30-Something Working Group

30-SOMETHING WORKING GROUP -- (House of Representatives - April 05, 2005)

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Ms. WASSERMAN SCHULTZ. Mr. Speaker, I thank the gentleman from Ohio (Mr. Ryan), and it is good to be here with you once again.

Quite honestly, it is good to be here to talk about once again an extremely important issue and that is Social Security. I can tell you that I wish that that is what we had been able to talk about for the last 2 weeks as opposed to some of the other issues we have been focused on, but I am glad we are able to refocus again.

What we have been trying to do in our 30-something Working Group over the last several months and prior to my arrival here in Congress, you and our other colleagues have done yeoman's work on getting the message out about the facts as its relates to Social Security because our generation, your friends, my friends, when you go home and you sit down and you are having coffee or you are having a beer, which we may occasionally do among our friends, and the conversation may turn to whether you think or your friends think that there is going to be Social Security there for you when you retire. Most people our age, they believe the myth that has been put out there by the President and by the leadership of the Congress. They believe that Social Security will not be there.

My colleague and I being in our 30s and we are trying to get the word out to other people our age across this country, the solvency issue to which you just referred, literally, before there is even a concern about a potential drop in benefits, is not for 37 years from now, at the earliest. More likely, 47 years when in my case, I will be 75 years old in 37 years and 85 years old in 47 years, long past retirement age, long past the point after which I would begin collecting Social Security.

So like my colleague said, we are not suggesting that there is not a problem that needs to be addressed. What we are suggesting is that there is not a crisis; that there is no need to sound the alarm bells; that we need to make sure that we approach this problem responsibly; that this is a 70-year program of success, probably the most successful program in our Nation's history, established as an iron clad safety net that no one should have to worry about it being there upon their retirement, which is why that if we are going to make changes, which we should to ensure its long-term solvency, that we take the time to do it correctly and responsibly and not rush to judgment and not make drastic changes which privatizing Social Security, I think by anyone's definition, would be drastic.

We have got to make sure that we preserve Social Security into the future, and what is ironic is that most of the talk coming from the White House and in the leadership of this body has been about privatizing Social Security, setting up private accounts, and this has just been mind-boggling to me because, like you said, privatization does nothing to deal with the solvency issue. We could privatize Social Security, and all we would be doing is adding to our deficit and putting our Nation more in debt than we already are, and we are badly, badly in debt.

So you can go that far and still have to address Social Security solvency problems, and we need to make sure that we responsibly make changes to preserve Social Security into the future.

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Ms. WASSERMAN SCHULTZ. I thank my colleague, Mr. Speaker.

I think that statistic and those two numbers there are so illustrative. They really are. People can feel, touch, taste and understand what $26,000 means. For every single person, including an infant in this country, that is their share of the national debt.
I think people have a harder time, though, I mean none of us literally have an understanding of what $7 trillion is; $7,781,336,014,734.14. That is the national debt.

Now, what does that mean? If you are going to try to break it down into what $7 trillion is like, and there are people actually out there figuring this stuff out to try to translate that concept of a trillion dollars into more understandable bites of information, for example, if you stacked a thousand $1 bills, you took a thousand $1 bills and stacked them on top of each other, $1 million would equal 1 foot high of thousand dollar bills. That is how high.
Mr. RYAN of Ohio. One bill that equals $1,000 stacked. Okay.

Ms. WASSERMAN SCHULTZ. Right. Stacked up would equal a foot. A billion dollars would equal the height of the Empire State building in New York. One trillion dollars, stacked up on top of each other, would be a thousand times the height of the Empire State Building.

So if you are trying to think about how much $7 trillion is, that is how large that number is. That is not something that almost anyone can get their arms around. And think about the unbelievable irresponsibility that that is, and that there currently appears to be almost no regard for that problem and how to deal with it, and no focus here on how we are going to get a handle on the sheer size of that number and shrinking it, and no realistic proposal; only conversations like that of privatizing Social Security, which are going to make that number ever larger. It really starts to boggle your mind.

Yet, when we go home, as we just did, and I spent the last couple of weeks at home going around my district and had town hall meetings. I had a town hall meeting in my district on Social Security, and it appeared as though there is an inverse relationship between the more the President talks about his vague outlines of a proposal and the more people hear about his vague outlines of a proposal. They are moving in opposite directions.

In fact, for our age group, which is his target audience, because he has been assuring people 55 and over they will not have to be concerned about their continued checks and the continuation of Social Security for them, and if you believe that, which I found in my district, and I have a very large population of senior citizens who are Social Security recipients, they are very, very skeptical about how a program the size of Social Security, with as monumental a change as this would be, how it is that they can be assured that a monumental change like that is not going to affect them.

So there is a healthy amount of skepticism as it is, but the target audience, which is our generation and people younger than 30 years old, the polling that has come out recently, and the Pew Research Center did a March 24 poll, which shows support for private accounts among young adults absolutely plummeting. The more young people have heard about this proposal, the less they like it. They are more than twice as likely to oppose private accounts when they have heard a lot about it. And that is illustrative of the inverse relationship between the President's canned town hall meetings, for lack of a better term. Because what we have been doing out in our districts, as Democrats, we are not ticketing our events. We are not hand-picking the audience. We are saying, come on in and talk to us about Social Security. Let us talk to you about what we hear about this proposal, and you tell us what you think.

What is going on in the President's meetings is he is saying, do you agree with me? Oh, okay, you can come in then, and booting people who do not agree with him.

That is really not very democratic. It does not show a real ability or desire to actually get input. It is more my way or the highway politics, which is not the way we should be shaping this debate.

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Ms. WASSERMAN SCHULTZ. And, Mr. Speaker, my colleague is just absolutely right on target. We are more than willing to sit down and hash out in the spirit of compromise, like the gentleman referred to what they did in 1983. But, at least in my experience, with compromise, you have to be singing off the same song sheet. You cannot start from two completely different places and define the problem in completely different ways and ultimately reach compromise.

So if the President and his supporters on this concept would come off of the concept of crisis and get to where we are and where the reality is, because every factual description, including from the Social Security trustees that just released their report 2 weeks ago, points to a problem, a problem looming on the horizon that needs to be dealt with.
So when we are singing off the same song sheets, then we will be able to move forward and talk about a compromise that will actually address the solvency question, because private accounts do not address the solvency question, they just cause more debt.

What is unbelievable about the private accounts is that the President, at least in my listening to him, has sold them as almost like it would be an addition to your Social Security benefits. But the reality of his vague plan is that you would not get your private account and your Social Security benefits. There would be a commensurate cut in your Social Security benefits in proportion to what is in your account; approximately a 46 percent cut in your Social Security benefits.

And let us not forget also that his proposal does not leave out the one-third of Social Security recipients who are not earners. You have people who are beneficiaries of Social Security recipients who have passed on and who are not earning an income. You have children and dependents, and you have the disabled community. Now, they are not able to benefit from private accounts because in order to have a private account, you actually have to have an income. So we are not even thinking about how we would address the huge pure cut that they would suffer from.

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Ms. WASSERMAN SCHULTZ. Mr. Speaker, the gentleman is so right. We need to boil this down in terms that people deal with every day. When we have these conversations on the floor, I try to zero in on the impact that this proposal will have on specific groups. For example, we have some information about the impact Social Security has on children.
Social Security survivor and disability benefits help 6.4 million children. We talk about welfare assistance and TANF, which is Temporary Assistance For Needy Families, funding and how important a program that is to helping sustain the lives of millions of children, but Social Security survivor and disability benefits help almost twice as many children as welfare does. That, I think, is something that people just do not realize. I did not realize it until I received this information, and that is according to our nonpartisan Congressional Research Service.

Social Security is currently the largest source of Federal funding that prevents children from falling into poverty. Social Security benefits have kept 920,000 children out of poverty, and more than one-third of families with Social Security income would be poor without these benefits.

If we look at the effects that privatization of Social Security would have on women, women comprise the majority of Social Security benefits. They represent 58 percent of all Social Security recipients at the age of 65, and women represent 71 percent of all beneficiaries by the time they are age 85. Privatization disproportionately harms women, especially because women really end up having much less because of the differences in earning potential, much less opportunity to benefit from Social Security when they are planning for retirement.

There are a number of factors that leave women even more vulnerable to this really radical proposal. Women and poverty in old age is often rooted in the reality that their lives are shaped on. We earn less money. We are at 76 cents on the dollar compared to the same job that a man does. The reality of care giving, we are primarily responsible for caring for loved ones, both children and our older parents, and women have jobs more often that offer very few benefits. So women who have been in the workforce are far less likely to have IRAs and pensions and other outside extra benefits. Social Security for women ends up being the vast majority of the time their sole retirement benefit. So it disproportionately is pulling the rug out from under them.

I think we have to talk about how these proposed changes would impact people. What I have noticed in the time I have been here, and this is a big room and there are a lot of Members, 435 of us, and we talk about a lot of really important issues here. At a certain point, I think Members of Congress forget that the decisions that we make here affect individual people. It is really easy to forget about that. It is easy to talk about numbers in the trillions, and we forget that Mrs. Smith, Mrs. Jones, Mrs. Goldstein, those are real people where our decisions hurt them. Members need to think about them sitting in their kitchens and scratching out how they are going to buy groceries, cover their medication, and pay their electricity bill.

The report that came out from the Social Security and Medicare trustees 2 weeks ago shows that the crisis we should be talking about is Medicare and the looming problem that is going to present because that is what is facing insolvency. But, of course, that problem, according to the leadership here, has been taken care of. They took care of that, according to the leadership here, in the bill that took 3 hours to twist enough arms, from what I understand, to get them to have the votes to pass it. I am not sure why in that legislation they would not have taken steps to address what appears to be the real crisis.

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Ms. WASSERMAN SCHULTZ. Mr. Speaker, the gentleman is so right. I represent a community where it is not just the poor we are concerned about; it is the regular middle- to lower-middle class who are struggling. I have hundreds of thousands of senior citizens in south Florida who struggle every single day because Social Security for the vast majority of them is their primary source of income. They are much more focused. It is what I hear

when I am stopped at a picnic or at the supermarket. They are concerned about how they are going to pay for their medication. Some of them cannot even make their co-payments. They are concerned about the increase in their premiums for Medicare that just happened.

That is the handwringing that is going on. They are not that concerned about a problem that does not face them for another 37 years. Quite honestly, in the senior citizen community, most of them realize 37 years is not something they are going to have to worry about. But 2017 is when the Medicare trustee report says is the point at which we would literally be paying out more in Medicare benefits than we are bringing in in premiums. That is a serious problem.

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Ms. WASSERMAN SCHULTZ. Mr. Speaker, I want to ask the gentleman because the gentleman was here. The thing I talked about and heard about on the campaign trail last year was how we ended up with a Medicare bill that added a prescription drug benefit but did not allow, in fact prohibited, the negotiation of discounts for prescription drugs. I know that the VA, the Veterans Administration, already has that ability and drugs made available to our veterans through the VA are significantly less than they are on the private market. So maybe the gentleman can help clarify that for me because I was not here. People out in the real world do not understand that.

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Ms. WASSERMAN SCHULTZ. Mr. Speaker, I thought it was very interesting that just last week the former Secretary of Health and Human Services, Tommy Thompson, in a speech to the Kaiser Foundation said it was his biggest frustration in the negotiations on the Medicare prescription drug reform bill because he believed the Secretary should have that ability, that the Secretary, just like they do in the VA, should have the ability to negotiate those discounts, and it absolutely ties the hands of the Health and Human Services Secretary.

In talking about this in his speech to the Kaiser Foundation, he said, unfortunately, membership of the leadership of his party, including the President, did not agree, and he was not able to get through to them that that was an important component, to reduce those prices.

What we have here is we have a Social Security plan, or an outline of a plan, that is going to harm young people and hopefully not harm older people who are imminently collecting benefits or already collecting benefits.

It is hard to get young people to think about when they are going to collect Social Security. We are having town hall meetings for younger people and trying to get them to come, and talk to them about why they should think about this, because it is not looming on the horizon of their lives. And then we have Medicare. We also with our generation have a group of people who just are not thinking about whether Medicare will be there for them. They just feel like they are invincible, and there are no major health care issues for most people in our generation.

We have got to make sure that we continue to pound the drum on this issue and talk to as many people as we can, because if we do not, we will all get caught asleep at the switch. As a result, this train will run smack into a wall at the point in our lives when we do need to worry about it.

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Ms. WASSERMAN SCHULTZ. Just a couple, because I think we again need to maybe finish up by zeroing in on the impact that this proposed privatization scheme would have. The private accounts do not make up for the 46 percent cut in benefits that would be part of this proposal. A 20-year-old who enters the workforce this year would lose about $152,000 in Social Security benefits under the Bush proposal.

Social Security provides disability insurance that young families need, and there is no private insurance plan that can compete with the Social Security disability benefits that are offered. The cost of those benefits bought privately would be beyond most people's ability to pay for them. For a worker in her mid-twenties with a spouse and two children, Social Security provides the equivalent of a $350,000 disability insurance policy, again not one that most people can afford to pay out of pocket for. And suppose, God forbid, you have a young parent that dies suddenly. Social Security provides for the children who are left behind. Social Security survivors benefits will replace as much as 80 percent of the earnings for a 25-year-old average-wage worker who dies leaving two children and a young spouse. For that parent, Social Security survivors benefits are equivalent to a $403,000 life insurance policy.

What we have been trying to do in our Thirtysomething Working Group is explain to our generation what the reality would be in their lives without Social Security as a continued safety net.

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