30-Something Working Group
30-SOMETHING WORKING GROUP -- (House of Representatives - April 05, 2005)
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Mr. RYAN of Ohio. Mr. Speaker, I appreciate the opportunity to be here. I have a slight cold so please forgive me, but we are back with the 30-something Hour, and I will be joined by my two colleagues from Florida here in a few minutes.
We want to continue this debate that we have been having in the United States over the past several months, a debate that the President has initiated in saying after the campaign that he wanted to have a national discussion in regards to the issue of Social Security and the Social Security solvency and where Social Security is going to be in the next few years and the kind of changes that we have to make in the country in order to deal with it.
Those of us on this side, and I think many on the other side, have very many concerns about this because Social Security, quite frankly, has been one of the most successfully administered Federal Government programs in the history of the United States of America.
We have talked over the past few months on how Social Security runs with only a 1 percent administrative cost. So there are a lot of government programs I think we all agree in this Chamber and across the country that are inefficient, that are ineffective, that maybe do not work, that maybe take too much money without getting the kind of results that we ultimately want.
Social Security is not one of those programs. Social Security has been an enormous success, and I think what is great really about Social Security in trying to advance this argument, I think why the President is having so much difficulty is that Social Security is a program that touches all of our lives.
We here in the 30-something Caucus watched our grandparents receive Social Security, and the story of my great-grandfather when Social Security was first implemented, he could not believe when he got to America that he could retire and walk down to the end of the driveway and get his Social Security check and he would have dignity in his final years.
This program has been successful, and the President is having great difficulty making an argument that we need to somehow radically change the Social Security system.
The President's proposal is to say that those of us who are in our 20s and 30s and 40s, instead of putting our percent, our 6.2 percent into the Social Security system, will be allowed to divert a certain portion of that over into some private annuity or private account that we would be allowed to set up, and there are all kinds of math involved in this in the President's proposal that lead to someone who does put money into a private account to not receive the kind of benefits that they thought they were going to get in the first place.
But the main point is this: the Social Security system, the Social Security program may need change, may need to be tweaked, but it does not need to be privatized, and the President's plan does not fix the problem. It in no way, shape, or form fixes the long-term solvency issues that Social Security has, and there are many other ways we can go about fixing this program. It is good until 2042, into 2050 and even after that you will still get 80 percent of your benefits if we do absolutely nothing.
So there is no need to get crazy. There is no need to get crazy and try to make some radical changes to this program like privatizing it and somehow jeopardize and slash benefits for our seniors and our grandparents and our parents.
I am joined by the gentlewoman who has been on all the talk shows over the past few weeks and did a fantastic job. I yield to the gentlewoman from Florida.
Ms. WASSERMAN SCHULTZ. Mr. Speaker, I thank the gentleman from Ohio (Mr. Ryan), and it is good to be here with you once again.
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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.
Mr. RYAN of Ohio. Absolutely.
And, Mr. Speaker, when you just look at how the privatization process would be set up, you are actually taking money that would be going into the system out away from the system. And we do not even know, and the President's proposal from all the ones I have read, is that the 4 percent that I would be able to take and move into the side account, the business match will not go into the Social Security account either. So you put in your 6.2, the business puts in theirs, but if I divert 4 percent, then that is 4 percent less that the employer has to put in. So you are talking about taking out trillions of dollars. And I think if there is one point we want to make tonight, that will be it.
We brought our handy-dandy charts here. Privatization equals massive borrowing. There is only one way to fill the gap. We do not have money to plug a $2 trillion hole. And it says in the first 10 years of the plan, anywhere from $1.4 trillion to $2 trillion in borrowing, and over the next 20 years it will be $5 trillion that we will have to borrow just to plug holes in the President's plan. We are running a $400- to $500 billion trade deficit in a year, and we are going to go out and borrow $5 trillion? Where are we going to get $5 trillion to plug the hole in the Social Security plan? We are borrowing the money from foreign countries, and we are shifting the burden on to the next generation. It is irresponsible. It is lunacy. There is no reason to have to do this. So, again, push the taxes off.
Now, this is the chart I like, and Tom Manatos, from our staff, is responsible for this. This is it. The national debt, my colleagues. There are so many numbers here. And this is always changing. You can go to the United States Treasury Web site, and this ticker here will keep going and keep adding, but it is $7.7 trillion. And we are going to go out and we are going to borrow $5 trillion? This is our debt now, almost $8 trillion. And if the President gets his way and we have to implement the private accounts, we are going to go out and have to borrow $5 trillion, which is more than half the national debt that we have right now.
But here is the number you will love the most, your share of the national debt. Your share, one person sitting at home right now, if you are sitting there or if you are born today, you owe $26,000. That is what you owe because we spend more than we take in. Now, if we are going to add $5 trillion to this over the next 20 years, this number will almost double.
So when you think about a baby that is born today that owes this, and if we keep going at the rate we are going, running $500- to $600 billion annual deficits, and this number keeps going, and we are out borrowing money and paying more interest on it, and you live your whole life and this number keeps going up, and then at 18 you go out and borrow money to go to school, to get a bachelor's degree, master's degree, Ph.D., become a lawyer, you are going to borrow more money, what does this number look like? How are we providing opportunity for our children in the next generation?
We are being irresponsible here. The gentleman talked earlier here about the trade deficits and how we have to balancing those off and balancing the budget, but we are not being very kind to the next generation coming up.
Mr. Speaker, I yield once again to my colleague.
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.
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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.
Mr. RYAN of Ohio. And that is not the way we did it in 1983. And everyone has been talking about this monumental national discussion and Tip O'Neill sitting down with President Reagan and Bob Dole, and we had all the great political figures of that generation coming together to say we are going to put politics aside, and we are going to fix the problem.
And we are not here to bash the President or to bash the Republicans or to bash anybody, but we are here to say we have issues here that are going to affect the long-term interest of the country. In many districts across the country we are losing manufacturing jobs. One of the main problems we have with this whole thing is we do not have enough taxpayers working and making a good living and paying into the Social Security System. My own opinion is that is what would really help fix this long term. But we are just here to say we want to sit down and work with you.
You cannot have a national discussion if you do not include the opposition into your town hall meetings. Boy, it would be great to go to a meeting and never have anybody stand up and question any votes you have had or anything like that. We cannot get away with that in our congressional seats, nor should we be able to. And so the President needs to come to Congress and work with us. We want to help him figure this out.
Now, private accounts, for us, are off the table. That is ridiculous. That is not going to happen. But we want to work with the President
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Mr. RYAN of Ohio. And, Mr. Speaker, when you look at when you would want to actually take out the money, our colleague, the gentleman from New York (Mr. Weiner), who was here a few weeks ago with us, had a great explanation. The stock market goes up. The stock market goes down. The stock market goes up. The stock market goes down. Well, what if you are going to retire at the wrong time? What if you were planning on retiring in 2001, 2002, and your private savings account was cut in half? Now all of a sudden you are not retiring.
Social Security grows at a steady pace and keeps up with inflation and makes sure that you would be able to maintain the kind of buying power that you would normally have, and it is stable, and it is safe, and it is guaranteed.
Ms. WASSERMAN SCHULTZ. That is why we call it Social Security.
Mr. RYAN of Ohio. Social Security, exactly, instead of having the up and down. And that is the kind of risk you are going to have to take on if you are going to put your money into some of these private accounts.
One point more before I pull up another slide here. Your share of the national debt is $26,000, and I think we really need to start looking in terms like this, because not only do business people always worry about what the next quarter's earnings are going to be, what is the next quarter's profits going to be, and we tend to always think what is the next election going to be like, because we get elected every 2 years, so there is no real long-term thinking. So I think it is important for us, especially during the discussions the 30-something group has, is to have this broad discussion: What does this look like to a baby born today and you add this on?
Then we have got the number here that the average college student has $20,000 of debt after going to college; plus a credit card debt, plus a car payment. So what we are trying to say here is that a baby born today has a tax on their head of at least, at least, and that is today, if the clock does not run, of at least $50,000 by the time they are 22 years old and graduating.
Mr. Speaker, you add in inflation and the fact college tuition is doubling, add in all of the other factors, and the bankruptcy bill, which I will not go into, we are not serving our country well and we are not serving the next generation well when we do this. I think we are being very shortsighted and selfish. It sounds good; we are going to borrow money. Wall Street is going to make a killing on the whole deal. It sounds good, and sometimes if it sounds too good to be true, most often it is.
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Mr. RYAN of Ohio. The fix there to save Medicare solvency was to spend an additional 500 to $600 billion, not to do anything with the cost of prescription drugs, not to allow for reimportation, not to allow the Secretary of HHS to negotiate down the drug prices with some of these drug companies.
The gentlewoman is exactly right. When I think of a crisis going on in my district right now, many of the school districts that I represent, half the kids live in poverty. That is a crisis because those kids are going to be taking from the system instead of creating wealth and paying taxes and contributing to the system. That is a crisis.
In Mahoney County, which encompasses the city of Youngstown, there are thousands of kids who have lead poisoning. There are 2,000 kids, young kids who have lead poisoning in Mahoney County at a level by which it actually affects their cognitive ability which puts you on a level of slight retardation. It is unbelievable. Those are the crises we have in the country: health, education, making sure that the poorest among us have some kind of security.
If Members went to Youngstown, Ohio, and tried to convince the residents there that the biggest crisis in the country starts in 2042, they would laugh at you.
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Mr. RYAN of Ohio. And to not do anything about cost for the prescriptions I think illustrates and speaks to the point better than anything else that too much money drives what is going on down here. They are not worried about Mrs. Jones and Mrs. Smith and Mrs. Goldstein. Sometimes the decisions here are about who raises us a lot of money.
Mr. Speaker, who would pass a $500 billion prescription drug bill that is now $700 billion, $800 billion, $900 billion, we do not even know what the real number is, and not do anything about trying to control the price of prescription drugs, and then turn around and come in and say drugs are not the issue, cost is not the issue, Social Security is the biggest crisis in the country now?
Let us not forget as we begin to start wrapping things up, we gave this administration a lot of leeway, a lot of rope with the war, with the prescription drug bill and the war that the taxpayers would not have to pay anything more than $50 billion because we would use the oil money for reconstruction and be greeted as liberators. We are going to be in and out, and all of the things we heard before the war turned out not to be true.
Ms. WASSERMAN SCHULTZ. And the report said gross misrepresentation, grossly inaccurate facts when it comes to reports of there being weapons of mass destruction.
Mr. RYAN of Ohio. And everyone who was telling them there were no weapons of mass destruction, they ignored them; and to now push the blame off on some bureaucrats is unfair. And that was the war. We all know that. And then the prescription drug bill started off $400 billion as we sat in this Chamber, because many of our fiscal friends on the other side of the aisle did not want to spend more than $400 billion. After the bill was signed, 2 months later, all of a sudden the real price was $500 billion and an actuary was threatened not to give the real numbers to Congress.
After the election a few months ago, we find out this is going to be closer to a trillion dollars in cost. I am saying the track record here is not good for when the administration comes forward and says trust me because we have, we have been burnt; and we are certainly not going to let this happen with the Social Security system.
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.
Mr. RYAN of Ohio. Mr. Speaker, the only answer I can come up with is the pharmaceutical companies did not want it. It is amazing because we have obviously signed numerous free trade agreements with every country. In my area we have been devastated by a lot of the agreements. All of a sudden we say if we are going to free trade everything else, let us free trade pharmaceuticals. As long as they have good safety standards, let us let them come in from Canada and drop the price down. But the kibosh was put on that.
When we look at the pharmaceutical industry had three or four lobbyists for every Member of Congress and donated $100 million to Congress over the course of that period when we were negotiating that drug bill, the money comes in here. The pharmaceutical industry did not want that. So they got what they wanted. They got that language removed or not put in. So now the Secretary of Health and Human Services is not allowed to negotiate. Not only are we not allowed to bring drugs in from Canada, but the Secretary of HHS is not allowed to sit down with Pfizer and say Pfizer, Merck, if you want the Medicare drug contract for X drug, and of course they do, so you say we are going to talk price, just like any other business would do.
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Mr. RYAN of Ohio. The gentlewoman makes a great point about just kind of how the whole system is working right now. Basically by not having the Secretary of HHS be able to negotiate down the drug prices and by not free-trading pharmaceuticals, it is basically corporate welfare. It is basically public taxpayer, hard-earned money coming down here, and we are giving it to the pharmaceutical companies and inflated drug costs through the Medicare program. So we have corporate welfare going to the most profitable industry in the world right now. Then you give tax cuts to those people who make more than $350,000 a year so they do not have to pay. You reduce the corporate tax rate so those shareholders, and those people who benefit most from moving jobs overseas get the tax benefits there, too. And then you are cutting services here with Medicaid and food stamps and education, the Pell grant and everything that we have talked about. And now you want to go try to mess with Social Security.
So if you see what is happening down here, if you take a step back and you see the whole process, there is all this corporate welfare going to all the big major corporations, they get all the tax cuts, the people who run those companies get tax cuts, and the rich get richer, and the poor are getting poorer. They say, well, that's class warfare. Mark Shields had a great line. He said, The war's over. The rich won. There is not much there anymore. But that is the way things are going, and that is why it is so important that at the bare minimum we keep that basic Social Security.
So if you see what is happening down here, if you take a step back and you see the whole process, there is all this corporate welfare going to all the big major corporations, they get all the tax cuts, the people who run those companies get tax cuts, and the rich get richer, and the poor are getting poorer. They say, well, that's class warfare. Mark Shields had a great line. He said, The war's over. The rich won. There is not much there anymore. But that is the way things are going, and that is why it is so important that at the bare minimum we keep that basic Social Security system in place.
I think having discussions like we are having tonight and town hall meetings, I think it has been very successful. The response I am getting, and I know the response the gentlewoman is getting down in Florida, and the gentleman from Florida (Mr. Meek), who could not be with us tonight, is getting, and all our colleagues on both sides of the aisle are getting it.
I yield to the gentlewoman for any final comments that she may like to make.
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.
Mr. RYAN of Ohio. Absolutely. I hope from the responses we have been getting, it sounds like some people are listening.
Thirtysomethingdems@mail.house.gov. Send us an e-mail, or you can go to the Web site, democraticleader.house.gov/thirtysomething, and join in our discussion. We will be happy to read some of the e-mails. We have been off for the last few weeks, so maybe next week we will read some.
I would also like to say before we close up, the President of the Ukraine, Victor Yushchenko, is going to be here tomorrow. If you had followed everything that was going on with the West and the Russians and the poisoning, it was like a soap opera going on. I think it is an important point for us to make, he is going to be talking to a joint session of Congress, his election and his uprising and his move to power in the Ukraine was led by young people.
We need to continue to try to encourage, not everyone has to run for office, not everyone has to be involved to the extent they make a career out of it, but it is so important when you see what is going on down here day in and day out and the lack of, I think, long-term vision. It is important because the young people are the ones who are going to be involved in the system longer than all of us are because they are younger. It is important for their voice to be heard.
I thank the gentlewoman from Florida. We missed the gentleman from Florida, but I know he will be back with us next week.
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