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Social Security

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Location: Washington, DC


SOCIAL SECURITY -- (House of Representatives - March 02, 2005)

The SPEAKER pro tempore (Mr. Fortenberry). Under the Speaker's announced policy of January 4, 2005, the gentleman from Connecticut (Mr. Larson) is recognized for 60 minutes as the designee of the minority leader.

GENERAL LEAVE

Mr. LARSON of Connecticut. Mr. Speaker, I ask unanimous consent that all Members may have 5 legislative days in which to revise and extend their remarks and include extraneous material on the subject of my Special Order today.

The SPEAKER pro tempore. Is there objection to the request of the gentleman from Connecticut?

There was no objection.

Mr. LARSON of Connecticut. Mr. Speaker, it is my great privilege this evening to be able to address a vital subject to all of America, that of preserving and strengthening Social Security. Many of us have had the opportunity over the break to go back to our districts and hold public forums and hearings and town hall meetings, and the input that we received from our citizens has been extraordinary and insightful.

This evening, we will be joined by distinguished members of our caucus, the gentleman from Michigan (Mr. Levin), the gentlewoman from Illinois (Ms. Schakowsky), the gentlewoman from California (Ms. Woolsey), and hopefully others who will be joining us as well as we seek to report back to America about what is going on.

We are most fortunate to have the man who has followed in the footsteps of the dearly departed Bob Matsui who was a champion on Social Security. The gentleman from Michigan (Mr. Levin) is the leading expert in our caucus and on the Committee on Ways and Means in matters of Social Security and has held these forums and hearings not only in his State but has been on shows and appeared all across this great Nation. I yield to the gentleman from Michigan.

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Mr. LARSON of Connecticut. So these forums that the President is conducting are not open to the public, that you have to be invited by the President's people? Carl Rove?

Mr. LEVIN. As far as I know, that has been true. There may have been an exception, but I do not think so. So the gentleman is right. These are staged meetings and people who come are screened. For those of us who speak tonight, yourself, myself and others who have held our town hall meetings, there is no screening. We notify the public at large and whoever comes, comes. We have people who have differences of opinion. That was one statement of his that is very, very inaccurate. It is really an insult to the people who want to come to the President's meetings, saying that they come to heckle. The answer is they cannot get in. And they would love to participate in the discussion.

He also mentioned another allegation about the number of workers per retiree, and I think he mentioned 15 to 1 or 16 to 1. That is a figure that existed before Social Security began to make payments. The truth of the matter is that when Social Security began to make payments to retirees, the ratio was 6 to 1. Higher than today, it is true. There is a shortfall that would exist either in 2042 or 2052. After that, according to the CBO, the payments would be 78 percent of the scheduled benefits and according to the actuaries, 72 percent. So the notion that it is headed for bankruptcy, this is the path for bankruptcy, is inaccurate.

Then another thing that the gentleman from Arizona said, it is just a bunch of IOUs. The President of the United States will not say it is just a bunch of paper and I am sure the Secretary of the Treasury will not, or better not. Why? Because the trillions of dollars held in bonds by our creditors, foreign governments and also individuals, have a bond and those are the same bonds held by the Treasury of the United States to cover Social Security payments. The full faith and credit is behind those bonds. There has never been a default. Actually the bonds have been redeemed for Social Security over the years 11 times. So this notion it is just a bunch of paper is really a serious mischaracterization, and I hope that our leaders will never repeat it.

Let me say a word about this compound interest argument. The privatization proposal would do nothing to address the shortfall.

Mr. LARSON of Connecticut. When the gentleman says the privatization proposal, this is the so-called plan that perhaps the President may submit to us?

Mr. LEVIN. There is no comprehensive plan, but what has happened is that the President or his spokespeople have come forth with some proposals. So we have proposals, for example, in the commission report which was called a good blueprint by the President. We have a proposal that would shift from wage indexing to price indexing, would lead to a cut in benefits over time of over 40 percent.

Mr. LARSON of Connecticut. So this privatization plan will lead to a cut of more than 40 percent in benefits. We heard the gentleman from New York (Mr. Rangel) say earlier that it does not even solve the gap or the supposed problem that the gentleman from Arizona was alluding to. Is that correct?

Mr. LEVIN. This proposal would not address the shortfall, and $1.5 trillion would be diverted from Social Security the first 10 years and a total of $5 trillion over 20 years of privatization.

Mr. LARSON of Connecticut. This is confusing to some of our citizens. The gentleman from Michigan is an expert on this. He has served on the committee. Why does this transfer have to take place? Seniors are asking about this. Some have said, this is like taking a credit card of your own and trying to go out and purchase stock with your credit card in the hope that the stock's returns will exceed both the interest you are paying on that credit card. This is hard to understand for a generation that has relied on Social Security as a guarantee. What actually happens?

Mr. LEVIN. I am glad the gentleman raised that point, because we are going to spend some time talking about the impact of this privatization proposal on women. In future times, you are going to be talking about its impact on other segments of our population. Let me say just a word about this notion, borrow $1.5 trillion the first 10 years, another $3.5 trillion the second 10 years, what this all means and how it would impact on people.

What has Social Security meant? It has meant independence. There are just a couple of facts I want to mention, and they show what Social Security has meant in this case, specifically for women. Four out of 10 widows in our country rely on Social Security for 90 percent or more of their income. So those who want to play around with or really dismantle Social Security are really affecting the lives of people. Another thing, it is not the income alone, but the meaning of that income, because research has shown that Social Security income is key to so many people deciding they continue to live independently. When you compare the life of people before Social Security went into effect and when it did, the number of older women who are widows who are living independently increased the first 25 years of Social Security almost three times. So as was true for my beloved mother has been true for millions and millions of women. Social Security has not been a source of dependence; it has been a source of independence.

Let me just say a few other things about the impact potentially of privatization on women. As we know, women on the average earn less than men, on the average. Social Security has a progressive element to it. And so that means that for women in terms of the replacement of their wages, Social Security is even more important on the average than for men. And also because life expectancy is greater for women than men on the average, if there were private accounts, it would have an especially adverse impact on women.

The gentleman says there is not a comprehensive plan, but there are proposals. In the State of the Union briefing that was done by the White House, they talked about annuitization. There would be a requirement for millions of people to annuitize their private accounts if they existed. So it is not a nest egg that is their own. There would be a requirement of annuitization. And because women on the average live longer, the annuities would cost more.

These are just some of the reasons why when we go to meetings and people can come, they are not screened, men and women, younger and older; and we are going to be talking another day about the deleterious impact on younger workers, but so many of the people who come, women on Social Security, they just say, look, this has meant I can continue to live my own life. That is what is at stake here. And so what we say to everybody is, the gentleman from Arizona said fix it. Yes, they would fix it by dismantling it. The fix would be in for Social Security.

What we say is, we have fought to keep Social Security strong, we did 20 years ago here, and we will continue to fight to keep it strong. The President said, and I close with this, we need to keep Social Security strong, we need to keep it safe, we need to strengthen it. What they would do is to weaken it and dismantle it.

So I thank the gentleman for letting me participate, and I am glad that others can continue with this. We are determined to go everywhere in this country and tell the truth.
Mr. LARSON of Connecticut. Mr. Speaker, reclaiming my time, I thank the gentleman from Michigan (Mr. Levin) again for his insight and his outstanding service to the Committee on Ways and Means in this United States Congress.

I think Roosevelt said it best when referring to our distinguished colleagues on the other side of the aisle. With regard to Social Security and its impact and the plight that so many citizens go through, he said, they are frozen in the ice of their own indifference, the indifference to what ordinary Americans face on a daily basis.

No one understands that better than the gentlewoman from Illinois (Ms. Schakowsky), who works on their behalf every single day and fights for them and has done an outstanding job in her district and beyond and also held public hearings and is here this evening to add to this dialogue.
Mr. Speaker, I yield to the gentlewoman from Illinois (Ms. Schakowsky).

BREAK IN TRANSCRIPT

Mr. LARSON of Connecticut. Mr. Speaker, reclaiming my time, that is an excellent point, and the gentlewoman from Michigan (Ms. Kilpatrick) made it earlier as well when she stated quite succinctly and clearly, Social Security was never intended to be in and of itself the retirement vehicle. It was, as she pointed out, the third leg of a three-legged stool, having pensions, which we know are under stressed everywhere; personal savings, where it is so difficult for people to save; but the thing that people could count on.

The reason that it came into existence was to provide, as the gentlewoman has pointed out, an absolute guarantee, the full faith and credit of the United States of America standing behind its commitment to its citizens. It is as simple and as fundamental as that and more eloquently stated by our citizens and the young women who have come to forums and hearings and town hall meetings like the gentlewoman's all across this country.

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Mr. LARSON of Connecticut. Mr. Speaker, reclaiming my time, I thank the gentlewoman from Illinois for her insightful comments and for her continued diligent work in this area on behalf of all of our citizens, but especially for all women across this great country of ours.

Mr. Speaker, speaking of a leader on those issues, we are also most fortunate to have the gentlewoman from California with us here this evening who also has done an outstanding job in the caucus and on committee in terms of focusing on the needs of women and children and families all across this great country of ours.

Mr. Speaker, I yield to the gentlewoman from California (Ms. Woolsey).

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Mr. LARSON of Connecticut. Mr. Speaker, reclaiming my time, did most of the individuals who attended the gentlewoman's forums and public hearings understand that Social Security benefits were not just retirement benefits, that they also provided survivor benefits?

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Mr. LARSON of Connecticut. Mr. Speaker, it is interesting that they were friends during the Medicare debate but now that they have spoken out against Social Security, they are now a special interest group.

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Mr. LARSON of Connecticut. Mr. Speaker, reclaiming my time, the gentlewoman raises a very excellent point, and, again, it is the same point that was raised earlier by the gentlewoman from Michigan (Ms. Kilpatrick) and also the gentlewoman from Illinois (Ms. Schakowsky). What we need, and the guarantee that we have provided every American through Social Security, is, as the gentlewoman pointed out, a safety net, a floor from which they cannot fall through. And, as the gentlewoman pointed out, our pension systems are already overstressed. We have gone from defined benefit to defined contribution to companies pulling out, wholesale, from providing benefits, to people's personal savings where, again, the gentlewoman points out the difficulty that people have, the lack of incentives that are there for them to save.

So the question that a lot of the people at my forums ask is why would we introduce an element of risk in the only guarantee that we have on that three-legged stool that prevents us from falling through the floor and into the depths of poverty, which for a woman in this country is so vitally important.

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Mr. LARSON of Connecticut. Mr. Speaker, reclaiming my time, no, I did not. But I think the gentleman from New York (Mr. Rangel), our distinguished leader on the Committee on Ways and Means, said earlier that clearly the President has asked us to wait until he brings forward a plan. He has withdrawn the fact that this is a crisis, but points out there are problems.

Everyone recognizes that there are problems with Social Security and Social Security needs to be strengthened. But the President further goes on to now admit, as well as the gentleman from New York (Mr. Rangel) points out, when the actuaries and the financial people have a chance to look at the proposed plan, that it does nothing to solve the problems that the President has spelled out in Social Security.

So one has to come away with thinking as to why would they possibly then want to privatize or introduce risk in the most successful governmental program in the history of this country.

BREAK IN TRANSCRIPT

Mr. LARSON of Connecticut. Mr. Speaker, reclaiming my time, it might surprise a number of our viewers, because I believe the gentleman from Arizona was talking before about the need to get the facts straight. I believe that the gentleman is correct about that, and there should be an open and honest and frank debate about this issue, and all the various proposals should be laid on the table. The gentleman from New York (Mr. Rangel) has asked for that, where we still have not seen any plan. We are told by Secretary Bolton and others that it is a ``work in progress,'' that we may see it in the future.

In the meantime, I think a number of our listeners would be interested to know that in 2000, Social Security lifted 7 million senior women out of poverty. This means that without that safety net, without that floor which they cannot fall through because it has the full faith and credit of the American Government, it is the social contract we have with our people who have paid in to this system, that it is there for them. It is a guarantee.

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Mr. LARSON of Connecticut. Mr. Speaker, reclaiming my time, it might also surprise people too, when we are talking about Social Security, I know for many people, from Hoover to Landon to Friedman to Stockman, that Social Security is anathema. It is something that they would just as soon do away with. Mr. Stockman said it is ``a beast that needs to be starved.''

When we look at the policies emanating from this administration, you wonder if this is not still the plan that they are marching forward with, to privatize and to further starve the moneys that are needed.

How much money do people receive on average? What does someone get who has worked hard and played by the rules and sacrificed all their life, whether they be people that are currently serving in Afghanistan or Iraq, or whether they are firefighters or our police, or whether they are in the hospitals as nurses or other people?

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Mr. LARSON of Connecticut. The monthly retirement benefit for a woman is $798. In America, could you live on $798 a month? This is what the guarantee is. But it does prevent these people from falling into the depths of poverty. It is what Franklin Delano Roosevelt promised to the American people.

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Mr. LARSON of Connecticut. Mr. Speaker, reclaiming my time, many have said to me in my forums as well, and I am sure the gentlewoman heard the same thing, and I am pleased to announce we have been joined by two distinguished Members from the Great State of California as well to contribute to this dialogue, but many have said at the hearings that I have conducted how Social Security for so many of them is their only source of income, and they look out and they see their pensions disappearing, they see cuts that are being made on a regular basis, and so they ask aloud for the government to please honor, honor, what it has promised and guaranteed them and what they have worked so hard for throughout all of their life.

I think it is important, as the gentleman from Arizona said, that we get the facts out there and expose the myths that have been put forward.

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Mr. LARSON of Connecticut. Mr. Speaker, I thank the gentlewoman for articulating that point.

I am pleased now to turn to the gentlewoman from California (Mrs. Capps), who also has spoken and held hearings in her district and is here this evening to contribute to this very important dialogue about the strengthening of Social Security and pointing out the direct impact that it has on women who rely so heavily on Social Security.

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Mr. LARSON of Connecticut. Mr. Speaker, reclaiming my time, let me echo the sentiments of the gentlewoman and commend the outstanding leadership that has been provided by the gentlewoman from California (Ms. Solis).

I yield to the gentlewoman.

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