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Public Statements

Updating Social Security

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Location: Washington, DC


UPDATING SOCIAL SECURITY -- (House of Representatives - April 27, 2005)

Mr. GINGREY. Mr. Speaker, I thank the gentlewoman from Kentucky, and as well my good friend from Indiana; and it is a pleasure to be with my colleagues tonight to discuss something of such tremendous import to the country.

I have done about, Mr. Speaker, 10 listening sessions, town hall meetings on this subject; and it is very, very instructive. If you do them during the daytime, it is typically going to be senior-dominated; and many of those individuals, of course, are among the 43 million who are current Social Security beneficiaries.

One thing that we try to make sure that they understand is in any of the plans that are out there, and of course, every plan is a work in progress and nothing is set in stone, but that the concept, first of all, of holding harmless anyone 55 years or older, that their Social Security benefits will not change. Their checks will only change when they get their annual COLA, and they would not, in fact, have the opportunity to invest in an individual personal account, if that is part of the final solution.

I do not know, maybe my colleagues have heard this, too. Some of them, in particular at age 55, they are a little disappointed: Why did you cut me out? I do not get full retirement until I am 67 years old because of those changes that occurred under the Reagan administration in 1983, the last time we were in crisis. They are kind of disappointed, particularly if they are planning on working and deferring their benefits until age 70. They would have 15 years of an opportunity to get the miracle of compound interest.

But these seniors, and I am sure again that my colleagues are hearing the same thing, they are very concerned. Even when we tell them that they are secure and we promise them this is our pledge, they are concerned about their children and grandchildren; and they are there not so much for themselves, even if their Social Security was at risk, they are very concerned about their children and grandchildren. That kind of renews my sense of faith and spirit in our seniors and in the American way. It is really great to hear that from them.

BREAK IN TRANSCRIPT

Mr. GINGREY. Mr. Speaker, I thank the gentlewoman because it is such a good point.

The gentleman from Indiana said in his earlier remarks that we have a $10 trillion unfunded liability. That is a big number, but the cost of doing nothing is estimated at $600 billion a year for every year we do nothing and continue to try to avoid the problem, pretend that it does not exist, hope that some other Congress, the 110th, the 112th, whatever, will address that, and we will not have to put our political careers at risk.

I have heard others say, and I have said many times in my discussions across my district, that I am more concerned about the next generation than the next election. We do an interesting thing in our listening sessions. We have a video clip. Of course, it is a black and white movie reel going back to 1935 showing a little clip of President Roosevelt signing that initial law, and he said very clearly this is not going to be enough to take care of the average senior's full retirement. I encourage them because of, and he used a term I hardly knew what it meant, I had to look it up in the dictionary, the vicissitudes of life. Things happen, good and bad; and people should prepare by buying an annuity to cover the vicissitudes of life, but unfortunately, people, fully a third of our seniors, cannot afford to invest in an IRA. Maybe they never had an opportunity to participate in one of these employer-sponsored 401(k) benefit plans for retirement, where the employer matches the employee, and they certainly did not have enough money in the paycheck they were earning to buy an annuity.

So where the problem is, and we all know it, nobody is disputing this, a third of our seniors get to age 62 or 65, they do not have a job, they do not have any other savings. They only have the Social Security check.

So this idea of an individual personal account is not a brand-new idea, and I know my colleagues agree with me on this point. It is not privatization. We are not turning the Social Security trust fund over to Merrill Lynch or Smith Barney and saying, here, go ahead and invest the money and you do this on behalf of the government and its retirees, and if you want to invest in Enron or Global Crossing or WorldCom or something not at all.

I think it is just so disingenuous, but we have to spend so much time undoing some of the negative publicity that has been sent out to our seniors to literally scare them, just like the same scare tactics that were used when we were passing the Medicare Modernization and Prescription Drug Act. Tear up your AARP card because they supported that; resign from that organization. Even if you are eligible to get $600 a year benefit on your prescription drugs, $1,200 over 2 years, do not accept that Medicare-approved drug discount card.

So we are spending an inordinate amount of time trying to overcome that negative publicity, those scare tactics in regard, yes, now with Social Security.

It is important and I really commend the gentlewoman from Kentucky for sponsoring this hour, for leading this hour so that we can make sure our colleagues understand that clearly it is time to do something about Social Security, and we cannot afford to put it off to the future.

BREAK IN TRANSCRIPT

Mr. GINGREY. Mr. Speaker, I thank the gentleman from Wisconsin (Mr. Ryan). I think the Ryan-Sununu plan is one that excites me. There are several others out there, but one thing that the gentleman from Wisconsin (Mr. Ryan) said that we need to emphasize, he is explaining that if we totally, completely say that an individual personal account, not privatization but as he has explained it, an opportunity to invest a portion, just a portion of that payroll tax in something like a thrift savings plan, if we completely rule that out as our friends on the other side of the aisle have done in both Chambers, drawn a deep line in the sand and said no, not only no, but heck no.

But when we say show us your plan, what do they do, they hold up a blank sheet of paper because they do not want to admit what the gentleman from Wisconsin (Mr. Ryan) just pointed out, alternatives are to raise the payroll tax or to decrease benefits or raise the age at which a person can receive full benefits. Let us say because people are living longer and are healthier, let us say full retirement is 75 and early retirement is age 70, so it is important that people understand.

We are not ruling out anything on our side of the aisle. We do not have a plan set in stone, but clearly this option of an individual personal account enjoys, like no other fix, the miracle of compound interest. Einstein, when asked what the greatest power on Earth was, everyone expected him to say atomic energy, but he said the miracle of compound interest. I think the gentleman is on the right track.

http://thomas.loc.gov

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