Social Security
SOCIAL SECURITY -- (House of Representatives - May 03, 2005)
The SPEAKER pro tempore. Under a previous order of the House, the gentleman from Oregon (Mr. DeFazio) is recognized for 5 minutes.
Mr. DeFAZIO. Mr. Speaker, today and pretty much every day for most Americans of this year, they will see 6.2 percent taken out of their paycheck to pay for their Social Security retirement. If they are self-employed, they will see 12.4 percent taken out. That is everyone who earns up to $90,000 every paycheck, day in day out they are paying that tax.
And in paying that tax, they will create a $170 billion surplus to pay for future retirement benefits for themselves. But, now, the President has revealed his true agenda. After talking about privatization for months, something which would, in fact, worsen the financial condition of Social Security, he has now changed the debate to talking about how he is going to reduce the retirement benefits of middle-class Americans.
Now, things are a little bit different from the President. I mean, we will disregard all of his unearned income and all of the things that he has been given and all of those earnings. Let us just talk about his salary, $400,000 as President of the United States. So that means that the President of the United States pays Social Security tax until 3 a.m. on March 24.
Now, that does not seem quite fair. Other working Americans are going to pay that tax all year long. But, let us look at some of Mr. Bush's friends. Tom Freston and Les Moonves of Viacom. They stop paying Social Security tax at 4 a.m. on January 2, because they earn $77,000 a day.
Now, it really is not going to matter or even be noticed by George Bush when they are reduced or Mr. Freston or Mr. Moonves at Viacom, you know, not even their accountants will notice it, but it is certainly going to be noticed by those middle-class Americans.
The President's cuts, which he cast as being fair and progressive, will fall most heavily on middle-income working families in this country. You know, a median, what they call a median earner, $36,000, say a public school teacher, will see, if they retired 40 years from now, a young teacher, they will see a reduction of 16 percent in their Social Security benefits, from $19,000 down to $16,000. I think they are going to notice that; it is going to hurt a lot.
What the President's folk call a high earner, $58,400 a year, well they will see a 25 percent reduction. In fact, the reduction for people who earn $58,000 a year will be equal to or worse than if Congress did nothing about Social Security, because it is not going to be bankrupt like the President says. Social Security will never be bankrupt. Stop saying that.
It will have to, if nothing is done and we have a very bad economy, reduce benefits by, say, 20 percent according to the Republican Congressional Budget Office or 25 percent, so they can pay benefits into the indefinite future, starting 40 or 50 years from now. That is not a crisis. That is not bankruptcy.
But the President would guarantee reductions, at least that big, for many working families to save the program. But that is not all. That is not all the President has in mind. Because, he said, this is based on the Pozen plan, some financial guru out there who he says is a Democrat. Who cares if he is a Democrat or Republican. He is some rich guy, financial guy. And what Mr. Pozen proposed is you not only reduce retirement benefits, you reduce survivor's benefits, and you reduce disability benefits.
That is what the President said he endorses last week during his speech. He is going to reduce middle-income retirees' Social Security benefits 25 percent. And if they should be so unlucky as to become totally disabled, incapable of working, he is going to reduce their disability benefits by 25 percent; or should they have even more misfortune and die, their survivors will get a reduced benefit of 25 percent to, quote, save the program.
The President is not done there, though. He is not only reducing survivors benefits, retirement benefits, disability benefits. He wants to push these people into so-called voluntarily private plans after he has reduced their benefits; and the so-called private plans, the President's privatization has a little something called a claw-back, which is the government is allowing you to divert your Social Security money, but it is considered to be a loan, which will be repaid at the time of your retirement, death, or disability at the rate of 3 percent plus inflation.
Now, if your investments did not do too well, your survivors are going to be writing the government a check; or if you get to retirement and you did not do too well, well, you are going to see your Social Security benefits reduce up to 97 percent under the President's privatization plan.
There are better ways to secure the financial future of Social Security, which I will talk about on another evening.
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