Thank you, Mr. President. I thank my colleagues as well. This is a great opportunity to discuss such an important program. I appreciate all three of my colleagues who have spoken who have stressed how important it is that we keep the…
Thank you, Mr. President. I thank my colleagues as well.
This is a great opportunity to discuss such an important program. I appreciate all three of my colleagues who have spoken who have stressed how important it is that we keep the promise of Social Security. We have heard a lot of numbers and different information. If I could, I would like to try to make it a little simpler so at least I could understand it.
I am reminded, as I hear some of the information, of a TV commercial I have seen that the AARP has sponsored. Some of you may have seen that commercial. The Presiding Officer may have seen it as well. In the commercial they have a wrecking ball that is tearing down a house and a Caterpillar tractor tearing down the walls and a family fleeing, and they are saying: This is what the President is trying to do to our Social Security system, to tear it down completely when all it takes is a few simple adjustments.
I think the real truth here is the house is more like one I saw on the news during the rains and the mud slides in California: a beautiful big house sitting on the mountainside, and from the front it looked perfect. It was perfect in the inside. The roof was perfect. It did not leak. But when you looked around the back, from the air with a helicopter, you could see that half of the foundation had been washed away, and it was precariously perched there on the side of the mountain. But it looked perfect from the front. A few hours later they showed a clip from the air where the whole house went down the side of the mountain.
Unfortunately, what we have happening today is we have a Social Security program that has worked, and it looks good, just like that house, but the foundations have been eroded for many years, and we are coming to the point where we have to rebuild those foundations.
I appreciate what the President is doing. This President has been willing to confront the most difficult issues of our generation. He has confronted terrorism head on. He is the world leader now in exporting freedom and democracy. He has taken the education issue on, recognizing we were leaving children behind, and made it more accountable. He saw that seniors were not able to buy prescriptions, and he has worked with the Congress to make sure they could. He sees that Social Security is like the house on the cliff and that we need to fix it.
Now, I am afraid my Democrat colleagues and the AARP and some other groups are still showing people around the house and telling them it looks fine. And it does. But, folks, the real truth is, the foundation of our Social Security system has been eroded. The President is trying to show us the truth, that we need to rebuild the foundation.
Senator Santorum painted a clear picture. The foundation of our current Social Security system was based on a lot of workers and few retirees, a lot of workers putting in $60 or less a year. Today, we have the average family putting in over $5,000 a year. The problem with that foundation and why it is being washed away by today's demographics is there is no savings. We have not saved 1 penny. Even though the average American family puts in over $5,000--some dual-income families over $15,000 a year--we are not saving any money in the Social Security system.
I am afraid while the trust fund is a nice idea, it is no more real than Santa Claus or the Easter Bunny. The President today pointed out that the trust fund is simply a file cabinet with a bookkeeping record of how much the Federal Government has borrowed from Social Security. This money was being borrowed before our tax cuts. It is being borrowed today. This year, there is $75 billion in Social Security surpluses. It is being spent. And if we had not had the tax cuts, it would have all been spent because there is no way in our current Social Security system to save real money. That is all the President is talking about, rebuilding the foundation of our Social Security system with real savings. And that is what we are trying to do.
I will put up a chart. I want to point something out that is very important. So much has been said that we are taking money out of the Social Security system. But what we are doing with
personal accounts is welding them to the current Social Security system.
As you will see with the first bar on the chart, this year, in 2005, all of the benefits to today's retirees are being paid from the current system. But what we are proposing, since the current system is running out of money, is to begin to add personal savings within the Social Security system. By 2025, over half of the benefits that will be paid-- and it is important to see that the benefits will be the same--will be paid in part by personal savings and in part by the traditional system.
Now, by the time my children retire, in 2045, all of the benefits will be paid from a funded Social Security system, from real savings, and people will actually get better benefits in the future than they do today.
Let me point out on a second chart, it is important to recognize no money is going out of the system. It is all part of a system that has a new foundation of real savings.
This is something we require of every corporation in the country that offers a pension plan, that they have real money in it. That is what we need to do to Social Security.
One of the benefits of this--in addition to structuring a program where we can guarantee benefits; we don't change disability; survivors benefits can be even better--is the average American worker, if you look at 2035, average median income at 35, it is already close to $400,000 that they can work with their current system. The benefit there is that if you die before you are 65 instead of today when you have nothing, it is left to your heirs. It is part of your estate. More people can inherit wealth.
We can continue to talk about this as we go through the questions and answers.
An excellent question. Those are legal obligations of the Federal Government which we have to honor. But the Supreme Court has said Americans have no legal right to a Social Security benefit. It is not their money. They don't own it. Unfortunately, the Social Security trust fund could not write one check to a Social Security retiree today. There is no money.
The only place the money can come from for the trust fund is if it comes back from the general fund to the trust fund. In other words, these cash deficits that we have talked about are the money that has to come out of the General Treasury, out of our education fund, our transportation fund, out of our military, in order to pay these IOUs that are in this so-called trust fund. And we don't have the money to do that.
And the talk of tax cuts hurting the Social Security trust fund, I am afraid, is ridiculous. The money was all being spent anyway. If we had not had a tax cut, more would have been spent. This year there is $75 billion in a Social Security surplus that we are spending.
My question to the Senator is, would the Senator support a proposal that actually saved the Social Security trust fund--that is all we do-- save the money that is surplus between now and the time that runs out in 2017--and that is when the program is in trouble because that is when we have to start pulling money out of the general fund. But my question to both of my Democratic colleagues is, would they support a proposal to save the Social Security surplus today?
That is what the Supreme Court----
Mr. President, I appreciate the question because I actually do have a proposal. The fact is, if you add personal savings within the current system, you do fix the system permanently. The example on this chart is while right now the traditional benefits are paying 100 percent of our promise, and Social Security is a promise we need to keep--Republicans are committed to it, and the President is, and that is why we are looking at this house that is on a cliff. We want to figure out how to build a foundation that will keep it there for our children and grandchildren.
But if we allow personal accounts to work with the traditional system, when we get out to the year 2045, we not only have a permanently solvent system, we have one that is completely funded. In other words, it would meet the legal criteria of pension plans today.
I think all of my colleagues know that if corporate America asked us to set up a plan such as Social Security where we take workers' money today, we spend it all, and then we try to pay benefits out of future revenues, we would say no and we would probably put them in jail.
The plans we are talking about eliminate risks. They guarantee a future benefit and they are slanted toward giving the poor a better deal than they have had under the current system. We can design a Social Security system with personal accounts that eliminate risk and help the poor more than this current program and make the program permanently solvent.
My question back to the Senator would be, if the Senator is not for personal accounts--and I guess if the Senator is thinking the trust fund is going to pay benefits after 2017 even though last week the Social Security actuaries in their report said in 2017 payroll taxes will no longer be enough to pay promised benefits, so we will have to start pulling money from the general fund--my question to the Senator is if the Senator does not want to put personal accounts into the system, which we continue to stress we are not taking money out, we are adding new money to the Social Security system, we are saving it in personal accounts, we are welding it to the traditional system so that it will be stronger in the future, how is the Senator going to fix Social Security and pay benefits in 2018?
Thank you again. I have enjoyed this tonight. Our talk, I guess, has gone in some interesting directions. My opinion is that Social Security is now too expensive to be just an insurance policy. When Americans paid $60 a year when the program started, yes, maybe it was an insurance policy. But today, with Americans averaging over $5,000 a year, for many it is their only savings plan. We cannot assume that the average American can save, after we take 12.5 percent of their income, additional money for retirement. We have to transform Social Security into a program that is not only secure but helps people create real savings to build a foundation of the program.
We are as committed to Social Security as you are. In fact, we wouldn't be here talking today if Social Security was secure. In fact, we see that it is running out of money, and the best way to fix it is to save some of the money that we are putting into Social Security.
I know there are plans that don't put people at risk because I have one and several other Republicans do. The plan I have introduced, which has been scored by the Social Security Administration, guarantees that no American will ever receive less from Social Security than is promised by the current system. It gives the poor larger accounts. It reduces the deficit for Social Security by two-thirds. It is a program that makes every American a saver and investor.
In this country today, with so many Americans who do not own anything, the opportunity to own something, and for that ownership to grow in wealth so that they can participate in a country
as our economy flourishes, this is what Social Security can be in the future--just as secure, but it can contain real savings for the first time.
That is all we are asking today. Let's not cut benefits. We don't want to cut benefits. Let's not raise taxes. The problem with Social Security is that the foundation does not include real savings, and that is what we are proposing. Let's save Social Security with real savings.