Social Security

SOCIAL SECURITY -- (House of Representatives - March 01, 2005)

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Ms. WASSERMAN SCHULTZ. Mr. Speaker, I thank the gentleman from Florida for yielding to me. It is a pleasure to be here with my 30-something colleagues once again.

I did have townhall meetings in south Florida last week. I had three townhall meetings, and more than 500 people attended those meetings. Other than two, two out of those 500 hundred, every single person left with the feeling that they were completely opposed to the President's privatization plan. They understood first and foremost that it is incredibly disturbing that the privatization proposal he has put forward does not even solve the problem.

We, I think, have tried to stress as Democrats that we are not saying there is no problem, that there is a problem that needs to be addressed. But, for example, and one of the examples I used in my meetings, was that the earliest that we have a problem where we are taking in less than we are paying out is in 2042, and many of the studies show that it really could last until 2052. Our generation, when I talk to my friends at home and ask them whether they think Social Security is going to be there, they do not think it will.

Let me just throw out an example. I am 38 years old. In 2042, I will be 75. I will be 85 in 2052. So that shows you that Social Security will be there for our generation. What we need to do is we need to make some changes to Social Security, shore it up, help preserve the safety net; but we need to take the time to do it right. We do not need to perform the radical surgery the President is proposing, and that was the overwhelming message I got from my constituents.

Mr. Speaker, I yield back to the gentleman from Florida.

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Ms. WASSERMAN SCHULTZ. Mr. Speaker, one of the things that came up in my town meetings, talking about the debt and privatization would add to in America, the gentleman from Florida and I served with a wise Republican member of the Florida Senate, Senator Jim King, whom when we were engaged in a debate with our House colleagues and it was the State Senate versus the State House and our position in the State Senate was we should not be adding to debt and we should not be continuing to borrow to pay for our needs, he likened that concept to using our MasterCard to pay off our Visa.

Mr. Speaker, that is really the policy that the President is advocating. He appears to think it is okay to add to the debt, make our deficit much more significant, to overrely on nations like China and Japan. I feel an overwhelming sentiment coming from my constituents, and just by applying a little logic, why would we want to leave our constituents' future retirement security in the hands of the economic whims or decisions of foreign governments. That is essentially what is being done when we talk about privatizing Social Security.

The other really big issue that the President has tried to stress and underscore and use to try to relieve the concern that senior citizens may have over his plan, he is saying do not worry, people over 55 and over, we are not going to touch your benefits, nothing is going to happen.

Well, as neutrally as I possibly could, and some people might chuckle about that, I presented that argument in my town meetings last week. And overwhelmingly, my constituents, the constituents of the gentleman from Florida (Mr. Meek), understood when we have a massive program like we have in Social Security in America, and we are talking about the kinds of numbers and the impact that privatization would have on that program, $1.4 trillion cost to privatize in the first 10 years, and another $3.5 trillion in 10 years after that, when we apply a radical surgical procedure to a program that size, they understand there is no way you are going to avoid impacting them. It is not possible. They are smarter than that.

The other reason for the answer to the question of why senior citizens care about this, assuming they believe the President, say they take the President at his word and believe it will not affect people 55 and older, the reason they care is they understand that our generation, their children and their grandchildren, we are not the generation of savers that they were. They were the generation of savers. We are the generation of racking up our credit card bills and trying to have as much as we possibly can. There is nothing wrong with that, but it needs to be recognized that is a policy where Americans continue to add to their debt and there are eventually consequences to that.

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Ms. WASSERMAN SCHULTZ. Exactly. And what the gentleman said about debt in general and making sure that we continue to have sound public policy when it comes to Social Security, these senior citizens understand that because we do not have the savings in generations following them, we have to make sure that we adopt an approach to fixing Social Security that recognizes that the emphasis should be on encouraging savings. There is a way to do that without moving to a radical proposal like privatizing the program.

Chairman Greenspan testified before the Committee on Financial Services and was pretty unequivocal in his testimony before our break about what he believes the direction we should take is.

His focus was absolutely on any policy change that moved away from encouraging a national savings was not a sound one. Almost every one of the comments that he made undermined the President's arguments. He testified in front of our committee that the overriding long-term retirement issue facing the Nation is increasing national savings. Before I yield back, I want to tell my colleagues a really telling story. The thing that I think is important to stress is that Social Security was created in 1935. It was created by Democrats, it was sustained by Democrats, it was improved by Democrats and that has generally been virtually without any Republican support for Social Security. It was not created with Republican votes. It has not been fixed by Republican leadership. The gentleman from Massachusetts (Mr. Frank), our ranking member on the Committee on Financial Services, asked Chairman Greenspan this question:

Mr. Chairman, in 1935 if you were a Member of Congress, would you have voted for Social Security?

The chairman's response was: I can't answer that question.

I think I will just leave it at that and allow that to underscore where the support for Social Security is. It certainly has not been on the administration's side of the issue.

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Ms. WASSERMAN SCHULTZ. I just want to expound on a couple of the things that the gentleman said. Given from the three of us, me being from the opposite gender from the two gentlemen I am here on the floor with, I think it is important to note the effect that privatization would have on women. We have talked about this before but just to give you an idea of what women face when it comes to the comparison to men. In 2003, the average monthly Social Security benefit for a woman was only $798. That is $241 less than the average man's monthly retirement. Women's earnings are still 77 percent relative to men in 2002 dollars. Women who reach retirement age live on average at least 3 years longer than men. So this is a female problem, to say the least. Social Security is the only source of retirement income for one in three unmarried retired women. That is a really significant number.

Without Social Security, 52 percent of white women, 65 percent of African American women and 61 percent of Hispanic women would live in poverty upon retirement. It provides more than half of the total income for female widows and single women. The other thing I wanted to expand upon that the gentleman from Florida talked about is the issue does arise, where is the Democrats' plan? Do my colleagues remember, I think it was a Wendy's commercial, the really famous Wendy's commercial, ``Where's the beef?'' That is what I would like to know, and my constituents want to know about the President's plan, where is the beef? It is very nice to talk about vague outlines of what you would like to see happen, pie in the sky concepts, but generally in my legislative experience, when a President or a governor in my experience makes a proposal, they usually send the legislative body a bill. They usually get a Member to sponsor it. And then we have an opportunity to dissect it and debate it and then the minority party offers their alternative. It is time. It really is time. It is the President that has laid out that this is a crisis. We call it a long-term challenge. We would be happy to sit down and discuss our approach to that long-term challenge but we are in an apples-to-oranges situation here.

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Ms. WASSERMAN SCHULTZ. Mr. Speaker, I just wanted to expand on something since we are going to try to focus on young people in our caucus. A really good example of what impact this proposal would have on younger people, a 20-year-old who enters the workforce today, over the course of their career would experience a $152,000 loss in their Social Security benefits that they would have otherwise received. It provides disability insurance that young families need. There is no private insurance plan today that can match the disability benefits that Social Security provides. For a worker in her mid-20s with a spouse and two children, Social Security provides the equivalent of a $350,000 disability insurance policy. Most young people cannot afford or obtain that kind of coverage outside of Social Security.

And let us say, God forbid, a young parent dies suddenly. I heard the gentleman from South Carolina (Mr. Clyburn) today talk about a person who came to one of his townhall meetings whose spouse died when she was 35 years old and Social Security provides the survivor benefits that are left behind for those kids.

To such an extent, most people do not realize Social Security's survivor benefits will replace as much as 80 percent of the earnings for a 25-year-old average-wage worker who dies, leaving two young children and a spouse. That is the equivalent of a $403,000 life insurance policy. And the gentleman from South Carolina (Mr. Clyburn) talked very poignantly this morning about the gentleman that he has known for years, and had never heard this story, that his 35-year-old wife, when she passed away, could at least rest in peace knowing that her life and her work had provided for her children's future benefit even in death.

And that is the type of rug that we are pulling out from under people if we go in this direction.

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Ms. WASSERMAN SCHULTZ. Mr. Speaker, actually what I want to close with is I want to quote the President because the President has said that leadership means not passing problems on to future generations and future Presidents. And I take him at his word, and I am hopeful that we do not go forward with this proposal because this plan to privatize Social Security flies in the face of his stated belief that we need to exercise some leadership and make sure that Social Security is preserved into the future for our generation and for our children's generation. And I look forward to working with both gentlemen.

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