Norm Coleman - United States Senator - Minnesota
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SOCIAL SECURITY REFORM
 
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February 2005 - Mr. President, much of the discussion of Social Security has been dominated by the politics of fear. Scaring senior citizens into believing their benefits will be cut or taken away

Let me be clear, the discussions about Social Security are not about the retirement security of those Americans who are 55 or older—the Social Security system for those folks 55 and over will not change in any way shape of form- no ifs, ands, or buts. I know many Minnesota seniors depend on their Social Security check each month to buy needed food and medicine and those checks will continue to come regardless of any reform we eventually agree upon.

Mr. President, strengthening and reforming a program that 45 million Americans rely on for their retirement security is a challenge—one that many may be waiting for a rainy day to come before dealing with. I, on the other hand, believe it is a challenge that is right around the corner.

In his State of the Union Address, the President gave this Congress a challenge—to work in a bipartisan way to find a way to fix the problems that we all know Social Security faces today.

Our society has changed in unforeseeable ways since Social Security was created. For example, we are living longer, healthier, and more productive lives and while this is all great news, this has also placed added pressure on America’s retirement system.

In the 1950s, Social Security had about 16 workers paying in for every person drawing out. Today, there are three workers for each retiree, and when the Baby Boomers retire, which begins in three years, there will soon be only two workers to support each retiree.

Does anybody else see a trend here, Mr. President?

Right now, the Social Security trust fund collects more money than what it pays out. And we use this surplus to fund government programs and in turn we put in the Social Security trust fund I.O.U.s that will be due in the future.

But while many have talked about Social Security being “bankrupt” in 2042 or 2052, we must all face the fact that, as I just stated, in three years the Baby Boomers start to retire. And in 13 years- in 2018- the Social Security program will be paying out more than what it will be collecting. In other words, it will no longer be contributing any surpluses to the total budget. In fact, each and every year, Congress will be forced to spend money from the general fund-- the same general fund which is used to fight the war on terror, fund education, housing, and other priorities or borrow more and more to make up the difference.

In a little over two decades, according to the Congressional Budget Office, there will soon be a $200 billion swing from a $100 billion surplus to a $100 billion deficit in the Social Security Trust Fund. Mr. President, you don’t have to be an accountant to realize there is a serious problem looming.

The easy thing, but not necessarily the right thing to do, Mr. President, is to sit and wait and just bury our heads in the sand and push the challenges of finding a solution to Social Security to another Congress and another generation.

Mr. President, right before my election as Mayor of St. Paul in 1993, my predecessor had just signed a union contract that included retirement benefits that would have generated $200 million in unfunded liabilities for the city 15 years down the road.

It would have been easy for me to sit and wait and pass along the problem to whoever was going to be the next Mayor. In fact, my advisors at that time said “Mr. Mayor, we don’t think you should take this problem on, this is someone else’s problem, after all, this won’t happen until 15 years down the road.”

Fifteen years is not a lot of time—it’s a blink of an eye. Just ask any parent….

Instead of making an easy political decision, I made a responsible decision, Mr. President.

I rejected the contract and was sued in court. Later, I was able to get the union back to the bargaining table. We worked together to figure out a solution. We fixed the unfunded liabilities issue without changing the benefits of those already in the system, while at the same time changing the benefits of those coming into the system to make it sound for them too.

The discussion surrounding Social Security is much the same. The President, in his State of the Union speech, called upon Congress to make a principled decision. To find a way to work together to solve the problems we all know exist in Social Security.

The President said that that fixing Social Security permanently will require an open, candid and a bipartisan approach in reviewing the options.

I agree—any proposal must be fashioned in a bipartisan way. On this score, the President highlighted a number of proposals that friends on the other side of the aisle have in the past offered up.

For example, former President Clinton spoke of increasing the retirement age when he was in office.

Former Congressman Tim Penny, from my home state of Minnesota, has raised the possibility of indexing benefits to prices rather than wages.

Former Senator John Breaux suggested discouraging early collection of Social Security benefits and the late Senator Daniel Patrick Moynihan recommended changing the way benefits are calculated.

I am hopeful that my Democratic colleagues of today will have the wisdom of their predecessors to recognize that a problem is on the horizon and will have the willingness to work together to find a solution.

Unfortunately, some will try to turn this discussion into a national scare campaign to exploit fears for political gain. All I ask is don't let them. Talking about the future of our kids is way too important.

Today’s discussion about Social Security is about giving today’s younger generation the opportunity to get a higher rate of return than the paltry 2% that they earn in Social Security today.

The discussion today is about allowing younger workers the opportunity to build their own nest-egg, to give them a sense of ownership that they don’t have over the money that they themselves earn and pay into Social Security.

So, the question is: will we in Congress make a political decision and do what is easy and push a $10.4 trillion gap in Social Security to another generation and another Congress or will we make a responsible decision and work together to find a way to make sure America’s retirement system is there for future generations.

Mr. President, I sincerely hope we choose not to pass along to our children and grandchildren a decision, which may be a difficult one today, but devastating tomorrow. It's been said that necessity is the mother of invention. There's a real need right now for us, as parents and grandparents, to come up with a plan that will truly leave our kids with something better than we have and that is an opportunity to own, to build, and to grow a nest egg of their own.

As President Clinton declared in 1998 about Social Security reform: "We all know a demographic crisis is looming. If we act now, it will be easier and less painful than if we wait until later." Well, Mr. President its 2005 and its time we do something.

Thank you, Mr. President. I yield the floor.
 
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