[Extensions of Remarks]
[Page E381]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]

DON'T BLOW AWAY SOCIAL SECURITY

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HON. BERNARD SANDERS

of vermont

in the house of representatives

Wednesday, March 10, 1999

Mr. SANDERS. Mr. Speaker, I would like to call your attention to an
article printed in the March edition of the Labor Party Press, and ask
that it be printed in the Congressional Record for my colleagues'
benefit:

``Don't Blow Away Social Security''

There is no Social Security crisis. But if Democrats and
Republicans get their way and privatize the system, there
will be.
``It's weird,'' says economist Dean Baker of the Preamble
Center, who has been studying and writing about Social
Security reform. ``We're all looking at the same numbers, and
what the numbers say--even the pessimistic ones--is that we
could take absolutely no action on Social Security for the
next 34 years, and the program would continue to pay out all
its benefits.'' And yet, politicians of both parties are all
aflutter about the need to radically reform Social Security
right away.
The picture they paint does sound grim. Mostly because
people are living longer, today's workforce is supporting a
greater and greater number of Social Security recipients. And
the trend will probably continue. In 1995, there were nearly
five people under 65 for every one person over retirement
age. But by 2030, the ratio will be more like three workers
for every retiree. And since Social Security is actually a
pay-as-you-go system--current workers pay for current
retirees--that spells trouble. (See ``Social Security
Basics'' on page 4.) For the time being, we can supplement
the shortfall by drawing from the extra pot of money the
Social Security system has amassed (the Social Security Trust
Fund). But then, in 2034, according to some projections, that
fund will be depleted, and Social Security money will have to
come from active workers alone. And, under the current
formula, they would only be able to cover about 75 percent of
the benefits retirees had been promised from Social Security.
President Clinton and members of Congress say ``saving''
Social Security is at the top of their agenda (after
impeachment, of course). Many recipes have been written for
rescuing Social Security. The most extreme plans involve
privatization. Some people want the Social Security payroll
withholding to go into our own ``personal security account''
that we can invest ourselves. Less radical plans would allow
the Social Security Trust Fund to be invested in the stock
market, where it would supposedly get a higher return than
where it is invested now, in U.S. Treasury bonds.
President Clinton favors a combination of both ideas. He
wants to invest part of the Social Security Fund (eventually
up to 15 percent of it) in the stock market. He also proposes
setting up voluntary new private accounts for middle- and
low-income Americans--but outside the Social Security system.
At a time when the stock market is in the stratosphere,
record numbers of Americans are investing, and the airwaves
are full of experts advising the general public on how to get
the best return, the idea of turning Social Security into a
personal Wall Street investment portfolio is appealing to a
lot of people.
But not everybody's sold on the idea. To begin with, many
people question whether there even will be a Social Security
shortfall. They argue that the Social Security hullabaloo is
all based on some very gloomy economic projections made by
Social Security trustees. In their reports, the trustees
assume that over the next 75 years, the U.S. economy will
grow at less than half the rate it has grown for the past 75
years. According to a report by the New York-based Century
Foundation, an increase in annual economic growth of just .15
percentage points over the next 35 years would raise output
by as much as the combined increase in the cost of both
Social Security and Medicare. Meaning: Workers of the future
may have no trouble supporting the growing ranks of the
retired.
And yet, our politicians have managed to convince a
majority of Americans that there really is a crisis at hand.
Polls of younger Americans show that many believe they can
expect little or no money from Social Security when they
retire (unless, perhaps, the system is radically changed).
So who started this rush for a ``solution'' to the Social
Security ``crisis''? Follow the money. Wall Street could
stand to gain $240 billion in fees within the first 12 years
of a privatized system, according to economist Christian
Weller. That, he points out, is enough to give 20,000 fund
managers an annual salary of $1 million each. No wonder the
financial industry has spent millions of dollars of late to
promote the idea of Social Security privatization.
Economist Dean Baker believes there's a deeper motive
behind the privatization push: ``I think much of this is
being driven by people who are just plain anti-government,''
he says. ``And Social Security is the government's flagship
social program.''
It may be, says Baker, that some minor adjustments will
need to be made to allow the Social Security system to
continue in good health. (See the sidebar on ``What We Should
Do.'') But privatizing the system and investing Social
Security money in the stock market is not the way to go. In
fact, he believes, it would take the ``security'' out of
Social Security. Most of us would see our retirement incomes
dramatically reduced.

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