pay about a half a percent in administration. On average we are told that it could be upwards of 20 percent, maybe 10, maybe 25, but we are told by the experts, 20 percent in order to administer an annuity or other kind of private account.
One of the things I find interesting is that among folks who are really pushing for this idea around here are those folks who would be paid to administer these accounts. I understand we now have something like five financial services lobbyists for every one Senator now here on Capitol Hill. Certainly there are folks who will make a lot of money from this, but it is wrong. This system works right now and we pay a half a percent.
The final thing I would say is it is estimated that the average person over 20 years, the average retiree, will lose $152,000 under the approach the President is talking about. This is wrong. This is not better for people. This is, in fact, worse.
I agree with my colleagues, and in fact let me also say I would welcome folks going to my Web site or any of my colleagues' Web sites to learn more about Social Security and the facts. We do need to be working together, not only to secure Social Security for the future past 2052, but we also need to work on those other ideas that create opportunity for people. One of my great concerns is that one-third of the cuts proposed by the President in the budget are in education. That is opportunity. That is the opportunity for ownership in the future. Why don't we focus on jobs and health care and those things immediately that need to be addressed?
We welcome those debates as well and we welcome working with our colleagues to keep the security in Social Security.