Mr. Speaker, I appreciate the opportunity to address the House this evening on an issue that is really of utmost importance and urgency. It is something that has been in the news an awful lot over the past number of weeks and months; and…
Mr. Speaker, I appreciate the opportunity to address the House this evening on an issue that is really of utmost importance and urgency. It is something that has been in the news an awful lot over the past number of weeks and months; and hopefully tonight we will be able, along with some of my colleagues, to bring some greater clarity to the importance of this issue, as well as the importance of solving the challenge of this issue, and that issue is Social Security.
As a freshman here in Congress, when I go home I get asked, What are your impressions of Congress? What is going on up there?
I am struck by two things. The first is that we live in challenging times, incredibly challenging times, and there are issues that demand attention and that demand the honest, hard work of the people in Congress on behalf of the citizens of our Nation, and it is imperative that we act. Our constituents demand that we act, and it is appropriate that they should do so.
The second impression that I have is that I could not be more proud to serve with a President who is not afraid to tackle big issues. We have got some incredible issues before us, Social Security being one of them, and this President has put it on the table and said, Ladies and gentlemen, let's work together honestly and sincerely and let's solve this problem.
We had a break at home recently; we were all home for 2 weeks talking to our constituents and our neighbors and friends, and I had the privilege of being with Secretary of Health and Human Services Mike Levitt, who was speaking to a group about Social Security, and he kind of crystallized it, I thought, really very, very well.
He said, There comes a time in history when a problem is large enough to see, yet still small enough to fix.
There comes a time in history when a problem is large enough to see, yet still small enough to fix, and I believe that Social Security is exactly at that stage. The problem is large enough to see, but still small enough to fix.
Let me begin very briefly, and then have some of my colleagues join me. I would like to talk about some principles. I think it is important when we have discussions about public policy, especially on something as important as Social Security, that we stick to principles. I can outline four or five principles that I find to be incredibly important in this discussion about Social Security.
The first one is that it is a promise. I believe and I suspect that the majority of Americans believe that Social Security is not just a government program; it is not just a program that was instituted 70 years ago willy-nilly. It is more than a safety net. It is a promise. It is a covenant with the American people by all of us to the generations of hard-working Americans, and it says that Washington took money from your paycheck, your paycheck, your entire life, and they made a promise to you to return that money upon your retirement. So it is a promise.
The second principle that I think is important to keep in mind is that of generational fairness. It is imperative that we save and that we secure Social Security so that our children and our grandchildren will receive the same benefits that we when we retire will have enjoyed. So generational fairness. It only works when it is fair for all Americans.
The third principle, and this is a tough one in this institution, and I was listening to my colleagues on the other side of the aisle a little bit earlier and sometimes with amusement, but the third, which I am serious about and I believe that all of us should be, is that this issue should not be partisan. It ought not be partisan.
When it comes to the retirement of tens of millions of Americans, there are not Democrats or Republicans. We are all Americans, and those Americans are counting on us to work together and to do what is right for the current generation and for future generations and those just entering the workforce. So it ought not be partisan.
Fourth is that concept of a nest egg. All working Americans deserve the peace of mind that if they live by the rules and they work hard and they live up to their responsibilities, that there ought to be a nest egg available to them, taken from that money that they have so generously put into the Social Security system.
Finally, and we oftentimes find that Washington forgets this, but to all Americans, this is your money. This is your money. It is not the government's money; it is your money. It is your future, and it is your life.
I think if we keep in mind those principles, that it is a promise, that there ought to be generational fairness, that it ought not be partisan, that we ought to concentrate on preserving that nest egg, and, finally, it is your money, that it is Americans' money, we will go a long way towards ending up with the right solution.
I am privileged to be joined tonight by a number of my colleagues who will touch on some issues as they relate to Social Security and their perspective. First is the gentleman from South Carolina (Mr. Wilson). The gentleman from South Carolina (Mr. Wilson) recently returned from that 2-week period conducting over 20 town meetings with constituents regarding Social Security.
When I think of those Members of the House who have the highest level of honor and integrity, the gentleman from South Carolina (Mr. Wilson) is right at the top of that list. In my very short period of time here in Congress, I have come to appreciate him greatly. He is the grandfather of two young boys, and he clearly understands the demographic challenges that are facing Social Security and the need to strengthen the system now.
With that, I yield to the gentleman from South Carolina (Mr. Wilson).
Mr. Speaker, I thank the gentleman from South Carolina (Mr. Wilson). He is absolutely right about the President, with his courage and leadership. The easy thing in this issue is to do nothing.
That is the easy thing to do. Because there are a few years where people are not going to feel it, they are not going to feel that pain, but the gentleman from South Carolina so vividly brings a face to that by presenting his son and his grandchildren, and I appreciate that very, very much.
I would like now to yield to the gentleman from Texas (Mr. Conaway), another fellow freshman who is the father of four grown children and a grandfather to six. He has demonstrated remarkable leadership in his 3 short months in Congress with me, and over the break he conducted 15 Social Security town hall meetings in his district. He brings excellent expertise to this issue, because he is a CPA and a small business owner and former chief financial officer. He truly understands the financial impact that a failing Social Security system will have on his children and his grandchildren and all of us.
So I thank the gentleman, and I yield to him to discuss this issue.
I thank the gentleman from Texas (Mr. Conaway) for his comments. I appreciate that. And that letter really just gets to the heart of the matter. I hope to see that letter in their newsletter. They ought to be sending that kind of information out to their members because, as he said, it really is a disservice when the level of discussion about something so incredibly important sinks to these little games that are played that are not productive and that frankly do a disservice to our Nation and to its citizens. So I thank the gentleman for his participation this evening.
Now I would like to ask the gentlewoman from Virginia (Mrs. Drake), another stellar member of the freshman class who is going to join us. She is a Realtor and former State delegate from Virginia. As a former small business owner herself, she is extremely familiar with the positive impact protecting Social Security will have on millions of American families and small businesses. And I yield time to the gentlewoman from Virginia as she consumes.
I thank my colleague from Virginia (Mrs. Drake). My goodness, she brought such clarity to this issue in her explanation there, and I really appreciate that. I also have used the analogy of refinancing a home, a home mortgage to kind of bring clarity and focus on what it is that we must do, we must do as a Nation. And so I appreciate her bringing that perspective to us.
I also just was struck as she was talking. You know, the other side seems to think that if we do not do anything, it costs nothing. Well, that could not be further from the truth. So I really appreciate her participation, and I thank her ever so much.
Mr. Speaker, I think what you have seen this evening initially with the discussions of the gentleman from South Carolina (Mr. Wilson) and the gentleman from Texas (Mr. Conaway) and the gentlewoman from Virginia (Mrs. Drake) on the issue of demographics and on the demand or the need for honesty in this discussion and the concern and the clarity with which the gentlewoman from Virginia (Mrs. Drake) talked about these transition costs as they are described, that they are bringing about those principles that I talked about: that it is a promise; that it is important that we make certain that generations are treated fairly; that this ought not be partisan; that there is a nest egg there; and that it is your money. It is America's money. It is not the government's money.
As I was, over the past couple of months, looking into this issue regarding Social Security, I always try to figure out where it all began, where is the fundamental problem, but also what are other folks saying on this. And I came across some interesting quotes I would like to share with you. The first
one, I think, gives a great perspective on the issue of Social Security. I am a child of the 60s; and so when I grew up, President John F. Kennedy, I remember clearly the manner in which he was able to convey his passion to our Nation and to focus our energy. And he recognized back in June 1961, regarding the issue of Social Security, he said, a Nation's strength lies in the well-being of its people. And the Social Security program, remember, this is 1961. The Social Security program plays an important part in providing for families, children, and older persons in time of stress. But it cannot remain static. It cannot remain static. Changes in our population, in our working habits, and in our standard of living require constant revision. Constant revision. It cannot remain static.
Well, what has happened to our program? It has remained static. There have been no fundamental changes to our situation as it relates to Social Security. So I am fond of telling folks that our current situation is a result of demographics, the aging of our society, but also to inertia. There is an inherent inertia in government at all levels to do nothing, that it is easier to ignore a problem than it is to fix a problem. That is not only true at the city council level, where it is easier to keep the collection for garbage on the same days, even though it might work better to do it in a different manner.
But it certainly is true here in Washington where we have big issues like Social Security. It is easier to do nothing. And that is why I am so proud again to serve with a President who understands the importance of tackling this issue head on.
When we think about Social Security, remember the program that President Kennedy said cannot remain static. I had my staff look up what kind of things were going on 70 years ago when the program began. Social Security is 70 years old, 70 years old. There has been a little tinkering but no fundamental changes, and the world has changed significantly.
Seventy years ago we were in the midst of the Great Depression. Seventy years ago FDR was our President. Babe Ruth hit his last three home runs in one game, setting the record at 714 career home runs. Seventy years ago, Elvis Presley was born. A 1935 sedan cost $495 brand spanking new, and a modern six-room house sold for $2,800. Seventy years ago, Parker Brothers released the board game Monopoly, nylon was discovered, and the construction of the Hoover Dam was completed. Seventy years ago was a long time ago, and the world has changed, and our population has changed.
I think it is clear that when Social Security began it was a wonderful program. It was first designed for a different generation and for a different America. There are really at least four specific facts that convinced me when I began looking at this issue that the old system, the current system, is no longer workable for our society and it is no longer secure.
The first is, as the gentleman from South Carolina (Mr. Wilson) mentioned, is that our Nation has matured from the time that men were the majority of the workforce and the life expectancy was about 60 years old. Today, in the majority of households, both men and women are working; and our life expectancy is significantly over 70 years of age. We are living longer and healthier lives, and that trend is only going to increase, and that is very good for all of us. But it is not good for our Social Security system.
We have seen this demographic before. This gets to the issue of the second thing that convinced me that we have got to modify and reform the system, and that is the issue of the workers. We are in a pay-as- you-go system, which means that today's workers pay for today's retirees. And when the system began in 1935 or 1937, there were 41 workers for every retiree. In 1950, there were 16 workers paying in for every beneficiary, every retiree. Today, there are 3.3 workers for every beneficiary or retiree; and in a very short period of time there will be two workers for every retiree. That is the system that cannot sustain itself. We are on an unsustainable course.
The third issue that led me to believe and understand and appreciate that we have got to reform the system is what I call the 2008 phenomenon. 2008, what happens in 2008? Well, this graph you may have seen. In the year 2008, these are the surpluses. This is the amount of money coming into the Social Security system. In 2008, the surpluses peak, the surpluses peak and begin to decrease. And at the same time the baby boomers begin to retire. That large group of individuals in our population, me being one of them, in 2008 they begin to retire.
The baby boomers started in 1946. The average age of retirement is 62. You take 1946, you add 62 to it, 2008 and they begin to retire. 2008 is not a long way off. It is right around the corner.
Finally, fourth, if you think about the system that we have had in place for Social Security, again it is a pay-as-you-go system, so the current workers pay for the current retirees. When there were lots of workers, there was more money in the pool for retirees. But what has happened? What has happened when we get down to that area where we have got 3.3 workers and then soon 2 workers for every retiree, the amount of money that is being returned is, frankly, an embarrassment.
When the system started, people got much more money than they put into the system. Now it takes years and years for individuals to get the amount of money back that they just put into the system. In fact, most individuals are getting less than 2 percent return on the money that they put into Social Security. Less than 2 percent. That is not a nest egg. That is not secure. That is not enough to retire with security.
There was an article that came out today that I think brings clarity to that, and it is by Stuart Butler, who is a renowned and noted economist, Vice President for Domestic and Economic Policies at the Heritage Foundation. And let me just share with you a couple of paragraphs from this article. It was entitled, ``The Social Security Crisis Gets Personal.''
In this article dated today, April 12, 2005, he stated that, ``As the Social Security system itself has aged, payroll taxes have grown relentlessly and the return on those taxes has fallen dramatically. When Social Security began the payroll tax was just 2 percent of income. Now it is 12.4 percent. Today, the average male worker about to retire will typically get just 1.27 percent return on his lifetime of taxes, less than he would get from a savings account. That is bad enough, but the younger you are the worse it will get. A 25-year-old worker can expect a return of minus .647 percent.'' He loses money.
Here is the kicker right here. ``Imagine what Congress would say if a private company was taking in billions of dollars from millions of hard working Americans and then giving them back less money in retirement.'' Well, you can imagine what Congress would say.
So we have got more retirees, fewer workers, and less money. All of these facts, and facts are the same regardless of whether you are a Republican or a Democrat, all of these facts do not paint a pretty picture.
It is incumbent upon us here in Congress to put the security back in Social Security. There was a time when our friends on the other side of the aisle agreed, and we did a little work and came up with some quotes from individuals. These are actual quotes, actual statements from some very prominent individuals on the other side of the aisle when they appreciated or they admitted that they have appreciated that there was indeed a problem in Social Security.
This is a quote from President Clinton in February of 1997, 8 years ago, February of 1997. ``For the long-term health of our society, we must agree to a bipartisan process to preserve Social Security and reform Medicare for the long run so that these fundamental programs will be as strong for our children as they are for our parents.'' Clearly identifying one of the principles I spoke about.
Here is a quote from President Clinton in February of 1998. ``So that all of these achievements, the economic achievements, our increasing social coherence and cohesion, our increasing efforts to reduce poverty among our youngest children, all of them, all of them are threatened by the looming fiscal crisis in Social Security.''
Now there has been some discussion about whether or not we have a crisis or a problem or it is a challenge. This
is 1998, 1998, President Clinton saying, ``threatened by the looming fiscal crisis in Social Security.'' Clearly, President Clinton understood the issue at that time.
Here is a quote from the late Senator Daniel Patrick Moynihan in March of 1998, talking about the issue of Social Security and investment, these personal retirement accounts, voluntary personal retirement accounts. ``Young people, especially, have lost faith.'' He is talking about the Social Security system. ``They wonder why they cannot take care of their own retirements with stock and bond investments, rather than trusting a system that either is headed for bankruptcy or will provide paltry or negative returns on their contributions.'' Another august individual from the other side of the aisle who certainly appreciated the problem.
And then Senator Harry Reid. He is now the Minority Leader in the United States Senate. In February of 1999, he said, ``Most of us have no problem with taking a small amount of the Social Security proceeds and putting it into the private sector,'' these voluntary personal retirement accounts that we have been talking about.
They recognized the issue. If they recognized the issue in 1997 and 1998 and 1999, what is the solution? What is the solution that they have put on the table? What are they offering to this remarkable challenge that we have as a Nation?
Well, a little earlier I talked about the initial impressions that I have had in my freshman term here in Congress, and one of the things that may not surprise anyone is the remarkable level of partisanship. Remember I talked about the need for this to be a nonpartisan issue, but the incredible level of partisanship and nowhere is it more clear than on the issue of Social Security. The Social Security problem is clearly defined, and there is a clear recognition by both Democrats and Republicans as demonstrated here that we need to fix the system. Yet where is the plan from the other side of the aisle? What is the plan that they have on the table?
Well, we searched and we searched and we searched and we searched. And this is the plan that we have come up with. This is the plan that the other side of the aisle in this incredibly important issue, in an issue that will impact every single American, this is the plan that they have on the table.
Just say no. Just criticize. It is politics as usual. It does such a huge disservice to us as a Nation and to every one of their citizens. So we should act now. There is no doubt about it. We should act now.
The Social Security trustees, the Comptroller General of the United States, Chairman of the Federal Reserve Board all agree that the sooner we address the problem, the smaller and less abrupt the changes will be for individuals and their families.
One of the individuals who works in my office just this past week got her Social Security statement, her Social Security statement that each of us get each year, and I was reading through the text of what everybody receives from the Social Security administration about their Social Security. And it clearly says and I urge every American to read the fine print when this comes to your home. It says from the Social Security Administration, ``Unless action is taken soon to strengthen Social Security, in just 14 years we will begin paying more in benefits than we collect in taxes. Without changes, by 2042 the Social Security trust fund will be exhausted. By then the number of Americans 65 or older is expected to have doubled. There will not be enough younger people working to pay all of the benefits owed to those who are retiring.''
This is not an opinion by anybody on my side of the aisle or the other side of the aisle. This is the Social Security administration who is looking at the numbers, seeing what kind of revenue is coming in and what is going to happen and warning each and every one of us, further, that there will be enough money to pay only about 73 cents for each dollar of scheduled benefits.
So I had the plan from the other side of the aisle. This is their plan. If you wanted to put a face on it, if you wanted to draw it on a graph, that plan is this graph. What this says is that we go along and go along and go along just as we are doing now until we get to that date, 2041, when the bottom falls out of the system and individuals are only able to receive 73 or 74 percent, which is a 26 or 27 percent cut in benefits.
I promise you that that is not acceptable. It certainly is not acceptable to me. It is not acceptable to our side of the aisle, and I do not believe it is acceptable to the American people. So it is a promise. This issue ought to be nonpartisan. We ought to get together, and I urge my colleagues to do so. There needs to be generational fairness so that younger individuals have faith that some of the money certainly that they have put into the system will be able to grow and be able to provide for their nest egg.
Finally, it is your money. It is Americans' money. It is not the government's money. It is your money. These ought to be our principles, and we should focus on the facts, study the issue and alternatives that are available to us, vigorously debate, both sides of the aisle vigorously debate and then act. It is imperative that we move forward with this because, as we have heard, every year we delay costs this Nation, costs the American public, costs you $600 billion.
Social Security is a system that has worked for decades and for generations, but the current system is outdated and does not meet the needs of the American people. It is not secure.
We have a wonderful opportunity right now. Right now, imagine the peace of mind that you would have knowing that the contributions that you make each month into Social Security will result in a nest egg for your retirement that you own and that no one can take away. That is my vision and that is my dream and I hope that you share that.
In closing, Mr. Speaker, I urge my colleagues and I ask my colleagues to take the time now, take this time now and let us get to work. We all look forward to the discussion that is coming about on this issue, but I am hopeful that we will remember those principles, that it is a promise and ought not to be partisan and to keep in mind every single generation and be fair to them. Remember that nest egg that must be maintained for security and that it is American's money, it is not the government's money. If we do not act now, that would be the height of irresponsibility, as with saying that there is no problem or that little needs to be done.
So I urge this House, I urge the Senate and I urge the President to work together and I congratulate the President for bringing this issue forward to find a responsible and a secure solution.