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Social Security Guarantee Act of 2005

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Location: Washington, DC


SOCIAL SECURITY GUARANTEE ACT OF 2005

Mr. SANTORUM. Mr. President, Senator DeMint and I are here tonight to talk about an issue that has drifted to the back burner of American political discourse. It is unfortunate that it has. It is an issue that both the Senator and I, and I know many others on this side of the aisle, have worked to accomplish diligently now for many years, for me since 1995, trying to grapple with the shifting demographics and the changes that are coming to this country when it comes to the issue of entitlement programs.

There is no more important entitlement program that we have to preserve and protect and save than the Social Security system. It is the bedrock upon which our seniors have the security to meet the needs they have in their later years in life.

We understand this demographic timebomb of the baby boom generation, people living longer, lower birth rates, all of those things come together to create a demographic perfect storm that causes the Social Security not to be able to pay for the benefits promised to future retirees. We have tried to put forward solutions. I put forward solutions. Senator DeMint has put forward more than one solution. Other people on this side of the aisle have done so. The House has done so. The President has put forward ideas on how to address this problem. We have done so because we believe it is important for us to step up to the plate and be serious about addressing this serious concern that millions of Americans who are retired, near retirement, and even younger Americans have about their ability to collect their Social Security check.

We fought hard to bring this debate to a head on the floor of the Senate. Unfortunately, we have not succeeded. We have not succeeded because we have been met with a partisan obstructionism that is as rock solid as the marble before me on the rostrum.

The fact is, we have seen no cooperation at all from the other side of the aisle. Unfortunately, we have not seen any attempt to come to the table and try to solve the problems of Social Security that all sides of the spectrum admit is looming for future generations of retirees. That is unfortunate. It is unfortunate because we have had an opportunity this year to address an important issue before the crisis strikes.

One of the great complaints that Americans have about Congress is that we wait until the problem is almost overwhelming us before we do anything to react to it and therefore end up with less-than-optimal solutions.

We have an opportunity now, as the crisis looms but far enough away, to be able to address it in a way that can spread out the burden and create better opportunities for future generations of retirees, and just as importantly, future generations of taxpayers and American families trying to keep the quality of life and, in fact, improve the quality of life that we have in America. But we did not get that accomplished.

What Senator DeMint and I have decided to do, in cooperation with our leadership in the Senate, is to try to take a first step. Using football analogies, which I know the Senator from Virginia, Mr. Allen, loves to use, we tried to throw the long ball and march down the field, but we are going to try to run off tackle here and see if we can pick up a yard or two to move the ball down the field to get to the goal of providing retirement security for future generations and saving and strengthening the Social Security system.

The first play in trying to accomplish that is legislation that I have introduced called the Social Security Guarantee Act of 2005. As I mentioned before, Americans work very hard and pay a lot of money. It is the biggest tax that most Americans pay. The overwhelming majority of Americans, the biggest tax they pay is the Social Security tax. From the tax they pay, they expect that benefit to be there when they retire.

The point is, for those who are at or near retirement, the answer is that it will be there. In fact, in looking at the long-term problems of dealing with Social Security, there is nothing this Congress should do to affect the near-term retirees and those who are retired today. We have said over and over again, those of us who have been advocates for strengthening the system, whether it is the President or Senator DeMint or Senator Frist or others, that we do not want to do anything to impact those who are near-term retirees and those who are already in the system.

The reason is twofold. No. 1 is we do not have to. The system is solvent. In other words, there is more money coming in than we need to pay out over the next 15-plus years. Therefore, we do not need to have any kind of fixes for those in the short term. The problem is out in the long term.

The second reason is a matter of fairness and equity. To change the game literally before someone crosses the finish line, to move the finish line--or even the people who have already crossed that finish line and have ended up in Social Security, to move it back would simply be inequitable. People would not have the opportunity to plan for that, and it could be very disruptive to their retirement.

So what Senator DeMint and I have suggested in the Social Security Guarantee Act is that we put in writing in the statute what everyone has sort of agreed to in casual conversation and even beyond casual conversation. If we can put that chart up, the Senate recently, March 15 of this year, all 100 Senators, including every Senate Democrat, in a rollcall vote, voted for the Graham-Santorum amendment to the budget resolution. If we look at the language, I will point to the part A. It says that Social Security reform ``must protect current and near term retirees from any changes to Social Security benefits.''

So what the Social Security Guarantee Act does, which I am proposing, is to actually make it a Federal law, not just a resolution, something that we all think is a good idea, which is what a resolution is, but actually put legislative language in place, put something in law that says that your benefits are guaranteed, your cost-of-living increases are guaranteed in the Federal law which, contrary to what most seniors believe, is not the case. There is a Supreme Court case from 1960 which says that there is, in fact, no legal right that you have.

Obviously, there are claims that can be made in the political process to those rights, but as far as legal rights in the statute, there is no guarantee to that cost of living.

It would be vitally important for us, as we head into hopefully a longer term and more complete look at the Social Security system and saving that system, that we start from the ground that we are not going to affect anyone who was born before 1950. That is basically people 55 and older in our society today, we are going to say, If you were born before 1950, you are off the table; we are not going to discuss it. We are not going to play politics with you. We are not going to scare you. We are not going to threaten you. We are going to take these benefits and we are going to enshrine them in the law to protect them from anyone playing politics with them or even trying to include them in any kind of reform down the road.

This is a first step. It is a small step, but it is an important one for our Nation's seniors. I am hopeful we will be able to get that done maybe even this evening.

I yield the floor to the Senator from South Carolina.

BREAK IN TRANSCRIPT

Mr. SANTORUM. Mr. President, while I was trying to be courteous in yielding to my colleague, I want to make a couple of comments about what the Senator from Montana said. I would hope he would go back and read the Social Security Guarantee Act of 2005 because it does not do anything the Senator from Montana spoke of. What this bill simply does is guarantee benefits in the law for people who were born before 1950. It does not set up any kind of personal account system. It does not do all of the things that the Senator from Montana said.

The Senator from South Carolina will talk about his Stop the Raid bill, which simply takes money out of the surplus and puts it into accounts for holders to make sure that that money is spent on Social Security benefits but no administrative costs. All the things the Senator from Montana talked about do not apply to either one of our bills.

I understand there may be an objection, but I would caution the Senator from Montana that the objection cannot be under those terms because the objections that the Senator from Montana cited are not in either one of the bills. I yield to the Senator from South Carolina.

BREAK IN TRANSCRIPT

Mr. SANTORUM. I ask the Senator from South Carolina, one of the things I hear, and I think you were alluding to this, is that some people believe that they actually have an account at Social Security where this money they contribute is sort of there--that is maybe what Congressman Rangel was alluding to--for them to sort of pay their benefits out. Is that the fact, first and foremost? Then I will ask my followup.

Mr. DeMINT. I have had people back home, when we are talking about saving Social Security and putting it in personal accounts, tell me that is what they thought was already happening. They thought we were saving their money because we talk about a trust fund. But the more people find out about the truth, when we say there is not any money in the trust fund, first people smile and think I am not telling them the truth. We need to tell Americans the truth.

Mr. SANTORUM. The Senator got into something that is a rather complex concept, but it is really important for understanding the difference between what he wants to accomplish and what goes on in the current system. That is, what your bill does is it creates an explicit debt. How is that different? What is the difference to the average person, that they have a specific account with that money as opposed to just sort of the general money that is owed to the Social Security trust fund? What is the difference?

Mr. DeMINT. Right now the largest tax most Americans pay is the 12.5 percent for Social Security. That is thousands of dollars for the average American family every year. It comes into the Social Security system. It is credited to a trust fund. Then it is spent either on Social Security benefits or spent on other things.

We have made Americans believe we are saving that money for them, but it is all passing through. The only thing that is in the Social Security trust fund is IOUs. Our President, who has been a leader on this issue, actually went and opened the file cabinet where these IOUs are.

The problem, Senator, as you know, is we cannot pay future benefits from IOUs. But we can from real money if we start saving it. There is nothing risky about saving this money in Treasury notes so it cannot be spent on other things. But you asked an important question. Right now, the Government owns the Social Security benefit and politicians control it. If we start saving Social Security in personal accounts--we are not talking about taking it out of the Social Security system. It is still just as much a part of the Social Security system as what we have today, only it is real money and people own it, which means they have a legal right to it, which they do not today. In the future, politicians cannot build their whole election campaign around frightening seniors that we are going to take their Social Security.

Mr. SANTORUM. What is the impact? Let's take it a step further. Let's assume we were successful tonight in getting the Stop the Raid bill passed and every American would have their own personal retirement account with the money from the Stop the Raid bill, and 15 years go by and that money has built up. What is the practical effect on the average citizen of what your bill does versus the current system?

Mr. DeMINT. This bill alone would not change anyone's benefits. In fact, it includes, as yours does, a guarantee. People will continue to get the benefit they have been promised. Only part of their benefit would be paid by the traditional system and part from real money. Our hope is, as you mentioned before, this is a first step. We need to move past the first step of saving the $775 billion and go back and get the Government to pay back what they have already borrowed from Social Security, invest that in those accounts and let them earn interest, and it grows. It is a large step toward solving the future problems of Social Security.

It is going to take several steps to fix it, but this is the most important first step. If we cannot stop spending Social Security on other things we cannot go to the American people and honestly tell them we have a solution, not if we cannot even stop spending it on something else.

Mr. SANTORUM. I would just ask the Senator from South Carolina, this bill has something to do with something else I hear a lot about, which is honest accounting. One of the things I hear a lot of my colleagues on the other side of the aisle talk about is that the deficit is really much bigger than the deficits reported because the Social Security surplus hides the deficit.

Will your bill cure that problem?

Mr. DeMINT. Only if we slow our spending as a government.

Mr. SANTORUM. Would it cure the problem of hiding the deficit?

Mr. DeMINT. It is definitely an honest accounting bill. Right now this money goes on the table and the Government secretly sweeps it away and spends it.

Mr. SANTORUM. And lowers the deficit as a result, correct?

Mr. DeMINT. Right. We are going to take it off the table and save it. So the whole point is, if you want to keep spending that money as a Congress, we are going to have to recognize it as debt and admit to the American people that we are spending more than we told them we were spending.

Mr. SANTORUM. So this is not just a Stop the Raid bill. This is a truth in accounting bill? This basically says: Here is how much money we are taking in. Here is the obligations that the Federal Government has with this money we are taking in. In fact, we are taking that obligation and realizing it, in other words putting it into an account that actually could pay that obligation. Is that correct?

Mr. DeMINT. Exactly right. We will also be honest about telling the American people we have not been saving the money, but we are going to start saving their money and we are going to figure out a way to go back and get what has been borrowed from Social Security and put it back so that Social Security will be there for your children and mine and our grandchildren.

Mr. SANTORUM. I thank the Senator from South Carolina for, not just the work he has done on the Stop the Raid bill, but I want to thank him for the other ideas he has put forward. He is one of three Senators on this side of the aisle who have put forward comprehensive bills, along with Senator Sununu and Senator Hagel. They have put forth ideas to try to move the ball forward, down the field substantially. I will not speak for the Senator from South Carolina, but I think what he has realized is that the opportunity for us to do that this session of Congress is probably dramatically diminished. So we are both looking at trying to move the ball forward, trying to take a vital first step, or first two steps, in assuring the American public that those who are the most vulnerable, their benefits are safe; and for those concerned about the resources being there to be able to pay benefits in the future, we are going to make sure that money is set specifically aside and given to them to make sure that money is there and promised by the Federal Government to pay in the future.

By the way, the Senator from South Carolina is not the only one who has introduced comprehensive legislation. Over in the House, Congressman Kolbe, Congressman Johnson, Congressman Shaw, and Congressman McCrery on our side of the aisle have put forward comprehensive proposals on dealing with the long-term issues.

So we have made the case. We have worked hard to try to move this issue before the American public but have met a stonewall here on the other side. I suspect, unfortunately, tonight we will probably continue to see that stonewall appear when we ask for unanimous consent to move forward on this legislation. I will certainly make my commitment that this is an issue I feel very passionate about. This is a issue that is important to my State. We have the second largest percentage of seniors in our population. We have a little over 16 percent of our population who are people over the age of 65. That is second only to the State of Florida.

It is important for my State to have the peace of mind for my seniors. I always say we may have fewer as a percentage of our population, we may have fewer seniors than the State of Florida, but my seniors need Social Security more than those in the State of Florida because all my rich seniors moved to Florida. The folks who are still in Pennsylvania are getting through those tough winters, in some cases they need and rely on their Social Security benefits.

So as a Senator from Pennsylvania I will tell you that this is a high priority for me, to make sure that not only this generation of seniors gets the benefits they deserve but future generations of seniors get those benefits as well. I think this one-two of the Social Security Guarantee Act and the Stop the Raid bill will go a long way in helping create the atmosphere to get real long-term responsible reform of the Social Security system for future generations in place so they will have a strong and solvent system going forward.

I yield for the close to the Senator from South Carolina.

BREAK IN TRANSCRIPT

Mr. SANTORUM. I thank the Senator from South Carolina for taking the time to have this important debate. I appreciate the indulgence of the Democrat leader for his time.

What this unanimous consent will do, as the Senator from South Carolina has just stated--it will not be to pass the bill tonight. This is not an idea and we are just going to have unanimous consent and pass the bill. What we want to do is engage in a real debate about these two very important issues. So we are going to ask consent, at the time to be determined by the leader, to have a full debate. I am suggesting in this unanimous consent request that we have 10 hours of debate on both of these bills before we move forward and pass them, and obviously here in the next few weeks the chances of finding time to do that is going to be pretty limited. We will be happy to schedule it in January or February of next year so there is plenty of time for the American public to participate in this debate and to have a real discussion about whether we want to protect the benefits that are promised to those who are born before 1950 and whether we want to create the opportunity for honest accounting and for stopping the raid on the Social Security system, to make sure that money stays in the Social Security system and is there to pay benefits for the people who pay money into the system.

That is what this bill does. It stops the raid, it stops that money being used and taken by the Federal Government to pay for other programs and keeps that money--it is vitally important to understand--keeps the money in the system but creates an explicit debt of the Federal Government that must be paid. It is a public debt. It is not one of these privately held little debt transfers from one pocket to another but an explicit debt that is owed to an individual. That is about as explicit as you can get. It is a debt that has your name on the assets--Treasury bills. It is vitally important to have that ownership because it guarantees a legal right to a benefit for those taxes that are being paid in excess of what we need to pay for the Social Security system.

I see the Democrat leader is here. I will propound the unanimous consent.

BREAK IN TRANSCRIPT

Mr. SANTORUM. Mr. President, if I may address just briefly the comments made by the Democrat leader before I propound one final unanimous consent request, the Senator from Nevada suggested that there is a legal right to Social Security benefits in the law. The fact is that a Supreme Court decision--Nestor v. Fleming, 1960--said that ``Americans have no legal right to their Social Security benefits.''

While the Senator from Nevada can say those rights are guaranteed, there may be, certainly, a claim on those benefits, and the claim is a political one for anyone in Washington, DC, who would try to change those benefits. But there is no legal right in the law to payment of those benefits. There is no guarantee in the law to the payments of those benefits. The Supreme Court has said so. This would change that.

This particular group of retirees that is being frightened that somehow or another any change in Social Security will mean their benefits are going to be reduced--even for those who are in retirement at this point--we want to take that tactic as well as the fear that goes with it off the table for our seniors and near-term seniors.

With respect to the Stop the Raid bill, the characterization that that bill somehow is taking money out of the Social Security system, I think I made it very clear in the discussion, the fact that the bill is crystal clear with respect to the money that is going into these personal accounts is invested in Treasury bills. They are obligations of the Federal Government and will be used to pay benefits to the extent that is humanly possible. This money is legally bound to the individual who put the money there, and they have their name on this account. They own the Treasury bills that are in that account. That is about as rock-solid a commitment to pay benefits--more rock-solid commitment than promises by future generations of politicians who do not pay them.

When you have an obligation of the Federal Government with your name on it, that is a pretty good obligation and it would require a default of the Federal Government not to have it paid, as opposed to Social Security benefits in a Social Security trust fund, which is a promise to pay by future generations of politicians. I suggest that this idea that somehow or another this would cut benefits--in fact, you could make the argument that the benefit created by these accounts is the only real guaranteed benefit that an individual has going forward in the system. Nevertheless, the Democrat leader objected, and I certainly respect that.

I will make one last attempt to see if we can get an agreement on just one bill.

I remind Members here that earlier this year, in March, we passed the resolution that every Member of the Senate--Democrats and Republicans, all 100 voted for--which said that Social Security reform must protect full-term and near-term retirees--I will underscore that, italicize it--from any changes to Social Security benefits. This bill accomplishes what we voted for.

I assume we voted for it because we thought we needed to communicate a message--that it was important that we wanted to communicate a message--to the American public that we meant this, that we actually believed we should not do this. And the way to accomplish that, contrary to what the Senator from Nevada said, is to put a guarantee in law.

Mr. President, I renew my request just for S. 1750, the Social Security Guarantee Act. I can ask unanimous consent, but it is identical to the request which I read earlier.

http://thomas.loc.gov/

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