Rick Santorum - Social Security

Summary

Senator Santorum has been vocal and active on social security since entering the Senate. He has been a strong advocate for reforming the system to keep it solvent in future years.

In June of 1999, Senator Santorum spoke on the senate floor and noted the problems in social security with respect to it's structure. He noted that the social security originally had 17 people paying in for each person in the system. As of 1999 there were 3.3 people paying for every one in the system. He notes that there will eventually be 2 or less people paying in for every retiree. To prevent the inevitable increase in taxes or decrease in benefits caused by the shifting demographics, Senator Santorum advocated in favor of "lock box" legislation. The plan would have ensured that surpluses being paid into the social security system would have been stored in a lock box for the days when the system was running deficits and not spent on other governmental projects. 

In September of 2003, Senator Santorum spoke in support of a partial privatization of social security. This partial privatization would have allowed people to take a portion of the money that would have gone into social security and put it into a personal account and possibly invest the money. He notes that this would be a plan similiar to one offered to federal employees. By doing this, Senator Santorum hoped to make up some of the projected shortfalls in the social security projections through the growth in the invested funds.

Senator Santorum continued to urge action on social security going into 2005. To combat the inevitable reduction in benefits that would come from future insolvency, Senator Santorum co-sponsored the Social Security Guarantee Act of 2005. This legislation would have prohibited any changes to the social security system for anyone born before 1950, and would have guaranteed cost of living adjustments for seniors.

One option that Senator Santorum has proposed is to raise the retirement age for social security. He has noted that all options should be on the table when addressing the problems in social secutity and that given the increased lifespans since the start of the program, increasing the retirement age is a reasonable move.

During the Presidential campaign, Senator Santorum has continued to push to address the problems in social security. He has also advocated for changing the cost of living adjustment to be linked to actual cost inflation instead of wage inflation. He also supports means testing. His total plan consists of:

• adjust the CPI
• adjust dependent benefits and disability income benefits
• move back the retirement age for younger workers
• means testing benefits
• dedicate Social Security payroll taxes to Social Security

Social Security Lockbox

In June of 1999, Senator Santorum spoke on the Senate floor about social security in general and about the need to ensure that funds paid in through social security are spent on social security. On June 13, the Senator gave a long speech discussing the number of people paying into social security and the number of people receiving social security. He notes the need to save money from today so that people in the future will have the funds they need when there are fewer workers to support the system. A few days later on June 16, the Senator participates in a floor discussion with Senator Lautenburg of New Jersey and several others. Senator Santorum discusses his disappointment at Senate Democratic opposition to social security reform and the unwillingness of Senate Democrats to act on securing the social security and Medicare surpluses.

Mr. SANTORUM. Mr. President, I rise today to address the issue of Social Security. Last week I got up toward the end of our time and did not have a chance to talk about the issue, but I briefly mentioned my strong admiration and support for Gov. George W. Bush's courageous and bold proposal in offering to the American public an opportunity to meet the Social Security crisis head on and deal with it in a responsible way through investment as a way to try to bridge the gap that now exists in the Social Security system--``the gap'' meaning not enough money coming in to pay benefits down the road once the baby boom generation begins to retire.

I have been out for the past 4 years talking about this issue and have talked in front of every conceivable group you can imagine. Yesterday I was in Harrisburg, PA, talking to the State AARP about Social Security and the importance of having politicians face up to the issue and explain to the American public how we are going to fix the problem.

The problem is very simple. Right now, there are about 3.3 people working for every retiree on Social Security . Social Security is a pay-as-you-go system. So those 3.3 working people have to pay enough in Social Security tax to pay for the benefits to that 1 retiree.

Just to give you a comparison, back in 1950 we had 17 workers paying into the system for every 1 retiree. That is why, in 1950, we had a payroll tax of 2 percent on the first $3,000 you earned, because there were 17 people paying and you could pay a relatively low rate of taxation to pay for the benefits. Now you pay 12.4 percent of every dollar you earn, up to, I believe it is, $72,000.

So it is a dramatic increase in taxes that has occurred because we went from 17 workers to every 1 retiree to 3.3 workers to every 1 retiree. In the next 20 years, we will go from 3.3 workers to every 1 retiree, to around 2 workers or maybe even a little less than 2 workers to every 1 retiree.

It is pretty obvious what is going to have to happen. We are going to have to make a change in the system because the current flow of revenue from 3.3 workers to support 1 retiree will be dramatically reduced when you only have 2 workers. You cannot keep the current rate of taxation and support that 1 retiree.

So the question is, What do we do about it? Do we wait, knowing it is going to happen? Everybody who is going to be working 20 years from now has been born, and everybody who is going to retire in 20 years from now has been born. So we know what the demographics are going to look like. The question is, What are we going to do about it?

There are three things you can do to fix the Social Security problem and only three things. There are only three things you can do.

No. 1, you can do what we have done 20-some times in the past; that is, increase taxes, from what started out as 2 percent on the first $3,000 to now 12.4 percent on up to $70,000 of income. So you can increase taxes.

The second thing you can do is reduce benefits. We have done that in the past, too. We raised the retirement age. We adjusted some of the benefit numbers. You can reduce benefits.

How much would we have to do of either raising taxes or cutting benefits? According to the Social Security trustees, the actuaries there, we are looking at a payroll tax increase, if we wait 15 or 20 years--which is what some here at the national level, the Vice President, for example, and some on the other side of the aisle have suggested; that if we wait, everything is going to be fine, that there will be no problem for another 30 or 35 years. Just wait. What if we wait? If we wait 20 years to fix this problem, we are looking at a payroll tax increase of roughly 40 percent, going from 12.4 to about an 18- or 19-percent payroll tax for the next generation.

So if you are a politician today and you do not plan on being around 20 years from now, I guess the answer of waiting is a pretty good option: Put it on to the next group of politicians and the next generation of people, and let them pay those taxes. They may say: ``As for me, I would rather just get elected and not make any tough decisions and not have to tell anybody about what pain is going to be in the future because under my watch there will not be any.'' That is the kind of leadership we do not need in America, in my opinion. But that is an option.

The first option is to increase taxes dramatically down the road. The second option is to cut benefits. By the year 2035, I think it is, Social Security taxes coming in will cover about 70 percent of what is needed to be paid out in benefits. So what does that tell you? We will have to cut benefits by about a third; that if we do not increase taxes, then we will have to cut benefits by a third. I suspect you will not find one vote in the Senate to do that today. And I do not believe you will find any votes in 20 years to do that. So that option is pretty much off the table, I suspect.

So those are the two options that are available, unless you take the third option. This is where Governor Bush has come out. I give him a lot of credit for doing so. The third option is investment, increase the rate of return on the money that is actually going into the system now to make up the shortfall in the long run. This is not a view that is a partisan viewpoint; this has broad bipartisan support in the Senate.

Many on the other side of the aisle believe in personal retirement accounts. Even more Members on the other side of the aisle and the President agree with investment where the Government actually takes the money and invests it.

So there are two kinds of investments. We can do it two different ways. The way I suggest and Governor Bush suggests is that every individual get a portion of their payroll tax to be put in a personal retirement account, which they own, they control, they invest, but they cannot touch until they retire. That is how I suggest the investment be done: The individual owning it, the individual investing it, the individual controlling it.

The President's suggestion, in two of his budgets in this current term of office, is that, yes, a portion of Social Security trust funds can be invested, but the Government invests it. There would be no individual ownership. It would be Government ownership. The Government would invest a portion of the Social Security trust funds in stocks and corporate bonds. Why? The President pretty much gave the same speech I am giving where he said there are three options: You can increase taxes, cut benefits, or invest; and the President chose investment.

The President, in his budget, chose investment. But the investment he chose was the Government ownership of that investment. We choose investment and say the individual should own the investment, and the individual should benefit from the investment; that the Government should not ``benefit'' from the investment.

There are a whole host of reasons the Government should not own corporations or stocks. We already regulate corporations. We tax corporations. Now we have gotten in the business of suing corporations. We should not also own them. That is the Government owning the means of production. For those of you who have not been in your political science class recently, the Government owning the means of production comes right out of the books of Karl Marx. We do not need the Government of the United States owning corporations.

By the way, I think most Americans believe very strongly about that, that Government ownership of stocks and bonds is not something that is particularly desirable, but the idea of investment is desirable.

The biggest criticism I hear from the Vice President, and the critics of Governor Bush's idea, is that this is a ``risky scheme.'' Contrast that with what their proposal is. Their proposal has, I would agree, less risk and more certainty. I would agree with that. There is less risk and more certainty. The certainty, though, is not a particularly desirable one. The certainty is we will have to raise taxes or cut benefits.

So you can argue that the Gore plan is less risky, is much more certain. We will have to raise taxes or we will have to cut benefits, or do a little of both. So in that respect there is certainty. But it is not certainty that I think the American public is looking for.

He suggested the Bush plan is risky because it involves investment. I did not hear that criticism of the President's plan to invest in the equities market. He did not criticize his own President's plan when he suggested that money from Social Security should be invested in the equities market. I guess some believe it is not risky if the Government invests it, but it is risky if you do. I am not too sure that holds a lot of water. Either investment in the market is risky or it is not risky.

Sure, obviously, there are risks in investment in the market. But every other retirement system in America is financed through investment. The people who are doing basically pretty well in America have 401(k) plans and IRAs and Keogh plans and other plans where they take money that they are earning. Here in the Federal Government, Federal employees have a thrift savings plan, all of which is invested in stocks and bonds. And we use the miracle of compound interest, over time, to be able to then afford to pay the benefits for those retirees once they hit retirement.

Every person who is doing pretty well in America has one of those plans at their disposal. It is the folks who are not doing so well who don't get a piece of the American pie. What the Vice President is saying is: For you folks who have these plans, that is OK; we think that is a good idea.

In fact, you will find the Vice President and others who are opposing personal retirement accounts for Social Security are at the same time encouraging people to go out and develop 401(k)s and invest and save for retirement; that it is a good idea. ``So if you have your own money and you make enough money, we encourage you to invest it. But if you are low income and you can't put money aside, we don't want you to have a piece of this. We don't want you to have your own personal retirement account within Social Security . We are just going to reserve that for people who have enough money to do it on their own. We will allow you to participate in the growth of the American economy, in the increase in the markets and economy, in the dynamism of the American dream that is going on in our capital markets today. If you have money, you go ahead and participate, and we will encourage you. We will provide tax incentives for you to do that. But if you are lower income and you are making ends meet and all you have for your retirement is Social Security , sorry, we will not allow you. It is too risky for you to do this.'' How paternal; how discriminatory.

What we support is to give every working American a very small piece at first. Maybe in years to come it will be larger, but at first a very small piece of the American pie, 2 percent, 3 percent of every dollar they earn for low and middle-income people to be put in a personal retirement account for them to invest; so as America grows and prospers, they won't be sitting on the sideline watching the rich get richer while they do not prosper from the growth in America. That is cruel.

We have an opportunity to reach out to moderate and low-income individuals and allow them to participate in the American dream of ownership, of investment, of participating in the growth of America, not just their own growth with respect to their wages. I think it is a tremendous opportunity. It is the first and biggest chance to bridge what I see as one of the biggest problems facing America today, which is the growing gap between the rich and the poor in this country.

I will never forget back in 1992, then-candidate Clinton would talk about the decade of greed of the 1980s, how the rich got richer and the poor didn't get it. ``The 1980s, under Reagan, was the decade of greed.'' We don't hear President Clinton talking about that now. Does anybody ever wonder why he doesn't talk about that anymore? The reason he doesn't talk about it anymore is because during the 1990s, the rich got far richer than they did in the 1980s, and the poor didn't do that much better than they did in the 1980s. In fact, the gap between the rich and the poor widened more in the 1990s than it did in the 1980s. If the 1980s was the decade of greed, the 1990s, under the Clinton-Gore administration, was the decade of supergreed.

Why did that happen? It is pretty obvious why it happened. It happened because those who were wealthy, who owned and invested as the markets went up, as the value of assets went up, their income went up. Their wealth went up. If you are a worker who doesn't have wealth, doesn't have savings, doesn't have investment, then your wealth only goes up by the wage increase you get, which is 3 or 4 percent. So while the NASDAQ goes up or the Dow Jones goes up 10, 15, 20 percent or higher, your wages go up here at the bottom 2 or 3 percent, the gap grows.

One-third of all income in this country comes from investment. Yet the average person in America, someone right in the middle, has a total savings of $1,385. Half of America or more is left behind.

What we want to do with personal retirement accounts for Social Security is say to those Americans: Welcome to the American economy; participate in the American dream of growth and ownership of investment. With that, we will not only fix Social Security , but we will begin to do something that is fundamental, which is to bridge the wealth gap in America.

I thank the Chair and yield the floor.

Mr. SANTORUM. Mr. President, I will respond to the Senator from New Jersey. The Senator from New Jersey knows if we get cloture on this bill, germane amendments would be allowed. So if what he is concerned about is Social Security and debating Social Security , germane Social Security amendments will be available. What will not be available are spurious amendments to make political points that have nothing to do with Social Security , such as what is being discussed by the Senator from North Dakota who wants to take non-Social Security money, non-Medicare money, and create a lockbox of general fund revenues for Medicare.

As the Senator from New Jersey knows, that has nothing to do with Social Security . It has nothing to do with lockboxing Social Security . It has nothing to do with lockboxing the Medicare trust fund. It is a tangential amendment aimed at making political points, having nothing to do with Social Security , as are the bulk, from my understanding, of the other amendments.

So in sincerity, I say to the Senator from New Jersey, if he really is concerned about Social Security and having an honest debate about Social Security and the amendments thereto, vote for cloture because he will have ample opportunity to have a plethora of amendments that deal with the issue of Social Security and the lockbox thereon.

So the demagoguery we have heard that somehow we are precluding debate on the most vital issue of the day is false. We are, in fact, providing a forum for a limited and narrow and focused discussion, absent political demagoguery, to talk just about Social Security .

So, if the Senator is truly concerned with the issue of Social Security and the preeminence of it as a policy issue, then he has the opportunity before him right now to vote for cloture so we can focus the agenda and the discussion on that very issue.

Second, I want to respond to the Senator from North Dakota who I think has offered a very reasonable concept, although I am not sure his charts follow through with that concept. The Senator from North Dakota suggested that we need to lockbox Medicare and suggested there were $650-some-odd billion to be lockboxed for Medicare. I do not know where he comes up with $650-odd billion that is in the Medicare fund surplus in the future. In fact, between the years 2000 and 2009, the net surplus in the Medicare trust fund is $14 billion. In the next 5 years the surplus will be $53 billion, but then it goes negative, from 2006 to 2009 $39 billion.

I am willing right now to coauthor a bill with the Senator from North Dakota to put a lockbox on the Medicare trust fund similar to the Social Security trust fund. But that is not what the Senator from North Dakota is saying. He would lead you to believe that is what he is saying, that we need a similar lockbox for Medicare as we have for Social Security .

Remember, the Social Security lockbox said Social Security money must be used for Social Security . A similar Medicare lockbox would be very simple: Medicare taxes must be used for Medicare.

Is that what the Senator from North Dakota has asked for? No, he has not. What the Senator from North Dakota said is all of the surplus in the future--the non-Medicare surplus, the non-Social Security surplus, the general fund surplus--has to be used for Medicare. That is what the Senator from North Dakota did. That is not what he told us, but that is what he did.

Why does he want to do that? Because he wants to take the general fund surplus--which many believe, if we have more money in the general fund than we need, we should provide tax relief to those who overpaid--and use it for Medicare.

I believe in the integrity of the Medicare program and the integrity of the Social Security program. They are funded specifically by taxes and spent within that trust fund. That is how we should fix Medicare, and that is how we should fix Social Security . We should not be borrowing from other areas any more than on the general Government side we should not be borrowing from Social Security and Medicare. It is honesty in budgeting. What happened a few minutes ago on the floor was not exactly the most forthright explanation of budgeting in this area.

What we are proposing is very simple. We have a surplus in Social Security , and if we do not lock it up and create hurdles for spending that money, there will be those, incredibly enough, who will use that money for other things such as, oh, wonderful things, including tax cuts. There may be some who want--I do not want to do tax cuts with Social Security money; I will not do tax cuts with Social Security money. You will not find any tax cut I will not vote for. I will vote for all of them, but I will not use Social Security money.

It puts constraints on us on this side of the aisle who would love to see tax cuts but will not use Social Security , contrary to what the Senator from New Jersey just said. You cannot use it for tax cuts and spending increases. That is all we say.

Let's make a downpayment on Social Security reform by not spending the money. It is as simple as that.

I yield the floor.

Mr. SANTORUM. Mr. President, finally I want to comment on the vote we just had on the lockbox. I have to say I am puzzled and disappointed at the unanimous opposition by Senate Democrats to a proposal that passed with 416 votes in the House. Obviously, almost every House Democrat--all but 12--voted in favor of this measure, a measure which obviously has broad bipartisan support and, as many have stated in the House and the Senate, one that is a first step toward dealing with the long-term problems of Social Security .

The first step is very simple. We have a surplus. Do not spend it on things other than Social Security ; save it for Social Security . We are eventually going to have to do Social Security reform. We are going to have to strengthen it and save it for future generations. It runs out of money in the next 15 years, so we are going to have to do something. We have surpluses building up which are now just being borrowed by the Government and spent on other things. We have had that happen for the past 20 years.

We are now in a unique position. We are close to an on-budget surplus. We are not quite there, but we are very close to an on-budget surplus, non-Social Security surplus. So we have the Social Security money which will go to save Social Security by reducing the Federal debt unless we spend it. In a sense, all this lockbox does is say: Don't spend the money. Don't come up with new ideas and new ways to spend Social Security .

We are not asking anybody to cut anything. That is one of the most remarkable things about it. We are not asking the other side to cut money to make sure the money is there for Social Security . All we are saying is don't spend more. That is why it received bipartisan support in the House.

We hear so much talk on both sides of the aisle about how we have to save Social Security first, how Social Security is the highest priority, how we have to make sure money is there for future generations. In fact, in the budget vote just a couple of months ago, we had a 100-to-nothing or 99-to-nothing vote that we need to save Social Security ; we are not going to spend that money in the trust fund. That was just a sense of the Senate. In other words, the first had no binding effect in law.

Now the mechanism comes along that says if we are going to pass a bill that is going to spend Social Security surpluses, we have to have a separate vote where we have to stand up before the clerk and say: Yes, I will spend the Social Security surplus on this.

There is no such vote that has to be cast right now. This will set up a point of order where every Member of the Senate has to say to the people back home: I want to spend Social Security money on this, because I think it is more important than Social Security . That is all this point of order does.

There are points of order out there on spending, but there is nothing clear. There are points of order whereby you can challenge something if it breaks the budget point of order or this and that, and people run out and say it is really not Social Security . You can dance around it. You can spin it back home. There are lots of folks very good at spinning. The wonderful thing about this provision is you cannot spin it. It is what it is. It is a vote that says we will spend the Social Security surplus on this. That will have, I believe, the

greatest impact--in this body and the other body, and in particular the other end of Pennsylvania Avenue, the President--on controlling our willingness to raid the Social Security trust fund for the demands of spending today. Or, for that matter, the demands of tax cuts today. I want to add, it is not just a governor on those, principally on the other side, who want to spend more. It is also a governor on those on this side who want to cut more taxes.

As I said before, there is no tax cut I will not vote for, just about. But I am not going to do it out of the Social Security surplus. We will do it out of the general fund where the taxes are paid in. If people are paying in too much in the general fund, give them a tax cut, if we can. I will vote for it. If we can cut spending in the general fund to pay for a tax cut, I will vote for it. But I will not fund a tax cut out of Social Security funds, and that is what this says.

While on the first vote on cloture many Democrats will vote no as a matter of principle, I am hopeful they will understand this is a bill that has consensus, that can be signed, that can put real restraints on our ability and the President's ability to spend the Social Security surplus and, hopefully, we will reach a point where we can have bipartisan consensus on this, because Social Security is simply too important to continue to play political games.

I think what we have seen here is all the rhetoric says: Yes, we agree; yes, we agree. But when it comes down to casting the vote, what we have is this spurious argument, ``You are not letting us amend it,'' which I find is quite remarkable because, if you look at the amendments, they have virtually nothing to do with Social Security .

In fact, I have not seen all the amendments, but those I have been made aware of have absolutely nothing to do with Social Security . They all have to do with what we do with the general fund surplus, and that is the non-Social Security , non-Medicare surplus.

We have on a bill, which is focused on Social Security , on how we save Social Security , an attempt to bring in a whole lot of other issues to clog up this issue, to bog it down, and, in my mind, to try to destroy any chance of this ever becoming law.

Social Security and Privatization

On September 22, 2003 Senator Santorum carried out a conversation relating to social security and privatization with numerous other Senators on the Senate floor. The discussion covered aspects of privatization, and the need to take surplus amounts from the system and prevent them from being spent on other projects.

Mr. DURBIN. Mr. President, I thank my colleagues for staying this evening. The world's greatest deliberative body does not spend a lot of time debating. That was one of the biggest surprises that I learned when I first came over to the Senate. I hope tonight, if we have a good debate, it will set a standard that will lead to even more debates on the Senate floor.

For 66 years, Social Security has been America's insurance policy. Social Security has been America's promise that when all else fails, the monthly check from Social Security is going to be there to help you pay for your food, your utilities, and your prescription drugs.

Social Security has never been Uncle Charlie's red hot investment tip, that stock that just could not lose. Social Security has always been that rainy day fund that your dad and your grandfather told you to take care of first before you even listened to Uncle Charlie.

Some politicians do not like Social Security . It is an old idea. It has been around for several years. It is conservative. It is a Government program. It was created by Franklin Roosevelt during the New Deal. It is also the horse, though it never sets a track record, that always finishes the race.

The critics want to dismantle Social Security for a flashy, dazzling money maker that just cannot lose. They want to cut the current Social Security monthly benefit and add higher administrative costs at the expense of your parents' retirement and your own.

Now, they tell us that Social Security privatization adds up, but like that hot stock tip, their privatization argument is all about faith and not facts. As every good magician, they want to divert your attention from the most important part of their presentation.

The supporters of privatizing Social Security cannot explain how they will fill the $2 trillion hole in the Social Security trust fund that will be created when people lift out money to put in privatization personal accounts. If they were honest about their $2 trillion shortfall, they would tell you that the options are very limited and very painful.

For one thing, they might suggest we raise payroll taxes to make up the difference, but who needs an increased payroll tax with this lame economy? They could tell you honestly that we can raise the retirement age under Social Security and make up for the $2 trillion shortfall in privatization. But is that something you want the Government to mandate at this point in your life? Or they could cut Social Security monthly benefits, but that might come just at the time when your mother's prescription drug bill goes up $100 a month.

If it turns out that Uncle Charlie's hot stock tip, or the Republican privatization of Social Security , fails, guess who ends up holding the bag. Well, first, your parents, then you as their children, and ultimately, when the bottom falls out, future taxpayers.

The bad news about Social Security is not the bedrock principle on which it was founded. The bad news about Social Security is that this President and this Republican Congress, with their tax cuts for the wealthy and recordbreaking deficits, are endangering Social Security and Medicare at exactly the wrong time.

This is a news flash from those who are supporting privatization, which I think they should crawl across every TV screen in America whenever this debate starts, and it ought to say, just so you did not miss it: The baby boomers are on the way.

We have only known that for 50 years. We have seen them coming. We know they expect Social Security to be there because they paid into it. So instead of historic deficits and Social Security privatization schemes, how about some conservatism for a change? How about protecting the Social Security trust fund?

In closing, this is a historic moment. Since the Republicans chose the issue of privatizing Social Security as our topic tonight, it now can be said officially to Republicans across America that it is now safe to say privatize Social Security again. For 3 years, they would not do it while the Dow Jones was diving, the Standard & Poor's was sliding, mutual funds were muddling, and corporate robbers were led away in shackles. Welcome back Social Security privatization. But there is one problem: the Republicans may now think it is safe to dive again into the Social Security privatization pool, but when it comes to common sense that pool is still empty.

The PRESIDING OFFICER. The Senator from Pennsylvania.

Mr. SANTORUM. Mr. President, I want to make sure the record is straight. I do not believe the Senator from New Hampshire used the word ``privatization.'' My colleagues will not hear me use the term ``privatization.''

Privatization intimates to the American public that we are going to abandon the current Social Security system and turn it over to completely private accounts, which is not what any proposal on this side of the aisle or what the President's commission suggested.

What the President's commission suggested, what every bill over on this side of the aisle proposes--and, by the way, joined in a bipartisan fashion and has historically been a bipartisan issue--is to take a portion of the contribution that comes into the Social Security Administration and give people the option voluntarily to establish a personal retirement account to be part of their Social Security benefit which continues to be guaranteed as it is, as much as it is, under current law.

So let's understand that we are still talking about the foundation of this system being the same. What we are talking about is trying to solve the problem, a problem that my two colleagues on the other side of the aisle did not address. They talked about the criticisms of the personal retirement account option for people to help finance the shortfall in Social Security , that $25 trillion shortfall. They did not propose one solution as to how to do that.

We have proposed a solution that uses the power of the market, which uses individual choice. If my colleagues want to talk about guarantees, ask the people back in 1978 and 1984, after the 1977 and 1983 changes in Social Security , whether that benefit is guaranteed. In both 1977 and 1983 benefits were reduced. So this idea that there is some guarantee out there is only as good as the next Congress's vote. The real guarantee is ownership. One owns that money in their account. That is a private property right that is now not subject to the whim of the next Congress to take away from an individual.

So what we are doing is giving real guarantees, real security to Social Security , No. 1.

No. 2, this idea that if we don't do anything, things will be fine? I hold up a comment by David Walker before the Aging Committee in the Senate. He said:

Taking action now on Social Security would not only promote increased budget flexibility in the future and stronger economic growth but would also make less dramatic action necessary than if we wait.

Waiting is not an option. There are three things we can do to fix the Social Security shortfall. No. 1, raise taxes; No. 2, cut benefits; No. 3, grow through investment and thereby make up the shortfall. Those are the three options.

Senator Sununu and I think most Republicans, and some Democrats, thankfully, have said we prefer option 3.

By the way, this debate has been around a while, as the Senators have suggested. One of the issues is, Do we include people who are not now in Social Security in Social Security , like teachers, local government employees, State employees who are now exempt? They are vehemently against losing their investment-based Social Security system if they have to trade it for a pay-as-you-go, promise-from-politicians system that we have. If it is such a bad system, then why do all the people who have an investment-based system, at least in part, not want to be in this other system? The reason is because it works. Every other pension system in this country is based on that. And virtually every other pension system, Social Security system in the world, has some component of private investment.

We will be--I underscore ``will'' because I think it will eventually happen--the last to do this. But we should not wait because waiting costs. The longer we wait, the deeper the cuts in benefits that will have to be made if we do not go the personal retirement route, or the higher the taxes must go, again, if we do not come up with another method to solve this problem.

I want to put up a chart from Senator Moynihan. I heard talk that somehow or another, if this money is put aside, we are robbing money from the Social Security system. I have a couple of comments on that.

No. 1, the Social Security actuaries say:

If the personal accounts are considered as part of Social Security , it is reasonable to combine the amounts of the trust fund assets and the personal accounts for representation of the total system.

So when the Senator from New Jersey said you are taking this money out of the system, you are not actually taking the money out. Actuaries say you actually should include it as part of it since it is going to pay benefits.

The Senator from New York said:

Critics charge that establishing personal savings accounts would turn Social Security over to Wall Street. Dock workers would become day traders. A market downturn could wipe out benefits. The latter charge is obscene. The present progressive retirement benefit would remain.

That is the point I was making before.

We are not eliminating the base Social Security Program. We are enhancing it, we are stabilizing it, and we are better securing it through investment. There is no occasion to touch it.

Not one proposal the President has put forward or one proposal put forward on this side of the aisle, in a

bipartisan fashion I might add, does anything to undermine the basic Social Security system. It is, in fact, a response to shore it up, to make it stronger, and to make it secure and guaranteed for future generations. That is why we so strongly believe in it.

I yield.

The PRESIDING OFFICER. Under the previous order, there will now be a period for questions and answers: 1 minute has been allocated for questions, 2 minutes for response. The Democrats are to propose the first question. The Senator from Illinois.

Mr. DURBIN. Paul Krugman of the New York Times summarized this pretty well.

Social Security as we know it is a system in which each generation's payroll taxes are mainly used to support the previous generation's retirement. If contributions from younger workers go into personal accounts instead, the problem is obvious. Who will pay benefits to today's retirees and older workers? Privatization creates a financial hole that must be filled by slashing benefits, providing large financial transfers.

The obvious question to the supporters of privatization is, Where will you find the $2 trillion that makes your proposal honest? Without filling that financial hole with $2 trillion, you have a theory that is too good to be true.

Mr. SANTORUM. That is a very good question.

The PRESIDING OFFICER. The Senator from Pennsylvania.

Mr. SANTORUM. This question always hearkens me back to a commercial which dates me a little bit. It was Fram Oil Filters. The question was: Pay me now or pay me later?

The issue is, and the issue that, again, my colleagues on the other side of the aisle fail to address, and that is there is an unfunded liability here. How are we going to make it up? The question is, What is the best way to guarantee that for future generations?

What I believe is, by allowing individuals to put money into accounts which they own, which increase in value, we will secure that system to the future. Does that mean coming up with more money now to secure the system later? Yes. But if you don't do that, you are going to pay much more later. So the question is, Pay me now--do it in a way that is progressive in the sense that individuals own money and have control of that investment, have real guarantees because it is their money--or pay me later, on a promise that my benefits will not be cut, which they will have to be, or taxes will not increase, which they will be.

The PRESIDING OFFICER. The Senator from New Hampshire.

Mr. SUNUNU. Mr. President, in their opening statements we heard the other side use the word ``guarantee'' numerous times. To be sure, my colleagues and I believe strongly in the moral obligation that we have to ensure a sound retirement system. But to simply say ``guarantee,'' ``guarantee,'' as if that will solve the fundamental problems in our retirement security system is a huge mistake and it ignores both demographics and the baby boom generation and history because, we all know, in 1977 and 1983, significant changes were made.

We are willing to stand up and talk about ways that have been actuarially shown to strengthen the solvency of the system, but we still have not heard a single idea or proposal of substance from the other side. If you are not going to cut benefits, and you are not going to raise taxes, what ever are you going to do?

The PRESIDING OFFICER. The Senator from New Jersey.

Mr. CORZINE. I appreciate the comments of the Senator from New Hampshire about guarantees. The idea of making certain that those payments, that $900 average that we are talking about, is available is going to take some of those kinds of choices that the Senator outlined, as did the Senator from Pennsylvania. We have to make some tough choices.

We made a very tough choice when we said we are going to cut taxes, the present value of taxes, $12.1 billion, which put us into deficit financing of $550 to $600 billion in the upcoming fiscal year, when the Social Security shortfall in this country, on a present value basis as opposed to accumulating all those totals over 75 years, is $3.8 trillion--three times the coverage of the estate tax. Even if you reformed it up to a $4 million or $5 million exemption, it would fill about one-quarter of that hole. The dividend exclusion, the cut in capital gains, would take it up a little over half.

There are other options than just sitting here and suggesting that there are no ways to fund this Social Security gap. That was why it was so important to emphasize ``Save Social Security First'' when we were running surpluses. We wanted to build up that Social Security trust fund so there would be income from it, but also have the ability to meet those needs as we go forward.

I think it is absolutely essential that we focus on guaranteed benefits because we are looking at the core, the fundamental cornerstone of what retirement savings is for a vast number of Americans. Fifty percent plus depend mostly on Social Security .

So having that at the risk of the whims of the market is a whole different kettle of fish than having what a guaranteed benefit is about. That is why we emphasize it.

The PRESIDING OFFICER. Next question, Democrat Senator.

Mr. DURBIN. I ask my colleagues on the Republican side, they say it is voluntary and all about giving people a choice. What kind of choice do you give people who do not want to open a personal account, who don't want to privatize? The choice you give them is to see their monthly Social Security benefit reduced. The average benefit of $900 will go down, if you decide that you don't want to play the stock market, you don't want to invest.

I have to ask you, How voluntary is that, if you are going to reduce the monthly benefit payment to those who do not sign up? And, the ultimate cost of this, since you cannot come up with a way to pay for the $2 trillion, could be as much as 40 percent of that current $900 monthly value. How voluntary is that? What kind of choice does that person have, when they lose the benefit they counted on all their working years?

Mr. SANTORUM. I assume what the Senator is referring to is the proposal by the administration to use price indexing versus wage indexing. Is that correct?

Mr. DURBIN. I was talking about the overall $2 trillion.

Mr. SANTORUM. Maybe I am confused. When the Senator says what change would then occur, my guess is--I am confused by the question.

Mr. SUNUNU. If the Senator from Pennsylvania will yield on this point because it was a confusing question, to say the least, but I think it gets the facts completely wrong. There are pieces of legislation that protect the guaranteed minimum benefit and that make no changes to those in the current system. To suggest that simply the act of proposing to allow some worker to control 2 or 3 percent of what they earn every week in a private account means that somebody else's benefits will be cut is simply demagoguery.

The Senator from Pennsylvania addressed the question of pay me now or pay me later. To be sure, if you allow personal accounts to be set up, you won't have as much money flowing into the trust fund today, but you will earn a rate of return and increase the value of those accounts in such a way that the total value of all the assets in your retirement system will be greater in the long run.

I think the Senator who worked on Wall Street understands that fact. I think anyone who has an IRA or a 401(k) understands that fact.

The legislation that has been introduced in a bipartisan way in this Chamber and in the House has been scored by the Social Security actuary to increase the solvency of the Social Security trust fund over that 75-year window.

That may be a frustration to those who vehemently oppose personal accounts in any way, shape, or form, but it is a fact. The Social Security actuaries are not partisan in this debate.

The PRESIDING OFFICER. The next question is from the Senator from Pennsylvania.

Mr. SANTORUM. Thank you, Mr. President.

I reiterate the first question which the Senator from New Hampshire offered, which is, What specific plans are out there? But I am not sure we are going to get an answer to that tonight. I will go to a second question.

We hear a lot, as I mentioned in my remarks, about their guarantee, and I know both Senators know about the Fleming v. Nestor case in 1960--a U.S. Supreme Court case that said that Social Security benefits are not guaranteed. You do not have a private property right to Social Security benefits. It is a political promise.

We saw evidence of that in 1977 and 1983 with those amendments to the Social Security Act which reduced benefits. So we are talking about this great guarantee, this incredible, infallible promise. Yet we have seen cuts in Social Security by previous Congresses.

My question is, Can the Senator tell me that the 1977 and the 1983 amendments are not examples of what you would call a guaranteed benefit and how those reductions in benefits square with you telling the American public that there is a guaranteed benefit?

Mr. DURBIN. Mr. President, let me just say that we can argue for some time as to whether this is a guaranteed entitlement. This much I can guarantee you. In a nation where 40 million people rely on Social Security for their checks, and where their families rely on receiving them, trust me; the people who are elected to this Chamber and the House of Representatives will be responsive to guaranteeing the future of Social Security . There is much less political risk when it comes to the future of Social Security than there is market risk when you decide that you are going to take a chunk of your savings and hope that you happen to retire at the right moment when the stock market is on the up tick rather than the down tick. The market risk is far greater than the political risk.

We might be able to suspend the rules of political science in this debate. We certainly cannot suspend logic, common sense, and mathematics.

If you wonder why this Nation is in deficit, listen to the argument on the other side. They will allow workers to opt out of Social Security and go into personal accounts and argue here calling this demagoguery when we raise the question that even if these workers opt out, that did not endanger Social Security . That doesn't add up. Once the workers opt out, there is not enough money to make current payments to retirees. They cannot explain to you how they will make up the difference. That is the problem--if we are going to maintain benefits, make it voluntary and not penalize current Social Security retirees. You have to explain to us how we make up the difference.

The PRESIDING OFFICER. The next question is from the Democratic side.

Mr. CORZINE. Thank you, Mr. President. Let me say on the constitutional question, the Court rules. But if there is a law that has to be changed, it has to come before this body. The political risk is no higher, in my view, than the market risk, being one who has lived with market risk for a fairly substantial period of my life and understanding that those risks are real and tangible. We have very real and tangible examples of that in the world today.

Look at the underfunded pension liabilities that are managed for some of those teachers and other people who have been talked about.

I think we are talking about two relationships. And I think when you are talking about--which gets to my question: Is $900 a month too much to promise our seniors? Is a guaranteed benefit of $900--and then adjusted for wage indexes so it is a standard of living and replacement wage--is that really too much? I ask the Senators.

Mr. SANTORUM. Only two-thirds of that $900--$600--is funded under the system we have right now. Three hundred dollars of that benefit--in other words, two-thirds of that benefit--over the course of the next 75 years is going to be funded. So the question is, How are you going to make up this difference? We have put forth a plan that reduces that unfunded liability, that makes up that gap substantially. If we were to do one of the plans, it makes it up completely.

So I suggest that we have plans on the table on how you get there. What we have not heard from the other side is how they get there. We have heard about the Bush tax cut. Are you suggesting we should increase taxes? What taxes do you want to increase to pay for these benefits? Are you suggesting that you don't want to increase taxes but somehow you want to reduce benefits? What benefits are we going to reduce to pay for this? But the fact is, you can't say to folks, It would cost this much--and it is not costing anything because all of the money stays in the system--to do their personal retirement account.

The question is, How do you make up the difference? Again, no answer and no ideas. We can do this or we can make up the difference or we will make sure the guarantee is good--but no plan and no ideas and no honesty to the American public as to what the particular solution is to solve this problem.

We have been courageous enough and bold enough to put forward a plan which, by the way, looks remarkably, in part, like the Thrift Savings Plan. Over these last few years, as bad as the market was, I didn't hear any Member of Congress or anybody else say we will abolish the Thrift Savings Plan. A diversified and balanced fund leads to good, long-term, stable investments over time.

That is what we are talking about. If it is good enough for Federal employees, it should be good enough for Social Security recipients.

Mr. SUNUNU. Mr. President, we always hear the opponents of personal accounts talk about risk. They love to talk about the fact that the market was down yesterday or the day before, or a particular stock didn't perform well. But, of course, nobody is talking about investing their retirement savings in the market the day before they retire. We are not even talking about investment for 1 or 2 years. We are talking about investing for 20, 30, or 35 years. Everybody knows the market goes up and down. But in a portfolio that is balanced and that is mixed with stocks and bonds, or with a blend of the two, the return over the long term will be strong but will be much higher than you could otherwise get from Social Security .

As a proof of that, I ask my colleagues if they can find any 20-year period in the last 100 years when this stock market didn't outperform U.S. Treasuries?

Mr. DURBIN. Mr. President, if you will look at the funds to invest in for individuals, virtually all of them suggest there is going to be an administrative cost in that instance. Most of them require a minimum investment of $2,000 because, frankly, the administrative costs can be so overwhelming. You tend to ignore that when you talk about the creation of personal accounts.

The British, in their experience in the United Kingdom, found that the administrative costs got out of hand to the point where they had to step in after several years. They also will step in because fraud was taking place. People were deluding future retirees into believing they were going to win in the market if they invested. That is a case in point where they tried to take the retirement savings in the United Kingdom using your model, and it didn't work.

The administrative costs were far greater than they anticipated. Also, there was a fraud involved.

Taking money and putting it in the stock market is an option every American should have. But to use the Social Security funds of an individual for that purpose raises a risk that is too great for some people.

If the Senator from Pennsylvania suggests in the Thrift Savings Plan, the Federal retirees--he did not say that is part of our retirement; that is our savings account, over and above our retirement. I support what Al Gore supported, as do most Democrats, Social Security Plus. That allows people to invest in the Social Security over and above their Social Security . That would give them a chance to take advantage of a good market and not be eaten alive by administrative costs or defrauded out of the basic needs to survive.

The PRESIDING OFFICER (Mr. BROWNBACK). The next question is from the Democrats.

Mr. CORZINE. If the Senator from Pennsylvania will wait, I will ask that question.

The question we have to get to when we are talking about an intellectually honest debate about Social Security and whether people have a plan--you can ask whether one wants to talk about capital gains, tax dividend exclusion, inheritance tax, as I suggested, as a means to fill some of this gap. Others may have other choices. It happens to be this Senator's choice with regard to these particular issues, but there are other ways to do it.

There is no answer that I am hearing from my Republican colleagues about where you get the $2 trillion that is going to finance these transitions to private accounts--there is none; I have yet to hear it--without entering into the general funds at a time when we already have denigrated our fiscal posture in this country to an extraordinary degree, switching from $250 billion surpluses.

The PRESIDING OFFICER. The time of the Senator has expired.

The Republican response.

Mr. SANTORUM. First, I say again what we are talking about here with this thrift savings model--and I know many have been critical of that. It was stated that administrative costs would eat up the benefit. The administrative costs on Thrift Savings was .05 percent, .07--only 50 cents on every $1,000 investment. So it will not eat up the benefits of investment. That is No. 1. It can be done in a way that makes sense from the market return point of view.

The question the Senator from New Jersey poses is, How are we going to finance this? Again, the cost of not doing something is much larger than the cost of doing something.

The Senator has said he would increase taxes. I suggest that is certainly not an option I support. But I certainly respect the Senator from New Jersey for coming forward and saying we can solve this problem by increasing taxes.

The Senator suggests we increase taxes on things having nothing to do with Social Security , which would separate the covenant we have had, that Franklin Roosevelt put forward, that the contribution would somehow tie directly to the benefit you receive. So we will finance Social Security with things outside of Social Security .

I am not suggesting that. I am suggesting we will finance the shortfall through allowing people to take a portion of what is already being paid. If we did it immediately, we could put a little over 2 percent into personal retirement

accounts and it would not affect anything. We have a surplus right now big enough to finance 2 or 3 percent of benefits going to that account. And over time, yes, we would have to come up with a mechanism in the short term to finance that 2 or 3 percent, whatever we put aside. Again, that would grow, so we would not have to do so over the long time.

The PRESIDING OFFICER. The time has expired.

The next question is from the Republicans.

Mr. SANTORUM. The Senator from Illinois mentioned the British system. The Senator from Illinois knows that the current Prime Minister of Britain, who is not a Conservative-Republican but a Labor-Democrat, if you will, has suggested expanding the personal retirement accounts in Britain, saying they have learned from their mistakes, the system has been improved and reformed, and he wants to expand the system to create more opportunities.

Just recently--in the last couple of years--Sweden--that conservative bastion in Scandinavia--has gone to personal retirement accounts. Most European companies have done so. Almost all of the South American countries have done so. Russia and China are going in that direction. The rest of the developed world has recognized the power of the market as a reliable tool to finance long-term commitments for retirement. Not here in America. Now, that is not a surprise because when we adopted Social Security in the late 1930s, we were one of the last to do so.

I ask the Senator who asked the question, if it is good enough for the rest of the world, why isn't it good enough for us?

Mr. DURBIN. I thank the Senator from Pennsylvania. It is rare of him to argue that the social programs in Russia and China should be emulated here in the United States.

It is interesting he would start with the British because they certainly have a much grander view when it comes to government responsibility on health care. If we were to guarantee the same type of health care protection to Americans as the British, not only for retirees but for the people, perhaps we could follow their logic in saying we may have failed over the last 10 or 15 years with their private savings accounts but people were not hurt that badly.

In the United States, if the experiment which the Senator has suggested with Social Security benefits tries and fails, we will have a generation or two of retirees on the hook, people who will not have what they anticipated they would have at the time of retirement. Then where does the burden fall? It falls on their children, first, to try to take care of their parents, and ultimately on the rest of the taxpayers.

This noble experiment, unfortunately, still has this big gap in it--$2 trillion--which the Republicans, suggesting privatization of Social Security , cannot come up with. Until they do, we are going to have to cut benefits. Cutting benefits is certainly not the answer to providing any kind of security for our retirees.

The PRESIDING OFFICER. The next question is from the Democrats.

Mr. CORZINE. I know my colleagues on the other side of the aisle are a little resistant to talking about avoiding making permanent some of the Bush tax cuts, but I wonder if there is any proposal at all, among the tax cuts that the President has laid down and we as a Congress have supported, that one would feel were appropriate to help finance this incredible deficit that I think we all agree is so important,

whether it is to fill that $2 trillion gap that you admit is there and will have to default. Is it looking at people who make more than $1 million? Is that worth trading off financing adequately the Social Security system? Is there no tax cut that has come through that would not be justified relative to the cost of having it?

The PRESIDING OFFICER. The time has expired.

Mr. SUNUNU. Mr. President, let me provide for my colleagues an example of what it is to answer a question: No. Of course not.

Cutting taxes is about strengthening the economy. If you have not noticed, we have been in a recession. When you are in a recession, you want the economy to grow because economic growth is the single most important thing to increasing revenues. If you want to balance the budget, you need to do two things: Strengthen the economy and strengthen revenue growth, and of course control spending. I am not willing to forgo the tax cuts that have strengthened the economy.

When we asked the Democrats in this Chamber tonight for a plan to strengthen Social Security , we heard no answer. When we pointed out that the long-term success of markets in generating economic growth and a strong rate of return is historically without argument, they ignored the question. When we asked about the success of personal retirement accounts in country after country around the world, they changed the subject and decided they wanted to talk about health care.

We cannot ignore the challenge before us. We have talked about substantive solutions here. The suggestion that simply because we are creating personal accounts means we have to cut benefits and the fact that the Democrats want to ignore the rate of return that strengthens the assets in the entire system is not reason not to take action.

We need to take action. We need to take up this challenge. And we need to be clear in the answers to the questions that are being asked tonight.

The PRESIDING OFFICER. This will be the final question that will be asked by the Republican side, which will have 1 minute.

Mr. SUNUNU. Mr. President, to that point about this suggestion that there is $2 trillion or $3 trillion--the number seems to get greater--in this so-called hole that does not exist because in the long run the system will be in better actuarial balance and because those assets will always be part of this system--to this point precisely, the nonpartisan actuaries of Social Security found that under a reformed system as proposed by the President's commission almost all workers could expect to receive higher benefits with a personal account plan, and the biggest increase in benefits would go to low-income workers.

In 2050, a low-wage retiree could expect 26 percent higher benefits from the commission's personal account proposal. Why, if this kind of a proposal is not just actuarially sound but better for low-income workers, are my opponents unwilling to even consider the idea of personal accounts?

The PRESIDING OFFICER. Two minute response from the Democratic side.

Mr. CORZINE. The Senator from New Hampshire makes the assertion that the Social Security actuaries have said that these plans--at least the President's commission's plans--will resolve the problem related to solvency. I, for the life of me, do not read those actuarial reports with that conclusion. In fact, the reason we are talking about the $2 trillion that seems to be missing--the magic asterisk--is that that, in fact, is talked about in these actuarial reports as a basis for cutting guaranteed benefits--25 percent for near termers, 45 percent for people out in that 50-year timeframe.

There is a missing hole. It is not enough just to assert that this is actuarially sound when that is not, in fact, what the reports say, at least as I read them. And I do not understand how we are going to get through those transition costs, which are repeated by almost any objective analyst I have heard talking about moving to privatized accounts.

That is why we so strongly stand and speak to guaranteed benefits because that is what the program is about. Yes, it has the political risk, but, as I think the Senator from New Hampshire knows, markets have a risk. They have real risk.

The Senator talked about a 20-year timeframe. I think if one looked from 1929 to 1949, you would find a 20-year period where returns were at best flat, if not diminished. So it is a very tough analysis to show that any individual retiring at any given point in time is going to be secure because the markets have produced a 7-percent return, which, if you look at 100 years or 50 years, may very well be the actuarial result. But you don't eat actuarial results; you eat benefits.

The PRESIDING OFFICER. There will now be a period for closing arguments on either side. Each side has 5 minutes in which to close their arguments.

Who yields time?

The Senator from Pennsylvania.

Mr. SANTORUM. Mr. President, I would like to be recognized for 2 1/2 minutes.

The PRESIDING OFFICER. The Senator is recognized for up to 2 1/2 minutes.

Mr. SANTORUM. Thank you, Mr. President.

I thank my colleagues for this debate and appreciate the opportunity to talk about this very important issue in a way that talks about the bigger issues of the day. I thank them for their engagement on this issue.

I end my part of this debate by going back to someone who is not necessarily a great favorite of mine but someone who knew a little bit about the Social Security system, and that is Franklin Delano Roosevelt. He was adamant--adamant--that we have a funded Social Security system. He did not agree with the pay-as-you-go system that was adopted in the late 1930s. In fact, his Secretary of Labor, Frances Perkins, said that he--``he'' being FDR--described building such a system, a pay-as-you-go system--which is the system today--as ``immoral,'' immoral because he understood that a pay-as-you-go system would pile up obligations on future generations of taxpayers.

That is exactly what is going on. Back in 1940, there were 40 workers for every 1 beneficiary. Today, there are 3.4 workers for every 1 beneficiary. In 20 years, there will be less than 2 workers for every 1 beneficiary.

This system is becoming more and more and more inequitable. Franklin Roosevelt was right when he said such a system is immoral. A moral system, which every other retirement system in America is funded upon, is a funded system, a system that says you will contribute so much, invest that money and have that money funded--real assets to pay benefits, not taxing future generations for accrued benefits of someone in the past.

We are in a system that has what I described. We will keep that system forever. But we should at least have a partially funded system that has some buildup of equities to be able to pay benefits for future generations. That is what we are trying to do. It is a more moral system. It is a better and more equitable system. Considering the changes in demographics that we have going on in this country, it is one that is necessary to avoid big cuts in benefits or big tax increases. It is the fairest, most equitable, just way--most moral way, according to Franklin Roosevelt--and we should adopt it.

Doing Nothing is a Bad Choice

In February of 2005, Senator Santorum spoke on the Senate floor about social security and the bad choice that the US would be making by chosing not to act on social security.

Mr. SANTORUM. Mr. President, first I thank and congratulate the Senator from Wyoming for his comments and also for his steadfast duty in coming here to make the case on a variety of different issues. This issue, in particular, Social Security , is a passion of mine, something I have worked on since I came to the Senate back in 1995. To me, this, as the Senator from Wyoming just said, is about a social compact from one generation to the next.

What we are in danger of doing is breaking that compact. We are in danger of telling the next generation of Americans who are entering the workforce that if we do nothing now, they, as a generation, will not get a positive return on their money. In other words, they will not get out of the system money they put in. To me, that is breaking this compact.

Every generation of seniors that has retired--in fact, those who are at or near retirement now--will, in fact, be able to get some measure of return on their money. Some earlier generations got very high rates of return. This generation's retirees will get a relatively low rate of return, but they will have invested money or paid into the program for people in the system while they were working and at least be able to get their money out of the system they paid in when they retire.

If we do nothing, which some have suggested we should do, which I think is irresponsible, but if we do nothing and simply wait for this generation that is in their twenties and thirties right now to retire, then they will be hit with one of two things. Either in the next few years--10 to 15 years--they will be hit with payroll taxes which will take their rate of return, if you will, from a bare positive to a negative or they will be hit with benefit cuts which, again, will take their rate of return--to get out of the system what they put in--and turn that into a negative.

That, in my mind, is breaking the compact. That is saying we have now turned Social Security into somewhat of just simply a tax from one generation and transferring it to another in an ever-increasing severity of tax. I think we can do better than that. That is what the President has suggested. He has come forward on an issue that he did not have to. This problem is not going to hit America until probably the midteens when we begin to go negative into the Social Security system. In other words, we will not have the amount of money coming in to pay for benefits. Borrowing will have to start to occur from the Government side to pay off these bonds that are in the Social Security trust fund in order to pay benefits. We will do something at that point in time because the deficit impact will be huge on the United States of America.

Social Security , instead of running $100 billion surpluses, will be running $200 billion deficits. Compound that with the growth of Medicare and other things we are seeing, and we will be in a huge deficit situation, which will cause either income taxes to go up, spending on the Government side to go down--which I think is highly unlikely--benefit cuts in Medicare and Social Security , or tax increases for Medicare and Social Security . Any one of those situations puts a burden on future generations either through benefit reductions or tax increases, which I think is breaking the compact that we have had since 1936 with our seniors.

I am hopeful we can find some bipartisan cooperation to look at the problem that is confronting us and say: We have an opportunity to give people hope, to give younger people hope that we can have a better system for them than currently is promised. What is promised for people in their twenties right now is basically 70 cents on the dollar of the benefits that are promised under the system. We can only pay for 70 cents on the dollar. That is what this current system provides.

So when you hear, ``We will keep these promises,'' I understand what keeping the promises means. It means higher taxes for future workers or lower benefits for future retirees. That is what happens if we wait.

So the idea that says there is no problem, understand what that means. That means future generations--whether it is 5 years from now, 10 years from now, 15 years from now--will be hit with higher taxes and lower benefits or some combination of them or maybe one exclusive of the other. But the bottom line is, it is going to impact adversely that generation of workers and that generation of seniors.

We can avoid this problem right now if we allow younger workers the opportunity to put some money away, invest in the American economy, the strength of the American economy, with broad-based index funds that invest in the growth and future of the American economy, which I think we all have

high hopes for and believe will be strong going into the future. We believe that is the most responsible way of avoiding this breaking of the compact with future generations, of saying to future generations they will not do as well as other generations of Americans have done under the current system.

So with that, Mr. President, I thank the other side for their indulgence and for the 5 minutes, and I yield the floor.

The Problems Facing Social Security

In April of 2005, Senator Santorum spoke on the Senate floor discussing the problems facing social security of lowering population and increasing lifetimes of those within the social security system. He participates in a discussion with a number of other Senators relating to social security.

Mr. SANTORUM. Thank you, Mr. President. I thank both chairmen for structuring this debate.

I am here to talk about the problems confronting the Social Security system. Then my colleague Senator DEMINT will talk about in more detail the solutions we are putting forth--many of us on the side of the aisle are putting forward.

The problem with Social Security is it is driven by demographics. Social Security is a pay-as-you-go system. That means the people working pay into the system for those who are retired. The system worked well when you had a lot of people working and only a few people retiring. But that has fundamentally changed over the years. As a result of that change, what you see in the red line is a dramatic increase in taxes--from 2 percent, which is what the tax was on Social Security in 1936, now up to 12.4 percent. It was 2 percent on the first $3,000 you made. That is the green bar. Now it is up to 12.4 percent of the first $90,000 you make. If you are working in the system now, that is when you start, high based; in other words, almost every dollar most people make is going be taxed at a very high rate.

This is a big tax burden on future generations of America as we stand today. But this tax right now doesn't pay for the benefits that are going to be provided for future generations. Why? Demographics are changing.

The first thing to happen is the fact that we are not having as many children. There are some exceptions to that. But we are not having as many children as we had in previous years. You see the baby boom generation, 6.3 children of women of childbearing age. We are now going to be below a sustainable birth rate. But for immigration, we would be losing population in America.

We see a gradual decline in the number of workers going into the system. That is No. 1.

No. 2, we have a problem--a good problem. People are living longer. Life expectancy at the time Social Security started was age 61. Truly, at the time, Social Security was an old-age program. What does that mean? It was for people who could no longer work. People didn't live to age 65 back in 1936. Now we are seeing seniors living to age 77, and increasing 1 month every 2 years.

What we are going to be asking future generations of Americans to do--these workers, fewer of them--is to support seniors up to almost one-third of their lifespan in ``retirement'' on Social Security .

People are living longer, fewer people paying benefits, and the final big blow to the demographic perfect storm is the number of people turning 65.

If you look back over the last 40 years, back and beyond 1982, the average number of people turning 65 in America was 2 million. When boomers start to retire, as you can see in the year 2011, the average going out over the next 40 years is going to be 4 million people. We are going to double the number of people retiring, and they are going to be living longer, and fewer people are coming into the workplace to pay for those benefits. As a result of this combination of three factors, we see this very important distinction. This is what is driving the personal accounts. That is what is driving the need for changes in the Social Security system. It worked fine when you had a lot of people paying 42 to 1.

Now we have a system where almost one person is paying for one person in retirement; it is two to one. Franklin Roosevelt would never design a system where workers were paying for retirees if you only had two workers paying for one retiree. No one designing a system today would design a system with demographics looking like this. In a sense you are almost paying for one person's retirement.

If you do that, anyway, why not have a personal account? Why not have the money paid to you and accrue that money over time, earn interest, have the miracle of compound interest being used to benefit from the taxes you are paying, instead of simply paying it to someone who is getting a transfer payment from you as you work today.

Franklin Roosevelt was right; Members never thought a Republican would say that. He was right to design a system such as this because it made sense. There was a very small burden on taxpayers. But we have changed. America has changed. And as a result of that change we need to look at the system differently.

Here is what happens now because of this demographic. Huge deficits in the future. Why? Fewer people paying and more people retired live longer. We have a short window of 10 or 12 years when we are paying more into the system than we need to pay benefits.

Why don't we lockbox that? How do you lockbox it? You can't lockbox it. Every Senator I have ever talked to says the money goes to pay for other Government programs. The answer is right. How do we lockbox it? Put it into personal savings accounts for their benefits in later years. That is how you lockbox Social Security today. That surplus that is there right now, put it into personal accounts. If we don't do that, we will have a cashflow problem in our ability to pay benefits. We cannot pay benefits with IOUs. The President showed that today in Parkersburg, WV. You have to pay benefits with cash. That is the cash deficits we will be running in the Social Security Program alone: $63 billion in 10 years, $250 billion cashflow. What does that mean? Someone will have to pay more in taxes in 10 or 15 years, someone will get less benefits, or we will have huge borrowing to pay current benefits--not doing anything about saving money, not doing anything about having a better benefit, just to pay the current benefits being promised and that we cannot deliver on.

...

The PRESIDING OFFICER. The minority is now recognized and has 1 minute to pose a question.

Mr. DURBIN. Mr. President, I will ask the first question. If you take up to 2 percent out of the Social Security trust fund--and it is a pay-as-you-go system--it is clear you don't have enough money to pay the benefits. The White House memo suggested that the way to deal with this is to reduce the amount of benefits paid to Social Security retirees. So I would like to ask my Republican friends if they support the White House memo that called for the price index that would cut benefits for Social Security retirees in years to come up to 40 percent.

Mr. SANTORUM. I would answer that and say that as you see, we have a surplus right now that can be used to fund these accounts for the next 10 years. After that we run a deficit in the Social Security Program, and we would have to come up with a way of financing that deficit.

What the President has suggested is that with Social Security , if we fix it the old-fashioned way, the way you did in 1938, which was increase taxes and cut benefits, workers would be paying more and getting less. With personal accounts, you have the opportunity of getting more because you use the compound interest, you use the miracle of the markets, and a balanced investment portfolio that is being used by pension funds all over the country to fund their accounts. And so what we would suggest is you initially use the surplus money and then you balance for future workers--again, no reduction in benefits today, but you balance for future workers.

What the President has talked about is a promise, a lower promise of benefits but a better opportunity for a return because you have the personal savings accounts which can exceed the promised benefit. So you have at least the opportunity to do as well as the current system promises but cannot pay--promises but cannot pay--and you have the opportunity of not having to have future tax increases, again, because you are able to compensate with the amount of money that is earned in these accounts, again, because of the compounding of interest and because of the diversified portfolio of investments you have.

To me, this is a balanced approach. It takes the good part of the Social Security system which is the security of having money go into this old system, keeps that in place for about two-thirds of the money, and a third of the money will be able to offset what would have to be a future reduction of benefits with the growth in the personal account.

The PRESIDING OFFICER. The time of the Senator has expired. The majority is now recognized for 1 minute to ask a question.

Mr. SANTORUM. I thank the Chair. I would like to ask a question about the 6 percent of the workforce that does not participate in Social Security . They are State and local workers. My first question is, Do you support requiring--just as you did in 1983 by requiring Federal workers to participate in Social Security --those State and local workers to participate in Social Security ? And if you do not, then why would you deny current workers who are in the Social Security system the opportunity to have a personal account like those workers do and allow them to continue to have their funded pension system and funded Social Security system, not allow current workers to have at least a partially funded Social Security system?

Mr. DURBIN. I might say that many of these people are teachers and firefighters and policemen who pay into their pension systems. They understood the arrangements when they went in and usually pay as much or more than Social Security requires. And for us to now change their system and bring them into Social Security fails on two counts. First, it doesn't solve the Social Security solvency problem. It is worth about 20 percent of the total that we are dealing with. And second, it is going to demolish their own pension plans. So you are going to find these people who are being interrupted into their current employment paying into pension plans who will now either pay more into Social Security and/or less into their pension plans.

Is that what we want to achieve? Do we want to take pension plans that people paid into for a lifetime and weaken them? Is that our way to solve the Social Security crisis? I don't think so. I listened to my friends on the Republican side likening the Social Security trust fund to Santa Claus, the Easter Bunny, and a file cabinet. They may not recall it, but it hasn't been that long ago, 6 or 7 years ago, when we generated surpluses in the Federal budget. The Social Security Program was stronger. We were borrowing less money from it.

Since President Bush arrived we have borrowed $800 billion out of the Social Security trust fund. The so-called file cabinet has been very generous to the President when he wanted to finance his tax cuts. If he hadn't given tax cuts to the wealthiest people, that file cabinet would have been full of money for Social Security recipients, lengthening the life of this program.

Also, this whole thing about the miracle of the markets,

I commend my colleague from Pennsylvania. Thank you for finally saying the words. You said we are talking about lower benefits but the opportunity to do better. That is what it is all about. So there is a guarantee of lower benefits to Social Security and the possibility of making more money on your investment.

Does the phrase ``past performance is no indication of future results'' ring a bell? That is what you see at the bottom of every ad for stocks and bonds and mutual funds. There is risk involved. Some may profit, others may not.

The PRESIDING OFFICER. The minority now has 1 minute to pose a question of the majority. The Senator from Michigan.

Ms. STABENOW. Mr. President, to follow up on the fact that we are hearing that there is no money in the trust fund, I am quite shocked to hear that because back in the 1980s, when the decision was made to come together, President Reagan, based on Alan Greenspan's commission, with Bob Dole and Tip O'Neill, they came together and on purpose designed a system to create surpluses for all of us baby boomers so there would be more dollars available in a surplus. And, in fact, what the President looks at, of course, just like when you go to a bank, you don't look in and just see dollars because there are investments being made and so on.

In the Social Security trust fund, individuals have been given secured bonds, the equivalent of a secured bond, an IOU, each one of us as individuals, with the full faith and credit of the United States behind it.

My question is this: We are giving those same kinds of assurances to those who buy our foreign debt, that we have the full faith and credit of the United States behind it. Would you suggest that we would pay China back and Japan back and our foreign creditors before we would pay back the people of America who have paid into the Social Security trust fund and have been given a secured IOU?

Mr. DeMINT. An excellent question. Those are legal obligations of the Federal Government which we have to honor. But the Supreme Court has said Americans have no legal right to a Social Security benefit. It is not their money. They don't own it. Unfortunately, the Social Security trust fund could not write one check to a Social Security retiree today. There is no money.

The only place the money can come from for the trust fund is if it comes back from the general fund to the trust fund. In other words, these cash deficits that we have talked about are the money that has to come out of the General Treasury, out of our education fund, our transportation fund, out of our military, in order to pay these IOUs that are in this so-called trust fund. And we don't have the money to do that.

And the talk of tax cuts hurting the Social Security trust fund, I am afraid, is ridiculous. The money was all being spent anyway. If we had not had a tax cut, more would have been spent. This year there is $75 billion in a Social Security surplus that we are spending.

My question to the Senator is, would the Senator support a proposal that actually saved the Social Security trust fund--that is all we do--save the money that is surplus between now and the time that runs out in 2017--and that is when the program is in trouble because that is when we have to start pulling money out of the general fund. But my question to both of my Democratic colleagues is, would they support a proposal to save the Social Security surplus today?

Ms. STABENOW. Mr. President, first I say to my friend and colleague, I am shocked to hear him say the people of America who have paid into the Social Security trust fund, the baby boomers, do not have a secured obligation by all of us. Is the Senator saying whether it is moral or whether it is legal, or is he saying we do not have to pay those benefits? He is actually saying that for the folks who have paid in as baby boomers that we are not obligated to pay those benefits?

Mr. DeMINT. That is what the Supreme Court----

Ms. STABENOW. I want to make it clear that we Democrats believe with all our hearts and souls we have a responsibility to pay and we will pay those obligations. To somehow say that it is different to pay a foreign country than it is to pay our own people the obligations when they are both secured obligations--this is not something written down on a little piece of paper. This is a secured obligation with the full faith and credit of the United States of America behind it.

So I ask my colleague in return, the simple thing to do here, the very simple thing to do would be to go back and vote again on simply making a policy statement. Why didn't my colleagues, either of my colleagues, vote to say ``put Social Security first,'' let's make sure we secure the obligation, keep it secure for 75 years, and then we can give 70 percent of the tax cuts; to say to those most blessed in this country, will you take 70 percent of $11.6 trillion rather than 100 percent so every single person cannot only have retirement, but have a disability policy, have survivor benefits?

Isn't that based on the great values of America in terms of paying into a system, knowing it is going to be there, working hard all your life and creating a way for people to care about each other and have community? To me this would be the easiest thing, and we could do it tomorrow if we had the votes to do it.

Mr. SANTORUM. Mr. President, I suggest the chart is not accurate. According to the Congressional Budget Office, extending the tax cuts would cost about .7 percent of the gross domestic product between now and 2050, whereas the Social Security deficit is 1.4 percent of GDP. Even if we repeal all the tax cuts, not just on the wealthiest but on everybody that we provided--that is child credit, that is marriage penalty, all of those things--if you take all of those tax reductions the President has put forward, they only make up half, according to the Congressional Budget Office, of the shortfall. It does not solve the problem, No. 1, and it also would be mixing apples and oranges.

We have never in the history of this system had a general fund tax transfer to Social Security . We have always funded Social Security within the Social Security system through payroll taxes, and I showed the increases of taxes over time. So now we are talking about something fundamentally different. We are talking about general fund revenue to fund Social Security . I do not think most people would see that as an insurance policy anymore. I think they start to see it as a transfer program looking more like a welfare program than what has historically been a social insurance program.

I do not think we want to head down that road. I think we want to keep the integrity of the Social Security system in place. That is why what we are suggesting, which is personal retirement accounts, where the money stays in the system--there is a lot of talk saying you are taking money out to put in these accounts. Remember, these accounts pay Social Security benefits. The money stays in the system. It does not come out of the system. It is used as a way of actually saving and capturing this money that right now is going to the Federal Government to spend, and in exchange we are getting this IOU.

Is the IOU an obligation to pay? Yes. How does the Government pay benefits? It pays benefits on the ability to take either tax revenue or borrow money and pay out benefits.

What we are suggesting with this chart of showing the cashflow problems is the deficits are going to be huge in the future, and that is going to be a problem of cash-flowing benefit payments in the future. It is not that we will not pay them; it is the deficits are going to be huge.

The PRESIDING OFFICER. The Senator's time has expired. The majority has 1 minute to pose a question to the minority.

Mr. SANTORUM. Mr. President, I ask either of my

colleagues, they have heard of the solution we have put forward, and I guess the question I have is, the Senator from Illinois suggested we can fix it the way we fixed it in the past. The way it was fixed in the past is we raised the payroll tax from about 10.4 percent to 12.4 percent and we raised the base and indexed it. And then secondly, we increased the retirement age from 65 to 67. Also, we taxed benefits for the first time on higher income individuals. We taxed benefits, increased the retirement age, and we raised taxes.

So my question is: If my colleagues do not want to go the personal account route, and if they accept at some point--pick the time--at some point there will be a shortfall in the system, how are we going to solve this problem? What tax are we going to increase or by how much? How much are we going to cut benefits, or how much are we going to tax benefits?

Mr. DURBIN. Mr. President, I think it is an honest question, and it is one we should face honestly. The last time we did, in 1983, Mr. Greenspan's commission came up with a list of recommendations and said: Choose from this chart and you will lengthen the life of Social Security dramatically.

Finally, we came up with a package, as the Senator from Pennsylvania described. A final vote in the House of Representatives included 81 Republicans voting with 158 Democrats. When it came to the Senate, there were more Republicans than Democrats supporting the Greenspan Commission proposal.

Yes, it gets down to basic math, and that is what troubles me about some of the statements made by my colleagues on the floor. It seems we think we can defy the laws of gravity and the laws of mathematics, and it simply gets down to this: If you want to strengthen a program such as this, you are either going to raise taxes, cut benefits, or find some new way to generate money into that system. My colleagues' program is not a way that puts money into the system. It takes money out of the system that then can be invested, that may have a good return, and if it has a very good return, you are going to be the winner. If it goes soft on you, if you happen to have a bad investment, you are a loser. You have fewer benefits under Social Security , less money from your investments. The risk is there.

But I think we need to get down to basics. The Senator from South Carolina suggested earlier that we might as well have tax cuts; otherwise, we will spend the money. But in the years when we were generating surpluses under President Clinton, before President Bush was elected, we had the largest increase in longevity in Social Security in modern history. In a matter of 3 years, as we are building up surpluses, not spending the money on tax cuts or new programs, Social Security is getting stronger by 8 years because we are being fiscally responsible.

Now with President Bush, with the largest deficits in the history of the United States brought on by a Republican President and a Republican Congress, Social Security is going the wrong way. The latest estimate says it has lost a year in solvency. They are connected.

You cannot take the money and overspend on programs or on tax cuts and not have a negative impact on the Social Security trust fund.

The PRESIDING OFFICER. The minority has 1 minute to address a question to the majority.

Ms. STABENOW. Mr. President, given the fact the President has indicated that the privatized accounts do not solve the solvency problem for Social Security , and given the fact that at this point colleagues have said they are not interested in putting Social Security first before additional tax cuts or new mandatory spending, what would my colleagues' proposals be at this point? Assuming the privatized accounts, as has been said--that is a philosophical difference; folks may or may not wish to privatize Social Security , but it does not add a day to the solvency of the Social Security trust fund.

I ask my colleagues, what would your proposals to protect and secure Social Security be for the future?

Mr. DeMINT. Mr. President, I appreciate the question because I actually do have a proposal. The fact is, if you add personal savings within the current system, you do fix the system permanently. The example on this chart is while right now the traditional benefits are paying 100 percent of our promise, and Social Security is a promise we need to keep--Republicans are committed to it, and the President is, and that is why we are looking at this house that is on a cliff. We want to figure out how to build a foundation that will keep it there for our children and grandchildren.

But if we allow personal accounts to work with the traditional system, when we get out to the year 2045, we not only have a permanently solvent system, we have one that is completely funded. In other words, it would meet the legal criteria of pension plans today.

I think all of my colleagues know that if corporate America asked us to set up a plan such as Social Security where we take workers' money today, we spend it all, and then we try to pay benefits out of future revenues, we would say no and we would probably put them in jail.

The plans we are talking about eliminate risks. They guarantee a future benefit and they are slanted toward giving the poor a better deal than they have had under the current system. We can design a Social Security system with personal accounts that eliminate risk and help the poor more than this current program and make the program permanently solvent.

My question back to the Senator would be, if the Senator is not for personal accounts--and I guess if the Senator is thinking the trust fund is going to pay benefits after 2017 even though last week the Social Security actuaries in their report said in 2017 payroll taxes will no longer be enough to pay promised benefits, so we will have to start pulling money from the general fund--my question to the Senator is if the Senator does not want to put personal accounts into the system, which we continue to stress we are not taking money out, we are adding new money to the Social Security system, we are saving it in personal accounts, we are welding it to the traditional system so that it will be stronger in the future, how is the Senator going to fix Social Security and pay benefits in 2018?

Ms. STABENOW. With all due respect, I am trying to figure out the new math in my head because the math that the Senator is talking about certainly does not add up to anything that I have seen. I would encourage folks who are watching to go to democrats.gov and use the calculator based on a 6-percent rate of growth that some financial folks put together where they can put in their date of birth and their average yearly earnings and find out for themselves how they would do. So far we have not found anybody who does better under these privatized accounts.

So when one is talking about what we ought to do, we need to start with the reality that the privatized accounts turn Social Security from a guaranteed benefit into a guaranteed gamble, No. 1. Secondly, there is nothing in what the Senator is talking about that has a relationship to what we are hearing about these private accounts.

I said to Secretary Snow in a committee hearing that I understand folks have to pay some of this back, so let me give an example. My daughter is 25. Let us say I give her $1,000. At retirement I tell her I want the $1,000 back, 3-percent interest, plus inflation. Is that what you are talking about? And he basically said yes. He did not disagree with that.

What we are seeing is a lot of hocus-pocus, a lot of where is the pea on the table moving things around. Of course, we have nothing specifically in writing yet from the President, which is one of the problems. But what we are seeing is a lot of talk that does not have a relationship to reality. The reality is that for the first time, in 2017 we begin to dip into the surplus that the Senator and I have been paying into as baby boomers all of our working lives. It is a commitment. It is a secured obligation and we are going to pay that to folks.

So the question is, what happens in 2052 when that surplus is no longer available? And if we can take privatization off the table, the Senator has very willing and able colleagues on this side of the aisle who want to work with the Senator to do those things that will secure it for the future.

The PRESIDING OFFICER. The Senator's time has expired.

The minority now has 1 minute to pose a question to the majority.

The Senator from Illinois.

Mr. DURBIN. President Bush created a commission that was stacked to be for privatization and personal accounts, but notwithstanding that the closest option to what the President has described, option 2 from that Commission, says in the first 10 years $2 trillion would be added to the national debt, in the second 10 years $4.9 trillion to the national debt. We have asked the administration repeatedly how are they going to deal with doubling America's national debt, doubling our indebtedness to the rest of the world. How can they believe America will be stronger in years to come when America's mortgage grows and America's mortgage holders, Japan, China, OPEC, Korea, and Taiwan, if they end their love affair with the dollar, will sink us by demanding higher interest rates to continue to finance our debt? How can this be fiscally conservative, I ask my Republican friends?

Mr. SANTORUM. I thank the Senator. This is really an interesting question, and I think everyone admits that there is a gap between the amount of money coming in and the amount of money that we are going to need to pay, and that is shown by this cash deficit. The fact is, we have to somehow or another in Social Security bring these two lines together. I think everyone would agree that is the option.

Right now, the shortfall over the life of the program is $11 trillion between the revenue line and the benefit line--the benefit line being up here, the revenue line down here. How do we bring those lines together, and how do we keep it solvent in the future?

What the President suggested is that if we do some--

let us assume it is all borrowing. We cannot make any spending cuts. We borrow up to--again, according to Alan Greenspan--$1 trillion to $2 trillion over the next 15 to 20 years to prefund Social Security , just like we prefund every other retirement system in America. In fact, they are required by law to prefund. We put the money into a diversified portfolio of investments and then that borrowing at the beginning creates an elimination of the $11 trillion long-term problem. So I would ask, is a $2 trillion investment now worth saving $11 trillion and making the system permanently solvent in the future?

I would answer that question with a resounding yes, and we put the Social Security system on stable funding forever and have it supported by ownership. Of course, we all know ownership has its privileges. One of the things is it can be passed to the next generation. One can do better than the current system promises and cannot pay for. Let me repeat that. The promised benefits we cannot pay for for my generation and for future generations of Americans.

What we want to give is ownership to future generations. We want to give them a good chance. This gamble--go to every union pension plan and tell them their union is gambling.

The PRESIDING OFFICER. The Senator's time has expired.

Mr. SANTORUM. Now my question. I asked this question, Senator DeMint asked the same question of both of my colleagues, and in neither instance did we get a response. So I will give my colleagues one last try. We asked, what would my colleagues do, what is their plan? I just want to get the transcript. In neither case did either my colleague from Michigan or my colleague from Illinois put forward specifically what increases in taxes do they recommend, what reduction in benefits do they propose, or how much are we going to tax existing Social Security benefits to make up the shortfall. Pick the date as to when my colleagues want to solve the problem, whether they want to wait until 2018 or 2042 or 2052, whatever the case may be. How are they going to solve this problem that at least some on their side of the aisle admit exists?

The PRESIDING OFFICER. The Senator from Michigan.

Ms. STABENOW. I will answer that for my colleague. As Senator Durbin just said to me on the side, it will not be privatization, and that is absolutely true. The American people, American families, can absolutely count on the fact that it will not be privatizing Social Security .

I would argue that the amendment we put up 2 weeks ago that simply says in the overall budget process, which is the value system for our country, the blueprint, is represented in what we do in our Federal checkpoint. The reality is, if we said we were going to take about 30 percent of what is being given over the next 75 years to those most blessed in this country, who are not worried about Social Security or Medicare or other kinds of opportunities, if we just ask them to take a little bit less, we would be able to secure Social Security for 75 years.

The other thing I would say about the issue of asking folks about pensions, we have all been told by our folks that retirement is about a three-legged stool: Social Security , pension, and savings. When it comes to savings, the risk is with us to save. I believe we ought to create more opportunities for that. When it comes to pensions today for workers, it is becoming more of a risk for the worker, not a defined benefit but a defined contribution.

The leg of the stool that has been secure , that we will fight to keep secure , is Social Security . I will never forget people working for Enron who came into my office 2 years ago, men in their fifties who worked all their lives and played by the rules and invested in their company, and one man with tears in his eyes said to me: Thank God for Social Security . It is the only thing I have left, and I never thought I would be in this situation.

Social Security is not a 401(k). It is not meant to be a pension system. It is America's families' life insurance policy, retirement disability, and survivor's benefits. It has worked now for years and years. The issue is how do we keep it going.

The PRESIDING OFFICER. The Senator's time has expired. The minority now has 2 1/2 minutes to close.

The Senator from Illinois.

Mr. DURBIN. Thank you, Mr. President, and thank you to my colleagues for taking time for this debate. I don't know how much we have lit up the place with our brilliance, but at least we did our very best to explain our points of view.

My colleague from South Carolina uses an interesting analogy of the house sliding off the hill. What they have suggested for that house that is starting to slide off the hill in privatizing Social Security is, before it slides off the hill, let's rip the roof off and start a fire in the kitchen. That is what privatization does. It doesn't create a stronger foundation for Social Security or for that house. It makes it weaker. It weakens Social Security , it cuts benefits, it drives more seniors into poverty, and it creates $2 trillion to $5 trillion more in debts.

If you want to make that house stronger, you have to backfill. You have to take the money you took out of the Social Security trust fund, money you took out for tax cuts, money you took out for things we couldn't afford to pay, money that has driven us into the deepest deficits we have ever seen in America under this President. That is how you backfill a foundation to save this house on the hill.

This debate is not about solvency. I think we know now that it is about the legitimacy of Social Security . I believe in it. Most Americans believe in it. It is a safety net we have counted on for almost 65 years and we will continue to count on.

But some of my friends on the Republican side see the world much differently. They have what they call the so-called ownership society. If you can just own it, then it has to be great. The model of the ownership society is, just remember, we are all in this alone.

But we are not in this alone. When Franklin Roosevelt created Social Security , he said the American family, all workers, will contribute through their payroll to make sure, if all bets fail, if your pension system fails, if you don't have enough in savings, you can always count on Social Security . That, he said, is what the American family needs.

They need it today more than ever. Pension systems are failing. These corporations are going bankrupt and throwing their shareholders and retirees and employees to the wolves. We cannot do the same with Social Security .

We ought to be able to stand together and make even difficult choices, as we did in 1983, when a larger number of Republican Senators joined Democratic Senators to find a bipartisan solution. Privatization is not the answer. Ripping the roof off that house and starting a fire in the kitchen is not going to make it any safer.

The PRESIDING OFFICER. The majority is now recognized for 2 1/2 minutes to close. The Senator from South Carolina.

Mr. DeMINT. Thank you again. I have enjoyed this tonight. Our talk, I guess, has gone in some interesting directions. My opinion is that Social Security is now too expensive to be just an insurance policy. When Americans paid $60 a year when the program started, yes, maybe it was an insurance policy. But today, with Americans averaging over $5,000 a year, for many it is their only savings plan. We cannot assume that the average American can save, after we take 12.5 percent of their income, additional money for retirement. We have to transform Social Security into a program that is not only secure but helps people create real savings to build a foundation of the program.

We are as committed to Social Security as you are. In fact, we wouldn't be here talking today if Social Security was secure . In fact, we see that it is running out of money, and the best way to fix it is to save some of the money that we are putting into Social Security .

I know there are plans that don't put people at risk because I have one and several other Republicans do. The plan I have introduced, which has been scored by the Social Security Administration, guarantees that no American will ever receive less from Social Security than is promised by the current system. It gives the poor larger accounts. It reduces the deficit for Social Security by two-thirds. It is a program that makes every American a saver and investor.

In this country today, with so many Americans who do not own anything, the opportunity to own something, and for that ownership to grow in wealth so that they can participate in a country as our economy flourishes, this is what Social Security can be in the future--just as secure , but it can contain real savings for the first time.

That is all we are asking today. Let's not cut benefits. We don't want to cut benefits. Let's not raise taxes. The problem with Social Security is that the foundation does not include real savings, and that is what we are proposing. Let's save Social Security with real savings.

The PRESIDING OFFICER. The minority is now recognized for 2 1/2 minutes to close.

Ms. STABENOW. Mr. President, I thank you and my colleagues very much. This is an important debate, and I appreciate being able to participate in it.

The President's privatized accounts, we know, will do three things, and that is why my colleagues and I are opposed to the privatized accounts.

First of all, they will greatly increase the national debt. In fact, do you know what folks are going to own with this? Seventeen thousand dollars more in debt for every man, woman, and child in the United States. That is what they are going to own. It is a lot more debt and a lot higher interest rates as a result of this plan. This is a bad idea.

The other thing that doesn't make any sense to me is that right now Social Security , which is retirement--and we do have a secured obligation to make sure that we pay it, but it is retirement, disability, and it is a life insurance policy. For that we pay about a half a percent in administration. On average we are told that it could be upwards of 20 percent, maybe 10, maybe 25, but we are told by the experts, 20 percent in order to administer an annuity or other kind of private account.

One of the things I find interesting is that among folks who are really pushing for this idea around here are those folks who would be paid to administer these accounts. I understand we now have something like five financial services lobbyists for every one Senator now here on Capitol Hill. Certainly there are folks who will make a lot of money from this, but it is wrong. This system works right now and we pay a half a percent.

The final thing I would say is it is estimated that the average person over 20 years, the average retiree, will lose $152,000 under the approach the President is talking about. This is wrong. This is not better for people. This is, in fact, worse.

I agree with my colleagues, and in fact let me also say I would welcome folks going to my Web site or any of my colleagues' Web sites to learn more about Social Security and the facts. We do need to be working together, not only to secure Social Security for the future past 2052, but we also need to work on those other ideas that create opportunity for people. One of my great concerns is that one-third of the cuts proposed by the President in the budget are in education. That is opportunity. That is the opportunity for ownership in the future. Why don't we focus on jobs and health care and those things immediately that need to be addressed?

We welcome those debates as well and we welcome working with our colleagues to keep the security in Social Security .

The PRESIDING OFFICER. The time of the Senator has expired. The majority has 2 1/2 minutes to close. The Senator from Pennsylvania.

Mr. SANTORUM. I thank my colleagues from Illinois and Michigan, and my colleague from South Carolina and my colleague in the chair on this debate. I think it was a good and spirited debate. Hopefully, we added a little light to the issue. Let me try to focus a little bit.

The Senator from Illinois used a quote: We are not in it alone. If you are a 20-year-old today, you are feeling pretty lonely because there are only two of you going to be paying for every one retiree. When FDR said that, there were 42, and he could say we are not in it alone. You are pretty close to being in it alone today, and that is why we need a different system, a system that prefunds, that actually uses the money, the surplus today, and saves it for future retiree benefits.

We are not taking money out of the system. We are putting the money, instead of for the Government to spend and giving an IOU to replace it, we are putting it in real assets that will be real benefits when real workers really retire.

Second, I want to comment on the cost of administering the program. The cost of administering the program has been estimated by the Congressional Budget Office, not at 20 percent--I can maybe understand the difference--it is 20 basis points. That is .2 percent, not 20 percent. It is 20 basis points, which is .2 percent of the amount of money. So I believe that is a dramatic difference. It is actually less expensive to administer this system than to administer the current Social Security system.

The other thing I would like to mention, if we can go to the next chart, three times we asked the question, How are you going to fix the Social Security system? The only answer we got was to repeal the Bush tax cuts which, of course, does nothing to the Social Security system because that money is not paid to the Social Security system. So repealing the Bush tax relief would simply put more money in the general fund, but it would have no impact at all, no actuarial impact at all on the Social Security system. So when the Senator from Illinois said we had to make difficult choices in 1983, that may have been the case in 1983, but so far we have not heard word one of the difficult choices that the other side would like to present to the American people.

Several Republicans have come forward with plans, plan after plan after plan of details of how we are going to save this program, and all we have gotten from the other side is sniping at the plan that we put forward and no answers. If we do not solve the problem----

The PRESIDING OFFICER. The time of the Senator has expired.

Mr. SANTORUM [continuing]. Of what the promised benefits are, we are looking at taxes of 18 to 20 percent if we wait until 2041 or later. That is not a plan fair to future generations.

Social Security Guarantee Act of 2005

On November 15, 2005 Senator Santorum spoke on the floor of the Senate with Senator Jim DeMint of South Carolina about the Social Security Guarantee Act of 2005. He responds to objections by Senator Max Baucus and Senator Harry Reid.

Mr. SANTORUM. Mr. President, Senator DeMint and I are here tonight to talk about an issue that has drifted to the back burner of American political discourse. It is unfortunate that it has. It is an issue that both the Senator and I, and I know many others on this side of the aisle, have worked to accomplish diligently now for many years, for me since 1995, trying to grapple with the shifting demographics and the changes that are coming to this country when it comes to the issue of entitlement programs. 

There is no more important entitlement program that we have to preserve and protect and save than the Social Security system. It is the bedrock upon which our seniors have the security to meet the needs they have in their later years in life.

We understand this demographic timebomb of the baby boom generation, people living longer, lower birth rates, all of those things come together to create a demographic perfect storm that causes the Social Security not to be able to pay for the benefits promised to future retirees. We have tried to put forward solutions. I put forward solutions. Senator DeMint has put forward more than one solution. Other people on this side of the aisle have done so. The House has done so. The President has put forward ideas on how to address this problem. We have done so because we believe it is important for us to step up to the plate and be serious about addressing this serious concern that millions of Americans who are retired, near retirement, and even younger Americans have about their ability to collect their Social Security check.

We fought hard to bring this debate to a head on the floor of the Senate. Unfortunately, we have not succeeded. We have not succeeded because we have been met with a partisan obstructionism that is as rock solid as the marble before me on the rostrum.

The fact is, we have seen no cooperation at all from the other side of the aisle. Unfortunately, we have not seen any attempt to come to the table and try to solve the problems of Social Security that all sides of the spectrum admit is looming for future generations of retirees. That is unfortunate. It is unfortunate because we have had an opportunity this year to address an important issue before the crisis strikes.

One of the great complaints that Americans have about Congress is that we wait until the problem is almost overwhelming us before we do anything to react to it and therefore end up with less-than-optimal solutions.

We have an opportunity now, as the crisis looms but far enough away, to be able to address it in a way that can spread out the burden and create better opportunities for future generations of retirees, and just as importantly, future generations of taxpayers and American families trying to keep the quality of life and, in fact, improve the quality of life that we have in America. But we did not get that accomplished.

What Senator DeMint and I have decided to do, in cooperation with our leadership in the Senate, is to try to take a first step. Using football analogies, which I know the Senator from Virginia, Mr. Allen, loves to use, we tried to throw the long ball and march down the field, but we are going to try to run off tackle here and see if we can pick up a yard or two to move the ball down the field to get to the goal of providing retirement security for future generations and saving and strengthening the Social Security system.

The first play in trying to accomplish that is legislation that I have introduced called the Social Security Guarantee Act of 2005. As I mentioned before, Americans work very hard and pay a lot of money. It is the biggest tax that most Americans pay. The overwhelming majority of Americans, the biggest tax they pay is the Social Security tax. From the tax they pay, they expect that benefit to be there when they retire.

The point is, for those who are at or near retirement, the answer is that it will be there. In fact, in looking at the long-term problems of dealing with Social Security, there is nothing this Congress should do to affect the near-term retirees and those who are retired today. We have said over and over again, those of us who have been advocates for strengthening the system, whether it is the President or Senator DeMint or Senator Frist or others, that we do not want to do anything to impact those who are near-term retirees and those who are already in the system.

The reason is twofold. No. 1 is we do not have to. The system is solvent. In other words, there is more money coming in than we need to pay out over the next 15-plus years. Therefore, we do not need to have any kind of fixes for those in the short term. The problem is out in the long term.

The second reason is a matter of fairness and equity. To change the game literally before someone crosses the finish line, to move the finish line--or even the people who have already crossed that finish line and have ended up in Social Security, to move it back would simply be inequitable. People would not have the opportunity to plan for that, and it could be very disruptive to their retirement.

So what Senator DeMint and I have suggested in the Social Security Guarantee Act is that we put in writing in the statute what everyone has sort of agreed to in casual conversation and even beyond casual conversation. If we can put that chart up, the Senate recently, March 15 of this year, all 100 Senators, including every Senate Democrat, in a rollcall vote, voted for the Graham-Santorum amendment to the budget resolution. If we look at the language, I will point to the part A. It says that Social Security reform ``must protect current and near term retirees from any changes to Social Security benefits.''
 

So what the Social Security Guarantee Act does, which I am proposing, is to actually make it a Federal law, not just a resolution, something that we all think is a good idea, which is what a resolution is, but actually put legislative language in place, put something in law that says that your benefits are guaranteed, your cost-of-living increases are guaranteed in the Federal law which, contrary to what most seniors believe, is not the case. There is a Supreme Court case from 1960 which says that there is, in fact, no legal right that you have.

Obviously, there are claims that can be made in the political process to those rights, but as far as legal rights in the statute, there is no guarantee to that cost of living.

It would be vitally important for us, as we head into hopefully a longer term and more complete look at the Social Security system and saving that system, that we start from the ground that we are not going to affect anyone who was born before 1950. That is basically people 55 and older in our society today, we are going to say, If you were born before 1950, you are off the table; we are not going to discuss it. We are not going to play politics with you. We are not going to scare you. We are not going to threaten you. We are going to take these benefits and we are going to enshrine them in the law to protect them from anyone playing politics with them or even trying to include them in any kind of reform down the road.

This is a first step. It is a small step, but it is an important one for our Nation's seniors. I am hopeful we will be able to get that done maybe even this evening.

I yield the floor to the Senator from South Carolina.

The PRESIDING OFFICER. The Senator from Montana.

Mr. BAUCUS. Mr. President, I am not going to spend much time, frankly.

(Several Senators addressed the Chair.)

The PRESIDING OFFICER. The Senator from Pennsylvania and the Senator from South Carolina control the time.

Mr. BAUCUS. Mr. President, I ask the Senator from Pennsylvania if I may have 5 minutes. I have to leave very quickly.

Mr. DeMINT. We have been waiting for several days to do this. We will keep the time.

Mr. SANTORUM. I would be happy to yield. I will yield 5 minutes to the Senator from Montana, the

ranking member of the Finance Committee.

The PRESIDING OFFICER. The Senator from Montana.

Mr. BAUCUS. Mr. President, I am not going to spend a lot of time on this because this is just ``kabuki'' tonight. Everyone knows this is not a serious effort. Everyone knows that this is an attempt, frankly, to make a statement to the press and the people back home. It is very disingenuous, in this Senator's view, because it is not serious, and it is playing with the lives of a lot of senior citizens who wonder what is going on.

This consent asks the Finance Committee to be discharged of the legislation. I do not understand that at all. If this is such an important issue, why doesn't the Finance Committee deal with that? I think the answer to that is because there are not the votes in the Finance Committee. The majority of Republicans would not support this in the Finance Committee. They know privatization of Social Security is one of the worst ideas that has come out of this body by any group of Senators in a long time. Why? The DeMint bill increases the Federal debt held by the public by $1 trillion in current dollars in the first 10 years. It increases the Federal debt by $1.7 trillion the first 20 years. By 2080, the debt will be higher under current law by more than $800 billion. So it is a massive increase in the Federal debt.

Secondly, it will cause a huge increase in the annual budget deficits for the same reasons.

Third, what does it do? It means a reduction in benefits that would otherwise go to Social Security recipients. Why is that? Because the money taken out of Social Security would not be available to pay for Social Security benefits. That will reduce the benefit payments out of Social Security.

The argument is private accounts would offset that. All studies show, at best, that is barely a wash, probably worse than that because the private accounts would be subject to the vagaries of the markets. Over the long haul, seniors would not be doing very well at all.

Add to that, it usually creates a huge risk. More than that, it creates a very large administrative cost not recognized by the authors.

Jason Furman, from the Center on Budget and Policy Priorities, estimates the plan would have administrative costs of at least $25 billion over the first 10 years. That is above what is paid now in the current Social Security system.

Also, the DeMint proposal would treat individuals with different years of birth in different ways. It would cause an inequity among benefits of Social Security recipients.

So I am not going to say much more about this. It is flawed. Frankly, it is a phony gimmick. One has to call a spade a spade around here sometimes and not be too deferential, not be too nice, too courteous, but to call it a spade. This is a fraudulent effort to play with people's lives, and at the appropriate time, it will be appropriately objected to.

Mr. SANTORUM. Mr. President, while I was trying to be courteous in yielding to my colleague, I want to make a couple of comments about what the Senator from Montana said. I would hope he would go back and read the Social Security Guarantee Act of 2005 because it does not do anything the Senator from Montana spoke of. What this bill simply does is guarantee benefits in the law for people who were born before 1950. It does not set up any kind of personal account system. It does not do all of the things that the Senator from Montana said.

The Senator from South Carolina will talk about his Stop the Raid bill, which simply takes money out of the surplus and puts it into accounts for holders to make sure that that money is spent on Social Security benefits but no administrative costs. All the things the Senator from Montana talked about do not apply to either one of our bills.

I understand there may be an objection, but I would caution the Senator from Montana that the objection cannot be under those terms because the objections that the Senator from Montana cited are not in either one of the bills. I yield to the Senator from South Carolina.

Mr. DeMINT. I say to Senator Santorum, as he can tell, I was originally hesitant to yield to our distinguished Democratic colleague, but I am now so grateful that the Senator did yield because it made the case of why we need to guarantee benefits and why we need to stop the raid on the Social Security surplus.

Practically all the information that we heard is untrue as it relates to my bill, but the misleading information is the best case for the Guarantee Act that Senator Santorum has proposed. It is so important, when people are getting untruths and so much misinformation that is intended to confuse them, that we reassure the American people that regardless of how we change Social Security to benefit future workers, that we are not going to change anything about the benefits of anyone who was born before 1950.

I am honored to be presenting these ideas with Senator Santorum today. There is no one in this Congress and probably no one in this country who has done more to protect Social Security for this generation or the next than has Senator Santorum.

I am also supporting this Guarantee Act because Americans know that we have a problem with Social Security. It is disingenuous for any Member of the Senate to suggest otherwise. So we must guarantee in the face of these folks knowing we have a problem, but we also must begin now the process of fixing the Social Security system so it will be there for younger Americans. We can do that by, first, stop spending Social Security on other things. That is what we are doing right now as I speak.

Americans know why we have a problem with Social Security. Maybe Senator Santorum can add more later since he has done so many townhalls. There are many Congressmen

and Senators who have gone out to talk about Social Security, and they have had many people stand up and say, Social Security would be fine if you folks in Congress would stop spending Social Security on other things. They figured out that every dime that comes in for Social Security that is not needed for today's retirees is spent on other programs.

If we could look at the next slide, since the mid-1980s we have had $1.7 trillion of Social Security taxes that have come in that were not needed to pay benefits. Our colleagues will say that that is safe and sound in the trust fund but, frankly, if there is one fact that is true on this floor tonight, it is that every dime has been spent on something else. Not one penny has been saved for Social Security for today's retirees or for tomorrow's retirees.

What we are proposing is to stop that raid on Social Security. We are not proposing a comprehensive change in the Social Security system. In fact, Americans would see no difference in the Social Security system. What we would start doing is to take the money that is not needed for Social Security today and save it so that it would not be spent on other things.

Here is the proposition: Between now and 2017, we are going to spend another $775 billion of Social Security money on other things unless we pass this Stop the Raid on Social Security bill. We can see it year to year. This year it is almost $70 billion that came in for Social Security that was spent on other things. Next year it will be well over $80 billion, and it will continue until it disappears in 2017. At that point, there will not be enough Social Security taxes to pay benefits, and we will have to start moving money from the general fund to make sure every American gets their Social Security check.

The Stop the Raid bill would take all of this money, $775 billion, and put it in Treasury bills so that it could not be spent on other things.

Instead of the government owning it, the people who send the money for Social Security would own it.

My Democrat colleagues oppose ownership. They do not want the American people to own their own Social Security system. They want the Government to own it, and they want the Government to continue to spend it on other things. We want to stop that raid on Social Security. The Democrats, as we have heard tonight, will say that if we stop spending this Social Security money on other things, it is going to increase the deficit. Again, that is not true. All it does is make us honest with our accounting.

Right now, the $1.7 trillion we have already spent, and this 775 billion additional dollars is spent without any recognition that we are creating a debt. If we save this money in Treasury notes where there is no risk to the American people, we have to start counting it as debt if we continue to spend it. This is a secret slush fund that Congress has used for many years--$1.7 trillion plus $775 billion. Congress, every year, spends this money on other things and does not count it as debt. If we start saving it for Social Security, it will be a debt if we continue to spend it.

Only in Washington--and I am afraid only my Democrat colleagues--could say that saving money creates a debt. I am afraid only a Democratic colleague at this point could say that saving $775 billion of Social Security money for Social Security actually weakens the program. Their intent is to oppose ownership by the American people who should own Social Security. Their intent is to spend this $775 billion on something else.

I have heard my Democrat colleagues over the last couple of weeks talk about stopping the raid. They want to stop the raid by increasing taxes. They have said that they stopped the raid. That has never happened, and that is not true because even when we were in surpluses as a nation a few years ago, every dime of Social Security was spent. Some of it was spent to pay down debt, but it was all spent. And not one penny, even when the Nation was in surplus, was saved for Social Security. We need to stop that practice and be honest with the American people.

My Democrat colleagues have said interesting things about stopping the raid. Our distinguished minority leader has said he supports the raid. He called stopping the raid a ``bad idea'' that will ``threaten benefits and increase the debt and weaken Social Security.'' Get that. We are going to save Social Security for Social Security and that weakens Social Security. It is amazing.

Let's look at another comment from Democrat leaders. This comes from our colleague in the House, Minority Leader NANCY PELOSI:

There is nothing wrong with Social Security lending money with the prospect of returning it.

One more quote, and then I know Senator Santorum has probably some questions for me. This is from our colleague, CHARLIE RANGEL, the House Ways and Means ranking member. When talking about the raid, he says:

There is nothing wrong with that.

But let be read his whole statement. He said:

Would you have any problem if you put your money into a bank and they just took your money and invested it and you went to the bank and they gave you your money when you needed it? There is nothing wrong with that.

The problem is, that is the core of the misinformation we are hearing from Democrats, that our money from Social Security is actually saved in a bank; that it is actually there. But that is not true. It is not fair to tell the American people that it is true. There is no bank. There is no money. We need to start today to stop the raid on Social Security money.

Mr. SANTORUM. I ask the Senator from South Carolina, one of the things I hear, and I think you were alluding to this, is that some people believe that they actually have an account at Social Security where this money they contribute is sort of there--that is maybe what Congressman Rangel was alluding to--for them to sort of pay their benefits out. Is that the fact, first and foremost? Then I will ask my followup.

Mr. DeMINT. I have had people back home, when we are talking about saving Social Security and putting it in personal accounts, tell me that is what they thought was already happening. They thought we were saving their money because we talk about a trust fund. But the more people find out about the truth, when we say there is not any money in the trust fund, first people smile and think I am not telling them the truth. We need to tell Americans the truth.

Mr. SANTORUM. The Senator got into something that is a rather complex concept, but it is really important for understanding the difference between what he wants to accomplish and what goes on in the current system. That is, what your bill does is it creates an explicit debt. How is that different? What is the difference to the average person, that they have a specific account with that money as

opposed to just sort of the general money that is owed to the Social Security trust fund? What is the difference?

Mr. DeMINT. Right now the largest tax most Americans pay is the 12.5 percent for Social Security. That is thousands of dollars for the average American family every year. It comes into the Social Security system. It is credited to a trust fund. Then it is spent either on Social Security benefits or spent on other things.

We have made Americans believe we are saving that money for them, but it is all passing through. The only thing that is in the Social Security trust fund is IOUs. Our President, who has been a leader on this issue, actually went and opened the file cabinet where these IOUs are.

The problem, Senator, as you know, is we cannot pay future benefits from IOUs. But we can from real money if we start saving it. There is nothing risky about saving this money in Treasury notes so it cannot be spent on other things. But you asked an important question. Right now, the Government owns the Social Security benefit and politicians control it. If we start saving Social Security in personal accounts--we are not talking about taking it out of the Social Security system. It is still just as much a part of the Social Security system as what we have today, only it is real money and people own it, which means they have a legal right to it, which they do not today. In the future, politicians cannot build their whole election campaign around frightening seniors that we are going to take their Social Security.
Mr. SANTORUM. What is the impact? Let's take it a step further. Let's assume we were successful tonight in getting the Stop the Raid bill passed and every American would have their own personal retirement account with the money from the Stop the Raid bill, and 15 years go by and that money has built up. What is the practical effect on the average citizen of what your bill does versus the current system?

Mr. DeMINT. This bill alone would not change anyone's benefits. In fact, it includes, as yours does, a guarantee. People will continue to get the benefit they have been promised. Only part of their benefit would be paid by the traditional system and part from real money. Our hope is, as you mentioned before, this is a first step. We need to move past the first step of saving the $775 billion and go back and get the Government to pay back what they have already borrowed from Social Security, invest that in those accounts and let them earn interest, and it grows. It is a large step toward solving the future problems of Social Security.

It is going to take several steps to fix it, but this is the most important first step. If we cannot stop spending Social Security on other things we cannot go to the American people and honestly tell them we have a solution, not if we cannot even stop spending it on something else.

Mr. SANTORUM. I would just ask the Senator from South Carolina, this bill has something to do with something else I hear a lot about, which is honest accounting. One of the things I hear a lot of my colleagues on the other side of the aisle talk about is that the deficit is really much bigger than the deficits reported because the Social Security surplus hides the deficit.

Will your bill cure that problem?

Mr. DeMINT. Only if we slow our spending as a government.

Mr. SANTORUM. Would it cure the problem of hiding the deficit?

Mr. DeMINT. It is definitely an honest accounting bill. Right now this money goes on the table and the Government secretly sweeps it away and spends it.

Mr. SANTORUM. And lowers the deficit as a result, correct?

Mr. DeMINT. Right. We are going to take it off the table and save it. So the whole point is, if you want to keep spending that money as a Congress, we are going to have to recognize it as debt and admit to the American people that we are spending more than we told them we were spending.

Mr. SANTORUM. So this is not just a Stop the Raid bill. This is a truth in accounting bill? This basically says: Here is how much money we are taking in. Here is the obligations that the Federal Government has with this money we are taking in. In fact, we are taking that obligation and realizing it, in other words putting it into an account that actually could pay that obligation. Is that correct?

Mr. DeMINT. Exactly right. We will also be honest about telling the American people we have not been saving the money, but we are going to start saving their money and we are going to figure out a way to go back and get what has been borrowed from Social Security and put it back so that Social Security will be there for your children and mine and our grandchildren.

Mr. SANTORUM. I thank the Senator from South Carolina for, not just the work he has done on the Stop the Raid bill, but I want to thank him for the other ideas he has put forward. He is one of three Senators on this side of the

aisle who have put forward comprehensive bills, along with Senator Sununu and Senator Hagel. They have put forth ideas to try to move the ball forward, down the field substantially. I will not speak for the Senator from South Carolina, but I think what he has realized is that the opportunity for us to do that this session of Congress is probably dramatically diminished. So we are both looking at trying to move the ball forward, trying to take a vital first step, or first two steps, in assuring the American public that those who are the most vulnerable, their benefits are safe; and for those concerned about the resources being there to be able to pay benefits in the future, we are going to make sure that money is set specifically aside and given to them to make sure that money is there and promised by the Federal Government to pay in the future.

By the way, the Senator from South Carolina is not the only one who has introduced comprehensive legislation. Over in the House, Congressman Kolbe, Congressman Johnson, Congressman Shaw, and Congressman McCrery on our side of the aisle have put forward comprehensive proposals on dealing with the long-term issues.

So we have made the case. We have worked hard to try to move this issue before the American public but have met a stonewall here on the other side. I suspect, unfortunately, tonight we will probably continue to see that stonewall appear when we ask for unanimous consent to move forward on this legislation. I will certainly make my commitment that this is an issue I feel very passionate about. This is a issue that is important to my State. We have the second largest percentage of seniors in our population. We have a little over 16 percent of our population who are people over the age of 65. That is second only to the State of Florida.

It is important for my State to have the peace of mind for my seniors. I always say we may have fewer as a percentage of our population, we may have fewer seniors than the State of Florida, but my seniors need Social Security more than those in the State of Florida because all my rich seniors moved to Florida. The folks who are still in Pennsylvania are getting through those tough winters, in some cases they need and rely on their Social Security benefits.

So as a Senator from Pennsylvania I will tell you that this is a high priority for me, to make sure that not only this generation of seniors gets the benefits they deserve but future generations of seniors get those benefits as well. I think this one-two of the Social Security Guarantee Act and the Stop the Raid bill will go a long way in helping create the atmosphere to get real long-term responsible reform of the Social Security system for future generations in place so they will have a strong and solvent system going forward.

I yield for the close to the Senator from South Carolina.

Mr. DeMINT. I say to the Senator, I know you want to make a motion. But it is important that you and our colleagues know what we are asking for. We are not asking to pass a bill tonight. We are asking to move the bill into the debate process so that the American people can find out more about where we are and how this Guarantee Act and this Stop the Raid Act can secure their future.

I yield back to the Senator to make the motion.

Mr. SANTORUM. I thank the Senator from South Carolina for taking the time to have this important debate. I appreciate the indulgence of the Democrat leader for his time.

What this unanimous consent will do, as the Senator from South Carolina has just stated--it will not be to pass the bill tonight. This is not an idea and we are just going to have unanimous consent and pass the bill. What we want to do is engage in a real debate about these two very important issues. So we are going to ask consent, at the time to be determined by the leader, to have a full debate. I am suggesting in this unanimous consent request that we have 10 hours of debate on both of these bills before we move forward and pass them, and obviously here in the next few weeks the chances of finding time to do that is going to be pretty limited. We will be happy to schedule it in January or February of next year so there is plenty of time for the American public to participate in this debate and to have a real discussion about whether we want to protect the benefits that are promised to those who are born before 1950 and whether we want to create the opportunity for honest accounting and for stopping the raid on the Social Security system, to make sure that money stays in the Social Security system and is there to pay benefits for the people who pay money into the system.

That is what this bill does. It stops the raid, it stops that money being used and taken by the Federal Government to pay for other programs and keeps that money--it is vitally important to understand--keeps the money in the system but creates an explicit debt of the Federal Government that

[Page: S12832] GPO's PDFmust be paid. It is a public debt. It is not one of these privately held little debt transfers from one pocket to another but an explicit debt that is owed to an individual. That is about as explicit as you can get. It is a debt that has your name on the assets--Treasury bills. It is vitally important to have that ownership because it guarantees a legal right to a benefit for those taxes that are being paid in excess of what we need to pay for the Social Security system.
I see the Democrat leader is here. I will propound the unanimous consent.

UNANIMOUS CONSENT REQUEST

Mr. President, I ask unanimous consent that at a time to be determined by the majority leader after consultation with the Democratic leader, the Finance Committee be discharged from further consideration of S. 1750, the Social Security Guarantee Act of 2000; provided further that the Senate then proceed to its immediate consideration and there be 10 hours for debate equally divided in the usual form, no amendments or motions be in order, and that following the use or yielding back of time, the bill be read a third time, and the Senate proceed to a vote on passage of the bill, with no intervening action or debate.

I further ask unanimous consent that following that vote, the Finance Committee be discharged from further consideration of S. 1302, the Stop the Raid on Social Security Act of 2005, and the Senate then proceed to its consideration; provided further that there be 10 hours of debate equally divided in the usual form, no amendments or motions be in order, and that following the use or yielding back of time, the bill be read a third time and the Senate proceed to a vote on passage of the bill, with no intervening action or debate.

The PRESIDING OFFICER (Mr. CHAMBLISS). Is there objection?

Mr. REID. Reserving the right to object, Mr. President, first of all, I will say regarding S. 1750, I will use different words than the distinguished ranking member of the Finance Committee, the Senator from Pennsylvania. My words are as follows: This legislation is a sham, s-h-a-m. Social Security benefits are guaranteed today in the United States Code, the law of the land. To meet that legal commitment, we are saving enough in Social Security to pay full benefits for a long time into the future. The only threat to that guarantee is posed by Republicans who want to undermine Social Security, slash benefits, and privatize the program.

I object to S. 1750.

I reserve my right to object to S. 1302 as follows:

Mr. President, I heard my friend, the distinguished Senator from South Carolina, talk about raiding the Social Security trust funds. This message should be delivered at 16th and Pennsylvania Avenue. During the Clinton years, remember, we weren't doing that. We weren't using the Social Security surplus to mask the deficit. So he should direct those remarks to this administration.

Do not be fooled. This is simply another bill to privatize Social Security. The American people have already rejected this tired approach, and for very good reason. Just like President Bush's privatization plan, the DeMint bill would require deep cuts in benefits and a massive increase in debt. Under the bill, those who divert funds into privatized accounts would have their benefits cut automatically through a privatization tax--even if the value of their account has collapsed. The bill would also require $1.7 billion in additional borrowing over the next 20 years. The bill would do nothing to strengthen Social Security--quite the contrary--and it certainly wouldn't extend the program's solvency. In fact, diverting money from the trust fund accelerates insolvency and makes matters worse.

Despite the claims of its proponents, this bill itself amounts to a massive raid on Social Security and would cut the funds available to pay guaranteed benefits. Therefore, I object.

The PRESIDING OFFICER. Objection is heard.

Mr. SANTORUM. Mr. President, if I may address just briefly the comments made by the Democrat leader before I propound one final unanimous consent request, the Senator from Nevada suggested that there is a legal right to Social Security benefits in the law. The fact is that a Supreme Court decision--Nestor v. Fleming, 1960--said that ``Americans have no legal right to their Social Security benefits.''

While the Senator from Nevada can say those rights are guaranteed, there may be, certainly, a claim on those benefits, and the claim is a political one for anyone in Washington, DC, who would try to change those benefits. But there is no legal right in the law to payment of those

benefits. There is no guarantee in the law to the payments of those benefits. The Supreme Court has said so. This would change that.

This particular group of retirees that is being frightened that somehow or another any change in Social Security will mean their benefits are going to be reduced--even for those who are in retirement at this point--we want to take that tactic as well as the fear that goes with it off the table for our seniors and near-term seniors.

With respect to the Stop the Raid bill, the characterization that that bill somehow is taking money out of the Social Security system, I think I made it very clear in the discussion, the fact that the bill is crystal clear with respect to the money that is going into these personal accounts is invested in Treasury bills. They are obligations of the Federal Government and will be used to pay benefits to the extent that is humanly possible. This money is legally bound to the individual who put the money there, and they have their name on this account. They own the Treasury bills that are in that account. That is about as rock-solid a commitment to pay benefits--more rock-solid commitment than promises by future generations of politicians who do not pay them.

When you have an obligation of the Federal Government with your name on it, that is a pretty good obligation and it would require a default of the Federal Government not to have it paid, as opposed to Social Security benefits in a Social Security trust fund, which is a promise to pay by future generations of politicians. I suggest that this idea that somehow or another this would cut benefits--in fact, you could make the argument that the benefit created by these accounts is the only real guaranteed benefit that an individual has going forward in the system. Nevertheless, the Democrat leader objected, and I certainly respect that.

I will make one last attempt to see if we can get an agreement on just one bill.

I remind Members here that earlier this year, in March, we passed the resolution that every Member of the Senate--Democrats and Republicans, all 100 voted for--which said that Social Security reform must protect full-term and near-term retirees--I will underscore that, italicize it--from any changes to Social Security benefits. This bill accomplishes what we voted for.

I assume we voted for it because we thought we needed to communicate a message--that it was important that we wanted to communicate a message--to the American public that we meant this, that we actually believed we should not do this. And the way to accomplish that, contrary to what the Senator from Nevada said, is to put a guarantee in law.

Mr. President, I renew my request just for S. 1750, the Social Security Guarantee Act. I can ask unanimous consent, but it is identical to the request which I read earlier.

The PRESIDING OFFICER. Is there objection?

Mr. REID. Mr. President, reserving the right to object, first of all, understand that when the Constitution was written, it didn't talk about Social Security in the Constitution. But we in Congress have given Social Security to the American people. We did it back in the 1930s under the direction of Franklin Roosevelt. That is the Court decision to which my good friend referred. The Court didn't question Americans' rights to Social Security benefits. In effect, the Court said Congress can change the law if it chooses. But there is no question that under current law, Americans do have a legal right to the benefits they have earned. There is no question about that.
 

Meet the Press Debate

In September of 2006, Senator Santorum debated his Democratic opponent  for the Senate on an episode of Meet the Press which was moderated by Tim Russert. In this debate, Senator Santorum outlines a plan to reform social security by passing the Social Security Guarantee Act, stop taking surpluses from social security and place them in a lock box, and allow younger people to opt out of the system.

MR. RUSSERT: Let’s go back to the chart where Social Security and entitlements are such a huge part of our budget. They asked Willie Sutton why he robbed banks, he said that’s where the money is. Look at this pie chart. Social Security and Medicare and other entitlements make up 52 percent of our federal spending. It dwarfs defense and non-defense and interest on the public debt. There are 40 million people on Social Security and Medicare. There’s going to be 80 million in the next 15 years. Life expectancy is—used to be 65, it’s now approaching 80. We all know it.

Senator Santorum, when you ran first for the Senate in ‘94 you said, “You can raise taxes, you can cut benefits, or you can push back the retirement age in the future.” You also said this to—in La Salle University, “It is ridiculous if we have a retirement age in this country of age 65 today. ... Push it back to at least 70. ... I’d go even farther if I could, but I don’t think I could pass it.” Will you push retirement age back because of the huge influx of baby boomers?

SEN. SANTORUM: Yeah, everybody in Pennsylvania has seen that quote because it’s been out on every advertisement, but...

MR. RUSSERT: Well, you said it.

SEN. SANTORUM: I did say it. I said it to a group of students at La Salle talking about them in 1994 and I’ve had 12 years in the United States Senate and I haven’t introduced or voted for anything like that because I, I think that there’s a better way. And, and, and the alternatives at the time, as you heard me lay out, were either raise taxes or cut benefits or push back the retirement age.

I think there’s a third option now that I have been an advocate for which my opponent opposes, and that’s personal retirement accounts. I have a three-step concrete approach to dealing with Social Security. Number one, pass the Social Security Guarantee Act, which I’m the author of, which says that if you’re born before 1950, your benefits cannot be changed and your cost of living increases are guaranteed. Number two, stop the raid introduced by Jim DeMint which says take the surplus that’s coming in right now and actually put it into individual accounts so people have ownership of this surplus instead of the money being taken and raided to pay for, for current government expenditures. So number two is to stop the raid, give people their own personal accounts that, that will actually be there to pay for them down the road. And number three, give younger workers the opportunity to have personal retirement accounts. Those personal retirement accounts will grow faster and produce more than what the government, “investment in Social Security,” thus making up the difference between the two.

Meet the Press Appearance

In a June 2011 appearance on Meet the Press, Senator Santorum was asked about raising the retirement age and responded by changing the way social security increases are indexed. He states that changing that index from income to cost of goods will help solve a large portion of the problem.

Moderator: On social security, would you raise the retirement age?

Senator Santorum: I proposed that back in 1994, and I think that's an option that has to be on the table. I think that the one thing that we should do is to address the cost of living increase. 

I ask seniors everywhere I go whether it's Iowa or New Hampshire. I ask, "What should the cost of living increase be tied to?" The answer is always "Well, it should be tied to the prices that we pay for goods and services." Well, it's not. The cost of living increase in social security is tied to wage inflation. What does that have to do with the cost of living increase for seniors? It doesn't. So, what we need to do is change it from a wage inflation index to a price inflation index. If we do that, we solve anywhere from half to 2/3 of the shortfall in social security over time.

That's one thing that we can do, we can do it now, it will have minimal impact on anyone at or near retirement, but long term, it will create sustainability for young people who are sitting out there who don't believe that social security will be there for them.

Iowa Campaign Event

At a campaign event in Iowa, Senator Santorum spoke about the loss of the surpluses in social security funds and the insolvency of the program.

TEA Party Debate

In September of 2011, Senator Santorum appeared in the TEA Party debate in Tamp Bay, Florida. He stated that he had been calling for reform to social security for years and one reform could be raising the retirement age.

BLITZER: Senator Santorum, when it comes to Social Security, are you with Governor Romney or Governor Perry? 

SANTORUM: Well, the question is who is with me? Because I've been out here talking about -- you want to talk about courage to tell the truth, Governor? I was out in 1994 running against a Democratic incumbent in a campaign managed by James Carville, and I went out and talked about Social Security reform.

Why? Because I knew this day was coming. And I had the courage to go out and say Social Security is in trouble. And I told a group of young people at La Salle University that we needed to do something like raising the retirement age.

They ran that on TV for three weeks prior to the election, in the second oldest per capita state in the country. And I still won the election. Why? Because the people of Pennsylvania wanted someone who had the courage to tell them the truth.

(APPLAUSE)

SANTORUM: And I had the courage to tell them the truth.

And what I've done since I was in the United States Senate is every year I proposed -- I went, in fact, with Bill Clinton in 1997 on the first bipartisan Social Security town hall meeting, and I was the spokesperson, a Republican conservative from a blue state out there leading the charge on Social Security.

You folks want someone with courage? I've got a track record of courage and a track record of concrete proposals on how to fix this, among some of the things that have been discussed here tonight.

2012 Presidential Campaign Website Statements

RESTORING AMERICA’S GREATNESS
PROMOTING FREEDOM AND OPPORTUNITY

Reining in Spending and Reforming Government Entitlements for Sustainable and Better Solutions for America’s Families and Future

Living Within Our Means: Cutting $5 trillion over 5 years

Spending Core Principles

• Live within our means so that America, our families, and our future generations will have a brighter future unburdened with oppressive debt and high taxation.
• Prioritize our national security and defense
• Refocus the federal government on constitutional priorities and parameters
• Consolidate duplicative programs and agencies
• Promote competition for provision of essential services
• Eliminate outdated, ineffective, and wasteful programs
• Empower State and Local Governments through partnership, block grants, and reserving functions for the States
• Reform and Modernize Medicare since reducing healthcare costs is a prerequisite for our long term success and economic strength
• Reforming Social Security which is essential for solvency, sustainability, and real retirement security

 

Proposals

• Commit to cut $5 trillion of federal spending within 5 years.
• Implement Strong America Now reform through Lean Six Sigma management process as a key engine for cutting government waste and improving efficiency.
• Immediately reduce federal (non-defense discretionary spending) to 2008 levels through across the board spending cuts.
• Freeze defense spending levels for 5 years and reject automatic cuts.
• Freeze spending levels for social programs for 5 years such as Medicaid, Housing, Education, Job Training, and Food Stamps, time limit restrictions, and block grant to the States like in Welfare Reform.
• Repeal and Replace ObamaCare with market based healthcare innovation and competition to improve America’s and Americans health, control costs, improve quality and access, and to keep and create jobs which provide resources for healthcare.
• Pass a Balanced Budget Amendment to the Constitution capping government spending at 18% of GDP so that Congress and the President will need to balance the budget like Governors are required to do.
• Pass legislation to reform the Congressional Budget Process and support legislation to require Congress to pass constitutionally required spending bills on time or not get paid the next fiscal year.
• Implement Medicare Reforms and Innovation proposed by Congressman Paul Ryan and speed up their implementation to control healthcare costs and improve quality.
• Reform Social Security and place on a sustainable path by a combination of reforms such as addressing adjusting CPI, dependent benefits and disability income benefits reforms, moving back the retirement age for younger workers, means testing benefits, annual adjustments as needed, and dedicating Social Security payroll taxes to Social Security.
• Implement reforms and cost savings of up to $100 billion in March 2011 GAO report requested by Senator Coburn listing 34 areas of duplication and waste.
• Stop implementation of any remaining federal stimulus spending.
• Freeze pay for non-defense related federal employees for four years, cut workforce by 10% with no compensatory increase in contract workforce, and phase out defined benefit plans for newer workers.
• Eliminate all energy subsidies and most agriculture subsidies within four years.
• Eliminate funding for Planned Parenthood and use half of the dollars to support adoption instead.
• Cut EPA resources for job killing regulations and return focus to commonsense conservation and safe and clean air and water.
• Cut in half the number of State Department USAID employees and US funding for United Nations programs.
• Eliminate funding for implementation of Dodd/Frank regulatory burdens.
• Eliminate funding for implementation of ObamaCare.
• Cut funding for National Labor Relations Board for decision preventing airplane factory in South Carolina.
• Eliminating funding for United Nations’ agencies which oppose America’s interests and promote abortion and cut the US contribution to the UN in half.
• Phase out Fannie Mae and Freddie Mac within five years.
• Sell unproductive and wasteful federal properties.
• Transition Team will review all spending cut proposals and restructuring reforms of the Heritage Foundation, CATO Institute, American Enterprise Institute, and the Simpson-Bowles Commission for additional savings.

Defender of the Taxpayer

From the moment he was elected to public office, Rick Santorum worked tirelessly to ensure the hard-earned tax dollars of all Americans were being spent wisely.

Along with John Boehner and Jim Nussle, Rick was a member of the “Gang of Seven” who targeted the waste and fraud of the House Post Office and Bank. This did not make Rick Santorum a popular man in an old boy’s club like the House of Representatives, but Rick knew that the only way to make a positive difference in the lives of his constituents was to challenge the corrupt norms that had seeped into the People’s Body.

Being elected to the upper-chamber of the United States Senate did not slow down Rick’s passion for government reform. Two of the first bills Rick sponsored were the “Balanced Budget Amendment” and the “Line Item Veto,” because Rick knew the importance of reigning in a government drunk on spending.

Rick Santorum knew that reforming Congress was a great start, but our nation’s entitlement programs were the cancer to the long-term fiscal health of our nation. This is why he was one of the lead sponsors of the landmark 1996 Welfare Reform law that has helped more Americans transition from the government welfare rolls to work than any legislation before or since.

In 2005, seeing our Social Security system on the brink of bankruptcy, Rick led the charge to reform the broken entitlement system. Along with South Carolina Senator Jim DeMint, Rick was one of only a handful of legislators who stuck their head out of the foxhole and fought to save the Social Security system for future generations by offering creative reforms focused on empowering the individual.

Rick also fought to ensure that all Americans kept more of their hard-earned tax dollars. He spearheaded the passage of President Bush’s tax cuts in 2001 and 2003, because he believes that reducing the tax burden on businesses and individuals is the key to spurring economic growth.

Since leaving Congress, Rick has been a vocal opponent of the Wall Street bailouts and stimulus programs instituted by both President Bush and Obama. Rick believes that by having our government choose winners and losers, both Administrations are setting America on a course to crony western European capitalism that will lead to a weaker future for our children.

Rick was rewarded for his hard work on behalf of the American taxpayer, consistently being named as a “Friend of the Taxpayer” by the National Taxpayers Union and endorsed by pro-business organizations like the National Federation of Independent Business and the United States Chamber of Commerce during his political campaigns. 

Voting Record

Amendment - Balanced Budget without Social Security

In April of 1999, the Senate voted on an amendment to prevent the government from using the social security surplus from balancing the federal budget. It created a "locbox" for the social security surplus and established limits on the federal debt. The amendment established four findings and two resolutions with multiple points of order to enforce those resolutions. These findings and resolutions were:

Congress finds that--

(1) the $69,246,000,000 unified budget surplus achieved in fiscal year 1998 was entirely due to surpluses generated by the social security trust funds and the cumulative unified budget surpluses projected for subsequent fiscal years are primarily due to surpluses generated by the social security trust funds;

(2) Congress and the President should balance the budget excluding the surpluses generated by the social security trust funds;

(3) according to the Congressional Budget Office, balancing the budget excluding the surpluses generated by the social security trust funds will reduce the debt held by the public by a total of $1,723,000,000,000 by the end of fiscal year 2009; and

(4) social security surpluses should be used for social security reform or to reduce the debt held by the public and should not be spent on other programs.

SEC. 203. PROTECTION OF THE SOCIAL SECURITY TRUST FUNDS.

(a) PROTECTION BY CONGRESS.--

(1) REAFFIRMATION OF SUPPORT.--Congress reaffirms its support for the provisions of section 13301 of the Budget Enforcement Act of 1990 that provides that the receipts and disbursements of the social security trust funds shall not be counted for the purposes of the budget submitted by the President, the congressional budget, or the Balanced Budget and Emergency Deficit Control Act of 1985.

(2) PROTECTION OF SOCIAL SECURITY BENEFITS.--If there are sufficient balances in the Federal Old-Age and Survivors Insurance Trust Fund and the Federal Disability Insurance Trust Fund, the Secretary of Treasury shall give priority to the payment of social security benefits required to be paid by law.

The vote failed to overcome a cloture motion. However, it did get the majority of a 54-45 vote. Rick Santorum voted in favor of the amendment to create a lock box for social security surpluses and limit the federal debt.

Amendment - Private Accounts

In April of 1998, the Senate voted on amendment 2209 to the budget for that year. The amendment contained nine findings and a resolution. The nine findings were:

(1) The social security program is the foundation of retirement income for most Americans, and solving the financial problems of the social security program is a vital national priority and essential for the retirement security of today's working Americans and their families.

(2) There is a growing bipartisan consensus that personal retirement accounts should be an important feature of social security reform.

(3) Personal retirement accounts can provide a substantial retirement nest egg and real personal wealth. For an individual 28 years old on the date of the adoption of this resolution, earning an average wage, and retiring at age 65 in 2035, just 1 percent of that individual's wages deposited each year in a personal retirement account and invested in securities consisting of the Standard & Poors 500 would grow to $132,000, and be worth approximately 20 percent of the benefits that would be provided to the individual under the current provisions of the social security program.

(4) Personal retirement accounts would give the majority of Americans who do not own any investment assets a new stake in the economic growth of America.

(5) Personal retirement accounts would demonstrate the value of savings and the magic of compound interest to all Americans. Today, Americans save less than people in almost every other country.

(6) Personal retirement accounts would help Americans to better prepare for retirement generally. According to the Congressional Research Service, 60 percent of Americans are not actively participating in a retirement plan other than social security, although social security was never intended to be the sole source of retirement income.

(7) Personal retirement accounts would allow partial prefunding of retirement benefits, thereby providing for social security's future financial stability.

(8) The Federal budget will register a surplus of $671,000,000,000 over the next 10 years, offering a unique opportunity to begin a permanent solution to social security's financing.

(9) Using the Federal budget surplus to fund personal retirement accounts would be an important first step in comprehensive social security reform and ensuring the delivery of promised retirement benefits.

(b) Sense of the Senate: It is the sense of the Senate that this resolution assumes that the Committee on Finance shall consider and report a legislative proposal this year that would dedicate the Federal budget surplus to the establishment of a program of personal retirement accounts for working Americans and reduce the unfunded liabilities of the social security program.

The amendment was agreed to in the Senate 51-49. Rick Santorum voted in favor of the amendment to use surplus social security funds for private accounts.

Sponsored and Cosponsored Legislation

This representative has not been identified as sponsoring or cosponsoring significant legislation related to this title.

User Comments

• • Summary
  • Election Results
  • Voting Statistics
  • Sponsored Bills
  • Controversies
  • Political Positions
  • Speeches / Debates