[Congressional Record Volume 141, Number 164 (Monday, October 23, 1995)]
[Senate]
[Page S15463]
From the Congressional Record Online through the Government Printing Office [www.gpo.gov]
SOCIAL SECURITY TRUST FUNDS
Mr. CONRAD. Mr. President, earlier today Senator Domenici inserted in
the Record a column by Charles Krauthammer that displays a fundamental
misunderstanding of the operation of the Social Security trust funds
and attacks my position on this issue. I ask unanimous consent that the
response written by Senator Dorgan and me, which ran in the Washington
Post on March 16, 1995, to correct the many factual and logical errors
in Mr. Krauthammer's argument, also be published at an appropriate
place in the Record.
There being no objection, the material was ordered to be printed in
the Record, as follows:
[From the Washington Post, Mar. 16, 1995]
Unfair Looting
(By Byron L. Dorgan and Kent Conrad)
Charles Krauthammer's uninformed defense of an indefensible
practice [``Social Security Trust Fund Whopper,'' oped, March
10] demonstrates that it is possible to be a celebrated
pundit yet know nothing of the subject about which one is
writing.
In attacking us for our position on the balanced-budget
amendment, Krauthammer misses the mark by a country mile on
two very important points. First, he insists incorrectly that
``Social Security is a pay-as-you-go system'' that ``produces
a cash surplus'' because ``so many boomers are working
today.'' Second, he ignores the fact that Social Security
revenues were never meant to pay for expenses incurred in the
federal operating budget. Missing both fundamental points
undermines the credibility of Krauthammer's conclusions.
Here are the facts:
First, Social Security is not a pay-as-you-go system. If it
were, Social Security benefits would exactly equal taxes, and
there would be no surpluses. But there are. This year alone
Social Security is running a $69 billion surplus.
Apparently, Krauthammer completely missed the 1983 Social
Security Reform Act, which removed the system from a pay-as-
you-go basis. In 1983 Congress recognized that in order to
prepare for the future retirement needs of the baby boom
generation, we should raise more money from payroll taxes now
than is needed for current Social Security benefits. We did
that because when the baby boomers retire, there will not be
enough working Americans to cover Social Security benefits on
a pay-as-you-go basis. We will need accumulated surpluses to
pay these benefits.
Second, Social Security revenue is collected from the
paychecks of working men and women in the form of a dedicated
Social Security tax, deposited in a trust fund and invested
in government securities. This regressive, burdensome tax
(almost 73 percent of Americans who pay taxes pay more in
social insurance taxes than in income taxes) isn't like other
taxes. It has a specific use--retirement--as part of the
contract this nation made 60 years ago with working
Americans.
Because this tax is dedicated solely for working Americans'
future retirement, it shouldn't be used either for balancing
the operating budget or masking the size of the budget
deficit. Krauthammer not only irresponsibly condones the use
of the Social Security surpluses to do these things, he
thinks we should enshrine this procedure in our Constitution.
He apparently does so because he doesn't understand the
difference between balancing an operating budget and using
dishonest accounting gimmicks to hide operating losses. To
illustrate the difference and how it works to loot the Social
Security trust funds, let's use an example a little closer to
home for Krauthammer.
Assume that Krauthammer is paid a lucrative salary by The
Washington Post, which puts part of the salary into a company
retirement plan. Then let's assume The Washington Post comes
upon hard times and starts losing money each year.
Here's where honesty matters. The Post has two choices. It
could face up to its problems and move to balance its budget.
Or it could follow Krauthammer's prescription and disguise
its shortfall by raiding the employees' retirement fund to
make it appear that the operating budget is balanced. Of
course, the retirement fund would have nothing but IOUs in it
when it comes time for Krauthammer to retire. At that point,
even Krauthammer might recognize the fallacy of looting trust
funds to pay operating expenses.
Absurd? Sure. But the flawed Republican balanced-budget
amendment plan would in the same way keep on looting Social
Security trust funds to balance the federal operating budget.
Instead, we should take the honest course and begin the work
now to bring our federal operating budget into balance
without raiding the Social Security trust funds.
Contrary to Krauthammer's assertion, the only fraudulent
point about this issue was his uninformed column.
____________________