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Press Release

The Case for Social Security Reform


SOCIAL SECURITY -- (Senate - February 17, 2005)

Mr. McCONNELL. Madam President, I rise today because this Senate needs to act now to save our children's future. We all know that Social Security is one of this country's greatest success stories in the 20th century. But why? Is it the hundreds of thousands of elderly who were saved from poverty or is it the millions of seniors who have retired with the stability of their monthly Social Security checks?

Actually, there are two reasons. For me, the first is an Army sergeant who served in World War II and went to the European Theater. The second is the woman from Alabama he married. Although they were never a family of great means, they worked hard, paid into the system all their lives, and got the money they were owed from Social Security when they retired.

Of course, those two people I am referring to were my parents. It is because of what Social Security did for them and their friends that we all know it is a success story. I am sure millions of Americans feel the same way.

Today, I would like to make absolutely sure Social Security is the same success for my children as it was for my parents.

Let's get one thing out of the way right up front: This debate is about saving the future, not defacing the past. Every senior who now receives Social Security benefits or who is going to receive them within the next 10 years will get full benefits for their entire--their entire--retirement. They deserve that piece of mind, and they have it. This Congress will not touch Social Security in any way for Americans 55 or older, period. This debate is not about seniors today. It is about our children tomorrow.

I said Social Security was one of the greatest accomplishments of the 20th century. But this is the 21st century. We need to strengthen and save Social Security for today's workers. If we do not act now, this system, born out of the New Deal, will become a bad deal for our children and grandchildren.

When Social Security was created in 1935, it was still common to see a Ford Model T on the road. Today's young adults drive hybrid electric cars while listening to their I-Pods. A system designed for the 1930s just does not fit the 21st century.

Something must be done and done now. Some critics say there is no crisis; that we do not have to do anything about this problem, even though we can all see it coming; that we can put it off until later. Their response to this healthy debate on the future of Social Security has been to poke their fingers in their ears and bury their heads in the sand.

Well, that is simply not acceptable. We were elected to get things accomplished for America, not to mark time around here. Someday I will pass this desk, right here--the very same desk used by Henry Clay--along to another Senator from Kentucky. I do not intend to pass this problem along as well.

That is why I applaud the President's vision and courage in tackling this important but certainly tough issue. He deserves our gratitude for sparking this national discussion on saving Social Security . You might not agree with the various options laid out by the President--that is fine--but you have to agree that action ought to be taken.

In 1935, most women did not work outside the home. Today, about 60 percent do. In 1935, the average American did not typically live long enough to collect Social Security benefits. Today, our life expectancy is 77 years. In 1935, there were 16 Americans in the workforce for every retiree collecting benefits. Today, there are only slightly more than three.

And before the next President is sworn in, the baby boomers will begin to retire, creating four new retirees for each new worker over the next 30 years. Yet benefits are scheduled to rise dramatically over the next few decades.

What that means is the current system will begin to pay out more money than it takes in within just a very few years--by the time today's kindergarteners graduate from high school. At that point, the Government will have to borrow money or raise taxes to keep up with the benefits. When today's workers retire in 2042, the system will be insolvent.

If we do nothing until then--just keep putting it off--the only solution will be to borrow massive amounts of money, impose crippling taxes, or drastically cut benefits, or all three.

So at a minimum, we need to repair the system to keep it afloat. But we can do, if we chose to, a lot more than that. There is a lot of room for improvement in Social Security . We owe our children the most financially sound system possible. They will have paid into it their entire working lives. They deserve to be protected. I know a lot of younger people consider the portion of their paycheck that goes to Social Security to be like any other tax--money they will never see again. More young people believe they will see a UFO than that they will see their own Social Security benefits. That is how confident they are that it will be there for them in the future. That tells me we are letting down our children and grandchildren. They can see that Washington has done a terrible job managing their investment. Social Security pays out about 1 cent per dollar paid in, but IRAs and money markets pay on average seven times more.

I have a message for every younger worker who is about to enter or who has just entered the prime of working life: The money that goes into Social Security is not the Government's money. It is your money. You paid for it. You paid for it with sweat and toil to provide for yourself and your family. If the Government didn't take that money, you would have spent it on yourself or your spouse or a parent or a child or put it in the bank. The point is, it would have been your decision.

There is a way we can strengthen and save Social Security , still guarantee that it will fulfill its promises in the future, and also give younger workers the power to decide how best to grow their money and build a nest egg for retirement. We do that with voluntary personal retirement accounts. Voluntary personal retirement accounts are the best way to ensure that Social Security remains strong for our children and grandchildren. The money in these accounts will grow over time at a greater rate than what the current system now offers. The nest egg they build will be theirs and Government can never take it away. Most importantly, Americans will be able to pass on the money in these accounts to their children or grandchildren. It is a smarter, fairer system.

I hear some of my colleagues say: People will waste the money in these accounts, playing the lottery or betting on horses at the track. Take it from this Senator from a horse racing State, such claims are nonsense and only meant as scare tactics. This Congress and President Bush will only pass legislation that will save and strengthen Social Security once and for all. That means we will set careful guidelines for these personal accounts. The money will only be invested in conservative bonds and stock funds. We will keep fees and transaction costs low. We will install appropriate safeguards, and we will phase in personal accounts gradually over a period of time.

Voluntary personal retirement accounts are very similar to the Thrift Savings Plan that every Federal worker, like all of us, has access to. If we can offer this deal to Federal employees, including Senators, why can't we offer it to all Americans?

The accounts are also similar to an IRA or a 401(k) plan. So most Americans will already know how a personal account will work. They are easy to understand. They will be completely voluntary, so if anybody is uncomfortable with it, they don't have to do it. No one who does not want a personal account will be forced to have one.

On top of the voluntary personal retirement accounts, we need to do more to save and strengthen Social Security . The President said he is open to all reasonable ideas. So are all of us. But it is crucial that we tackle the problem now and not continue to kick the can down the road. Democrats and Republicans are going to have to work together to do this.

I have spoken before of my hopes that this 109th Congress will be able to work together in a spirit of bipartisanship, and we certainly got off to a good start last week with the class action bill. I believe we should start now by rolling up our sleeves and working together.

A few days ago the new chairman of the Democratic National Committee said:

I hate the Republicans and everything they stand for.

Well, it is pretty tough to sit across the table from somebody with that kind of an attitude. But I think most Democrats recognize that attitude is not productive and I don't think it is the view of Democrats in the Senate. I have already heard several of my Democratic friends say Social Security does, indeed, have a problem, and we do need to do something about it. That is good. Denying there is a problem is denying the obvious. We need their voices in this great national discussion. They recognize that when it comes to Social Security , what Republicans stand for is the same thing Democrats stand for--preserving the system for today's seniors and restoring its promise for our children and for our grandchildren.

Social Security was there for my parents. It will be there for me. But I have three daughters. They are all grown up and have blossomed into accomplished young women. I don't want them to question whether there will be anything left when they retire. We should not let a system that provided so spectacularly for my parents and for me to die due to our reluctance to tackle big, tough issues. We need to restore the system so it is fair for everyone. Working in a bipartisan manner, we have the opportunity to do that.

An increasing number of Senators on the other side of the aisle are acknowledging that there is a problem, and it seems to me a good place for us all to start is to acknowledge the obvious, which is that unless we address this problem, we are going to have a serious problem later, leading to massive tax increases or unacceptably large benefit cuts for our children.

I yield the floor.