SOCIAL SECURITY ACT AMENDMENTS OF 1983

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• Collection: General CIA Records
• Document Number (FOIA) /ESDN (CREST): CIA-RDP85-00003R000200120003-0
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• Document Creation Date: December 21, 2016
• Document Release Date: October 6, 2008
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• Publication Date: March 22, 1983
• Content Type: OPEN SOURCE

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March 2, 198.E CONGRESSIONAL RECORD - SENATE
banks and other financial institutions can
still have their own way in Washington-
has no place in the bill pending before the
Senate.
We should not accept an amendment de.
signed to prevent the collection of'taxes
that are already owed on interest and divi-
dends-even if the financial institutions find
it inconvenient.
This morning I have strongly urged the
leadership of the Senate to take whatever
steps may be needed to free the economic
security bill from this blatant attempt at
legislative hostage taking. The Social Secu-
rity and unemployment insurance lifeline
that extends to millions of Americans across
the breadth and width of our land cannot be
permitted to be severed by the obstruction-
ist tactics of a Washington lobby and its
Congressional friends. As I said last week it
would be far better if the bankers spent less
time lobbying and more time lowering inter-
est rates.
Mr. DOLE. Mr. President, I do not
think anyone would quarrel with
lower interest rates. That leads me to
the pending amendment. It requires
the banks to lower their prime interest
rate to 8-percent interest, to Qualify
for a 6-month delay in withholding. In
addition to quality for the new money
market accounts you would not have
to have $2.800, but you could get into
the money market accounts with $500.
That merely puts the focus where it
belongs, on people, rather than bank-
ers.
I would hope if we could dispose of
the Melcher amendment either with
adoption of the second-degree amend.
ment or with some other parliamen.
tary procedure, that we could finish
the social security bill today. That
may be somewhat optimistic. The Sen-
ator from Kansan has no idea how we
are going to dispose of the Melcher
amendment.
As I looked over the amendments on
social security, there are only about
four or five that would require rolicalll
votes and there is a strong desire by
the President of the United States. by
the House leadership which already
passed the social security bill. and by
the Senate leadership, at least on this
side, to try to pass the social security
bill and go to conference and pass the
conference report by Thursday eve-
ning.
In order to do that, we have a lot of
work to do.
Mr. President, I would think within
the next few minutes there would be
some move made to resolve the im-
passe. In the meantime, I suggest the
absence of a quorum.
The PRESIDING OFFICER. The
clerk will call the roll.
The bill clerk proceeded to call'the
roll.
Mr. MELCHER. Mr. President, I ask
unanimous consent that the order for
the quorum call be rescinded.
The PRESIDING OFFICER. With-
out objection, it.is so ordered.
Mr. MELCHER. Mr. President, if we.
want to move on to social security and
do just as the Senator requested, with
prompt consideration of my amend-
ment and other amendments without
S 3577
too many rollcalla, we can do that just having 10 percent of their savings removed
any time we vote on this issue. and given to the Government.
This is not a game we are playing It goes on to say that they object to
here, to offer an amendment that does it and hope. that something will be
not get voted upon. I guess I could done.
vote to table the chairman's amend-
ment, That is a letter "writ by hand." That
chairman but I he Fin e hesitake to do that to the does not seem to me to be something
do he at, We could uld suggest committee. I generated at the request of a bank, or
just hate to the
that that to amendment be voted d upon upon the request of a savings and loan, or,
for that matter, a credit union. For
with a voice vote and be distended those of us who take this position that
with. g could suggest that, instead of
makin a point of order against my something should be done about it, I
g
waive the budget rules concerning the
amendment, pass it, and get on.
Are we to be lambasted here, those
of us who feel very seriously, very ob.
jectively, and very sincerely that this
is a provision that ought to be passed
by the Congress and ought to be
signed into law by. the President so
that the Senate can reconsider what,
In my judgment, and probably in the
judgment of other Senators, was very
poor tax policy in the Tax Act of 1982,
last summer?
If the House does not like , my
amendment, they are going to knock it
off. But the House must like it or the
Senator from Kansas would not be
carrying on a filibuster against his
own bill. If the President does not like
it, he has a chance to veto the bill, but
I do not think he Is going to veto this
bill. That is a good reason for having
this very serious provision in this par-
ticular bill. because this is one that
tthhen. President is probably going to
Wiese people who write in to us
should not be glibly described as if
they do not know what they are talk-
ing about, that they are just respond-
ing to what a banker told them to do
or suggested they do. I never take the
letters of my constituents lightly. I
take their letters seriously.
We receive letters that say:
This is the first time I have ever written
to a Member of Congress, but I want to
write to youk about this because we think
this is too much. We are already paying all
of our taxes and, here is another withhold.
ing tax on savings. The IRS is going to
remove a. Portion of the interest due to us as
a 10-percent tax. They are going to use it
for up to a year.
Here I. a typical letter, on that very
point:
I have never written an elected official in
the past but at this point I feel Compelled to
express my opinion.I feel that the 10 per.
cent withholding tax on our. savings should
be repealed because it imposes an unneoes-
sary and unfair burden on savers. The cur.
rent laws requiring the reporting of interest
income are burdensome enough to one's sav-
ings institution but they alone should be
adequate to assure 'that interest income is
being reported to the Treasury Department.
I know our Government is facing a tre-
mendous problem in financing its operations
and withholding from savings accounts
seems like a relatively painless way to insure
that the inflow of tax revenue is smooth
and uninterrupted. However, the approach
taken by this new withholding law in effect
punishes those who are helping to finance
new jobs and capital construction by redue.
ing the amount of return they can receive,
do not think it serves any good pur-
pose simply to say: "Well, this has
been caused by' the bankers lobby."
Personally. I have never found a bank-
ers lobby that had influence with very
many Senators to hold up a process
here for consideration of something
that they dearly want.
I have observed, over my time in
Washington, both in the House and
the Senate, that when people really
zero in on a point that they think they
are being abused on. they do get the
attention of Congress, both the House
and the Senate. In this instance, I
know it has captured my attention. It
has captured. I think, the attention of
the vast majority of the Senate. It is
because these people write to us, or
call us, or buttonhole us, or set us on
the telephone and say this is just too
much.
I am particularly sympathetic to the
elderly who write in and say they
depend upon their savings, the inter
sat from their savi ngs, f r part of their
monthly bills. But I would have to say
that I am also very sympathetic to the
ordinary wage earner who has with-
holding out of his payehek and knows
that he is paying ill that is due. I am
advised by the Treasury Department
that 75 percent of those taxpayers pay
more than is due and at the end of the
year get a refund. SoIthink itisap-
parent to that group, when they know
that on withholding they are paying a
little bit more than they should, it is
particularly objectionable to them
when they find out that there is going
to be money withheld on their savings
accounts from the interest that is due
them. I can well understand their frus-
tration. They are saying: "If you are
after cheaters, why do you not zero in
on them?"
As a matter of fact, in discussion
with members of the Committee on Fi-
nance during the past couple of days.
it has been brought to my attention
that, even though this provision was
locked into the 1982 tax law very
Quickly, without hearing& some of the
members of the Committee on Fi-
nance, after the fact of its getting into
the bill, went to the Treasury Depart-
ment and said. "Tell us where you be-
lieve there are taxpayers escaping
paying their just taxes, their lawful
taxes on interest from savings and
dividends." They were told that it was
impossible or their questions almost
disregarded. shoved aside, and the
Treasury Department said., "We really
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CONGRESSIONAL RECORD - SENATE March 22, 1989
can't identify all of those and this pro-
cedure will help ft."
When they were asked why the 1099
form. that form that every savings in-
stitution, or every insurance company,
or other such institution must send
out to all of the recipients of interest
income, or dividend income, was not
matched up with the 1040 form, it was
very brusquely explained to them that
it was not possible.
I think it is perfectly logical to re-
spond to the constituents who are tax-
payers and who are saying that this
particular provision in law should be
either repealed or delayed, either re-
pealed or modified so that it is really
zeroing in on those people who escape
paying their taxes, rather than bur-
dening everybody. As this constituent
letter that I read stated, while it may
seem.' a relatively painless way of se-
curing more revenue that is needed for
the Government, why must. it become
a burden on all, and particularly take
away some of the interest income or
dividend income from those who use it
during the course of the year to pay
their bills?
Yes, Mr. President, we can get on
with this social security bill any time.
We can certainly show some progress
around here by getting this amend-
ment in shape to pass and get on with
the rest of the amendments; send this
bill over to the House and, if the
House is so inclined to agree with the
amendment, fine. Then we send it to
the President and, we hope. and I am
confident that. on balance, he is going
to sign it.
The question of taxation is a matter
between the taxpayers and Congress
primarily. I think this was a bad move
last summer, this particular provision.
That is my judgment. I would have to
say that, based on the letters I have
received, it is the judgment of the ma-
jority of my constituents that it was a
bad move. But I think what is ex-
tremely important in this issue and
should not be ignored, or forgotten, or
shoved aside is that taxpayers are very
concerned about the methods of
paying taxes that involve them direct-
ly I am going to repeat that, Mr. Presi-
dent. Taxpayers are resigned to having
to pay taxes. Who wants them?
Nobody wants them. But they are re-
signed to paying them. They know
that congress must pass tax laws that
will raise a sufficient amount of reve-
nue. But taxpayers feel strongly about
the method of collection of taxes from
them and resent undue, uneeded hard-
ship imposed on them.
I said yesterday in offering the
amendment that, while I realize that
passage of this amendment would
mean $1.1 billion less in this fiscal
year for the Treasury, my best judg-
ment is that it is still a very reason-
able amendment because we can now
have time to review better ways of col-
lecting the revenue and, if it is the
judgment of the majority of the
Senate after revenue, that this is still
the best way, we shall go along with
that.
I doubt that that will be the case
and we shall find a better way. But it
is this particular method of collection
that is being objected to by taxpayers.
It is a method that imposes on them
an unnecessary withholding if they al-
ready pay all the taxes due. The IRS
says that is 97 percent-plus of all tax-
payers. They are not fools, these
people who write to us. They do not
take pen in hand or pencil in hand and
write these letters with the idea that
they are somehow being duped or
being conned by one of the savings in-
stitutions. They are writing to us be-
cause they are taxpayers and they
think this matter is important.
What they are really saying is that
the method of collection of sufficient
revenue has not been properly exam-
ined and this one must be a very costly
method of collecting revenue.
Why would they say that? First,
they know there is some cost to the
savings institution where they draw
their interest from their savings ac-
count. They know that. They under-
stand that. And they know who is
going to pay that. They are going to
pay it. They are going to get less in in-
terest because that savings institution
has some cost in collecting the tax;
and they know they are going to get
less in interest if their practice is to let
their interest income accrue to the
principal rather than withdrawing it
upon payment. If they do withdraw
their interest income for living ex-
penses many resent having the 10-per-
cent tax withheld.
If the interest accrues and allowed
to compound, as many of them do, at
least a portion of it, they know that
the early collection of taxes will take
some of the money due them on that
compounded principal which would
generate more interest payments for
Bunt they also believe that this is just
added paperwork and that, after all,
the form 1099, which reports all the
interest income, should be adequate;
that if something else needs to be
done to close the gap for those who
are not paying the taxes they should
pay on interest income, then there
should be other methods of collecting
that, without involving them. It is in
their Judgment a poor method of col-
lecting taxes, because they are already
paying their full taxes.
So, first of all, although my amend-
ment would decrease revenue for this
fiscal year by $1.1 billion, which is 0.6
percent of what is projected as a
budget deficit, less than 1 percent, I
strongly feel that we must find a
better way and collect the money and
make up the revenue that would be
lost. I think that is what our constitu-
ents are writing to us about.
That is far removed from just a
simple attaching a banking label to
any Senator who dares offer an
amendment to either repeal it or to
delay the implementation of it, in
order to look at the method again and
reconsider it. Labeling that attempt as
just something that represents the
banking lobby is not doing Justice to
the issue involved.
Mr. President, I do want to make
progress. I see the chairman of the
Budget Committee on the floor now,
and I should like to expedite proceed-
ings. The chairman of the Budget
Committee desires to make a point of
order against my amendment as being
outside the budget waiver on the bill.
To expedite that, I move, under sec-
tion 904(b), to waive the relevant sec-
tion contained in titles III and IV of
the Budget Act.
The PRESIDING OFFICER. The
motion is debatable.
Mr. MELCHER. Mr. President, while
the chairman of the Budget Commit-
tee is getting ready to discuss this
matter, I point out that, for all the
reasons we have been citing for the
consideration of this amendment to
delay, interest withholding and.recog-
nizing that it would deplete revenue
by $1.1 billion for the remainder of
this fiscal year and possibly close to
$300 million for the first quarter of
the succeeding fiscal year. I believe it
is still obvious that there is a strong
feeling throughout the country that
this matter should be reviewed, thor-
oughly thought out, and possibly
modified to make it a better method
for the collection of taxes.
Mr. DOLE. Mr. President, I am sorry
that I had to leave the Chamber brief-
ly.
Again I say to the Senator from
Montana that he is debating the issue,
and I commend him for it. He has indi-
cated many times what I consider to
be accurate statements concerning
whether you like withholding or not.
He has fairly said many times that it
is a collection procedure, not a tax;
and that debate, or course, is helpful.
Before the Senator from New
Mexico speaks, I just want to say that
the unemployment implications in this
bill are significant. Without going
through all the States, if we do not
take action this week, it is going to
affect about 28,000 people in Alabama,
6,000 in Alaska, 209,000 in California,
14,000 in Colorado, 46,000 in Florida,
48,000 in Massachusetts, 92,000 in
Michigan, 89,000 in Illinois, 57,000 in
Indiana, 131,000 in New York, 78,000
in Ohio, 99,000 in Pennsylvania, 58,000
in. Texas, 38,000 in Wisconsin, and
31,000 in Washington.
So I think it is fair to say that this
social security bill does contain an ur-
gently needed extension of the Feder- ,
al supplemental compensation pro-
gram that is due to expire at the end
of this month. The problem is that we
are not scheduled at this time to be in
session next week and will not be here
at the end of the month.
The FSC program provides extra
benefits to the long-term unemployed
who have exhausted their right to
benefits under the regular State un-
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CONGRESSIONAL RECORD - SENATE March 22, 1989
of Representatives in a timely fashion,
that the Senate says, "Well, we cannot
do it because we have to deal with the
special interest amendment."
We have time for the special inter-
ests, and I believe the elderly are a
special interest, and I believe the un-
employed are special interests. I hope
that today we can turn our attention
to these special interest groups and try
to pass the social security bill by mid-
night tonight.
Mr. DOMENICI. Mr. President, if
the distinguished Senator from Mon-
tana had not moved to waive the
Budget Act, I would have raised the
point of order against the pending
amendment. If I had raised the point
of order the distinguished Senator
could have moved to waive. So we are
right back in the same posture of
voting on a waiver of the Budget Act
under section 311.
If the distinguished Senator from
Montana had inquired, his amend-
ment clearly violates section 311 of the
Budget Act. For that reason he has
moved to waive it.
This amendment violates section 311
because it reduces revenues in the
fiscal year 1983, and we are already
below the floor set in the budget reso-
lution now in-effect. There is no room
at all under the budget resolution for
a tax reduction, and that is exactly
what the amendment does. It reduces
revenues by $1.1 billion in fiscal year
1983.
We are talking here about a princi-
ple, and I will discuss that in a little
more detail. In addition, it is obvious
tq me that this amendment is merely
an interim step toward repeal of the
entire withholding and I think that
revenue losses will be much larger.
With repeal of withholding we would
lose about $20 billion in revenues over
the next 5 years.
I understand that argument could be
made against section 311. I know that
the budget resolution that we now
have on the books is out of date. I
know that fiscal year revenues must
be revised very soon to take into ac-
count that the economy has not per-
formed quite as well as we thought.
But, Mr. President, as far as policy
changes are concerned I do not think
there is much chance that our new
budget proposal for fiscal years 1983
and 1984 will make room for a tax cut.
Quite to the contrary. We are almost
certainly going to provide for some tax
increases. The President asked for a
few billion dollars. On the other end
of the spectrum, of course, the House
of Representatives is asking for $30
billion. I do not think that is very
practical when we are just beginning
to see the full blessings of the recov-
ery, but I will challenge anyone to say
that the new policy is going to provide
for significant tax reductions and,
therefore, this procedure that we are
talking about is not very relevant.
(Mr. PRESSLER assumed the
chair.)
Mr. LONG. Mr. President, will the
Senator yield for a question at this
point?
Mr. DOMENICI. I would be pleased
to yield.
Mr. LONG. Is it not true this very
bill here right now is here because of a
budget waiver recommended by the
Senator's committee, and does not
that waiver include a waiver of
$2,070,000,000 in spending for unem-
ployment purposes over the Budget
Act?
Mr. DOMENICI. The Senator is cor-
rect.
Mr. LONG. If we are talking about
being wrong, the way the Budget Act
was waived we are already wrong. We
have a bill here which is already $2
billion over the Budget Act to begin
with, and the Senator recommended
that waiver.
Mr. DOMENICI. That is correct. I
recommended that waiver and it is ob-
vious to this Senator that there is a
tremendous distinction between waiv-
ing the Budget Act when you have un-
employed people in our country who
are not going to get their unemploy-
ment benefits and we have to do some-
thing to make sure that they do. That
is a clear emergency.
There is nobody who can tell us that
this social security bill itself is not an
emergency, coupled with the unem-
ployment compensation that we
wanted to extend, but which costs
money for which we waived the 1983
budget targets. Nobody can say that is
not an emergency. There Is no emer-
gency on the Senator from Montana's
amendment. Quite to the contrary,
the U.S. Senate clearly plans to con-
template it, debate it, and vote on it.
Everybody has their procedures. The
Budget Committee has its procedures
for April 15. It clearly seems to the
Senator from New Mexico that as a
matter of principle this is precisely
what the Budget Act had in mind.
We can take a clear look and say
"Do we want every time something
like this comes along, that has plenty
of time and does not belong on this
bill, do we want to waive the Budget
Act?"
As I indicated, I would have made a
point of order. I did not make one on
the basic bill. Quite to the contrary.
Consulting with the leadership we pro-
vided a mechanism to say we do not
want to use the Budget Act in this
case because this is an emergency and
that worked. Nobody challenged it. We
did not shove that down anyone's
throat. Anybody could have gotten up
and objected to it and forced a vote,
and said "We don't want to waive the
Budget Act."
We have a different situation here,
very different from the standpoint of
policy and from the standpoint of pro-
cedure. We can vote on withholding
another time; we cannot vote on un-
employment compensation 2 or 3
weeks from now. It will be too late. I
just note that in a small State like
New Mexico we are talking about 5,000
people running out of unemployment
compensation if we do not pass this
bill. In other States it is many times
more than that. That is what makes
this situation different from the
amendment that the Senator from
Montana has here. Twenty-six thou-
sand unemployed in the State of Lou-
isiana will not get their unemployment
benefits if this bill is not passed.
One might say, "Well, what about
all those people who are being ad-
versely affected by the withholding?"
I think I have addressed that. There is
already a procedure for taking care of
that. We will all have our opportunity
to look that one squarely in the face
without the unemployed people of the
country losing benefits without the
social security compromise coming un-
raveled, and all of the other things
that have been said here on the floor.
Mr. LONG. Mr. President, will the
Senator yield for a further question?
Mr. DOMENICI. I would be pleased
to.
Mr. LONG. In view of the fact we
have been informed by the distin-
guished chairman of the Finance Com-
mittee that Treasury proposes by reg-
ulations to put the withholding off to
make it year-end withholding rather
than to make it withholding prior to
the end of the year, can the Senator
tell me how much revenue the Treas-
ury would lose during the remainder
of fiscal year 1983?
Mr. DOMENICI. I am informed that
that which the Secretary of the Treas-
ury proposes to do by regulation was
already taken into consideration in the
basic bill, and that the only change
was in NOW accounts which came into
existence afterward. This will have
some effect on the total revenues, but
there is nothing we can do about that
in terms of the issue that is before the
Senate. If the law provided for that
they are free to do that and, as I un-
derstand it, the estimates took that
into consideration.
Mr. LONG. Can the Senator give us
his estimate what difference it makes
to start withholding in 1983 rather
than 1984?
Mr. DOMENICI. I submitted it for
the RECORD a couple of days ago, it is
about $1.1 billion for the remainder of
fiscal year 1983, I think the Senator
knows the numbers with reference to
the outyears. Since the Senator from
Montana's amendment addresses only
a year, the loss is $1.1 billion in reve-
nue using the same CBO estimates
and Joint Tax Committee experts on
both the original estimates and these.
Mr. LONG. Is this not true,, Senator,
that the Budget Act with regard to
the issue of waiver makes no real dis-
tinction between waiver for emergency
purposes or waiver because Congress
for some other reasons might regard it
as good Federal policy?
Mr. DOMENICI. The Senator is ab-
solutely correct.
Mr. LONG. I thank the Senator.
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you cannot tell whether it is good or
not until you read the article.
So, Mr. President, I went and got
this article that the Senator from
Kansas (Mr. DoLE), the distinguished
chairman of the committee, referred
to yesterday.
I wish to congratulate the person
who wrote the article on Sunday,
March 20, Mr. Paul Taylor. It was
worthy of reference by the chairman
of the Finance Committee.
Let me just read what the author
said on this subject:
One ad that especially annoyed Dole
reads, in large boldface type: "Warning: 10
Percent of the Money You Earn in Interest
is Going to Disappear," with the word "Dis-
appear" fading to white.
That ad was held up for us to see
yesterday, and I saw it.
Misleading? Perhaps. But the body of the
ad makes it clear that this is a withholding
scheme, not a new tax, and that therefore
the 10 percent is a payment against taxes
that would be owed at year's end
The ad notes there are exemptions for the
poor and elderly, although it objects to the
red tape.
A more inflammatory treatment-
This is the writer to whom I compli-
mented for writing in the Washington
Post-
A more inflammatory treatment comes
from a sample speech distributed by the
ABA to member banks: "Literally, the Gov-
ernment will be picking the taxpayers' pock-
ets."
Now, that is a strong statement, Mr.
President. I doubt if I would go as
strong as the American Bankers Asso-
ciation.
"Literally, the Government will be picking
the taxpayers' pockets." The Government
will be able to "loot your savings account,"
it says.
That compares with a passage in the 1980
Republican campaign platform, which op-
posed President Carter's withholding pro-
posal: "They would literally rob the saver of
the benefits of interest compounding."
Now, I leave it up to any fair-minded
person, who is being the stronger in
overstating his case? Would it be the
bankers who said that they would pick
the saver's pockets or would it be the
Republican Convention which said
they would rob him?
"Robbing" suggests that someone is
breaking and entering feloniously at
night or separating one from his
wealth at the point of a - pistol or a
knife.
Mr. President, it is difficult to
choose who was the more vitrioloc in
that regard. I suggest that we stop this
thing of the pot calling the kettle
black.
Now, Mr. President, to go further,
the Senator from Louisiana had lost
all interest in the matter some years
ago until a majority of the Senate
brought in a resolution taking the po-
sition that the Congress should under
no circumstances engage in withhold-
ing on interest and dividends.
That was Senate Concurrent Resolu-
tion 92, 96th Congress, 2d session,
June 12, 1980. This was reported on
CONGRESSIONAL RECORD - SENATE March 22, 1989
July 23, the legislative day of June 12,
1980.
Mr. President, the resolution was re-
ported by Mr. Loco as chairman of the
Finance Committee. The RECORD will
show Mr. LoNa did not sponsor this
resolution. He had nothing to do with
it. It came from others. Let me just
read the resolution.
Concurrent resolution declaring that the
Congress does not favor the withholding of
income tax on interest and dividend pay-
ments.
Resolved by the Senate (the House of Rep-
resentatives concurring), That it is the
sense of the Congress that the enactment of
a withholding tax on interest and dividend
payments would be detrimental to the eco-
nomic well-being of the United States]
I confess, Mr. President, the Senator
from Louisiana reported that resolu-
tion to the Senate. It was not his reso-
lution. Whose resolution was it? The
principal sponsor was Mr. CHAFER. For
himself and who? Mr. DoLE, Mr.
LUGAR, Mr. GOLDWATER, Mr. DECON-
CINI, Mr. HATCH, Mr. Dmuulr, Mrs.
KASSEBAum, Mr. STAFFORD, and so
forth, Mr. President, 60 Senators in
all.
I ask unanimous consent that the co-
sponsors be printed in the RECORD, Mr.
President.
There being no objection, the co-
sponsors were ordered to be printed in
the RECORD, as follows:
LIST OF COSPONSORS
Mr. Dole, Mr. Lugar, Mr. Goldwater, Mr.
DeConcini, Mr. Hatch, Mr. Durkin, Mrs.
Kassebaum, Mr. Stafford, Mr. Tower, Mr.
Humphrey. Mr. McClure, Mr. Cochran, Mr.
Church, Mr. Helms, Mr. Pressler, Mr. Ford,
Mr. Garn. Mr. Randolph, Mr. Danforth, Mr.
Hayakawa, Mr. Thurmond, Mr. Pryor, Mr.
Zorlnsky, Mr. Hatfield, Mr. Mathias, Mr.
Wallop, Mr. Young, Mr. Schmitt, Mr.
Cohen, Mr. Heine, Mr. Roth, Mr. Laxalt,
Mr. Durenberger, Mr. Baker, Mr. Stevens,
Mr. Warner, Mr. Armstrong, Mr. Stone, Mr.
Percy, Mr. Glenn, Mr. Leahy. Mr. Morgan,
Mr. Nunn, Mr. Bumpers, Mr. McGovern,
Mr. Tsongas, Mr. Schweiker, Mr. Hart, Mr.
Eagleton, Mr. Boren, Mr. Metzenbaum, Mr.
Melcher, Mr. Stewart, Mr. Williams, Mr.
Levin, Mr. Gravel, Mr. Nelson, Mr. Riegle,
and Mr. Bentsen.
Mr. LONG. Mr. President, that is a
majority of the U.S. Senate, ably
headed by the ranking member of the
Finance Committee, Mr. CHAFES, for
himself and Mr. DoLE, who was at that
time the ranking member of the mi-
nority side, and who serves with great
distinction as chairman of the Com-
mittee on Finance at the present time.
Mr. President, here is a statement
that I read off the wire, indicating
that President Reagan charges that a
compromise on social security legisla-
tion is being held hostage by "selfish
banking interests and urged Congress
to reject efforts to bar withholding
taxes on interest and dividends.-
I ask unanimous consent that this
item be printed in the RECORD, Mr.
President.
There being no objection, the news
item was ordered to be printed in the
RECORD, as follows:
WITHHOLDING
(By Jim Luther)
WASHINGTON.-President Reagan charged
today that compromise social security legis-
lation is being held hostage by a "selfish"
banking industry and urged Congress to
reject efforts to bar withholding taxes on
interest and dividends.
"The social security and unemployment
insurance lifeline that extends to millions of
Americans ... cannot be permitted to be
severed by the obstruction tactics of a
Washington lobby and its congrsssional
friends," the President said in a written
statement issued at the White House.
Because of the fight over the withholding
amendment, it appears unlikely Congress
will be able to meet its deadline of complet-
ing work before Easter on the $185 billion
measure to shore up the troubled social se-
curity system. Lawmakers plan to recess all
next week.
Reagan met with congressional Republi-
cans today and blasted the banking lobby
for its tactics, according to Senator ROBERT
J. Dozes, R-Kan.
After the meeting, Dole told reporters,
"The President, in one of the rare times I
have seen him really disgusted, threw his
glasses down and said he's had it up to his
keister with the banking industry for their
distortion and outright falsehoods on with-
holding on interest and dividend income."
Dole, the manager of the social security
legislation and the biggest champion of
withholding, said Reagan singled out the
American Banking Association or its "out-
right false information."
In his statement, Reagan said he would
have "gladly signed" the social security leg-
islation "to relieve legitimate worries about
the economic security of so many."
"Now, however, a selfish special interest
group and its congressional allies are at-
tempting to make this vital economic secu-
rity bill a legislative hostage," the President
said.
The amendment to repeal withholding-
"based on a campaign of distortion and de-
signed to prove that the banks and other fi-
nancial institutions can still have their own
way in Washington-has no place in the bill
pending before the Senate," he said.
Mr. LONG. Mr. President, I find
myself asking that if one is in error,
why must he be so self righteous when
he changes his mind? Why should he
not concede that these are matters
about which honest people differ?
Some people might feel strongly one
way, some might feel strongly the
other way, and there is a lot to be said
for both sides of the argument.
I. for one, Mr. President, am not con-
vinced-with all the mail I have re-
ceived, 58,000 communications at last
count, many thousands of them hand-
written-I am not convinced and I
cannot believe that the people of Lou-
isiana who sent me those communica-
tions are ignorant, stupid, or incapable
of knowing what they are talking
about. It just seems to this Senator
that people are very well informed on
the subject. They have been informed
by both sides. I cannot believe that
they do not know what they are talk-
ing about.
Furthemore, Mr. President, when
the Senator made reference yesterday
to the so-called two-way mirror, this
Senator cannot find any basis for get-
ting upset about that. What it appears
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CONGRESSIONAL RECORD - SENATE S 3583
happened was that a public relations
firm, seeking to determine how beat to
pursue their effort to convince the
public, or persuade the public to their
point of view, paid people $25 each to
sit down and talk about matters. They
had someone looking through one of
these mirrors where you can see
through one way but you cannot see
through the other, seeking to observe
how people reacted.
Mr. President, there is no claim of
right of privacy here. These are people
who accepted $25 to sit down and talk
about matters of the day. Incidentally,
that is good pay to talk about matters.
Most people are willing to sit around a
cracker barrel and talk about some-
thing for nothing, but here they are
paying $25 per head to sit down and
talk to you, telling you what they
think about matters. It seems to me
that is a pretty nice proposition.
People get my opinion all the time
without paying, and I pick other peo-
ple's minds from time to time without
any pay. I see nothing wrong about
that technique.
I should think that advertising firms
might decide whether to recommend
that their clients should put out
purple hose rather than brown hose,
or green hose rather than white hose.
They, might pay somebody, and I
think that would be a generous thing
to do, to pay somebody $25 to sit down
and give their opinion. One beautiful
lady walks in with purple hose, and
then a lovely lady walks In with -laven-
der hose. Then they ask, "Which hose
do you think Is the more attractive?
Which do you think would more at-
tract the customer?"
Chances are, the person interviewed
would probably answer the question
based on the shape of what was in the
hose. But, Mr. President, if they
brought in two identical twins, then I
think one might get an unbiased opin-
ion as to which hose would be more at-
tractive on a young lady and would be
in a better position to suggest to his
client which he would recommend. .
I find nothing improper about that,
Mr. President. It just seems to me to
be one of prejudging his own position
to say that there is some evil about
someone seeking to test public reac-
tion. by paying, somebody $25 to talk
to them about matters Ikud recording
it.
I would be willing to bet if you went
out there on the street right now. and
you asked, "How many people can we
find who would be willing for $25 an
hour to talk about matters and give
their judgment about matters, well un-
derstanding that somebody is going to
be peeping through a mirror and re-
cording everything they said about the
subject? I would think that for.;25 an
hour you would find a whole horde of
people out there on Pennsylvania
Avenue right now who would be will-
ing to do something like that.
I think there is no point in someone
suggesting anything improper about
that matter.
I do think, Mr. President, that those
of us who take a position have a re-
sponsibility to report to our constitu-
ents on what we did about it. Did we
prevail? Did we have a vote? Did we
win or lose? Did someone filibuster
and delay? What happened?
Mr. President. the majority of the
Senate indicated that we do think this
provision for withholding on interest
and dividends ought to be repealed.
Having taken that position. Mr. Presi-
dent, as one of the group of more than
50 Senators, this Senator is going to
continue to support the repeal effort.
Does the Senator from Montana
desire that I yield to him at this point.
Mr. President?
Mr. MELCHER. Yes, Mr. President.
Mr. LONG. I will yield for a ques-
tion, if the Senator desires or other-
wise I will yield the floor.
Mr. DOLE addressed the Chair.
The PRESIDING OFFICER. The
Senator from Kansas.
Mr. DOLE. Does the Senator yield
the floor?
Mr. LONG. Does the. Senator desire
that I yield fora question or that I
yield the floor?
Mr. MELCHER. I wanted to ask a
few questions, if the Senator will yield.
Mr. LONG. I believe I will just yield
the floor, Mr. President.
Mr. DOLE addressed the Chair.
The PRESIDING OFFICER. The
Senator from Kansas.
Mr. DOLE. Mr. President. I will be
happy to yield to thF Senator from
Montana in a moment. I just want to
compliment the senior Senator from
Louisiana for upholding the banks,
the ABA, and the other powerful lob-
bying groups. I cannot believe the Sen-
ator from Louisiana would defend the
tactic of gathering 5 or 10 people to-
gether. without telling them that they
are being watched through a one-way
mirror, simply, because they are get-
ting paid $25. I guess what we need to
know is, did the people know they
were being watched, and do we know
what they were being asked, or what
they were being told?
The Senator from Kansas suggests
he can almost hear,$he questions and
statements, or mistatementa, based on
the ads we have seen run by the
American Bankers Association.
One in that the. 10-percent withhold-
ing is a new tax. If you get four people
together In a room, and I do not care
whether it is a one-way mirror or a
two-way mirror (a two-way mirror
might not help very much) if you said
it was a new tax, and asked "What do
you say about this?" they would say "I
am against it."
And then throwing more raw. meat
into the. cage, claiming that the law
will be taking away savings, or hurting
the elderly, you can stimulate people
pretty well.
There is no doubt In my mind that
these are experts. They demonstrate
how good. they are. I hope we can get
the name of this marketing group be-
cause if they can sell this to 'the Con-
gress and the American people they
can probably sell almost any candi-
date.
Maybe even those running for office
want to look up this group. I would
just suggest that if these people can
market' repeal of this law, which is
nothing but collection mechanism,
they may have a knack for selling can-
didates.
I do not really think that is the way
the bankers in my State would deal
with their grievances with the law. I
do not believe there Is any banker in
the State of Kansas who would bring
people into a room and peek at them
through a mirror while somebody was
feeding them some "raw meat," some
inflammatory misinformation. in an
effort to stimulate a proper response. I
do not think that would happen-I am
certain that would not happen in the
State of Kansas.
I have heard a lot about the Repub-
lican platform. I did not realize the
Democrats had so much interest In the
Republican platform. That L the first
time I have heard it mentioned in a
couple of years. I am not even certain
the Republicans have much interest in
the Republican Platform. Now we are
getting all this bipartisan interest in
the Republican platform. But there
was a significant' difference between
the Carter proposal and the proposal
that is on the floor today.
The senator from Montana read.
with some enthusiipssa a reference to
the Republican platfOr m. In the first
place, the Carter plsa-, required 15-per-
cent withholding, not 10 percent.
Second, the broad, examimtione for the
poor, the elderly, and . the small ac-
counts were not svaflpble. Third, the
broad end-of-the-yew withholding
rules were generally not available
under the Carter Proposal. Thus, the
proposal criticized by the Republican
platform was very different from that
of'last year.
I am sorry to we the Senator from
Louisiana leave. I was lust going to
read a statement he made on June 80.
1976. I voted with the Senator from
Louisiana, he was so persuasive. The
Senator from Louisiana said:
In 1962 the House passed a proposal very
simflar to what the Senator is Proposing
here. President Kennedy worked very hard
to try to get us to agree to that. I was one
who held out against it and would not sup-
port it at that time because it seemed to
place a very heavy burden on the banks to
do all the bookkeeping and handle this. I
have had friends who are in the banking
business tell me that with these new com-
puters, and they may it confidentially-they
are part of a fraternity and want to work to-
gether-it is really not much of an adminis-
trative problem at all. It would be very easy
for the banks to comply with this withhold-
ing.
Furthermore, they have perfected the
techniques to be used. Here is a situation
where literally millions, perhaps 5 million
and maybe even more, of taxpayers are suc-
cessfully avoiding paying their taxes on in-
terest and dividend income to the Govern-
ment. As the Senator said, it I. not a matter
of closing a loophole. but this is. Just a
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CONGRESSIONAL RECORD - SENATE S 3585
Would we even consider the revenue
loss there? Of course we should, if we
are going to be completely honest and
fair and complete about what we are
talking about in raising revenue.
I point out that what is being done
does cost Treasury money. The 90,000
employees IRS has on the payroll,
paid for out of Treasury funds, have
work to do in connection with this par-
ticular withholding provision in the
law.
There were requests for a delay in
the areas I have mentioned. The
Treasury Department has established
the delay. They have established it
under their own regulations. They
have done so because they cannot get
ready before then. In order to get
ready for the rest of it, affecting ordi-
nary taxpayers what they are doing is
sending out with every tax refund the
Form 662-A which I described yester-
day. It describes to the individual tax-
payer what they are going to start
doing in connection with withholding
on interest and dividends beginning
July 1, if there is no change in the law.
I am advised that 50 million of these
are being tucked In the envelopes with
the refund checks. We are told by the
Senator from Manna, the, chairman of
the Finance Committee, that every-
body who receives a social security
check on April i will also have one of
these forms inserted Into the envelope
along with the check. That is another
36 million. Yes, they are busy prepar-
ing these forms in order- to be able to
explain the collection of the taxes
withheld. That costs money. There is
no budget waiver on those. They have
been busy preparing this brochure I
have here. It is on a pretty good grade
of paper. They probably cost about 6
or 7 cents apiece. The questions and
answers In this Treasury 'Department
brochure deal with withholding on in-
terest and dividends.' I will read only
the last question and the answer.
The question "Why couldn't the
Government simply strengthen the in-
formation reporting system In order to
accomplish the withholding?"
The answer. "Much nonreporting is
due to inadvertence, forgetfulness and
failure to keep records. Any attempt
to reach this unreported income
through information reporting and
audit procedures would require mil-
lions of telephone calls, letters, and
visits, many involving small amounts
of tax, which Inevitably would have
been regarded as "harassment" of tax=
payers."
Treasury Department March 2 press
release describes the area in which
they are going to wait for January 1,
which they have identified as an area
where they really want to zero in,
where they feel there are large
amounts of tax due from taxpayers
who are evading payment. For Treas-
ury notes and other discount instru-
ments-there is going to be a delay
until. January 1 to start withholding
taxes. But for ordinary taxpayers with
savings accounts.
I want to return to that answer In
the brochure. The last phrase says
that "telephone calls, letters, and
visits ? ? ? would have, been regarded
as harassment of taxpayers." The
word "harassment" is in quotation
marks.
So. ther than harassing those indi-
viduals who they feel constitute the
big area In which many tax dollars are
escaping. they will delay that to Janu-
ary 1, and they are going to send out
these forms to the rest of the taxpay-
ers and start collecting on July 1.
I think that is the answer as to why
we are getting the letters we are re-
complaining.
ceiving from constituenia
They we through the IRS method of
collection of additional taxes.
People feel it is harassment. People
feel it L unnecessary. People feel it is
Just some more redtape. People feel it
is just another step by the IRS, and
they do not really believe that the cost
of doing it really nets. out much reve-
nue gain.
I agree. I think in the revenue esti-
mate by Treasury the revenue gain is
overestimated. But I use their figures
in stating my case. Those figures are-
$1.1 billion.
My motion is for a budget waiver on
the amendment and hopefully it will
be a favorable vote so we can get on to
the real issue of voting on the amend-
ment itself, pass it hopefully, and then
get on with the rest of the amen
ments to the social security bill and
final The VICE PRESIDENT. The major-
ity leader is recowe
Mr. BAN IPresident. I will
not take very long because I agree it is
time for this issue to come to a head
But before we vote, I wish to make an
effort to establish an historical per
spective on where we are now, and
how we got here.
I can recall more than a year ago. a
year ago last August; In fact when I
had the opportunity to meet with
President Reagan and my colleague
and cohort on the other side of the
Capitol. the minority leader, Congress-
man M cma, and a few others. When
we were talkin g about social security
at that time it was about minimum
benefits. That encounter was one of
what has now grown to be a Hot of sev-
eral cases in which I was required. ac.
cording to the dictates of my con-
science, to tell the President that I did
not think he should do what he had
proposed to do in respect to social se-
curity and minimum benefits because,
as I pointed out then, I thought and I
think now that social security is such
a politically explosive, and such a dev-
astatingly important political issue
that unless we can drain some of the
heat and energy out of that issue,
Congress will be immobilized and find
it impossible, or virtually so, to do the
necessary reform to the system as a
whole.
At that time I felt that there was
the imminent danger that social secu-
rity would become the No. i political
football of this century. Perhaps it
should. I do not know many issues
that affect as many people as social se-
curity does, so many people are de-
pendent and have no other recourse to
a livelihood and subsistence except for
social security. It is a devastatingly im-
portant issue. I thought last year and
I think now, Mr. President, that on oc-
casion the political system of the
United States recognises in its own
unique and perhaps unusual way that
some issues are so important that they
must not be politicised, that we simply
have to rise above the usual and neces-
sary partisan political conflict and ad-
dress the issue at hand on a bipartisan
basis. It is not often that we act in
such a manner, but when we do, I
think they are the best moments of
our political system.
It was In the wake of my converse,
tion with the President and his advis-
ers and In the wake of subsequent de-
'velopments that the President sought
the establishment of a bipartisan com-
mission to consider the social security
question. It was an attempt to depolit-
icise in; an attempt to loft a commis-
sion modeled after the Water Quality
Commission which was chaired by
then 0. Nelson Ro$ef Slier, that com-
mission produced a series of recom-
mendations which wore rely en-
acted Into law and Were the result of a
bipartisan effort that was widely cele-
brated and cheered
The President. proposed that he
would appoint part of the Social Secu-
rity Commiealon, that the Speaker of
the House of Representatives would
appoint part and I would appoint part.
Indeed this was, done in collaboration
with my friend and oofleague, the mi-
nority leader of tko Senate. and the
Speaker invited ,the mi ity leader of
the House Repreaet-t*tivps to partici-
pate as well. Bo the bipartisan Com-
mission on Social was consti-
tuted, the latest embodiment of an
effort to rise we partisan political
advantage to address an issue of burn- -
ing. compelling importance.
And how well I recall reports of that
Commission's deliberations about how
pessimistic the Members were that
any agreement could be reached and
how their hopes were buoyed up and
then dashed on the- rocks of disap-
pointment. But finally, Mr. President.
the Social Security Commission pro-
duced a result and by near unanimous
vote recommended fundamental and
important and vital -changes In the
social security system on a bipartisan
basis. and those recommendations
were reported to the Rouse of Repre-
sentatives and to the Senate.
I recall at that time, Mr. President.
that many politically seasoned observ-
ers remarked at that time, "Well, this
is a good recommendation but it will
never hold together. the package will
fly apart because partisanship will
once again emerge and destroy the
best efforts of this Commission." But
those remarks proved to be false. Mr.
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CONGRESSIONAL RECORD - SENATE March 22, 1983
"(C) the recommended level of Federal Trust Funds and revenues from taxes im-
revenues required under section 30l(a)(4) of posed under sections 1401(b), 3101(b), and
such Act for such fiscal year, 3111(b) of the Internal Revenue Code of
any amounts attributable to budget authori- 1954 under any functional category other
ty and outlays for the Federal Old-Age and than the categories established by the Presi-
Survivors Insurance Trust Fund and the dent pursuant to paragraph (1).
Federal Disability Insurance Trust Fund for "(e) The provisions of subsections (a)(2),
such fiscal year or any amounts attributable (b)(2), (b)(3). and (d)(2) are enacted by the
to revenues Tor any such Trust Fund or rev- Congress-
enues from taxes imposed under sections "(1) as an exercise of the rulemaking
1401(a), 3101(a), and 3111(a) of the Internal power of the House of Representatives and
Revenue Code of 1954 for such fiscal year. the Senate, respectively, and as such they
"(3) Any concurrent resolution on the shall be considered as part of the rules of
budget considered under title III of the each House, respectively, or of that House
Congressional Budget Act of 1974 for any to which they specificae apply, and such
fiscal year beginning after September 30, rules shall supersede other r rules only to the
1988, or any amendment thereto or any con- extent that they are inconsistent therewith;
ference report thereon, shall not contain and
any specifications or directions described in (2) with full recognition of the constitu-
such
the second sentence of section 310(a) of rules rules so faar of either ela to House such change House) at
such Act which relate to the Federal Old-
any time, in the same me manner, and to the
e
Age and Survivors Insuran
T
t F
d
ce
rus
un
,
the Federal Disability Insurance Trust
Fund, or revenues from taxes imposed
under sections 1401(a), 3101(a), and 3111(a)
of the Internal Revenue Code of 1954.
"(c) The budget outlays of the Federal
Old-Age and Survivors Insurance Trust
Fund and the Federal Disability Insurance
Trust Fund for any fiscal year beginning
after September 30, 1988, shall be exempt
from any general limitation imposed by
statute on budget outlays of the United
States, including any limitation on net lend-
ing.
"(d)(1) For the fiscal year beginning on
October 1. 1988, and the succeeding fiscal
years, the President shall, in accordance
with the second sentence of section 1104(c)
of title 31, United States Code, establish a
separate functional category for requests
for new budget authority and estimates of
outlays for the Federal Hospital 'Insurance
Trust Fund and the Federal Supplementary
Medical Insurance Trust Fund and a sepa-
rate category for revenues for such Trust
Funds and revenues from taxes imposed
under sections 1401(b), 3101(b), and 3111(b)
of the Internal Revenue Code of 1954. The
categories established by the President pur-
suant to the preceding sentence shall be
used in the preparation and submission of
the budget under section 1105(a) of title 31,
United States Code, for each such fiscal
year. The budget submitted under such sec-
tion for each such fiscal year shall not clas-
sify requests for new budget authority and
estimates of outlays and revenues for such
Trust Funds and estimates of revenues from
taxes imposed under sections 1401(b),
3101(b), and 3111(b) of the Internal Reve-
nue Code of 1954 under any functional cate-
gory other than the categories established
by the President pursuant to this para-
graph.
"(2) Notwithstanding any other provision
of law, any concurrent resolution on the
budget considered under title III of the
Congressional Budget Act of 1974, for a
fiscal year beginning after September 30,
1988, shall use the categories established by
the President under paragraph (1) in speci-
fying the appropriate levels of new budget
authority and budget outlays for the Feder-
al Hospital Insurance Trust Fund and the
Federal Supplementary Medical Insurance
Trust Fund and the recommended level of
revenues for such Trust Funds and for rev-
enues from taxes imposed under sections
1401(b), 3101(b), and 3111(b) of the Internal
Revenue Code of 1954. A concurrent resolu-
tion on the budget considered under title III
of the Congressional Budget Act of 1974 for
any such fiscal year shall not classify the
appropriate levels of new budget authority
and budget outlays for such Trust Funds or
the recommended level of revenues for such
same extent as in the case of any other rule
of such House.
"(f) For purposes of this section-
"(1) the term 'budget outlays' has the
same meaning as in section 3(1) of the Con-
gressional Budget and Impoundment Con-
trol Act of 1974;
"(2) the term 'budget authority' has the
same meaning as in section 3(2) of such Act;
and
"(3) the term 'concurrent resolution on
the budget' has the same meaning as in sec-
tion 3(4) of such Act.".
Mr. HEINZ. Mr. President, this
amendment was put into the RECORD
by me on Friday. This is the amend-
ment that would remove social secu-
rity trust funds from the unified
budget. On Friday, I spoke at some
length on the merits of this amend-
ment. We did not take the amendment
up at that time out of fairness to Sen-
ator DomzNIci and Senator CHILES
who had engagements out of town and
have very strong views on the amend-
ment. We wanted to be sure we could
fully debate this amendment. I shall
not repeat for the Senate all the re-
marks I made on Friday. I shall simply
summarize the arguments I made.
Before I do that, however, I am ad-
vised that Senator PERCY and Senator
RIEGLE wish to be cosponsors of this
amendment. I ask unanimous consent
that they be so included.
The PRESIDING OFFICER (Mr.
GOLDWATER). Without objection, it is
so ordered.
Mr. HEINZ. Mr. President, first, I
want to make clear to my colleagues
that this amendment would remove
the operations of the OASI and DI
trust funds from the President's
budget, from the concurrent resolu-
tion, and from the reconciliation proc-
ess, effective with fiscal year 1989. In
that respect, it tracks the House
amendment that is in the House bill,
H.R. 1900. Some have suggested that
we should separate OASI and DI from
the unified budget but leave it in the
reconciliation process. Leaving OASI
and DI in the reconciliation process
might remove it from the budget on
paper but it would leave social security
in the budget process in fact.
Legislating social security changes as
part of the budget reconciliation proc-
ess is, in my opinion, very unsatisfac-
tory regardless of which piece of paper
you use to account for its operations.
With social security subject to recon-
ciliation, it seems to me we would still
be forced to debate social security
changes in the context of the annual
effort to reduce budget deficits. And
we would be forced to do that this
year, next year, and the year after be-
cause, as we look at those horrendous
budget deficits, they show no signs of
disappearing on any horizon that this
Senator is able to see.
Furthermore and most importantly,
Mr. President, I believe the greatest
source of public confusion and public
cynicism about social security financ-
ing comes from the fact that we have
been talking about the financing prob-
lem and our tremendous budget defi-
cits in the same breath. How is anyone
out there supposed to know that we
are not balancing social security on
the backs of the elderly, as some say,
or not raiding the trust funds to fi-
nance the defense budget as some
have accused us of trying to do, if we
are making all of these judgments at
the same time each year as part of the
budget process?
I want to be very clear about this,
Mr. President: the amendment I am
offering would remove social security
OASI and DI from reconciliation and
require Congress to address the budget
and social security as separate issues.
Why do I think we ought to treat
social security separately? For one
thing, it used to be separate. It was
only in 1968 that we combined it with
the rest of the Federal budget. It has
always been a very distinct kind of
Federal program. That is why I think
it should be separate now.
What kind of a program is it? Unlike
any other kind of program, it is a
social insurance program. It is not wel-
fare, it is not even like the medicare
program, where the benefits of the
medicare program bear no relationship
to the amount of contribution. This is
a program that is financed by its own
worker tax contribution quite apart
from the income tax we use to finance
most other Federal program. It is
judged over a far longer period of time
than most other Federal programs in
the Federal budget process. The Con-
gress reviews fiscal policy with a 1-
year, or a 3-year, or, maybe, on the
rarest of occasions, a 5-year horizon.
Most changes made in spending or
taxes through the budget process take
effect within a year or two-usually a
year or less-with very little warning
to those affected.
On the other hand, the social secu-
rity program has a horizon that Is
much longer. This bill looks forward
75 years. We cannot and we do not, in
this solvency bill, cut benefits in the
program quickly, because those now
retired make a lifetime of payments in
the expectation of receiving benefits,
benefits that we do not want to
change quickly, because that would
force them to change their retirement
plans significantly.
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March 22,19M CONGRESSIONAL RECORD -- SENATE
By the same token, those working
today in expectation of receiving bene-
fits in 20 or 30 years need adequate,
fair warning to adjust their retirement
plans. That is why when we change
the retirement age, we do it in the
next century. some 30 years from now.
before it becomes fully effective.
So In this social insurance program.
they review this financial status with,
the help of actuaries not over a 3-year
or a 5-year or even a 20-year horizon
but over a 75-year period.
To consider social security only in
terms of Its financial condition In the
next year or so forces Congress to
make changes on short notice to
achieve immediate budget savings and
destroys the notion we have tried so
hard to create, that social security is a
retirement program ' that younger
workers today can count on tomorrow.
Until social security financing is
sparated from the annual search for
some kind of quick fix In the budget,
younger workers are going to be hesi-
tant to plan on social security. to plan
on having its benefits, and they will
remain cynical about not Just the pro-
gram but also the Congress that pro-
poses to defend it.
Mr. President, there Is another
danger included in the OASDI cash
benefits program. the annual budget
process, and that Is that the Immense
size of this program makes it an Irre-
sistible target for budget cuts. whether
or not those cuts are needed to finance
the program.
With $960 billion a year in budget
deficits facing us for as far as we can
see, absent a good deal of action, and
social security accounting for $1 out of.
every $6 we expect to spend in that
budget, sooner or later somebody Is
going to come along In the search for
budget-cuts and latch onto social secu-
rity. Even though we do not think
that Is going to happen today or next
year, mark my words, that Is what will
happen.
Social security is a tempting target.
because. with 35 million beneficiaries
and 150 million contributing workers,
a very small change In the program
can result in substantial revenues or
substantial savings in outlays in a very
short period.
I have seen an this floor some very
small changes made in the last 3 days
that. frankly. will result in tens- of bil-
lons of dollars difference in the next
several years on what is in-or, in this
came, not in-the social security
system. Some of my colleagues did not
even know what was happening at the
time, I suspect.
Only when social security is out of
the unified -budget and the annual
budget process, can we assure our-
selves and the public that changes
made In the program are to improve
the financing of the program and to
insure its solvency and that they are
not there to eliminate our budget defi-
cits.
Mr. President, some of our col-
leagues are concerned that social secu-
S 3589
rity spending will rise uncontrollably reserves will begin to grow quite steep-
keeping social security In the budget
will force Congress to exercise fiscal
discipline in, this Proeraas. In my opin-
ion, social - security is an amusingly
stable program in * the long run. That
is contrary - to the conventional
wisdom, but the statistics belie the
conventional wisdom. OASDI outlays
are expected to fluctuate, roughly,
between 4 percent and 6 percent of
GNP over the next 75 years; but -75
years from now. they are expected to
be about where they are today-about
5 percent of the gross national prod-
uct.
It seem to me that having its own
dedicated payroll tax clearly identified
as such on payroll stubs.is the bat
source of fiscal dbdpline for this pro-
gram. I cannot imagine, fee the life of
me, how mixing this flaiwAing with fi-
nancing of every other program helps
Congress control the cost of this pro-
gram. It seems to me that the more we
mix it in, the more difficult it is to
control anything. The more apparent
the separate financial condition of the
program Is, the more exacting Con-
gross will. be in assuring .that, It is ii-
nanoed adequately.
If you look back at the last 2 years.
1991 and 1969. 1 think yen will agree
with my case. In 1961 and 1969, the
Budget Committee cum along and
said we need $40 billion or $90 billion
or $10 billion to make the social secu-
rity system solvent.
No. 1, not only did, we not believe
that was enough to mate the system
solvent-those of an who .Lave a little
knowledge of the system-but also, the
American public did not believe that
-those changes had anything to do with
social Security. Just were needed to
make the President's budget look a
little better.
If we look at the financing for the
OASDI program over the next 75
years. I think it is apparent that even
though the program Is expected to be
financed adequately as a ran* of the
measure before ust it will present seri-
ous problems of -a magnitude we
cannot fully realise now to the budget
process.
have a chart behind me. Mr. Presi-
dent. The chart 1 have hue has been
prepared on the basis of the bill re-
ported by the House Ways and Means
Committee. Unfortunately, that bill.
which Is far different from the one the
House passed and sent us, included a restore public confidence in the social
hefty tax increase that we do not have security program before the broad-
In our bill. We chose to restrict the based public support for this program
growth of benefits Instead Nonethe- begins to unravel.
less. the charts show us quite clearly The bill before us, as amended by
that over the next 30 years the social the Finance Committee, S.R. 1900, Is a
.security system is going to develop very good bill in that respect. not that
some very, very large surpluses, and everyone likes everything In it. but it
that sometime after the year 2020. does do the Job that -m have been
social security will start s saying should be dome, namely. to
those surpluses as a result of expert- either raise the revenues or slow the
eneing a number of years of very sig- growth of benefits so there will be a
nif leant annual deficits. social security "stem for young
As I think my colleagues can we on people and their children when they
the second chart, OASDI trust fund eventually retire.
until. about the year P110 or war,
when they will reach a peak of nearly
$3,trillion. In 1963 dollars. not 2020
dollars, $3 trillion in reserves.
What does that 'mean? What it
means I. that we are bodag to be under
more temptations than Adam and Eve
ever dreamed of to spend those re-
serves on things an which they should
not be spent
By the time we wake up to that
Problem and wake up and find that we
have created a whole new set of spend.
ing programs. about that time we are
going to start finding oat that we are
running huge defeats In the social se-
curity programs as we now know we
are going to do and as we have pro-
vided for, and we will mat have the
money to pay our sold security bene-
fits that we are prowdoing people
today.
Mr. President, unless we separate
social security from the budget it is
absolutely inoonceivsle to me that we
are going to be able to finance social
security In any kindof a rational way
In the long run, even though spending
in this progr m is expected to be rela-
tively stable in relation to the econo-
my.
Left In the unified budget there does
not seem to be anything we are ping
to be able to do except speIrd social se.
curity surpluses on other programs in
the surplus years and art social secu-
rity in the deftodt years.
Mr. President, that clearly Is bad
and irresponsible budget policy. and it
is irresponsible and destructive social
security policy.
So I ask you. Mr. President. what as-
surance can we provide young workers
that retirement benefits are going to
be there if we knows right now we are
going to slash benCStit beginning. in
every year starting In the year 2020?
Without some assurance that this pro-
gram will be treated like the social in-
surance program that it b, how can we
expect young workers who are paying
Into social security today. nearly 100
million of them. to trust that the
benefits that they pay In taxes are
going to be there when they retire 30
years from now?
The answer is unless we separate
social security as I Provided. I do not .
think we can. The only answer is for
this Congress to take strong action to
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S 3590 CONGRESSIONAL RECORD - SENATE March 22,198-Y
But if we Just leave it at that, if we that national debt because social secu- considerations. As recently as last year
do not take the second step, if we do rity will be able to absorb it and in the administration endorsed budget
not. insure that the surpluses we pro- that respect such investments will be included $40 billion in unspecified cuts
duce from passage of this legislation in the social security system and most in social security. The cuts which were
will be protected we will be back here welcome rather than in the general recommended at that time had the ap-
on this Senate floor-it may be 20 funds of the Treasury. pearance of helping to reduce the Fed-
years from now-and we will be saying Mr. STENNIS. I was here when it eral deficit but offered no assurance
to ourselves, "I thought those fellows was separated. Very few knew when it that social security benefits were not
back in 1983 solved the mess, but look happened, being cut beyond what was necessary
at the mess we are in now." Mr. HEINZ. Not everyone can make to preserve the social security system
Mr. President, we do not have to be that statement. by itself as a free standing entity.
in that kind of mess 20 or 30 years I thank my good friend from Missis- One need only review the events of
from now. Announcing our intention sippi. the last 2 years to see the justification
by the adoption of this amendment Mr. RIEGLE. Mr. President, if the for this concern. In May 1981, the
today, to treat this program responsi. Senator has completed, I wish to make Reagan administration unveiled a
bly with an eye to the long-term com- a statement. package of massive and unprecedented
mitment that underlies it, is the way The PRESIDING OFFICER. The cuts in social security, whose magni-
to address that concern. Senator from Michigan is recognized. tude went far beyond anything reason-
So I ask my colleagues to Join me in Mr. RIEGLE. I thank the Chair. ably needed to protect the safety of
assuring that social security will be Mr. President, I am pleased to join the social security trust funds. The ad-
treated responsibly by separating it with my colleague from Pennsylvania, ministration's proposal would have
from the unified budget and the Senator HEINZ, in offering this amend- built up substantial reserves in the
annual budget process. ment which would remove social secu- social security trust funds which
Mr. STENNIS. Mr. President, will rity from the unified Federal budget. would be applied toward helping the
the Senator yield briefly to me? I think it is important to know that administration meet its other objec-
Mr. HEINZ. I am pleased to yield to Senator HEINZ served in a distin- tives in the Federal budget. That same
the Senator from Mississippi. guished way on the Social Security year we saw the reconciliation bill-an
Mr. STENNIS. Let me commend as Commission and the Social Security arm of the budget process-used as the
well the Senator for a fine explanation Commission has made this recommen- vehicle for elimination of the mini-
here of this highly important amend- dation. mum social security benefit and
ment. It shows thoroughness, com- The amendment that he and I and making other reductions in the pro-
pleteness, and represents a lot of work the other cosponsors , are offering gram Also, last year during considera-
on his part. He has rendered a real today is an amendment that had the tion of the budget resolution, further
service here in preparing and deliver- endorsement of the Social Security attempts were made to enact unspeci-
ing that speech. Commission, which included other dis- fied cuts of $40 billion out of the social
I did not get to hear the first part, tinguished Senators, including that of
security ,system. These cuts would
but I understand this is an uncondi- the Senator from Kansas, Senator have produced budget "room" for
tional and complete separation from Dom, and Senator MoYNIIIAN. other Federal spending categories
what I call the general budget and sets So we have in behalf of this concept without any assurances that social se-
purpose of these funds for this particular the full endorsement of the National curity benefits would not be cut
purpose up in the budget of its own. Commission on Social Security, and beyond what is absolutely necessary to
Mr. HEINZ. The Senator is correct. this particular item was also included preserve the system's absolutely financial necessary to
Mr. STENNIS. I do not think the in the House-passed bill. So this is not ty
Senator could have chosen a more im- a new issue.
portant subject with reference to the This is an issue that has been looked So I think it is clear what ought to
entire matter that we have this year. at at length. It has been debated at be done here is what the Social Secu-
Mr. President, I ask unanimous con- length and, as I say, is a recommenda- rity Commission named by the Presi-
sent that I may be joined as a cospon- tion of the President's Commission on dent has recommended, namely we
sor, one of the sponsors of this amend- Social Security, separate these funds out of the
ment. The amendment we are offering budget, and that we handle them on
The PRESIDING OFFICER. With- today would first require that in fiscal their own basis.
out objection, it is so ordered. year 1984 the three social security We are taking the other steps to
Mr. STENNIS. Again I thank the trust funds, the old age and survivors, insure their integrity in terms of new
Senator. disability, and hospital insurance trust outside public participants on the
Mr. HEINZ. I thank the Senator funds, all of which are funded through board and by the financial steps that,
from Mississippi for his very kind re- a separate payroll tax, be included in a we are taking to put the system on a
marks. I am honored to have him as a separate functional category in the sound financial footing from an actu-
cosponsor. Federal budget. Also included in this arial point of view. The particular rec-
Mr. STENNIS. I thank the Senator, separate budget function would be the ommendation of the Commission we
Did the Senator say it is going to Federal supplementary medical insur- are now considering is fully in keeping
reach a point in the year 2020 or 2030, ance trust fund which is mostly with that set of moves, and I think the
somewhere in there, of $3 trillion? funded from general revenues. In the best and surest way for us to eliminate
What were his figures? fiscal year beginning in 1989, the old the temptation to go in and, as the
Mr. HEINZ. The Senator is correct, age and survivors and disability trust Senator from Pennsylvania says, try to
According to the analysis of the Ways funds, which are payroll financed latch on to those social security re-
and Means Committee bill there will would be removed entirely from the serves in future years as those reserves
be a surplus that will under their bill unified budget, while the hospital In. build up. What we are doing here is to
approach some $24'2 trillion to $3 tril- surance and Federal supplementary take and move them over into a sepa-
lion. We are used to dealing with bil- medical insurance trust fund would be rate category where we cannot get at
lion around here. But I say again this retained in its separate functional cat- them in the budgetary framework and
is trillion dollars, which is nearly in- egory. where the financial integrity of social
conceivable, but that amount will take As a member of the Budget Commit- security and the revenue-benefit rela-
more than twice our current national tee, I am particularly concerned that tionships will be maintained solely in
debt that we all say we are never going any changes that are made in the their own right and protected in that
to be able to pay off. social security system are considered fashion.
Mr. President, If the Senator will for reasons relating to social security Mr. President, in addition to con-
permit me, this is the way we can elim- and not become tied up in the endless cerns what social security should not
inate a very substantial amount of debate on other Federal-budgetary be part of the political forces which
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March 22, 1988 CONGRESSIONAL RECORD - SENATE
are part of the budget process, we
must remove the temptation to use
social security trust funds to disguise
the extent of the deficit in the rest of
the budget. Fluctuations in trust fund
balances are cushioned by trust fund
reserves, but as long as social security
remains a part of the unified budget
they also appear to effect the Federal
deficit or surplus, which provides mis-
leading information of the annual
budget deficit.
. Over the past few years, social secu-
rity has been running an annual defi-
cit and thereby paying benefits out of
the reserves in the trust funds. This
made it appear that the Federal Gov-
ernment had to engage in new borrow-
ing, when. In fact the total deficit cre-
ated by the shortfall in social security
revenues was met by using surpluses
from previous years. In addition, in
the next few years, after we enact the
legislation we are now considering, the
social security trust funds should be
running a rather large surplus. Under
the compromise package it is estimat-
ed that by fiscal year 1988 the trust
funds will have a surplus of over $14
billion. If social security is Included' in
the deficit totals for that year, It will
appear that the Federal Government
will have to borrow less to meet the
Government-wide shortfall when In
fact, the surplus in the social security
trust funds must be kept In reserve for
future social security beneficiaries.
Mr. President, finally I would like to
make it clear that I do not believe that
placing the social security trust funds
in a separate functional category, re-
moving it from the unified budget, and
removing it from the reconciliation
process will solve either the financing
problems of the social security system
nor problems with the Federal deficit.
It was not Intended to do that. What it
will do is clarify the choices which
must be made on both of these vital
issues and insure that those decisions
are made fairly.
AsIBay, andIdonotthink itcanbe
said enough, we had Senators from
our body here serving on the Social
Security Commission. That Commis-
sion was dominated 2 to 1, 10 rhembers
to 5, by appointees of the President
himself, and that Commission made
this recommendation.
I say to the Senator from Mississippi
and others, the Commission itself
made this recommendation. The chair-
man of the Senate Finance Committee
was on that group and was party to
this recommendation. The House has
adpoted it in their bill, and it ought to
be in here because it provides, I think,
every person in this country with cer-
tain knowledge that the social security
funds are going to be treated in their
own right, there will be no tampering
and people want that. That is one
thing that has come out of this debate
as these concerns have arisen out in
this country, people who are paying
into the social security system day in
and day out want that money set aside
and they want it kept inviolate and
they do not want it left in any fashion
where moves can be made to change
the social security arrangements in
order to try to meet certain other
spending priorities within the Federal
budget.
There is a need for a clear division
here. These are trust funds, and
"trust" implies a special fiduciary ar-
rangement, and by separating this out
in this fashion we will be in a much
better position to protect this money,
to see the integrity of the system
exists over a longer period of time and,
I think, restore the confidence of the
American people.
W. DOMENICI addressed the
Chair.
The PRESIDING OFFICER. The
Senator from New Mexico.
Mr. DOMENICI. Mr. President, I do
not want to take a lot of time but I un-
derstand . the distinguished Senator
from Florida desires to speak on this
subject and he will be here shortly. I
will take a few minutes though.
I would like to remind the Senate
that the blue ribbon panel on social se-
curity reform was established to pro-
vide the Congress with a set of recom-
mendations to-close the funding gap in
social security. The Social Security
Reform Commission was not estab-
lished to review Federal budgetary
practices. There was such a panel
about 15 years ago, the President's
Commission on Budget Concepts, and
that commission reviewed the way the
Government handled its budgetary
duties and found a lot of things wrong.
The Budget Concept Commission de-
cided that the different and competing
budgets confused the public and Con-
gress and impeded governmental deci-
sionmaking. It recommended that a
single unified budget should. be adopt-
ed to improve the utility of the
budget. This unified budget would In-
clude all of the trust funds; including
social security.
Mr. President, I bring up that bit of
history to illustrate a point. The Com-
mission established to reform social se-
curity arrived at a conclusion totally
different and at odds with the Com-
mission established to address reform
in budgeting. If we were to appoint a
similar budget commission today to
study budget Questions, what might
they conclude? Such a commission.
consistent with the blue ribbon com-
mission, would probably include the
chairman of the House Budget Com-
mittee, the chairman of! the Senate
Budget Committee, and maybe even
the Director of the Office of Manage-
ment and Budget.
What would they say about remov-
ing social security from the unified
budget? Mr. President, we do not have
to speculate about what they might
say. Instead we can refer to a letter
that I and the other.two principals
sent to the Social Security Reform
Commission. The letter states:
We strongly recommend that the social se-
curity program remain in the unified Feder-
al budget.
S 3591
The letter explains the reasons
behind the recommendation, and I ask
unanimous consent that the letter be
made a part of the Racoaa after my
remarks so that the Senators may
review the text.
The PRESIDING OFFICER. With-
out objection, it is so ordered.
(See exhibit 1.)
Mr. DOMENICI. Another member
of a commission to review budgetary
practices would certainly be the Direc-
tor of the Congressional Budget
Office. salgain we do not have to specu-
late as to what the Director of the
Budget Office might say. We have a
recent letter and I ask unanimous con-
sent it be made a part of the Raooiw.
The PRESIDING OFFICER. With-
out objection, it is so ordered.
(See exhibit 2.)
Mr. DOMENICI. Dr. Rivlin states at
one point in her letter.
. [Flrom the perspective of good budgeting
practice. the proposal to remove amounts
that represent about one-quarter of all Fed-
eral spending is inadvisable ... It is com-
prehensiveness, and integrity of the unified
budget be maintained.
Finally. a commission might include
representatives of the groups affected
by the change. What would the largest
group of retirees, the American Associ-
ation of Retired Persons say? Again we
do not have to speculate. We need
only refer to their written statement: .
On behalf of our mown than 13 million
members, we urge. In the strongest possible
terms. that you not-be stampeded Into sup-
porting any legislation that, would remove
social security from the "unified budget."
I ask unanimous consent that letter
be made a part of the RIooRD also.
The PRESIDING OFFICER. With-
out objection, it Is so ordered.
(See exhibit 3.)
Mr. DOMENICI. I do not mean at
all to denigrate the action of the
Social Security Reform Commission
on the budget issue. But this Commis-
sion was not estab1iphed to review
budgetary treatment of social security.
If It had been established for that pur-
pose it would have been composed of
somewhat different members. What
these letters show without doubt is
that a commission charged with re-
viewing the role of social security in
the budget would have arrived at a de-
cision to leave social security in the
unified budget. That was true 15 years
ago; it is true today.
Mr. President, the argument that
social security will in the future, God
willing, and we hope, have some sig-
nificant reserves and therefore It
ought to be taken off budget because
of those reserves just does not make
any sense.
One would conclude that because it
is going to have reserves in a trust
fund that we are going to spend trust
fund money. What Is next? We have a
highway trust fund. It has been on the
unified budget. We do not spend ev-
erything that is in that trust fund
every year. It is accounted for. If you
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S 3592 CONGRESSIONAL RECORD - SENATE March 22, 1988
want to go look at the account, you I think it is time to examine some of Another argument sometimes made
can find It. the arguments made in favor of re- for removing social security from the
The next logical thing is: Why do we moving social security from the budget is that public understanding of
not take the highway trust fund off budget. The first argument is that the budget and social security would
budget? What is the next logical Congress has made changes in the improve. This is simply not the case. It
thing? social security program solely to would, instead, make it- appear that
Mr. CHILES. Aviation. achieve short-term budgetary policy. Congress wants to hide Federal budget
Mr. DOMENICI. The aviation trust This argument is not valid. Recent realities from the American people.
fund. Then you can look at the other proposals to change social security The media and the public would justi-
pensions, including the military and have not been made simply to reduce fiably accuse Congress of sweeping its
the civilian pensions. Why do we not the unified budget deficit. Changes problems under the rug.
take them off, and in particular the ci- were suggested because trust fund re- There exists a great misperception
vilian pension trust fund? That is said serves declined to critically low levels. that removing social security from the
to be an annuity and the moneys are Changes were suggested because they budget will somehow help resolve the
supposed to be there; even if they are were-and still are-needed to insure financial problems of the system. Let
not, some think they are. We can take that all benefit checks go out come me lay that myth to rest. Removing
it off. Then we can start funding it out July of this year, and every month social security from the budget does
of general funds, and we will not even thereafter. not contribute $1 to social security sol-
have on the budget what we are fund- A second argument is that social se- vency.
ing with general funds. curity has somehow suffered by being In fact, it may increase the future fi-
that we are going to have excesses,
surpluses in that fund that Comes
from tax dollars, that spends money
into the American economy, that has
reserves that have to be invested, that
probably all by itself has more eco-
nomic impact in terms of looking at
what happens to the American econo-
my-how much are we taxing. for it?
How much are we spending as a pro-
portion of the ONP? We are going to
say let us take that one that has the
most Impact-and there is nobody that
thinks any other fund has more
impact-and we are going to set it over
on the side and may it is not part of the
American budget.
We cannot really believe that is
what will happen if we take it off
budget. We are going to be bringing it
back on budget every time we look at
the effect of Government, taxes,
spending, trust funds on the economy
of the United States. Why not put it
where it belongs? Put it in the unified
budget.
The fact that you have reserves does
not mean that you can spend trust
fund moneys for those items that are
in a national budget that are not part
of the expenditure of trust fund
moneys. They will be accounted for as
they have been in the past.
I compliment my friend from Penn-
sylvania. He has worked very hard on
this. He has a genuine concern. I Just
do not believe that the concern that
he expresses that we might at some
time be tempted, as he has described
here-is sufficient reason to take this
important segment of the economy
and take it off budget.
Mr. President, it is obvious to my
that this amendment violates the
Budget Act and, at the appropriate
time, I will make a point of order, but
I will not do it at this point.
Mr. President, I want to restate
some of the reasons I oppose the
effort to remove the social security
trust funds from the unified Federal
budget. Such a move would be bad eco-
nomic and budgetary policy. It would
not contribute one dollar to closing
the enormous funding gap in the
social security program.
During recent years, the inclusion of
social security and medicare within
the Federal budget has actually
caused deficits to be larger than they
otherwise would have been. Since
1969. when social security was first in-
cluded in the budget. the Federal defi-
cit has been less only four times. In 10
Years. social security made the Federal
deficit deeper.
The next argument I want to chal-
lenge Is that social security should be
removed from the budget to protect its
viability as an intergenerational retire-
ment plan. It Is true that social secuity
has a long horizon-we look at it in 75-
year chunks. However, Congress would
need to take all other retirement pro-
grams off budget to be consistent. We
would need to remove Federal civilian
and military retirement, and many
smaller programs.
Congress has already given an indi-
cation of how ft feels about the valid-
ity of this argument. Last Year, the
President proposed to removed the
railroad retirement program from the
unified Federal budget. Neither the
House nor the Senate even considered
that proposal. I do not think it would
be logical to remove one program and
not other similarly situated programs.
Another argument frequently made
is that social security should be re.
moved from the budget because it is a
trust fund program. Again, all trust
funds would need to be removed from
the budget to be consistent. That
would mean lumping social security
and Federal employee retirement into
the same category as, for example, the
highway trust fund. Removing all
trust funds would mean about 35 per-
cent less budget coverage of spending
and taxation.
If Congress allows social security to
be excluded from the budget on the
grounds that it is special, what pro-
gram will be next? Will we exclude na-
tional defense because it is too impor-
tant to handle on a year-to-year basis?
That has already been proposed, and
it will be much more difficult to deny
if we set a precedent with social secu-
rity,
nancial problems of the system by
making it more difficult to arrange
temporary or permanent infusions of
general revenues. This may be a par-
ticular problem for medicare, given its
bleak financial future.
I want to Commend my colleague
from Pennsylvania, the chairman of
the Committee on Aging, for alerting
us about the problems of dealing with
the large surpluses expected to build
up in the retirement trust funds in the
years beyond 1989. It is critical to
allow those reserves to accumulate so
that we have funds to pay for all bene-
fits when the baby boom generation
retires.
We must not be tempted to use
these reserves to pay for deficits in de-
fense or welfare or any other Govern-
ment programs. We must, instead,
insure that the reserves are not used
to cover the massive deficits we face in
the medicare program. We must also
insure that these future surpluses do
not tempt future Congresses to in-
crease social security benefits for
short-term political gains.
These are indeed serious problems,
and I am sure my colleague from
Pennsylvania will help us find a way
to insure that the large reserves do
not lead us into temptation.
Mr. President, I recognize that the
effort td remove social security from
the budget is intended only to help
the social security program. Unfortu-
nately, the arguments in favor of re-
moving it are weak.
Social security programs, like all
other programs, must be reviewed con-
stantly to assure that they are fulfill-
ing the basic objective of providing a
timely and adequate income for our
Nation's retirees, survivors, and dis-
abled. Removing social security from
the budget process would only make
such review much more difficult.
ExHiBrr 1
U.S. SENATE,
Coanarrrss ON THE BuDCET,
Washington D.C., December 2, 1982.
Dr. ALAN GRSSSSPAS,
Chairman, National Commission on Social
Security Reform, Washington, D.G
D&Aa ALAS: As stewards of the federal
budget process, we strongly recommend
that the social security program remain in
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March ,2.2, 1983
CONGRESSIONAL RECORD - SENATE S 3593
the unified federal budget. It would be de-
ceptive d unproductive to remove social
security from the budget, as many members
of the National Commission on Social Secu-
rity Reform are suggesting. This option
would not contribute one dollar to closing
the $150 billion to $200 billion short-term
deficit the commission identified In the re-
tirement trust fund. It would merely ob-
scure the problem.
Commission memorandum number 53 ex-
plained some of the pros and cons of includ-
ing social security in the unified federal
budget. We would like to add to this memo a
few more reasons for keeping social security
In the budget.
Social security trust funds Involve so
much money-over one quarter of all feder-
al outlays-that to omit them froth the
budget would misrepresent the govern-
ment's activities and their economic Impact.
Inclusion of trust funds in the unified
budget allows for a more honest and
straightforward budget presentation. The
American people are thus able to see clearly
how the government spends revenues.
Social securitly funds may not be used to
pay for other government programs or to
balance - the budget. These funds have
always been used to pay benefits and admin-
istrative costs for social security only. and
will continue to be used only for those pur-
poses. Keeping social security, In the budget
does not threaten its-separate status.
Social security programs, like all other
programs, must be reviewed constantly to
assure that they are fulfilling the bade ob-
adequate.
jective of providing a timely and
Income for our nation's retiree., dependents,
and disabled; removal of the program from
the budget would make such review more
difficult.
The public will perceiie any changes in
the present social security accounting
method as manipulation and an attempt to
hide the mandate of the social security fi-
nancing problems.
The National Commission was established
to solve the social security problem, not sub-
stantially alter the federal budget process.
We are sympathetic to the desires of the
members of the commission to ensure that
social security Is not used to Improve or
mask the overall budget picture. There Is a
simple and honest way to do this. Social se-
curity could be displayed within the present
unified federal budget as a separate budget
function, apart from other Income security
programs. This would Clarify the trust fund
nature of the program while retaining its
impact within the federal budget. We would
be willing to wtgt for such a change in cate-
gorisation if the commission believes it
would increase public understanding of the
relationship between social security and the
rest of the budget.
We commend the members of the commis-
sion for the hard work and bipartisan spirit
that they put Into this difficult task. We be-
lieve that a great deal of this progress will
be eroded if the commission recommends a
change in how we present social security In
the budget but fails to recommend a set of
concrete ways to ensure the solvency of the
system. As the American public is well
aware, taking social security out of the
budget does nothing to solve the social secu-
rity financing problem.
Sincerely,
Pars V. DOMMCI,
Chairman,
Senate Budget Committee.
JAMES R. Joxas,
Chairman,
House Budget Committee
DAVID A. STOCKMAN,
Director,
Office of Management and Budget.
Ezzma 2
CONGRESSIONAL BvnasrOrnrcx,
Washington, D.C., March 14, 1983.
Hon. Pars V. Dousxrcr.
Chairman, Committee on the Budget U.&
Senate, Washington, b.G
DeAR ML CNAfxMAN: This Is In response to
your request for my comments on the advis-
ability of removing the Social Security ac-
counts from the budget. From the perspec-
tive of good budgeting practice. the proposal
to remove accounts that ,represent about
one-quarter of all federal spending is cer-
tainly Inadvisable. In 1969, when Social Se-
curity and other trust funds were combined
with other programs into the unified budget
on the basis of - recommendations by the
President's Commission on Budget Con-
cepts, the principal reasons were the need
for a comprehensive budget and fars single
measure of budgetary balance to ensure
sound fiscal practice. Those needs are no
less urgent today.
Exclusion of Social Security would con-
fuse public understanding of -the govern-
ment's fiscal Impact.-The unified budget is
consructed to show clearly the flow of cash
to and from the federal government. Deci-
sions made on spending programs or on tax-
ation can be easily translated into increases
or decreases in the deficit and. In the govern-
ment's need to borrow. This Important
bottom-line data will be needed no matter
how Social Security Is posted on the books.
Current budgetary practice highlights the
borrowing needs of the government in a
straightforward and clear manner. By Con-
removing Social Security outlays and
receipts from the budget will be eonfusing.
To arrive at the. governments's borrowing
needs In any fiscal year, budget documents
would have to display a "regular budget
deficit or surplus" plus a "Social Security
deficit or surplus" to arrive at a "total deficit
or surplus." To some extent, this confusion al-
ready exists because of current off budget
entities, but putting one-quarter of federal
activity in the latter cats y would worsen .
the situation appreciably. Discussions of
"the else of the federal aeetor" would be
similarly confused. since many are familiar
with the fact that the federal government's
budget is 30 to 26 percentcmined before providing the regu-
lar drop yeas now In the law for all
workers. This would Insure _ that
women-or men-who stay out of the
work force to care for a child actually
receive some advantage over present
law.
I understand from the social security
actuaries that this amendment would
not Increase the short or long-range
cost of the proposal in the committee
bill.
This Is a good amendment, and I
think it should be accepted.
Mr. MOYNIBAN. Mr.'President, the
Senator from Colorado is quite correct
in his statement.
I will take just a moment to call at-
tention to the amendment he offered
on child care years and to remind Sen-
ators that there are more than a few
provisions In this legislation which lib-
eralize the system and get rid of In-
equities-in this case, for working
women, and particularly older women
as well.
-This Is not just an unalloyed bit of
castor oil. There. are many positive as-
pects, and one of them is precisely to
be ascribed to the efforts of the Sena-
tor from Colorado, for which I express
my appreciation. '
Mr. ARMSTRONG.-I on grateful to
the Senator from New York for his ob-
servation, particularly his words about
my role in presenting this amendment.
He is correct. There are throughout
this bill a number of provisions which
liberalize benefits. I thank him for his
observation and for his encourage-
ment in this amendment and the
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S 3608 CONGRESSIONAL RECORD - SENATE March 22, 1983
others in which he has had a large to all Senators, as it is to our constitu- siveness that has characterized this to
hand. ents, because I think most of us be- a large extent.
The PRESIDING OFFICER. The lieve that we are just beginning to see What is the justice of it? Aside from
question is on agreeing to the amend- an economic recovery which will even- how anyone feels about it, what is the
ment. tually bring unemployment rates down real bottom-line justice of a payroll
The amendment (UP No. 107) was to some kind of halfway acceptable tax increase as compared to the bene-
agreed to. levels. But if we are going to have that fit increases that we have seen in
Mr. ARMSTRONG. Mr. President, I recovery and if people are going to go social security?
move to reconsider the vote by which back to work, I suggest that it does not Mr. President, I would suggest to
the amendment was agreed to. make sense to increase payroll taxes. you that there is no stronger reason
Mr. DOLE. I move to lay that I approach this from a very simple than just fundamental justice not to
motion on the table. point of view, and it is that if you tax increase taxes. We all know that the
The motion to lay on the table was something, you are going to get less of source of support, the principal sours
agreed to. it. The last thing we want to get less of support for social security is payroll
UP AMENDMENT No. 108 of at this critical moment in our histo- taxes. Benefits during recent years
Mr. ARMSTRONG. Mr. President, I ry is jobs. We want more jobs. under social security have risen very
send an amendment to the desk. In 1977, the last time we increased rapidly. As a matter of fact, during the
The PRESIDING OFFICER. The payroll taxes, the Congressional last decade benefits for social security
amendment will be stated. Budget Office. estimated that the then -
The Senator from Colorado (Mr. Aanc- jobs, I do not think it is a coincidence Laic payroll on wnicn the tax is based;
sTRoNG) proposes an unprinted amendment that since that massive payroll tax in- workers that is, the earning capacity of the
numbered 106. crease we have seen a growth in the of the country.
Mr. ARMSTRONG. Mr. President, I problem of chronic unemployment. As a matter of fact, just to put it in
ask unanimous consent that reading of So the first reason I urge my col- an even clearer perspective, social se-
the amendment be dispensed with. leagues to support this amendment is curity benefits have risen about 50
The PRESIDING OFFICER. with. that it is bad macroeconomic policy. percent faster than the Consumer
out objection, it is so ordered. Second, I would suggest to you the Price Index, while wages of working
The amendment is as follows: higher payroll taxes simply are not men and women have fallen behind
On page 125, beginning with line 19, strike there. Counting both the employer the growth of the CPI.
out all through page 129, line 23. and employee contribution, the aver- So for all of these reasons and one
Redesignate subsequent sections accord- age working man and woman in this more which I wish to mention, I urge
ingly country pays more in payroll taxes the adoption of the amendment.
On page 120, strike out the matter be- than they do in Federal income taxes. The final reason to some may not be
tween lines 11 and 12, and insert in lieu Think of it. A tax which was originally important, but for some of us it has a
thereof the following expected and intended to be a very, In the case cif a taxable year- very modest small tax has now very great significance, and this is the
grown question of the refundable tax credit
Beginning %Eer. And before: Percent to be larger than the basic Federal which is built into the Finance Com-
December 31, 1983...... January 1, 1985 10.8 income tax for more than half the mittee recommendation. We have had
December 31, 19.4......January 1, 1990 11.4 workers of this country. ' a principle of parity of treatment be-
December 31, 1889..._.?_... ....... ?.... 12.4 One of our colleagues pointed out to tween employer and employee all
Page 131, In the matter between lines 14 me just within the last 15 minutes these years back to the very beginning
and la, strike out "s.9" in the item relating that when he first went to work he of social security. In the bill we violate
to 1984 and insert in lieu thereof "2.6". Paid $40 the first year he worked in that principle by providing a refunda-
Mr. ARMSTRONG. Mr. President, I social security taxes, and he estimates ble tax credit for 1 year of the employ-
send this amendment to the desk on- that if he went to work in that same ee's portion of the payroll tax in-
behalf of myself and the Senators job today at today's wages for that crease.
from Georgia (Mr. NUNN and Mr. MAT- same job he would pay $2,200. Now, that crosses two thresholds
TINGLY), the Senator from Nebraska That is not a trend that is unknown that I am reluctant to cross. One is
(Mr., ZoaINSKI), and the Senator from to working men and women. In fact, the general fund financing threshold
Idaho (Mr. SYi ru). many of them feel that this is a seri- and the other is the parity between
This amendment simply leaves the ous injustice, and I think they are employee and employer. If we roll
payroll tax alone. The Commission's right. back the suggested tax increase, we
recommendations and the proposal I am not bold enough tonight to sug- avoid the necessity for doing so.
which appears before us now as the gest that we roll back the payroll tax For these reasons, Mr. President, I
Senate Finance Committee recommen- increases of 1977, but I do suggest this
dation increases the already large pay- is not the moment to further increase urge the adoption of the amendment.
roll tax burden on the workers and the tax as is suggested by this bill. The PRESIDING OFFICER (Mr.
employers of the country and does so, I wish to also point out to the MATTINGLY). The Senator from New
it seems to me, at a most inopportune Senate that higher payroll taxes are York is recognized.
time. highly controversial with the people Mr. MOYNIHAN. Mr. President, the
During the 1970's, tax maximums who pay them, and the tendency of Senator from Colorado expresses the
quadrupled. They will triple again raising taxes in order to finance the judgment feeling that many of us have
during the 1980's as the result of legis- deficit in the social security system is and none of us would in any way wish
lation already on the books, without precisely to feed the flame of what to do what this bill is doing with re-
taking into account the increase which someone has called an intergenera- spect to payroll taxes if it were not an
is called for by this legislation. It tional time bomb. irony. We must raise 180-plus billion
seems to me that such an increase on I do not perhaps think that is an en- dollars in the next 8 years or our
top of that which is already in prog- tirely accurate characterization. It system will be defunct. If we do it we
ress-that is, the twelvefold increase in may be an overemotional characteriza- will go into a longer period of surplus
payroll tax maximums of the 1970's tion of. the concerns that younger which will surprise us but is there.
and 1980's-is not only illogical, is not workers have, but I do note that they I fear to report that the amendment
only bad economic policy, but also in are more and more reluctant to sup- before us would cost more than $42
its essence is unfair. Port the social security system, and billion in round terms, one-quarter of
Let me say a word first about the one of the things we want to get out of the additional revenues that we seek,
possible effects of higher payroll taxes the passage of this bill is a shoring up and without which we do not have a
on our overall economic situation, a of public faith and confidence in social secure system, without which, Mr.
matter I judge to be of great concern security and putting to ease the diva- President, we do not have legislation.
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March 22, 1988 CONGRESSIONAL RECORD - SENATE
The PRESIDING OFFICER. The
Senator from Idaho is recognized.
Mr. SYMMS. Mr. President, I am
pleased to, be a cosponsor of the
amendment offered by my colleague
from Colorado, Senator ARMSTRONG, to
eliminate the payroll tax increases in
this bill.
While the payroll tax increases
scheduled to go into effect in this bill
will provide some relief to the social
security system in the form of higher
revenues, this relief to the system
might prove to be temporary. Slower
economic growth as a. result of the
payroll tax increases might aggravate
the system's financial burden.
The increase in the payroll tax rates
represents an increase in cost to both
the employers and employees. The
higher cost to employers is an Impedi-
ment to business spending- on both
labor and capital inputs. Faced with
the higher tax rate per employee
hired, it discourages labor employ-
ment. Also, the increase in business
costs reduces the available funds for
business expansion. As a result,
growth in Investment is slower with
the 'tax rate increase than without It.
The higher cost to employees pro-
vokes the leisure/work tradeoff. be-
cause it will mean that it will be rela-
tively cheaper to engage in nonwork
activity than it is to work. More Impor-
tantly, it encourages early retirement
in the face of lower after-tax incomes .
relative to generous social security
benefits.
The slowdown in capital and labor
investment with the tax increase is
translated into slower output per man-
hour. Accordingly, overall economic
performance is made worse off by the
increase In payroll tax rates.
As far as the social security budget Is
concerned, the slower economic activi-
ty with the tax rate increases implies a
lower earnings base along with higher
unemployment. Therefore, revenues
will be lower while the demand for
benefit payments will be higher.
Mr. President, while I sincerely re-
spect the efforts of the chairman of
the Senate Finance Committee and
the efforts of the President's Commis-
sion on Social Security Reform to pro-
pose and implement a compromise so-
lution to the solvency problems of the
OASDI trust fund, I believe the tax in-
creases proposed in this package will
do more harm than good.
As everyone knows, we have severe
unemployment in several sectors of
our economy. Why we are passing leg-
islation which will make that unem-
ployment situation more severe is
beyond me. Payroll taxes are a tax on
employment and every time you tax
something, you will have less of It.
Surely, the senior citizen community
does not want to sacrifice the Jobs of
others Just so that all of them can re-
ceive cost-of-living adjustments which
actually overcompensate them for the
increased living expenses they are In-
curring.
I would encourage all of my col-
leagues to Join Senator Axworxoxo In
supporting his amendment
I make ; one point. The, President's
own,economic adviser, Dr.. Feldstein,
when he was at MIT, took a look at
these recommendations and made the
point that it might cost as much as 2
million Jobs in the United States to
raise payroll taxes at this sensitive
time of recovery.
So, whether or not my good friend
from New York is right, that it will
cost $40 billion out. of the future
income to the trust fund. I think that
is a debatable point. If we trigger more
unemployment by excessively increas-
ing payroll taxes, where people simply
do not him people because of this mas-
sive cost that it now costs on the front
end to hire a new employee for a small
business that hires most of the people,
we *may find out we get less money in-
stead of more money.
We need to get people back to-work
in this country, and I think there are
provisions in the bill that will assure
the solvency of the trust fund that are
built into this legislation with amend-
ments that the Finance Committee
has already adopted and that are part
of the legislation.
So I think that is the way that we
will take care of the solvency of the
trust fund.
I urge my colleagues to support the
amendment.
I yield'back the floor.
The PRFING OFFICER. The
Senator from Kansas is recognized.
Mr. DOLE. MLr. President, accelerat-
ing the OASDI tai Late Increases al-
ready scheduled tinder Current law Is a
key part of the financial solvency
package put together at such great
effort by ;the National Commission.
Dropping this element "out of the
package'now, or modifying It In a sig-
nificant way, could cause the compro-
mise to unravel.
Everyone knows that this entire bill
represents a series of measures that no
one is particularly happy about. The
virtue of the package, however, is that
every group shares somewhat in the
burden of preserving social security,
and no one pays an extravagant price
out of proportion to the others. If the
payroll tax acceleration Is eliminated,
it Just means that some other group
will have to take a bigger hit to meet
our financing targets.
In any event, we are not talking
about new taxes: The acceleration pro-
visions generate more revenues to the
trust funds simply by moving up the
effective date of the payroll tax rate
increase- schedule for 1985 to 1984, and
part of the increase scheduled for 1990
to 1988. This does, of course, raise the
payroll tax burden: But it does so in a
gradual and predictable way, in con-
junction with major benefit restraints
such as the 6-month COLA delay and
expanding coverage of social security.
While the payroll tax rate accelera-
tions do raise $40 billion between now
and 1990, a significant portion of that
S 3609
is offset: In 1984 employees will get a
dollar-for-dollar credit for the rate ac-
celeration, and employers will be able
to deduct the increased employer pay-
roll taxes. So the real impact on em-
ployers and employees will be consid-
erably less than the gain to the trust
funds.
Mr. JEPSEN. Mr. President, I rise in
support of the amendment offered by
the distinguished Senator from Colo-
rado, (Mr. ARMSTRONG). His leadership
and thoughtful debate-on the social
security issue has been extremely
helpful and appreciated. I believe all
Senators owe Senator ARMSTRONG a
debt of gratitude for h1i decision to
raise some important issues, despite
the controversial . nature of some of
them.
I have been very concerned about
the acceleration of tax increases ever
since the Commission ilidicated that it
was seriously considering such a pro-
posal. My colleagues remember
that it was not too long ago that social
security taxes were raised. constituting
the largest single peacetime tax In-
crease In our Nation's history.
Mr. President, whoever said that if
you want to get less of something, tax
it, surely had the social security tax in
mind when the a$atein pt, was made. If
it Is the Senate's Intention to retard
the recovery, stifle enooyment, and
increase the unemployment rolls, then
Senators should support .the accelera-
tion of the tax rates for social security
for surely this will to the result.
Social security taxes, are a tax on
work. If you work, you pay the tax.
Employers pay the tax and employees
pay the tax. Consequently, raising the
tax increases the cost of having em-
ployees.
In addition, because of the fail-safe
provisions in the bill, repeal of the tax
Increases would not Increase the likeli-
hood that social security would be in
serious financial difficulty in the
latter part of this decade. Some ad-
justmenta in the cost-of-living adjust-
ments might be necessary, but even
then, those at the lowest end of the
income scale would not be affected.
I urge my colleagues to Join the Sen-
ator from Colorado In his efforts. Oth-
erwise, the economic recovery we are
all hoping for might never occur.
Mr. MATTINGLY. Mr. President, I
riser to support and cosponsor the
amendment offered by the Senator
from Colorado (Mr. Axxerltoxo). This
amendment will simply strip from the
proposal the accelerated payroll tax
increases, one of the most onerous
provisions of the social security pack-
age.
I support the Armstrong amendment
for a number of reasons. First of all,
higher payroll taxes will mean fewer
Jobs. Second, higher payroll taxes are
not fair, because employer -and em-
ployee contributions are already so
high that the average worker is now
paying more In social security taxes
than in Federal Income taxes. Finally,
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83610
CONGRESSIONAL RECORD - SENATE March 22, 1983
raking payroll taxes on workers means
reducing the real income of those
whose income has barely kept pace
with rising prices. I urge my colleagues
to support the amendment offered by
the distinguished Senator from Colo-
rado.
Mr. DOLE. Mr. President, did the
Senator from Colorado ask for the
yeas and nays?
Mr. ARMSTRONG. I have not, but I
am glad to ask for them now. I ask for
the yeas and nays.
The PRESIDING OFFICER. Is
there a sufficient second? There is a
sufficient second.
The yeas and nays were ordered.
Mr. DOLE. Mr. President, I shall
just take a minute.
If we want a social security package
then this amendment has to be defeat-
ed.
I do not quarrel with the Senator
from Colorado. This is one of the
many unpleasant parts of the package.
We have Federal employees circling
the Capitol. They do not want to be
into the program. We have people who
do not want the COLA delay and some
who do not want the acceleration of
taxes. These are not new taxes but ac-
celeration of existing provisions.
The Senator from Colorado made an
outstanding contribution to the Com-
mission. We made a number of
changes in our bill through the efforts
of the distinguished Senator from
Colorado who is not only a member of
the Commission but chairman of the
Social Security Subcommittee. I would
like to know how the Senator would
offset the revenue loss of $40 or $42
billion?
Is that a part of the package you are
0MrARMSTRONG. Mr. President, H
the Senator will yield to me, the infor-
mation furnished my office indicates
that it would be something less than
that, but not to quibble over the
amount, the Senator knows there is a
provision which the Senator from
Idaho has referred to in the bill which
in effect tailors the cost-of-living ad-
justments in the future to available
revenues.
Now, again, to explore the justice of
it, we are projecting at the present
time benefit increase cost-of-living ad-
justment of $259 billion between now
and the end of the decade as a result
of COLA's. The Commission plan will
have a delay savings of only $39 bil-
lion.
It is the expectation of my amend-
ment that in the event that the $39
billion in revenue which would be lost
as a result of this amendment puts the
trust fund in a position where it could
not fully meet the COLA the other
provision of the bill adopted by the Fi-
nance Committee would simply scale
back very modestly future COLA in-
creases.
Of course, I recall, as do other Sena-
tors, that we have included a hold-
harmless provision for those at the
lower benefit levels which is by the
way one of the most important provi-
sions of the bill so if some additional
COLA restraints were required it
would be applied only to those who
were the best able to withstand such
restraint.
Again I point out to the Senator
from Kansas and others social security
benefits have gone up nearly twice as
fast as have the wages and salaries on
which payroll taxes are based and at
about 50 percent faster than the cost
of living.
So if the result were to be some
COLA restraint, and I hope it is not,
but if it is that would not be unjust or
bad policy. in my opinion.
Mr. DOLE. Mr. President, for the
reasons stated, I do not quarrel with
the Senator. If we could have a perfect
package and if he or the Senator from
Idaho or someone else could have writ-
ten the package, we might have avoid-
ed any acceleration of taxes, but as a
practical matter that does not happen.
We did the beat we could. The package
came out of our committee by a vote
of 18 to 1 with this provision. I hope
the amendment will be rejected.
The PRESIDING OFFICER. The
question is on agreeing to the amend-
ment of the Senator from Colorado.
On this question the yeas and nays
have been ordered, and the clerk will
call the roll.
The legislative clerk called the roll.
Mr. STEVENS. I announce that the
Senator from Alabama (Mr.'DENToN),
and the Senator from Illinois (Mr.
PERcY) are necessarily absent.
I further announce that, if present
and voting. the Senator from Alabama
(Mr. DxwToi) would vote "yea".
Mr. CRANSTON. I announce that
the Senator from Missouri (Mr. EAGLE-
ToN), the Senator from Kentucky (Mr.
Hv1mw sTON), the Senator from Mary-
land (Mr. SARBANEs), and the Senator
from Ohio (Mr. GLENN) are necessarily
absent.
The PRESIDING OFFICER. Are
there any other Senators in the Cham-
ber wishing to vote? .
The result was announced-yeas 27.
nays 67. as follows:
[Rolicall Vote No. 41 Leg.]
YEAS--27
Armstrong
Heflin
McClure
Boren
Helms
Melchor
Boechwlta
Hollings
Nickles
Cochran
Humphrey
Nunn
East
Jepsen
Quayle
Gun
Johnston
Roth
Goldwater
Kasseebaum
Symms
Hatch
Kasten
Tnible
Hawkins
Matthngly
Zcrk ky
NAYS-67
Abdnor
Cranston
Hatfield
Andrews
D'Amato
Hecht
Baker
Danforth
Heins
Baucus
Deconchd
Inouye
Bentsen
Dixon
Jackson
Baden
Dodd
Kennedy
Bingaman
Dole
Lautenberg
Bradley
Domenici
Iaxalt
Bumpers
Durenberger
Leahy
Burdick
Exon
Levin
Byrd
Pbrd
Long
Chafee
Gorton
Lugar
Chiles
Orassley
Msthlaa
Cohen
Hart
Matsunaga
Metsenbaum
Randolph
Thurmond
Mitchell
Riegle
Tower
Moynihan
Rudman
Tsongaa
Murkowski
Sooner
Wallop
Packwood
Simpson
Warner
Pell
Specter
Weicker
Pressler
Stafford
Wilson
Proxmire
Stennis
Pryor
Stevens
NOT VOTING-S
Denton
Glenn
Percy
Eagleton
Huddleston
Sarbanes
So Mr. ARMSTRONG'S amendment
(UP No. 108) was rejected.
Mr. MOYNIHAN. Mr. President, I
move to reconsider the vote by which
the amendment was rejected.
Mr. DOLE. Mr. President, I move to
lay that motion on the table.
The motion to lay on the table was
agreed to.
Mr. ARMSTRONG. Mr. President,,1
ask unanimous consent that the fol-
lowing Senators be added as cospon-
sors to my last amendment: Senator
HuMPHREY. Senator JEPSEN, and Sena-
tor HELms.
The PRESIDING OFFICER. With-
out objection, it is so ordered.
Mr. DOLE. Mr. President, we are
moving along rapidly. It is going to
take some time, but we are making
steady progress.
There is not any set order, but there
are Senators who have been waiting i
day or 2 days, such as Senator Hum-
PHREY, Senator HAwxnis, Senator
BAucus, Senator QuAYLc with one
amendment which I believe we can
agree to, an amendment by Senator
MATSUNAGA, and an amendment by
Senator LEvIN.
I am not certain, but I think we can
have a vote about every 15 or 20 min-
utes, hopefully.
Mr. HUMPHREY. Mr. President,
will the Sendtor yield?
Mr. DOLE. I yield.
Mr. HUMPHREY. Mr. President,
this Senator would agree to a time
agreement of 10 minutes on each side
on each amendment and then have an
up or down vote, with no point of
order being raised against either
amendment.
Mr. LONG. I object.
The PRESIDING OFFICER. Objec-
tion is heard.
Mr. LONG. Will the Senator yield? I
would like to explain my position.
Mr. HUMPHREY. I yield.
Mr. LONG. I do not want to agree to
a time agreement until we have a
chance to check with our minority
leader (Mr. BYRn). I personally have
no objection to a time agreement.
The PRESIDING OFFICER. The
Senator from Florida.
UP AIUMnUI PT NO. 109
(Purpose: To move up two years the phase-
out of the earnings limitation for benefici-
aries who have attained retirement age)
Mrs. HAWKINS. Mr. President, I
send an unprinted amendment to the
desk and ask for its immediate consid-
eration.
The PRESIDING OFFICER. The
clerk will report.
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Mach 22, 198.E CONGRESSIONAL RECORD -SENATE S 3611
The bill clerk read as follows: for someone in the lowest tax bracket, Committee will certainly pick a
The Senator from Florida (Mrs. Hew- someone receiving $4,000 in social se- higher, more realistic number.
KINS), for herself, Mr. Ammon, Mr. Ass- curity and earning $7,000 In wages for Analogous comparisons can be made
sxnoNG, Mr. D'Ai[ero, Mr. DICoscaQI, Mr. example. They probably also qualify for other economic variables that are
OARN, Mr. Heczr, Mr. Jzmw, Mr. NIOSLas, for food stamps. important determinants of OASDI
Mr. Symms. and Mr. Tan numbered 109. proposes an Equivalent tax rates for earning income and outgo. The results of such
unpranted lnted amendment number more than the limit are, therefore, comparisons are the same.
Mrs. HAWKINS. Mr. President, I even higher than 70 percent for most The II-B forecast Is already proving
ask unanimous consent that further people caught in this vicious trap. It to be too pessimistic, and the alterna-
reading of the amendment be dis-, can even exoeed 100 percent. Under tive III projection implausible. Which,
penned with. current law, it, is possible, for a senior come to think of it, is Just what we
The PRESIDING OFFICER. With- citizen to receive a bill instead of a should expect. The Socig Security Ad-
out objection, it is so ordered. check for earning more than the arbi-
The amendment is as follows: trary int. Now, how many people are casts. ministration actuaries make four fore-
On page 44, beginning with line 14, strike there that will work knowing that the native ative A In somewhat I otstic. c. Al-
out through line 6 on pace 45 and insert in' more they do, the worse off they will ternati v is somewhat pessimistic.
lieu thereof the following: \, e II-B b saactewha(D for each month in any taxable be? And alternative III is pessimistic. That
year ending after 1967 and before 1989; Even millionaires get a better deal from the Government. They have to means if the actuaries were to make
"(II) $500 for each month in any taxable only one forecast, take their beat shot.
year ending after 1988 and before 1990; face at most a 50-percent tax --rate.
"(UI) $750 for each month In any taxable Uncle Sam lets them keep at least 50 so to speak they would' use assump-
year ending after 1989, and before 1991; percent of however much they choose bons more optimistic than those used
(IV) $1,000 for each month In any tax- to earn. It is probably a lot higher if in II-B but lees optimistic than those
able year ending after 1990 and before 1999; they have a tax accountant. Why do used in II-A.
and we penalize the working old more than That best guess would permit imme-
year (v7 $1. ending 950 After aer each 1991 and month before any 1995.". taxable we tax the rich? I propose that the diate repeal of the earnings test, as
House voted to do in 1977.
On page 48. line a, strike out "1994" and earnings limit be raised by $3,000 for 5 the The arbitrariness at any earnings
insert in lieu thereof '~199T . years in a row beginning In 1998 and penalty law r even more obvious when
Mrs. HAWKINS. Mr. President, lifted entirely in 198x. penalty that t it does s not apply
under the legislation before us today Thus, the limit would be approxi- older than ft if
if
one whcoo ol 70. Why not 70? Some.
significant steps are recommended to mately $10,000 in 1988. $13,000 in YOU
resolve the shortrun and longrun 1989, $16,000 in 1990, $19,000 in 1991, all they is ? 7i1. without , 8a or even 91 can earn
penalty. But if
problems facing the OASDI trust $22,000 in 1998, with no limit alter- you he between the uses of p65 enalty. and if
funds. However, there is one problem ward. Assuming inflation remains 70,
left unresolved that we can help cor- under control during the 1960's, under you have to pay the price. Where is
rect today. The problem is we discrim- my amendment most of'the elderly pe- the fairness or logic behind such dis-
ination. Under the bill, anyone be- nalized by this misguided policy will be tinctions?
tween 65 and 70 who chooses to start unaffected by it by 1969. Few are - Frankly, any penalty for working if
drawing social security Is forced by the likely to earn more than $13,000 in you are over 65 is Inconsistent with
Federal Government to make the wages and salary in that year. By con- raising the retirement age as reeom
unfair irrevocable concession never to parlson, under the bill the earnings mended under the bill before us. You
work again full time. cap would equal about only $7,000, vir. cannot, without being inconsistent,
Current late sets a limit now equal to tually unchanged from today. chin that life expectancy has grown,
$6,600 as the maximum amount a Frankly, In- my mind the largest so people should work longer, and
social security recipient can earn in criticism that can be made against my then support penalns working after
wages or salary annually without pen- amendment is that it Is too cautious. you turn 65.
atty. In Flerida, the average per capita Immediate repeal of the earnings pen- The earnings penalty. In addition to
income is $7,200. just a little above the aity is affordable If one believes the being unfair. arbitrary, and inconsist-
limit. Above the limit, social security persuasive evidence piling up that eco. eat, also contradicts the firmly held
checks are reduced by $1 for every $2 nomic recovery has begun. That evi- belief that social security payments
earned. This direct penalty alone has deuce suggests that the II-B forecast are an earned right. The public thinks
the same impact as a 60-percent tax on is too pessimistic and alternative III social security is just like a private
wages earned above the limit. If you represents the pathway anticipated by pension plan or an annuity contract.
earn $2,200 above the limit, then you those who believe the :end. of the You pay in for a number of years and
will have only $1,000 left after your Earth is near. at an agreed upon age, you start draw-
social security check is reduced. Consider the unemployment figures Ing the benefits you contracted for.
However, the direct penalty is only a used. Under II-B, the unemployment After you pay In, you receive. That is
part of the disincentives thrown in the rate for 1983 is forecast at 10.7 per- the deal, with no strings attached. In
way of those wishing to work again, cent. And under alternative III. the fact, if private plans included provi-
Right now, social security is not taxed, unemployment rate is 11 percent. sons stating that pension benefits or
but wages and salary are. Thus, gain- Under the old way of calculating un- annuity payments stopped or were re-
ing $2,000 in wages and losing $1,000 employment, the rate is already 10.4 daced when you went back to wrnt,
in social security is not the same thing percent. Under the new way, it is 10.2 Congress would pass a law outlawing
to the tax men as receiving an extra percent. Both are well below the aver- them. However, maybe we would not
$1,000. They treat it as receiving an ages used for devising the II-B and III have to. Who would buy such a poor
extra $2,000. That means $140 is re- forecasts, and the recovery is just be- plan?
moved for social security taxes and at ginning. Mr. President, the earnings penalty
least another $200 is. taken 'for Federal Consider the economic growth rates did not became law by accident. It
income taxes. probably a lot more. Fl- assumed. The II-B projection assumes passed during a time when Congress
nally, most States, also have income the economy grows in real terms by felt it best that those who retired
taxes. Most municipalities and coun- . only 1.4 percent, and the alterntative should stay retired, making room for
ties do, too. So, take out another $60. III projection says we will produce less the young to take their yobs. However,
When the smoke clears, the net this year than we did last year. Mean- how many people feel that way today?
amount received for earning that while, the administration. which by Would not our ability to improve the
$2,000 is only $600. That is equivalent general agreement was considered to math and science skills of our young
to a 70-percent tax rate. ' . be lowballing its economic growth esti- be improved if we could entice some of
The example I have just given is not mates, assumed a growth rate equal to our best retired teachers to come back,
one covering a wealthy individual. It is the II-B forecast. Our own Budget full time or-part time?
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S 3612
CONGRESSIONAL RECORD - SENATE March 22, 1989
The President asked in his state of
the Union address for retired teachers
to come forward and teach our chil-
dren math and science. They certainly
will not if they get a bill instead of a
check for coming back to the working-
place.
For many elderly, the decision to
return to work is not voluntary. They
do not return to work out of choice
but out of necessity. Many people who
retire quickly feel the financial pinch
of living on a fixed income when the
prices of life supports are rising faster
than the inflation rate. Consider these
figures. The cost of electricity has
gone up 60 percent faster than the
CPI over the last 5 years. The cost of
housing and heating your home has
gone up 12 percent faster. Cost of food
has risen 7 percent faster. Bus fare
has gone up 50 percent faster. And
gasoline has gone up at twice the rate
of the CPI. Telephone rates for local
calls are expected to go up three times
within 3 years. Water and sewer pro-
viders are asking for large increases all
over the country.
What happens when the elderly get
their electricity turned off when they
do not pay their electricity bill? I will
tell you what happens. They have to
pay twice their monthly consumption
in cash. Utility companies will not
take a check once you have been cut
off for missing a payment.
Should we penalize these people for
deciding they cannot afford to retire
after all? Instead, they have to keep
working just to pay for a minuscule
roof over their heads, or to make a
telephone call since someone is break-
ing in their front door, or to have
water come out of the faucets in the
house they have lived in for 45 years
while their property taxes have tripled
in less than 5 years?
How about penalizing those who
incur enormous medical bills when
their spouses suffer from a catastroph-
ic illness that medicare does not cover?
The average person who is on medi-
care has to come up with $721 a
person annually just to cover the
charges for their health costs that are
not covered in medicare. Or how about
penalizing someone who gets swindled
out of their life savings? You can pick
up the paper daily in Florida and read
of someone who just gave $10,000 or
$15,000 of their life savings on some
flimflam game that went on in a back
parking lot. With a little imagination,
I am sure my colleagues will come up
with some other examples.
The point is simple. Most people
want to retire as soon as possible.
They look forward eagerly to the day
when they can afford to do so. Unfor-
tunately, inflation or a serious finan-
cial mishap forces some of them back
into a job. We should not make the
last years of their lives such a hard-
ship by what we do in Congress.
I suspect it was for some of the rea-
sons I have outlined today that the ad-
ministration proposed phasing out the
earnings penalty in 1983 when they
sent a plan to do so to Congress in
May 1981. I commend the Finance
Committee for agreeing to eliminate
the earnings penalty in 1995 as pro-
posed by this bill.
However, I believe we can do better
than wait until 1995. While there are a
variety of ways to accelerate the elimi-
nation of the penalty, I believe the
least controversial way is to increase
the 5-year phaseout schedule recom-
mended by the Finance Committee by
2 years. Instead of phasing out the
penalty over 5 years beginning in 1990,
I propose starting in 1988.
There should be no question we can
afford my amendment if we believe
the charts we have been shown and
the study we have read prepared by
the Social Security Administration.
Starting in 1988 under virtually any
conceivable economic conditions,
OASDI will run a string of annual sur-
pluses well into the 21st century. At
year end in 1988, OASDI under the
moderately pessimistic II-B forecast
will have a checkbook balance of $57
billion according to the Social Security
Administration. In 1989, the balance
will grow to $89 billion. And the 1990's
will be even better; positive cash now
is expected to exceed $400 billion in
that decade alone.. If the doom and
gloom III forecast is used, then the
1988 and 1989 year-end figures are $13
billion and $23 billion. However, even
under alternative III, OASDI will start
to run annual surpluses in 1988, the
year I propose to phase out the earn-
ings test. And they will continue
throughout the 1990's and beyond. By
comparison,. my amendment costs
OASDI $800 million in 1988 and $1.3
billion in 1990. That means it costs less
than 1 percent of 1 percent of taxable
payroll. Even this modest amount is
an overstatement if you believe the
studies that were presented before
comprehensive hearings held by the
House Subcommittee on Retirement
Income and Employment, during the
96th Congress, 1980.
The studies showed that if the limit
were removed people would go back to
work, and thereby return up to 85 per-
cent of the cost for repealing the test
in the ? form higher income and social
security taxes. This administration
campaigned as did many Senators-
that together we were going to reward
work, and now we have said we are
going to penalize you if you are be-
tween 65 and 70 and choose to do so.
Someday soon, perhaps sooner than
we think, for this reason many of us
will be called upon to answer why we
did not fight to eliminate immediately,
instead of starting in 1988 age discrim-
ination against the elderly forced for
financial reasons back to work. I
wonder how presuasive our answer will
be that we decided to look away and
wait until 1995 before justice was
done.
Mr. President, I ask for the yeas and
nays.
The PRESIDING OFFICER. Is
there a sufficient second? There is a
sufficient second.
The yeas and nays were ordered.
Mr. DOLE addressed the Chair.
The PRESIDING OFFICER. The
Senator from Kansas is recognized.
Mr. DOLE. Mr. President, I thank
the distinguished Senator from Flor-
ida for offering the amendment. I only
wish we could accept it. And I only
wish I was as optimistic as even the as-
sumptions cited by the distinguished
Senator from Florida. But I think we
have to be realistic. This is going to
take about $2.3 billion out of the trust
fund. When we were finally trying to
put all this together in the Senate Fi-
nance Committee, we ended up with
about four areas we wanted to address,
and one was the area just addressed by
the Senator from Florida. The other
was the so-called bend points, another
was increasing the retirement age to
66, and the other was the day care,
child care credit just discussed by the
distinguished Senator from Colorado
(Mr. ARMSTRONG).
Now, it is not that we did not want
to do more. It is that we had certain
guidelines to follow, and it seemed to
us that we had gone about as far as we
could go with reference to this partic-
ular issue.
We do begin the phaseout in 1990. I
would like it to begin immediately. In
fact, the Senator from Kansas coauth-
ored, with the Senator from Arizona,
the earlier action in this area. I am not
certain what year it was now but it
was 4 or 5 years ago.
Under the committee bi11; the retire-
ment earnings test for people 65 and
older will be phased out between 1990
and 1995. Each year the exempt
amount of earnings would rise by
$3,000 and the test would be complete-
ly eliminated in 1995. The phaseout of
the retirement test is an important
change in social security that I have
long endorsed. Under present law
there are strong disincentives for older
Americans to continue to work. The
problem with phasing out the test and,
indeed, the problem with this amend-
ment is that it costs money. I must say
that a lot of amendments are going to
be coming up now. They all cost
money. And we are hanging on by a
thread. We are trying to keep the
package intact and everybody is
coming along now with an amendment
that is $500 million or $700 million or
$2.3 billion.
That may not seem like a lot in the
social security package, but we have to
raise about $165 billion between now
and 1990, and every billion dollars we,
lose, or $2.3 billion we lose out of the
trust fund must be made up some-
where else. We just had an amend-
ment that would have taken $40 bil-
lion out of the trust fund.
Mr. MOYNIHAN. Mr. President,
may we have order. The manager of
the legislation is speaking.
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March 22, 1983 CONGRESSIONAL RECORD - SENATE
Mr. DOLE. I thank the Senator
from New York.
I really believe that if in fact we are
going to have these big surpluses, and
Congress Is going to meet in 1984,
1985, 1986, and 1987, then it would cer-
tainly be appropriate for the Senator
from Florida to offer the amendment
and I would join. her in that amend-
ment, assuming we are both here in
1987 or whenever that time comes.
Mr. President, we have thought
about taking the amendment. We tried
to find out some way we could squeeze
it into the package. but it seems to me
that finally the botton line is: Can we
take it? Do we have the money to take
it? The answer is no. Therefore, I
would hope we would reject the
amendment.
? Mr. LEVIN. Mr. President, I reluc-
tantly vote against the amendment of-
fered by the Senator from Florida to
Mr. BAKER addressed the Chair.
The PRESIDING OFFICER. The
majority leader is recognized.
Mr. BAKER. Mr. President, I hope
the Senator from Florida and the
managers of the bill will let me Inter-
vene just for a moment to bring in the
conference report an the jobs bill.
Before I do that, however, may I say
that I do not intend to call up the con-
ference report now. However, after the
Hawkins amendment Is disposed of, it
is my intention to ask the Senate to
turn to the consideration of this meas-
ure.
Mr. President, once again, after the
Hawkins amendment is dealt with, it is
the intention of the leadership to ask
the Senate to turn to the considera-
tion of the conference report, which is
privileged. It is hoped that it will not
take an unduly long time to finish con-
sideration of this measure, and then
ients. Under current law, this limita-
tion is $6,600. Income earned above
this amount results in social security
benefits being reduced by $1 for every,
$2 that are earned.
The committee has proposed phas-
ing this limitation out by 1995. The
amendment being offered would phase
it out by 1993. I believe that we should
phase out or raise the earnings limita-
tions so it is at least high enough to
allow an individual to earn an income
which can supplement their social se-
curity benefits, and, thereby provide
the necessities of life. But early total
removal of the limitations may
weaken the solvency of the system.
While I can support the phaseout by
1995 it has been carefully crafted to
avoid any additional reduction of
social security benefits to pay for it.
We had beat leave it that way.*
Mr. MOYNIHAN addressed the
Chair.
The PRESIDING OFFICER. The
Senator from New York is recognized.
Mr. MOYNIHAN. Mr. President,
there is nothing I would add to the re-
marks of the distinguished Senator
from Kansas except our appreciation
to the Senator from Florida for draw-
ing the attention of the Senate to the
fact that it may well be, if fortune
smiles, that we could afford this
toward the end of the decade. We do
not think we can.
As time goes by, if it turns out we
can, the amendment can be offered
and, as the Senator from Kansas said,
he will support it, and I will support it.
But for the moment we have very
little keel room in this legislation, and
a billion here and a billion there, as
somebody once said in this Chamber,
and pretty soon you are talking about
real money. And it is real money we
are trying to raise. I would ask Sena-
tors on both sides if they could stay
with the Finance Committee's meas-
ure in this regard. It is made up of
small items. If we start taking small-
items out, we do not know where we .
will be.
we can finish both the conference
report and the social security package
tonight.
Mr~ident, I yield the floor.
MESSAGE FROM THE HOUSE
At 7:56 p.m., a message from the
House of Representatives, delivered by
Mr. Gregory, one of its reading clerks,
announced that the House agrees to
the report of the committee of confer-
emce on the disagreeing votes of the
two Houses on the amendments of the
Senate to the bill (H.R. 1718) making
appropriations to provide emergency
expenditures to meet neglected urgent
needs. to protect and add to the na-
tional wealth, resulting in not make-
work but productive jobs for women
and men and to help provide for the
indigent and homeless, and for other
purposes; it recedes from its disagree.
ment to the amendments of the
Senate numbered 10, 12, 19, 26, 44, 54,
60, 74, 75, 77, 81, and 83 to the bill, and
has agreed thereto; it recedes from its
disagreement to the amendments of
the Senate numbered 1, 2, 9, 16, 21, 22,
27, 28. 64, 71, 76, 79, 88, 89, 90, 91, 92,
97, and 98 to the bill, and has agreed
thereto, each with an amendment, in
which it requests the concurrence of
the Senate, and it insists upon its dis-
agreement to the amendment of the
Senate numbered 82 to the bill.
The message also announced that
the House has passed the following
bill, without amendment:
S. 366. An act to settle certain claims of
the Mashantucket Pequot Indians.
The message further announced
that pursuant to the provisions of sec-
tion 1, Public Law 86-420, as amended,
the Speaker appoints as members of
the U.S. Delegation of the Mexico-
United States Interparliamentary
Group for the 1st session of the 98th
Congress the following Members on
the part of the House: Mr. DE LA
GanzA, chairman, Mr. YATRON, vice
chairman, Mr. KAZEN, Mr. SKELTON,
S 3613
Mr. KooovsEK, Mr. ALEXANDER, Mr.
BARNES, Mr. LsoowARsrno, Mr. RUDD,
Mr. GooDLINO, Mr. DRxi:sR of Califor-
nia, and Mr. BEREuTzR.
APPOINTMENT BY THE VICE
PRESIDENT
The PRESIDING OFFICER. The
Chair, on behalf of the Vice President,
in accordance with 22 U.S.C. 1928(a)-
1928(b), as amended, appoints the Sen-
ator from Delaware (Mr. Brani) vice
chairman of the Senate delegation to
the North Atlantic Assembly during
the 98th Congress, the Senator from
Rhode Island (Mr. PuL), resigning.
SOCIAL SECURITY ACT
AMENDMENTS OF 1983
The Senate continued with the con-
The PRESIDING OFFICER. The
uestion is on the amendment. The
eas and nays have been ordered. The
erk will call ' the roll.
The assistant legislative clerk pro-
ceeded to call the roll.
Mr. STEVENS. I .announce that the
Senator from Alabama (Mr. DENTON),
the Senator from Minnesota,.(Mr. DUR-
ENSERGER), the Senator from Arizona
(Mr. GOLDWATER), and the Senator
from Illinois (Mr. Psacy) are necessar-
ily absent.
I further announce that, if present
and voting, the Senator from Alabama
(Mr. DENTON) would vote "nay."
Mr. CRANSTON. I announce that
the Senator from Texas (Mr.- BENT-
sEN), the Senator from Kentucky (Mr.
HUDDLESTON), the Senator from Mary-
land (Mr. SARBANES) are necessarily
absent.
The PRESIDING OFFICER. Are
there any other Senators in the Cham-
ber who desire to vote?
The result was announced-yeas 44,
nays 49, as follows:
[Rolicall vote No. 42 Leg.
YEAS-44
Abdnor
Glenn
Mitchell
Armstrong
Hatch
Nickles
Biden
Hawkins
Nunn
Binsaman
Hecht
Pen
Boren
Heflin
Pressler
Boschwltz
Helms
Pryor
Burdick
Hollings
Quayle'
Byrd
Humphrey
Randolph
Chiles
Jepsen
Riegle
Cohen
Kasten
Symms
D'Amato
Leahy
Thurmond
DeConcini
Mathias
Trible
East
Mattingly
Warner
Ford
McClure
Zorinsky
Garn
Melcher
NAYS-49
Andrews
Hart
Packwood
Baker
Hatfield
Proxmire
Baucus
Heinz
Roth
Bradley
Inouye
Rudman
Bumpers
Jackson
Sasser
Chafee
Johnston
Simpson
Cochran
Kasaebaum
Specter
Cranston
Kennedy
Stafford
Danforth
Lautenberg
Stennis
Dixon
Laxait
Stevens
Dodd
Levin
Tower
Dole
Long
Tsongas
Damenici
Lugar
Wallop
Eagleton
Matsunaga
Weicker
Exon
Metsenbaum
Wilson
Gorton
Moynihan
Grassley
Murkowski
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S 3614
CONGRESSIONAL RECORD - SENATE March 22, 1988
NOT VOTING-7
Bentsen Goldwater Sarbanes
Denton Huddleston
Durenberger Percy
So Mrs. Hawkins' amendment (UP
No. 109) was rejected.
Mr. DOLE. Mr. President, I move to
reconsider the vote by which the
amendment was rejected.
Mr. MOYNIHAN. I move to lay than
motion on the table.
The motion to lay on the table was
agreed to.
Mr. BAKER. Mr. President, I indi-
cated earlier that as soon as we fin-
ished this vote we would go to the con-
ference report. The chairman of the
committee, the manager of the confer-
ence report on this side, needs a little
more time to examine the nature of an
amendment sent to us on one of the
items in disagreement with the House.
I understand Senator DOLE and Sen-
ator QUAYLE are prepared to proceed
now on another amendment to the
social security package which will not
require a rollcall vote. I hope the man-
agers will agree to do that while I con-
sult with the chairman of the Appro-
priations Committee and arrange for
us to proceed to the conference report.
UP AMENDMENT NO. 110, AS MODIFIED
(Purpose: To allow dislocated workers to
withdraw contributions to IRA's)
Mr. QUAYLE. Mr. President, I send
an amendment to the desk. .
The PRESIDING OFFICER. The
clerk will report.
The bill clerk read as follows:
The Senator from Indiana (Mr. QUAYLE)
proposes an unprinted amendment num-
bered 110. ?
Mr. QUAYLE. Mr. President, I ask
unanimous consent to withdraw that
amendment and submit this amend-
ment, which is a revised amendment,
in accordance with an agreement that
has been worked out.
The PRESIDING OFFICER. The
amendment is so modified. The clerk
will report.
The bill clerk read as follows:
The Senator from Indiana (Mr. QUAYLE)
proposes an unprinted amendment num-
bered- 110, as modified.
Mr. QUAYLE. Mr. President, I ask
unanimous consent that further read-
ing of the amendment be dispensed
with.
The PRESIDING OFFICER. With-
out objection, it is so ordered.
The amendment, as modified, is as
follows:
At the end of title IV add the following
new section:
SPECIAL PROVISIONS FOR DISLOCATED WORKERS
WITH RESPECT TO INDIVIDUAL RETIREMENT
ACCOUNTS
SEC. 423. (a) Notwithstanding any other
provision of the Internal Revenue Code of
1954, a dislocated worker having documen-
tation issued by the Secretary under this
section, may withdraw contributions to, and
interest on, an individual retirement ac-
count established in accordance with the
provisions of section 408 of the Internal
Revenue Code of 1954, without incurring
the tax penalty under section 408(f) of the
Internal Revenue Code of 1954.
(b) For purposes of subsection (a), an indi-
vidual is a dislocated worker if such individ-
ual-
(1) has at least twenty quarters of cover-
age under title II of the Social Security Act;
and
(2) has received regular unemployment
compensation under State law within the
preceding 12-month period, and has ex-
hausted all rights to such compensation in
his most recent benefit year.
(c) The Secretary shall provide for the is-
suance of documentation to individuals
identified as dislocated workers.
Mr. QUAYLE. Mr. President, I am
sending to the desk an amendment
which will permit the long-term unem-
ployed to withdraw their contributions
to individual retirement accounts
without incurring a tax penalty.
We all know that this Nation faces a
large problem of workers who have
been and who will continue to be per-
manently dislocated from their cur-
rent employment. These workers must
gain new skills before they can reenter
the productive mainstream of the
American economy. It seems to me
just a matter of commonsense to let
workers withdraw their IRA contribu-
tions without penalty when they are
faced with the need to make a funda-
mental change in their working career.
There is no sense in having funds
locked up in a long-term savings ac-
count when the workers' needs are im-
mediate and now. IRA withdrawals are
already permitted for the handi-
capped. This amendment permits
withdrawals for those who have, in
fact, been handicapped by the changes
in our economy.
Mr. President, this amendment is
very direct and very simple. It involves
the individual retirement accounts and
forbears the tax penalty for withdraw-
al to those who are dislocated workers.
This amendment, I am pleased to
report, does have the support of the
Treasury. It has been slightly modi-
fied, I might point out, from the ver-
sion that was printed in the RECORD on
March 16 in order to achieve a greater
administrative simplicity.
Basically what it does is just to allow
a withdrawal without penalty from an
IRA account for those people who are
dislocated workers and seeking em-
ployment.
Mr. DOLE. Mr. President, I under-
stand from the Senator from Indiana
that the Treasury does support this
amendment. As I understand what it
permits is if somebody is dislocated
they can-it is similar to the situation
with respect to the disabled. They can
withdraw from the IRA without penal-
ty. Is-that the essence of the amend-
ment?
Mr. QUAYLE. That is the essence.
That is correct.
Mr. DOLE. Does the Senator have a
revenue cost estimate?
Mr. QUAYLE. Obviously in fiscal
year 1983 there will not be any be-
cause they would not be paying the
penalty until the following year, so
any kind of revenue loss would not be
in fiscal 1983 but in fiscal 1984.
Mr. DOLE. Has the Senator talked
to the distinguished Senator from
Louisiana about this amendment?
Mr. QUAYLE. We have had from
the minority side for a considerable
amount of time no opposition. This is
really not a noncontroversial amend-
ment. I am going to get to one. So it
has been over there with the Senator's
staff for clearance, and we have had
no objection to it.
Mr. PRYOR. Mr. President, I might
say to the distinguished Senator from
Indiana, I was filling in for the Sena-
tor from Louisiana (Mr. LONG). I
wonder if we could have an accommo-
dation until he gives his acceptance or
possible disapproval of this, and so I
wonder if we might lay this aside tem-
porarily until the Senator from Louisi-
ana returns?
Mr. DOLE. I think that is a good
suggestion. I wonder if we might not
temporily set this aside until we check
with Senator LONG.
You have an amendment that has
been cleared with Senator LONG, the
one you discussed with him?
Mr. QUAYLE. I have discussed the
voucher amendment with Senator
LONG, I have not yet had clearance
with him. I thought I would wait for
clearance.
I was under the impression there
would not be any problem with two of
the amendments, but I would be glad
to accommodate the minority on this.
It has been printed in the RECORD, it
has been well established for a couple
of days, and I have heard no objection.
As a matter of fact, one day we had ac-
commodations we had made in re-
sponse to a number of people who
have seen this and commented on it.
Again, it is just foregoing a penalty
on withdrawal from IRA accounts of
dislocated workers. I can hardly imag-
ine that that is going to be a hugely
controversial issue. We are talking
about the Federal supplemental com-
pensation authorization and unem-
ployment compensation. This would
certainly be a way, without having any
drain on the Treasury, to provide some
comfort for people that are dislocated
and find themselves in a very unfortu-
nate circumstance.
I will be very surprised if, in fact,
there is any opposition. But I would be
willing to accommodate the minority
in any fashion that the manager of
the bill sees fit.
Mr. PRYOR. Mr. President, once
again, in regard to the amendment of
the Senator from Indiana, I certainly
cannot speak for our side on this par-
ticular issue. I would like to ask, re-
spectfully, if the Senator from Indiana
would temporarily set aside the
amendment until our side has had an
opportunity to examine the amend-
ment.
Mr. QUAYLE. Mr. President, I ask
unanimous consent that this amend-
ment be temporarily set aside.
. The PRESIDING OFFICER. With-
out objection, it is so ordered.
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Mach 22, 1983 CONGRESSIONAL RECORD - SENATE
UP AIRNDMM NO. 111
(Purpose: To provide that FSC shall not be
denied to an individual in training)
Mr. QUAYLE. Mr. President, I send
an amendment to the desk and ask for
its immediate consideration.
The PRESIDING OFFICER. The
clerk will report.
The assistant legislative clerk read
as follows:
On page 234, after line 23, insert the fol-
lowing:
TRAUUNO
Sec. 404. Section 602 of the Federal Sup-
plemental Compensation Act of 1982 is
amended by adding at the end thereof the
following new subsection:
"(g) The payment of Federal supplemen-
tal compensation shall not be denied to any
recipient (who submits documentation pre-
scribed by the Secretary) for any week be-
cause the recipient is in training or attend-
ing an accredited educational institution on
a substantially full-time basis, or because of
the application of State law to any such re-
cipient relating to the availability for work,
the active search for work, or the refusal to
accept work on account of such training or
attendance, unless the State agency deter
mines that such training or attendance will
not improve the opportunities for employ-
ment of the recipient.".
Mr. QUAYLE. Mr. President, this
amendment deals with the Federal
supplemental compensation benefits
and allows a different procedure for
whether an individual may be availa-
ble for work.
Under present law, these benefici-
aries are disqualified from benefits
unless their retraining has been previ-
ously approved by the State employ-
ment security agency. As a matter of
record, these agencies have rarely ap-
proved training courses unless the
agency has itself arranged for the
training.
Under my amendment beneficiaries
would not be disqualified from bene-
fits if they took training unless the
State agency determined that the
training would not improve the benefi-
ciary's prospect of employment.
So we are reversing the process on
determining whether an individual
would be available for work. The em-
phasis is to, try to get individuals to
seek training instead of waiting.
At the request of the Department of
Labor, I have included some modifica-
tions from my original amendment in
order to prevent potential misuse of
this provision. First, I have provided
that the beneficiary, the person re-
ceiving unemployment compensation,
must submit appropriate documenta-
tion, as will be prescribed by the Sec-
retary, concerning his retraining so
that the State agency will have adb-
quate evidence on which to base its de-
termination. Second, I have made the
provision applicable only to retraining
that is taken on a substantially full-
time basis to prevent the possibility of
someone being excluded from job
search requirements just because he is
taking training for 1 hour a week.
With these modifications, I under-
stand that this amendment will be ac-
ceptable. Let me summarize. What we
are doing is putting the burden on the
employment security agency to deter-
mine that he is not receiving or she is
not receiving adequate training. Right
now the procedure is very cumber-
some. Individuals find It very difficult
at times, because of the administrative
hurdles placed before them. to get cer-
tified that they are trying to receive
training to enhance one's skills and,
therefore, enhance one's employabil-
ity.
I believe this amendment certainly is
a step in the right direction. The em-
ployment security agency sees that
the individuals are taking advantage
of it or they do not provide proper cer-
tification. then, in fact, they would not
be available for work and, therefore.
they could not go ahead and seek this
training.
Mr. President, I just want to empha-
size one point. This amendment goes
to what is going to be the second
phase of the jobs bill. Later on tonight
we are going to be debating the jobs
bill. A number of people that support-
ed that, including the Senator from
Indiana, did. that because it is a short-
term solution. It is not a long-term so-
lution. The Federal unemployment
compensation is in there. It is a matter
of dire necessity , for every State, in-
cluding my own, that we pass that.
But, beyond that. the real jobs legis-
lation is not, first of all, going to mean
economic recovery. Second. and this is
the challenge that we have, how are
we going to train and retrain our sur?
plus labor in this country? How are we
going to take those individuals that
have been dislocated and displaced
and match them up with future jobs?
How are we going to take somebody
that has been employed for a number
of years. and develop new skills and,
therefore, new opportunities?
What this amendment does is to say:
"Look, what we are going to do is en-
courage training and we are not going
to deny benefits to somebody that is
seeking proper training and trying to
get ahead in life and to move a step
forward."
It is not going to be open-ended be-
cause there is going to have to be cer-
tification. Just like under the GI pro-
gram, certain certifications that if you
were taking courses,'to go ahead and
you would be eligible for the OI pro-
gram. This is the same requirement.
Once the individual shows that he or
she is receiving training, then they are
going to continue to get those unem-
ployment benefits unless the agency
determines that it is not going to en-
hance their employability.
I Imagine, in most cases, they would
not make that determination and,
therefore, there would be a positive in-
centive and reward for those people to
go out and to have training and there
would not be a punitive liability or a
disadvantage to those individuals
where they would say. "Oh, no, you
can receive training if you are going to
continue to get your unemployment
compensation."
S 3615
Let us face it, if they can go ahead
and receive that unemployment com-
pensation and receive that training,
they are going to be better off and the
Nation is. too. So I ' hope that there
will not be any dissent on this amend-
ment.
It just reverses the present process.
It has been printed in the Raoonu. It
has been discussed at the staff level. It
has the administration's support and
it should have the support of the
entire Senate.
Mr. DOMENICL Will the Senator
yield for a question?
Mr. QUAYLE. I am glad to yield to
my distinguished chairman.
Mr. DOMENICL Mr. President,
first, I wish to compliment the Sena-
tor for the amendment. I think it is an
excellent one.
Who will make the determination as
to whether or not the training or re-
training enhances one's employability?
Let me tell the Senator why I ask that
question. I have a pocket of unemploy-
ment attributable to copper mining. I
have been down there a couple of
times meeting with the working
people. They told me that they are at-
tempting to go to school there at the
regional university and take the voca-
tional course and that somebody at
the State level made the determina-
tion that they qualified if they were
learning to be a plumber but they did
not qualify for unemployment if they
were learning to be,a carpenter. Will
the amendment of the Senator change
any burden of proof there?
Mr. QUAYLE. It certainly does. It
changes the process. because under
the current process your employment
security agency sets up all of this cri-
teria and then they have to fall into a
certain category.
Under this amendment, the pre-
sumption, so to speak-and we will
have to wait and use exactly how it
will be carried out with the Secre-
tary-the presumption is if they are
certified and receive training, they are
also certifying that they are going to
elevate one's skills. There was a poten-
tial abuse we corrected.
Someone would say that maybe they
will be able to certify they are only
getting 1 hour a week and, therefore,.
that would not be right. So we put in
substantially full-time employment; in
other words, it has to be a basically
full-time training that they are seek-
ing. Therefore, once the employee or
the recipient or beneficiary deter-
mines that they are going to enhance
their employability, the burden of
proof is now on the Department to
say, "No. they are not."
Right now the Department can come
up with arbitrary standards, as they
have done in the Senator's State of
New Mexico, and say if you do not do
this you do not qualify. It simply re-
verses the process and reverses the
presumption.
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CONGRESSIONAL RECORD - SENATE March 22, 1983
Mr. DOMENICI. I compliment the
Senator. I ask him if I may be added
as a cosponsor.
Mr. QUAYLE. Mr. President, I ask
unanimous consent that the Senator
from New Mexico (Mr. DOMaNIcI) be
added as a cosponsor.
The PRESIDING OFFICER. With-
out objection, it is so ordered.
Mr. DOMENICI. I thank the Sena-
tor.
Mr. DOLE addressed the Chair.
The PRESIDING OFFICER. The
Senator from Kansas.
Mr. DOLE. Mr. President, again, we
are waiting for the distinguished Sena-
tor from Louisan (Mr. LoN(;) to come
to the floor so he will have a chance to
examine the amendment.
As I understand, the amendment has
been modified, but it is still hard to de-
termine that somebody is looking for
work if they are in a training program.
I do not have any real objection, but
I think it can be tightened up some
more and we can do that in confer-
ence. However, I would want the dis-
tinguished Senator from Louisiana to
clear the amendment.
The amendment that troubles me is
the one the Senator has not offered
yet. The more I heard about it, the
less enthusiastic I am about the
voucher. I would hope the Senator
would not press that amendment. It is
the same thing we have had hearings
on, or essentially the same thing we
have had hearings on, in the Finance
Committee.
As I understand, there are still a
number of questions to be resolved,
and I would hope that we, might delay
that amendment for another time.
Mr. QUAYLE. Will the Senator
yield?
Mr. DOLE. The Senator has not of-
fered the amendment yet, but I under-
stand he may do so. I just want to in-
dicate I have no objection to the first
two amendments. I feel after discuss-
ing the third amendment and learning
more about It, I would prefer not to
have to address that at this time.
The Senator is certainly at liberty to
offer it.
Mr. QUAYLE. Let me tell the Sena-
tor that when we started out with the
voucher proposal, there were a lot of
people we had been working with who
expressed the same concerns as the
Senator from Kansas, that maybe we
shold not be doing that at this particu-
lar time, or they had certain questions
on the amendment.
After working with particularly a
number of people in the administra-
tion this past week and this week, the
Department of Labor, the Department
of the Treasury, and OMB have basi-
cally signed off on this amendment
and they are now supporting it.
I would hope that we might be able
to get the chairman of the Finance
Committee, which has jurisdiction
over this matter, as well as the Labor
and Human Resources Committee, to
work this out. Maybe as time goes on
the Senator from Kansas might like
this amendment that I would like to
offer later on. It does have the sup-
port of the administration. I think it is
a good amendment. Nobody really
knows how these vouchers are going to
work.
This is an extension of the Federal
supplemental compensation. This is a
good place to offer it. There may be
some debate on it, and there may be
some questions that we could answer.
We have taken a considerable amount
of time and contacted a lot of people
who had a lot of reseravations to begin
with. We have made a lot of accommo-
dations on it and believe it is really a
good amendment.
Mr. DOLE. As I say, I just happened
to focus on it, and it may not be fair to
the Senator to say that because I have
really not had a chance to examine it.
I would hope, as a matter of fact,
that the Senator would not offer it at
this time and that we would temporar-
ily set aside the other two amend-
ments unitl the Senator from Louisi-
ana comes to the floor. I do not see
any problem with those two.
Mr. QUAYLE. I appreciate the Sena-
tor's comments. The other two amend-
ments were definitely not controver-
sial, and this one should not be too
controverisaL It may become a little
controversial as we go on. I will cer-
tainly accommodate the chairman on
that and work with him. I will also
work with the ranking minority
member as the evening goes on. We
have the jobs legislation to pass yet to-
night. Maybe by tomorrow we can get
this worked out.
Ur AMENDMENT NO. 112
I might say I do have an amendment
which I believe has been worked out
on all sides on section 1122. What I
will do is offer that one, which I be-
lieve we have everyone signed off on,
and then we can set those three aside
as they are noncontroversial. Then
when the Senator from Louisiana re-
turns, we can perhaps accept those
three en bloc.
Mr. DOLE. Mr. President, will the
Senator describe the amendment
which has been cleared all the way
around?
Mr. QUAYLE. The amendment on
section 1122 basiqally provides that on
section 1122 hospital construction of
over $600,000 they simply submit for
review to the section 1122 agency or to
the State planning agency. My origi-
nal preference was to have an actual
approval of the submission, but that
received strong objections from a
number of people.
What we are doing is simply submit-
ting it for review.
I think everybody knows there is a
tremendous question on health care
costs. This issue is one which has been
debated before. It is one that will con-
tinue to be controversial.
Under this amendment, which I be-
lieve has been worked out to the satis-
faction of everybody, it is not going to
be that noncontroversial. It is going to
be simply amending section 1122 to
provide for submission of the construc-
tion costs and capital expenditures of
hospitals to either the section 1122
agency or the State planning agency.
I believe that amendment has been
cleared, from what I have been told. If
not, we will have to go back to work a
little bit more, or we will just bring it
up and debate it later sometime.
Mr. DOLE. The Senator from
Kansas certainly has no objection. It
may have been cleared at the staff
level, but we do have to consult with
the distinguished Senator from Louisi-
ana. I do not see any problem at all
with the third amendment offered. If
it is satisfactory with the Senator, we
will set aside the three amendments
and take up another noncontroversial
amendment by the Senator from Mon-
tana.
UP AMENDMENT NO. 112
(Purpose: To make changes in the provi-
sions of section 1122 of the Social Security
Act relating to capital expenditures and
planning)
Mr. QUAYLE. Mr. President, I send
an amendment to the desk and ask for
its immediate consideration.
The PRESIDING OFFICER (Mr.
WILSON). The clerk will report.
The assistant legislative clerk read
as follows:
The Senator from Indiana (Mr. QUAYLE)
proposes an unprinted amendment num-
bered 112.
Mr. QUAYLE. Mr. President, I ask
unanimous consent that further read-
ing of the amendment be dispensed
with.
The PRESIDING OFFICER. With-
out objection, it is so ordered.
The amendment is as follows:
At the end of title III add the following
new section:
SECTION 1122 AMENDMENTS
SEc. 308. (a) Section 1122(C) of the Social
Security Act is amended by striking out
"the Federal Hospital Insurance Trust
Fund" and inserting "the general fund in
the Treasury".
(b) Sections 1122(g) and 1861(zX2) of such
Act are each amended by striking out
"$100,000" and inserting in lieu thereof in
each instance "$600,000".
(c) Section 1122 of such Act is amended by
adding at the end thereof the following:
"(J) A capital expenditure made by or on
behalf of a health care facility shall not be
subJect to review pursuant to this section if
75 percent of the patients who can reason-
ably be expected to use the service with re-
spect to which the capital expenditure is
made will be individuals inrolled in an eligi-
ble organization as defined in section
1876(b), and if the Secretary determines
that such capital expenditure is for services
and facilities which are needed by such or-
ganization in order to operate efficiently
and economically and which are not other-
wise readily accessible to such organiza-
tion.".
(c) Section 1861(z)(2) of such Act is
amended by inserting "(A)" after "(z)". and
by adding at the end thereof the following
new subparagraph:
"(B) provides that such plan is submitted
to the agency designated under section
1122(b), or if no such agency is designated,
to the appropriate health planning agency
in the State (but this subparagraph shall
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not apply in the case of a facility exempt
from review under section 1122 by reason of
section 1122(1));".
(d) The amendments made by this section
shall apply only with respect to cost report-
ing periods beginning prior to October 1.
1986.
Mr. DOLE. Mr. President, I under-
stand this is the amendment which
the Senator from Indiana has just ex-
plained.
Mr. QUAYLE. Yes, and I have a fur-
ther statement.
Mr. President, by the administra-
tion's own admission, there Is a little
more that needs to be done with
regard to their medicare prospective
payment legislation before it can-
really begin to make a dent on the
rising cost of health care.
I believe that the proposed "pass
through" for capital expenditures
under the prospective payment pro-
posal will stimulate unnecessary capi-
tal expenditures and defeat the cost
containment objectives of the propos-
al. We must act carefully if we are to
discourage capital expansion that has
not demonstrated it is needed.
Medicare prospective payment offers
an alternative to our present cost-
based system, which has not provided
incentives to hospitals to be efficient.
Clearly, changes are needed in the way
we pay for health care. While moving
forward on a prospective payment
system for hospitals is a step In the
right direction, we should not take
that step without attempting to link
prospective payment systems with sys-
tems for restraining unnecessary capi-
tal expenditures.
As long as capital expenditures are
passed through. there Is the potential
for the pass-through becoming a flood.
Passing through capital costs will con-
tinue to inflate hospital costs because
new capital expenditures will result in
increased supply, utilization and cost.
It Is known that for every dollar in-
vested In capital, it generates a 30-cent
increase per annum in operating costs.
Not only does the current proposal
allow for the unrestrained flow-thru
of capital costs, it In fact will stimulate
an already expensive component of
health can cost escalation by encour-
aging hospitals to make new capital
expenditures as quickly as possible.
The administration is quite clear in
stating that capital costs will eventual-
ly be included in prospective rates.
Combined with the current pass
through, it is an open invitation to
invest now and build up a base of
reimburseable debt before limits are
placed on capital costs.
While I strongly support and recog-
nize legitimate needs for capital ex-
penditures, I also believe that a system
which passes through new costs with.
out checks and balances will pay for
unneeded capital growth in the future.
At a time in our Nation when funds
are scarce, and in an industry that is
volatile in its inflationary spiral, new
capital expenditures should not be
paid unless they have been carefully
reviewed by the State to determine
the need for, and affordability of, the
proposed expenditures.
For this reason, I Intend to offer an
amendment to that portion of the
social security bill that addresses the
medicare prospective payment propos-
al.
My amendment will do several
things: It will require hospitals to
submit their 3-year capital expendi-
ture plan to either a designated State
planning or section 1122 agency.
My amendment will also raise the
threshold in the current 1122 legisla-
tion from $100,000 to $800,000-ex-
pected expenditures over $600,000 will
trigger the need for submission of the
capital expenditure plan. In addition,
section 1122C is amended to prevent
medicare funds from being used to pay
for any cost that the State may incur
from implementation of 1122, rather
the funds would be made available
from the general revenues.
It is my feeling that these steps will
insure that the States can continue to
monitor the capital expenditures
planned for their communities, and it
is hoped the States will not approve
those that are unnecessary.
Mr. President. I ask unanimous con-
sent that the amendment be tempo-
rarily set aside with the other two
Quayle amendments.
The PRESIDING OFFICER. With-
out objection, it is so ordered.
UP A191DMMT NO. 113
(Purpose: To modify certain provisions re-
lating to the establishment of the Com-
mission of independent experts)
Mr. BAUCUS. Mr. President, I send
an amendment to the desk and ask for
its immediate consideration.
The PRESIDING OFFICER. The
clerk will report.
The assistant legislative clerk read
as follows:
The Senator from Montana (Mr. BAUCUS)
proposes an unprinted amendment num-
bered 113.
Mr. BAUCUS. Mr. President, I ask
unanimous consent that further read-
ing of the amendment be dispensed
with.
The PRESIDING OFFICER. With-
out objection, it is so ordered.
The amendment is Is follows:
On page 137, line 1. strike out ", at least
every five years" and Insert In lieu thereof
"from time to time, and at least every three
years"
On page 137, line 6, strike out "adjust-
ments to be made" and insert In lieu thereof
"the need for adjustments".
On page 142, line 15, strike out "Commis-
sion of Independent experts," and Insert In
lieu thereof "Prospective Payment Assess-
ment. Commission, composed of Independent
experts".
On page 142, line 17, strike out "to
review" and insert In lieu thereof a comma
and "which Commission, in addition to car-
rying out Its functions under subsection
(d)(4XD), shall review".
On page 144, line 25, strike out "and" the
first place It appears.
On page 145,-line 1, strike out the period
and?insert in lieu thereof a comma and "and
individuals having expertise in the research
53617
and development of technological and scien.
tific advances in health care.".
On page 145, line 0, strike out "and".
On page 145, line 10, strike out "(III)" and
insert In lieu thereof
On. page 145, between lines 9 and 10,
Insert the following new matter.
"(iii) national organisations representing
manufacturers of health can products; and
On page 148, line 15, strike out "and".
On page 148, line 19, strike out the period
and Insert In lieu thereof a semicolon and
.,and".
On page 148, between lines 19 and 20,
insert the following new matter.
"(iii) adopt procedures allowing any inter-
ested party to submit information with re-
spect to medical and surgical procedures
and services (including new practices, such
as the use of new technologies and treat.
ment modalities), which Information the
Commission shall consider in making re.
ports and recommendations to the Secre.
tary and the Congress.
Mr.BAUCUS. Mr. President, this is
a technical amendment in fact, not in
theory. It has been cleared all around.
It Is a clean amendment.
Essentially. it establishes in the
medicare portions of the bill two
minor changes In that portion of the
bill Which deals with the prospective
payment assessment commission. In
the bill, that commission is established
to make sure that the DRO's and the
beneficiary payments are adequate,
neither excessive nor insufficient.
These two amendments are simple.
One is to make sure that the DRO's
are reevaluated every 3 years instead
of every 5 years. and. second. to make
sure the commission can draw on
other groups In its membership.
That is what it Is. It is clear. I thank
the-chairman for letting me introduce
my amendment.
Mr. DOLE. Mr. President, I can state
In this case that the amendment has
been cleared. It is technical in nature.
I think it is an improvement. I am pre-
pared to accept the amendment. There
is no objection on the other side.
The PRESIDING OFFICER. The
question is on agreeing to the amend-
ment.
The amendment (UP No. 113) was
agreed to.
Mr. DOLE. I move to reconsider the
vote, by which the amendment was
agreed to.
Mr. BAUCUS. I move to lay that
motion on the table.
The motion to lay on the table was
agreed to.
UP ANMKWA NT NO. 114
(Purpose: To require appropriations with re.
spect to certain provisions of sections 143,
144, and 145)
Mr. HATFIELD. Mr. President, I
send an amendment to the desk' on
behalf of Senator STSantis of Missis.
sippi and myself and ask for its imme.
diate consideration.
The PRESIDING OFFICER. With.
out objection, the Quayle amendment
is laid aside.
The amendment of the Senator from
Oregon will be stated.
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CONGRESSIONAL RECORD - SENATE March .22, 1983
The assistant legislative clerk read
as follows:
The Senator from Oregon (Mr. HATFIELD)
for himself and Mr. STEmSIS, proposes an
unprinted amendment numbered 114.
Mr. HATFIELD. Mr. President, I ask
unanimous consent that further read-
ing be dispensed with.
The PRESIDING OFFICER. With-
out objection, it is so ordered. The amendment is as follows:
On page 85, line 5. before the period insert
to the extent provided in advance in ap-
propriation Acts".
On page 85, line 13, before the period
insert ", to the extent provided in advance
in appropriation Acts".
On page 85, lines 16 through 19, strike out
"There are hereby appropriated into such
Trust Funds such sums as may be necessary
to reimburse such Trust Funds for the
amount of currently unnegotiated benefit
checks.".
On page 87, lines 4 and 5, strike out "of
the enactment of the Soeial Security
Amendments of 1983" and insert "on which
funds therefor are appropriated".
On page 87, line 9, strife out "not other-
wise appropriated" and insert ", to the
extent provided in advance in appropriation
Acts".
Mr. HATFIELD. Mr. President, I
wish to call the attention of the distin-
guished chairman of the Committee
on Finance as well as other Members
of the Senate to three troublesome
provisions in the Finance 'Committee
bill. These sections are 143, 144. and
145.
Section 143 of the committee bill ap-
propriates "such sums as may be nec-
essary" into social security trust funds
to credit the amount of social security
checks drawn on the Treasury but
never negotiated. The committee
report indicates that this provision
would result in a one-time appropri-
ation of about $800 million. Under
present law, such uncashed checks
benefit the Treasury, not the trust
funds. Further, the bill gives the Sec-
retary of the Treasury extremely
broad and vague authority to continue
to credit unnegotiated Treasury
checks to the trust funds. The commit-
tee report indicates this would be done
regularly.
Sections 144 and 145 provide lump
sum appropriations to credit the trust
funds with an amount equal to the an-
ticipated costs of military wage credits.
Reimbursement to the trust funds is
currently provided annually in the
general appropriation bill for the De-
partments of Labor, Health and
Human Services, Education, and Re-
lated Agencies. The committee provi-
sion does not change the formula for
calculating these credits, but rather
accelerates payment of anticipated
credits to the present, so that the
trust funds receive a one-time transfer
from general revenues estimated in
the committee report at $18.4 billion.
I ask the chairman of the committee
if he can inform us of the circum-
stances leading the committee to pro-
pose these extraordinary provisions.
Mr. DOLE. Mr. President, I thank
the distinguished chairman . of the
Committee on Appropriations.
The extraordinary circumstances are
simply the funding crisis facing the
social security system. As the Senator
knows, in 1981, the Congress permit-
ted interfund borrowing to enable con-
tinued payments from the Federal old
age and survivors insurance fund until
Congress could work out a more dura-
ble solution to the OASI problem. The
interfund borrowing authority expired
in December 1982. We still face a seri-
ous funding shortfall, and the commit-
tee has endeavored to find funds for
the system to prevent default in the
near term. Sections 143 through t45 of
our proposal would infuse the trust
funds with a total of about $19.2 bil-
lion, within 30 days of enactment of
the bill.
The system of annual appropriations
for the military wage credits has
worked well in the past, and will con-
tinue to be the vehicle for adjustments
to these credits. However, the crisis
facing the system led the committee,
as well as the Bipartisan Social Secu-
rity Commission, to recommend a one-
time change in the existing system.
Regarding the crediting of uncashed
social security checks to the trust
funds, this has been a longstanding
anomaly in this system. Since the
checks are drawn from the trust
funds, it is only logical and proper
that the trust funds, not the general
fund of the Treasury benefit if the
checks are not negotiated.
Mr. HATFIELD. Mr. President, I
thank the chairman for his remarks. I
certainly support the chairman's ef-
forts to insure ' the solvency of the
social security system. While I person-
ally oppose the direct appropriations
in sections 143, 144, and 145, and be-
lieve that a budget amendment for
these funds should be submitted by
the President for action by the Appro-
priations Committees, I understand
the importance of hamediately assur-
ing our senior-citimens that their bene-
fits are secure. Therefore, my amend-
ment does not touch section 145,
which will infuse the system with
$13.2 billion within 38 days of enact-
ment of this bill. Sections 143 and 144,
however, add another $6.6 billion to
the trust funds, and there is no reason
why these funds could not be provided
in the normal manner in my opinion. I
wonder if the Senator from Kansas
would respond to that observation.
Mr. DOLE. The Senator is correct.
With the almost immediate funds the
social security system will gain from
section 145, there will be no harm in
providing the funds made available by
sections 143 and 144 in the fiscal year
1983 supplemental appropriation bill.
Therefore, I have no objection to the
Senator's amendment.
The Finance Committee believes
that the Congress should adhere to
the conventional authorization/appro-
priation process whenever possible.
Reluctantly, however, the urgency and
high priority of the social security
crisis led the committee to recommend
the departure from the normal proce-
dure embodied in these sections.
I might say as an aside that I cer-
tainly understand, as chairman of a
major committee, the importance of
playing by the rules. I can assure the
distinguished chairman of the Appro-
priations Committee that we do not
intend to depart from the normal pro-
cedure. It was done in this instance
only because of the urgency of the
matter. I urge the adoption of the
amendment.
Mr. HATFIELD. I thank the Sena-
tor.
The PRESIDING OFFICER. The
question is on agreeing to the amend-
ment.
The amendment (UP No. 114) was
agreed to.
Mr. HATFIELD. Mr. President, I
move to reconsider the vote by which
the amendment was agreed to.
Mr. DOLE. I move to lay that
motion on the table.
The motion to lay on the table was
agreed to.
Mr. HATFIELD. Mr. President, I
shall yield to the Senator from Missis-
sippi if he has some comments.
Mr. STENNIS. I thank the Senator.
First, Mr. President, I want to com-
mend highly the Senator from
Oregon, the chairman of our Commit-
tee on Appropriations, for the scrupu-
lous and diligent way in which he fol-
lows through these special duties that
he has to keep the bill clean of legisla-
tion and keep other bills in line, and
for maintaining that principle for the
Appropriations Committee.
I know this was all done in the
utmost good faith by the legislative
committee. Nevertheless, there just
has to be a standard and we have to
have someone who will follow it up
and see that that standard is main-
tained. This might be just ordinary
moving along and not important to
some, but this goes to the very heart
of the principles upon which we oper-
ate. I am very proud to see him. again
and again, maintain this balance of re-
quirements and get results.
I am delighted to support him in all
this endeavor and in the amendments,
each one of them.
I thank the Senator.
Mr. HATFIELD. I thank the Sena-
tor from Mississippi.
Mr. President, the Senator from Mis-
sissippi is a valuable member of our
committee and has certainly been stal-
wart in maintaining the integrity of
the appropriations process. I have
always appreciated his willingness to
do battle at times when it is necessary.
I would also like to call the attention
of the chairman of the Finance Com-
mittee to section 339 of ILR. 1900, as
passed by the House of Representa-
tives. This provision establishes a joint
study panel on the Social Security Ad-
ministration (SSA) to determine
whether SSA should become an inde-
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CONGRESSIONAL RECORD - SENATE 83619
pendent agency. The panel is estab-
lished under the direction of the Com-
mittee on Finance and the Committee
on Ways and Means, and reports di-
rectly to the two chairmen.
While I do not want to take a posi-
tion on whether such a study is
needed. I do oppose the establishment
of such a panel. The funding arrange-
ment for the panel is most irregular.
Section 339(bX5) of H.R. 1900 appro-
priates "such sums as the chairmen of
the Committee on Ways and Means of
the House of Representatives and the
Committee on Finance of the Senate
shall jointly certify to the Secretary of
the Treasury as necessary."
As the chairman knows, there are
long-standing procedures in both
Houses for expenditure of funds by
congressional committees. in the
Senate, these procedures include sub-
mission of an annual budget request
by committees to the Rules Commit-
tee, and eventual adoption of specific
funding levels for each committee by
the full Senate. These expenses are
then appropriated in an appropriation
bill for the legislative branch. I see no
reason to deviate from this procedure
to establish such a panel. If such a
study is essential, it can be funded
through the normal process.
The Committee on Finance has not
included a comparable provision in Its
amendment. and I would like to ask
the chairman If be shares my deep res-
ervations about this section.
Mr. DOLE. I do share the Senator's
reservation, and as he pointed out the
committee did not include a compara-
ble provision in its bill. The Senate
has adopted an amendment by, the
Senator from Pennsylvania. (Mr.
Hxnrz) which calls for such a study
but without the irregular funding ar-
rangements called for In H.R. 1900. I
certainly will work in the conference
to assure that the House provision is
not adopted.
Mr. HATFIELD. 'Mr. President, I
want to thank the Senator for this col-
loquy because I think it Is well to
make the record at this point so every-
one has a clear understanding of ex-
actly what we are doing and to take
the action before the fact so that if we
run into problems later, then at least
we will have done everything we can
to make the system work.
I congratulate the Senator from
Kansas for he has really undertaken a
monumental task, and I am sure that
it is a n6-wln situation because any-
body and everybody can find some-
thing to pick at in this type of compre-
hensive package. Sure, I do not agree
with every section of It or every idea
expressed in it, but I am going to sup-
port the Senator from Kansas right
down the line as much as I can be-
cause I think he has brought to the
floor an important piece of legislation.
I did not raise these Issues to harass
him or to create problems for an al-
ready overburdened person, but I do
want to thank him for responding to
these issues.
Mr. DOME. If the Senator will yield,
I certainly appreciated, as did the Sen-
ator from Mississippi, the Senator
from Oregon raising these questions.
They are real questions that should be
dealt with and it is not the intent-as I
indicated in the statement-it is only
because of the extraordinary circum-
stances, but it should have been called
to our attention by the Senate F1-
nance Committee. For that I apolo-
gize, but at least the Senator was alert
to it and we have made a record. We
do not intend to violate the comity be-
tween committees and we will contin-
ue to operate in that fashion.
Mr. President, I suggest the absence
of a quorum.
The PRESIDING OFFICER W.
CocHW). The clerk will call the roll.
The legislative clerk proceeded to
call the roll.
Mr. DOLE. Mr. President, I ask
unanimous consent that the order for
the quorum call be rescinded.
The PRESIDING OFFICER. With-
out objection, It is so ordered.
Mr. DOLE. Mr. President, it 1s my
understanding that we were going to
move on to the jobs bill, but I have
now learned that they are not quite
prepared to do that. There are a
number of amendments that we would
like to take up on the'social security
package in the meantime I know the
distinguished Senator from Michigan
has an amendment, the Senator from
Montana has two ammendments, the
Senator from New Hampshire has as
amendment, the Senator from South
Dakota (Mr. Pte) has an amend-
ment, the Senator from North Caroli-
na (Mr. It- ) has an amendment,
the Senator from Kansas will have an
amendment later, Senator Lose has
two amendments.
I hope that would just about take
care of most amendments. If there are
Members within earshot, we might be
able to squeeze in one more amend-
ment while we are working out the
final details on the jobs bill. It is still
our hope that we could forge ahead
this evening. It is still early. We would
like to go to conference tomorrow
afternoon on social security and bring
the package back tomorrow night and
finish up. That is probably not going
to happen.
I suggest the absence of a quorum.
The PRESIDING OFFICER. The
clerk will call the roll.
The legislative clerk proceeded to
call .the roll.
Mr. HELMS. Mr. President, I ask
unanimous consent that the order for
the quorum call be rescinded.
The PRESIDING OFFICER. With-
out objection, it Is so ordered.
VP AX D TNO.its.
(Purpose: To provide for the establishment
of individual retirement security accounts)
Mr. Im . Mr. President, I have
an unprinted amendment at the desk
which I call up.
The PILFSIDING OFFICER. With-
out objection, the amendment of the
Senator from Indiana will continue to
be set aside.
The amendment of the Senator from
North Carolina will be stated.
The legislative clerk read as follows:
The Senator from North Carolina (Mr.
Hs[.YS) proposes an unprinted amendment
numbered 115.
Mr. HELMS Mr. President, I ask
unanimous consent that reading of the
amendment be dispensed with.
The PRESIDING OFFICER. With-
out objection, It is so ordered.
The amendment is as follows:
At the appropriate place In the bill, insert
the following new section:
Sac. . (aXI) Subpart A of partIV of sub-
chapter A of chapter 1 of the Internal Rest
rue Code of 1954 (relating to credits aiiaw-
ahle against tax) is amsended by Inserting
after section 44G the following new section:
"M NH. coxnt one 1 O DIYUUAL 109-
vT sacvasTV ?ooo(nrT.
Rs) OIIqmAi. Rues In the can of an In-
dividual, there shall be allowed as a credit
against the tax Imposed by this chapter for
the taxable year an amount equal to 20 per-
cent of the amounts contributed by the tax-
payer to an Individual retirement security
account of the taxpayer during the taxable
year.
"(b) Leas*riox.-The amount of any con-
tributions taken into account under subsec-
tion (a) shall not exceed the amount of
taxes paid by the taxpayer to the Federal
Old Age and Survivors Insurance Trust
Fund under section 3101 for the taxable
year.
"(c) Irrzvmvnt. Rariamrsw4 Sacuarry Ac-
oovxr.-For purposes of this section, "the
term 'individual retirement security so-
count' shall have the meaning given to such
term by section 130(cXi).".
(2XA) Subsection (b) of section 6401 of
such Code (relating to excessive credit is
treated as overpayments) is amended-
ii) by striking out "and 43 (relating to
earned income credit)," and inserting in lieu
thereof "43 (relating to earned income
credit). and 44H -(relating to contributions
to individual retirement security account),",
and
(II) by striking out "39 and 43".and Insert-
ing In lieu thereof "39,43, and 44W'.
(B) Paragraph (2) of section 55(f) of such
Code (defining regular tax) to amended by
striking out "39 and 43" and Inserting In
lien thereof "39, 43, and 44W'.
(3) In prescribing the forms by which any
individual liable for any tax imposed by sub-
title A of the Internal Revenue Code of 1954
shall make a return for taxable years begin-
ning after December 31, 1983, the Secretary
of the Treasury shall ansure that any such
individual who Is eligible for a credit under
section 44H of such Code may claim the
credit allowable under such section on any
such form.
(4) The table of sections for subpart A of
part IV of subchapter A of chapter 1 of such
Code is amended by inserting before the
item relating to section 45 the following new
item
"Sec. 44H. Contributions to individual re-
tirement security account.".
(5) The amendments made by this section
shall apply to taxable years beginning after
December 31, 1983.
(bXl) Part HI of subchapter B of chapter
1 of the Internal Revenue Code of 1954 (re-
lating to Items specifically excluded from
gross income) is amended by redesignating
section 130 as section 131 and by Inserting
after section 129 the following new section:
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"SEC. 130. INCOME FROM INDIVIDUAL RETIREMENT
SECURITY ACCOUNT.
"(a) IN GENERAL.-Gross income does not
include income which-
"(1) accrues on amounts contributed to an
individual retirement security account, and
"(2)(A) remains in such account until the
taxpayer attains age 62, or
"(B) is withdrawn from such account
before the taxpayer attains age 62 for the
purchase. of life insurance, health insurance,
or disability insurance for the taxpayer.
"(b) AccouNT ExEMPT FRoM TAx.-Any in-
dividual retirement security account is
exempt from taxation under this subtitle.
"(c) DEFINITIoxs.-For purposes of this
section-
"(1) INDIVIDUAL RETIREMENT SECURITY AC-
couNT.-The term 'individual retirement se-
curity account' means an account-
"(A) which is established by the taxpayer
with a qualified fiduciary;
"(B) which by written agreement or appli-
cable law provides that-
"(I) amounts may be withdrawn therefrom
before the taxpayer attains age 62 only for
the purposes specified in subsection
(a)(2)(D), and
"(ii) the interest of the taxpayer in the
balance of his account is not forfeitable; and
"(C) to which the taxpayer makes contri-
butions, in order to ensure the taxpayer an
adequate retirement income upon attaining
age 62.
"(2) Qualified fiduciary.-The term 'quali-
fied fiduciary' means a bank or other person
who demonstates to the satisfaction of the
Secretary that the manner in which he will
administer the account will be consistent
with the requirements of this section. An
account shall not be disqualified under this
paragraph merely because a person other
than the fiduciary so administering the ac-
count may be granted, in the instrument
creating the account, the power to control
the investment of the account funds either
by directing investments (including reinvest-
ments, disposals, and exchanges) or by dis-
approving proposed investments (including
reinvestments, disposals, and exchanges):".
(2) The amendments made by this section
shall apply to taxable years beginning after
December 31, 1983.
(c) Section 215 of the Social Security Act
is amended by adding at the end thereof the
following new subsection:
"(d)(1) For purposes of determining old-
age and survivors insurance benefits based
upon the wages and self-employment
income of an individual with respect to
whom contributions are made to an individ-
ual security retirement account, such pri-
mary insurance amount shall be reduced by
an amount'that bears the same ratio to such
primary insurance amount (as determined
without regard to this subsection) as the
IRSA offset amount determined with re-
spect to such individual bears to the present
value of the OASI annuity amount deter-
mined with respect to such individual.
"(2) For purposes of this subsection-
"(A) The term 'individual retirement secu-
rity account' shall have the meaning given
to such term in section 130(c)(1) of the In-
ternal Revenue Code of 1954.
"(B) The term 'IRSA offset amount'
means, with respect to an individual de-
scribed in paragraph (1), an amount equal
to the sum of amounts-
"(1) contributed by such individual to the
individual retirement security account es-
tablished with respect to such individual,
and
"(ii) taken into account for purposes of de-
terming a credit allowed to such individual
under section 44H of the Internal Revenue
Code of 1954,
(compounded, for the period beginning with
the date on which the return in which such
credit was claimed was required to be filed
and ending with the date on which such in-
dividual retires, by the social security yield
rate determined with respect to such indi-
vidual);
"(C)(1) The term 'present value of OAST
benefit annuity amount' means an amount
that would, if invested at a rate of interest
equal to the rate of interest payable on
United States Treasury bills at the begin-
ning of the period of entitlement deter-
mined with respect to the wages and self-
employment income of an individual, pro-
duced by the end of such period of entitle-
ment, an amount equal to the amount of
benefits which would be payable under sec-
tion 202 on the basis of such wages and self-
employment income (but for the application
of paragraph (1)) for such period of entitle-
ment.
"(ii) In determining the amount of bene-
fits which would be payable for the period
of entitlement determined with respect to
the wages and self-employment income of
an individual, the rate of the cost-of-living
increase under subsection (I) for the cost-of-
living computation quarter immediately pre-
ceding the beginning of such period of enti-
tlement shall be assumed to apply to each
base quarter in such period of entitlement.
"(D) The term 'period of entitlement'
means, with respect to the wages and self-
employment income of an individual de-
scribed in paragraph (1), the period begin-
ning with the date on which such individual
retires and ending with the date on which
such individual would attain the expecta-
tion of life (determined in accordance with
the official life table and in accordance with
the applicable provisions of this Act as in
effect on the first day of such period).
"(E) The term 'social security yield rate'
means, with respect to an individual de-
scribed in paragraph (1), the rate of yield
that, if earned on the OAST tax amount de-
termined with respect to such individual, for
the period beginning with the date on which
such taxes were paid and ending with the
date on which such individual retires, would
produce an amount equal to the present
value of the OASI benefit annuity amount
determined with respect to such individual.
"(F) The term 'OASI tax amount' means
with respect to an individual described in
paragraph (1), the amount of taxes paid to
the Federal Old-Age and Survivors Insur-
ance Trust Fund with respect to such indi-
vidual under sections 3101(a), 3111(a), and
1401(a) of the Internal Revenue Code of
1954 during the 80 highest quarters of cov-
erage for such individual.
"(G) The term 'cost-of-living computation
quarter' shall have the meaning given to
such term in subsection (i)(1)(B).
"(H) The term 'base quarter' shall have
the meaning given to such term in subsec-
tion (i)(1XA).
"(I) The term 'quarter of coverage' shall
have the meaning given to such term in sub-
section 213(a)(2).
"(J) The term 'official life table' means
the life table for total persons in the United
States that is prepared decennially by the
National Center for Health Statistics for
the 3-year period centering around the year
of the decennial population census.".
Mr. HEMS. Mr. President, at the
outset, let me pay my genuine respects
to the distinguished Senator from
Kansas, the chairman of the Finance
Committee, and the members of the
committee for the long and arduous
work they have done in connection
with this piece of legislation.
In particular, Senator DOLE, while
carrying an enormous load in other
March 22, 1983
legislative matters, has devoted an un-
believable amount of time to this bill,
which is about to be concluded to-
night.
Senator DOLE has said many times
that the bill now before the Senate is
not satisfactory to everybody. I hope I
may be able to make a suggestion that
will offer material improvement, par-
ticularly regarding the yol}ng people
just entering the work force but im-
portant for all citizens participating in
social security.
Mr. President, millions of Americans
have waited patiently for Congress to
come up with a plan to rescue social
security. They watched as a 15-
member, blue ribbon commission stud-
ied social security's funding problems
and then-offered a solution that fell
pitifully short of its mark. While the
panel's plan might or might not have
bridged the $200 billion short-term
deficit, it provided little relief or
social security's whopping $2 trillion
long-range debt.
Then Americans looked on as Mem-
bers of Congress debated solutions to
the system's long-term funding crisis.
Members of the House recommended
we solve the problem by making work-
ing men and women stay in the work
force beyond the present retirement
age. Still others suggested we reduce
future benefits to our senior citizens
or enact standby tax increases In
excess of those contained in the bill
before us now.
Mr. President, these patchwork ef-
forts just will not work. Fundamental
problems with social security remain
unsolved. They cannot be patched. We
will be deceiving ourselves-and the
American people-if we do not face up
to the seriousness of the social secu-
rity crisis and offer something better
than the reform bill now before us.
Population - growth patterns show
that fewer than two workers will be
supporting each retired person early
in the next century. Is there any
wonder so many Americans have so
little confidence in social security? A
recent Washington Post-ABC News
poll revealed that 66 percent of work-
ers under 45-and 70 percent of those
under 30-believe social security will
not even exist when they retire.
I, for one, believe Americans deserve
more than the present bankrupt re-
tirement system, which is subject to
the whims of politicians. That is pre-
cisely why I am offering this amend-
ment-to provide working men and
women a supplement to the present
system. It would establish a new kind
of private savings plan which I call an
individual retirement security account
(IRSA). Unlike social security, which
is not really a retirement insurance
and savings program at all, these new
accounts would allow each working
American to save and invest for his or
her own retirement security. For the
first time ever, there would actually be
a trust fund.
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Mr. President, I propose these ac-
counts be set up in banks, savings and
loans, and other lending Institutions
approved under the Treasury regula-
tions. The capital pool created In the
private sector by these accounts would
provide an enormous stimulus to our
economy. These IRSA's would encour-
age savings and Investment, create
jobs, help lower interest rates,, and in
the process restore strength and vital-
ity to our economy.
Some Senators perhaps are thinking
that IRSA accounts sound quite a bit
like the present IRA accounts. Well,
they are very similar. There are some
important differences, however. In-
stead of the income tax deductions al-
lowed individuals who set up IRA's,
my amendment provides a tax credit
to encourage IRSA's. The tax credit
would equal 20 percent of the amount
an individual invests in an IRSA, sub-
ject to a limit of 20 percent of the indi-
vidual's payroll tax liability for that
year.
There would be no limit on the
amount that could be deposited in
IRSA's. Interest, dividends, and capi-
tal gains accumulated In the IRSA's
would be tax exempt, and annuities
and withdrawals from it upon retire-
ment anytime after age 62 would be
tax free. Funds held in an IRSA ac-
count could be used tax free by a
worker before age 62 to acquire life in-
surance, health insurance, or disability.
insurance. The individual could par-
ticipate with his fiduciary in maneaging
the IRSA as a fully funded individual
retirement program.
Mr. President, I ask unanimous con-
sent that a table be printed in the
RECORD at this point.
There being no objection, the table
was ordered to be printed In the
REcoRD, as follows:
ESTIMATED IRSA PARTItPATION AND INVESTMENT
[Aft XW* M 086cm]
1984 ................................ _..... ............ ............
0.01
:0.894
1985........... ___._.. __..........
.03
3.072
1986 .......... ...__............__..
Al
7.802
1981 ....................................._......._._..._...............
.10
12.050
_...... _
.13
16.926
1989 .............. _......... ..... ..... __................. __....
.16
22.432
1990 ........................ _..............................................
.19
31.037
1901........_..._... .._._._......
.24
42.268
1992
.30
57.000
1993 ........................................................................
.38
77.900
38 percent of the work force partict-
pating would be $271,401 million In-
vested In the private sector.
For those who do not have a calcula-
tor handy the total amount invested
over the next decade would be in
excess of $211 billion, which is one
Whale of a lot of money.
Mr. President, sooner or later, a plan
such as the one I am proposing Is
going to be made mandatory in this
country because as fewer and fewer
workers support more and more retir-
ees the system we now have will
simply fold under the financial strain.
My plan, however, is completely vol-
untary, and I simply want to offer
these IRSA's to the working men and
women of this country as a supple-
ment to social security.
Let me emphasise they certainly are
not mandatory and more imporbai stay
they do not take one penny away from
the paryoll taxes so vital to the pres-
ent beneficiaries.
Mr. DOLE. Mr. President. as I have
indicated earlier, and I cannot remem-
ber which day-we have been on this
bill sort of off and on-the distin-
guished Senator from North Carolina,
Senator HEt31[9, was kind enough to
come before our committee and dis-
cuss what I consider to be a very Inno-
vative Idea and then he discussed it
later in the Chamber when he offered
his proposal and now this Is the so-
called IRSA part of his total package.
As the Senator pointed out earlier
about 11 of the 20 provisions In the
Senator's bill have now become a part
of the package before the Senate. So
there is more than 50 percent of what
the Senator was trying to achieve in
the package. The ERISA concept
would provide some additional capital
for the private sector. There is some
question as to how many people will
contribute to an IRSA If it will reduce
their social security benefits.
As I understand the statement just
made by the Senator from North
Carolina it is intended to be supple-
mental.
Mr. HELMS. That Is correct.
Mr. DOLE. Whether or not that
would have any reduction the Senator
from Kansas is not certain from a cur-
sory reading of the amendment.
The problem that concerns the Sen-
ator from Kansas Is whether or not
there is any revenue impact
,
and we
Total ................................................................................... 271.401 have not had an opportunity with the
Mr. HELMS. Mr. President, the pre-
ceding table reflects the huge amounts
of money that will be invested in the
private sector at various rates of IRSA
participation.
For example, 'let us assume that 1
percent of social security participants
set up IRSA accounts in 1984; $894
million would be left in the economy
for the creation of jobs and so forth.
If you will look down the table, 10
percent participation in 1987 would
result In $12 billion left in the private
sector, Go all the way down to 1993
and the total amount of money with
joint committee to make any revenue
estimates. Maybe the Senator from
North Carolina has some estimate..
Mr. HELMS. I do. If the Senator will
yield, I perhaps fnoved too rapidly in
putting too much in the RECORD, but it
depends on how you look at it.
I choose to look at it from the stand-
point of what this will generate in the
private sector of our economy.
To answer the Senator's question,
for fiscal 1984 it would cost $179 mil-
lion. That is assuming 1-percent par-
ticipation.
Mr. DOLE. That would be a credit,
as I understand, against taxes, so it
83621
would be a loss to general revenues, if
there Is 1-percent participation. If par-
ticipation were higher, say, the loss
would be greater, but on the other
hand the benefits that might offset a
greater portion of that loss.
Mr. HEI,IIMS. Yes.
Mr. DOLE. Again, I do not know
how far the Senator from North Caro-
lina wishes to press the amendment. I
-would hope that he would permit us to
continue to explore the possibility. It
makes a great deal of sense, and the
Senator from Idaho,- I might add, has
somewhat shnIIar provisions that he
has discussed and What we have done
in that case, which we can also do In
this case if it would satisfy the Sena-
tor from North Carolina, is to ask the
Treasury Department and the Social
Security Administration to take a look
at this new concept and give us some
definitive response within 6 to 9
months to determine whether or not
this might be a good supplemental
program because, as pointed out by
the Senator before our committee and
again in the Chamber tonight, this
will provide opportunities not now
available to those who will be retiring
down the road.
I do not know whether the Senator
wishes to have a vote on the amend-
ment tonight or whether we can ac-
commodate him In some other way.
Mr. HELMR. I want to work with
-the Senator from Kansas in any possi-
ble way.
Let me just say for the RscoaD that
whereas our calculations are that It
will cost $179 million In 1084 with that
1-percent-assumed participation, the
total of $894 million left in the private
sector would. I think, more than offset
that In terms of generating jobs.
Mr. DOLE. Mr. President, if the Sen-
ator will yield, I think the strength of
the Idea Is that It would cause people
to take more of an interest in their
own retirement.
Mr. HELMS. The Senator Is correct.
Mr. DOLE. I assume that more re-
sponsibility and more concern are
probably the underlying bases for the
amendment.
Again, I am not prepared to accept
the amendment. I am certainly willing
to work with the distinguished Sena-
tor from North Carolina: It is a good
idea. If we could have some time I am
willing to request the Treasury and
any other appropriate agency to take
a 'look at title I of the Senator's
amendment and to give us some re-
sponse as far as costs, what they think
what percent of people might use it,
what the impact might be on retire-
ment, might be on Individuals, and
how it mixes with the private pension
plans as well as the social security pro-
gram and any other thing that the
Senator thinks we might want to in-
clude in that request, and we are cer-
tainly most willing to do that.
Mr. HELMS. I think that is a good
idea and I express my appreciation to
the Senator from Kansas.
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S 3622 CONGRESSIONAL RECORD - SENATE
Let me make this suggestion: that
his staff, and mine, and perhaps the
staff of Senator Symms, because he is
also interested in it, consider the pro-
duction of a package of a number of
things and submit them to the Sena-
tor. Then he can proceed with the
Treasury Department. We can elimi-
nate what is not workable, and pick it
up from there. With that understand-
ing, I would see no point in having a
rollcall. I would rather work with the
Senator because I know of his interest
in trying to free this incentive for a
private retirement system.
Mr. DOLE. I might say to the Sena-
tor there is a great deal of interest in
our committee and pretty widespread
in the Senate on both sides of the aisle
in trying to beef up the IRA program,
and this is another aspect you might
consider. Our problem is where we
find the revenue to. offset the loss if
we do that. But the Senator from
Kansas is willing to do whatever he
can because it is a good idea and it
should be explored.
Mr. HELMS. All right.
Mr. DOLE. And it will be explored.
Mr. HELMS. Mr. President, I thank
the Senator from Kansas. He is always
thoughtful and always helpful, and I
think we might be onto something, as
the saying goes. Let us work in that di-
rection.
With that in mind and with that un-
derstanding, I withdraw the amend-
ment.
The PRESIDING OFFICER. The
amendment is withdrawn.
Mr. DOLE. I thank the Senator
from North Carolina.
UP AMENDMENT NO. 116
(Purpose: To index the base amount for the
taxation of social security benefits)
Mr. HUMPHREY. Mr. President, I
send an amendment to the desk and
ask for its immediate consideration.
The PRESIDING OFFICER. With-
out objection, the amendment offered
by the Senator from Indiana is tempo-
rarily set aside. The clerk will report.
The bill clerk read as follows:
The Senator from New Hampshire (Mr.
HUMPHREY) proposes an unprinted amend-
ment numbered 116.
Mr. HUMPHREY. I ask unanimous
consent that further reading of the
amendment be dispensed with.
The PRESIDING OFFICER. With-
out objection, it is so ordered.
The amendment is as follows:
On page 59, strike out lines 4 through 14,
and insert in lieu thereof the following:
"(c) BASLr AMOUNT.-For purposes of this
section-
"(1) IN GENERAL.-The term 'base amount'
means-
"(A) except as otherwise provided in this
paragraph, $25,000,
"(B) $32,000, in the case of a joint return,
and
"(C) zero, in the case of a taxpayer who-
"(i) is married at the close of the taxable
year (within the meaning of section 143) but
does not file a joint return for such year,
and
"(ii) does not live apart from his spouse at
all times during the taxable year.
"(2) INDEXING ADJUSTMENT.-
"(A) IN GENERAL.-The base amount which
applies for any calendar year beginning
after December 31, 1984, shall be the
amount determined under paragraph (1),
adjusted by the appropriate index factor for
such year.
"(B) INDEX FACTOR.-For purposes of sub-
paragraph (A), the index adjustment factor
for any calendar year shall be equal to the
wage adjustment for such year.
"(C) WAGE ADJUSTMENT DEFINED.-For pur-
poses of this paragraph, the 'wage adjust-
ment' for any calendar year is the percent-
age (if any) by which-
"(1) the average of the total wages for the
preceding calendar year. exceeds
"(ii) such average for 1983.
"(D) DETERMINATION OF AVERAGE OF TOTAL
WAGES.-For purposes of subparagraph (C),
the average of the total wages for any calen-
dar year shall be the average determined-
"(I) for the 12-month period ending on
September 30 of such calendar year, and
"(1i) in the same manner as such average
is determined for purposes of section
215(b)(3)(A)(ii) of the Social Security Act.".
Mr. HUMPHREY. Mr. President, as
my colleagues know, the social secu-
rity bill before the Senate contains a
provision taxing social security bene-
fits. The Finance Committee has con-
structed a system of thresholds above
which beneficiaries. will find their
social security benefits, half of the
benefits, subject to taxation. Those
thresholds chosen by the Finance
Committee are $25,000 for a single
taxpayer or $32,000 on a joint return.
Completely divorced from the issue
of the equity of taxing social security
benefits is the matter of the thresh-
olds themselves. This Senator has seri-
ous doubts at these relatively low
levels of $25,000 to $32,000 that they
represent an equitable threshold but
even apart from that contention, Mr.
President, I know a good number of
my colleagues share the concern that
because these thresholds are not in-
dexed to inflation, in the language of
the bill, that over a period of years, as
inflation occurs, as undoubtedly it will,
although we hope very much it will be
at negligible levels, social security re-
cipients and more and more recipients
will be boosted above the thresholds
and find their social security benefits
subject to this taxation.
Mr. President, I have constructed a
table which I have distributed to my
colleagues showing the effect of infla-
tion on the thresholds. This table
makes a very modest assumption that
inflation will average 4 percent per
year over the next 10 years. I think we
will count ourselves lucky if inflation
remains that low over that span of
time. But just basing it on the conserv-
ative projection of inflation at 4 per-
cent per year, the $25,000 threshold
for single taxpayers is reduced to
$16,892 over a 10-year period. That is
expressed in 1984 dollars. So it will go
from $25,000 to $16,892 expressed in
1984 dollars, and the $32,000 joint
income go-joint return threshold will
be reduced in value-to $21,622 in 1984
dollars.
This is a very substantial erosion ob-
viously of the value of the threshold,
March 22, 1933
and the upshot will be, of course, that
many, many more social security
beneficiaries will find their benefits
taxed than anticipated by the Finance
Committee.
We see the social security equivalent
of bracket creep at work in-the chart
which I have constructed.
I know the Finance Committee will
object to the amendment on the
grounds that it would cost the Treas-
ury some billions of dollars, I believe
the figure the committee cites is about
$4 billion if the Senate adopts the
Humphrey amendment to index these
thresholds.
I suggest to my colleagues that
whether the figure of lost revenue is
$4 billion or some other figure, higher
or lower, those are ill-gotten dollars
because they will be gained through,
you might say, bracket creep in the
social security system.
There are many who consider the
taxation that occurs through raising
of taxes, that occurs through bracket
creep, to be a dishonest form of raising
taxes and *many say if Congress wants
to raise greater tax revenues, it ought
to have the courage to increase tax
rates or tax increases directly and not
permit bracket creep to work secretly,
silently, and viciously. That is a great
argument and that is why the Con-
gress adopted indexation of the tax
rates, IRS tax rates, for 1985, and that
is why the President, including many
others, including the chairman of the
Finance Committee, I believe, are com-
mitted absolutely to retaining tax in-
dexation as part of the President's tax
package.
I wholeheartedly support them in
that, and it is only fair to agree if we
want to raise taxes we ought to have
the courage to do it up front and in a
straightforward fashion.
Likewise we should not seek to raise
taxes through taxation of the social
security benefits through the means
of bracket creep and that is precisely
what will occur if the Senate does not
by some means or other index the tax
on social security benefits. That is
what the Senator from New Hamp-
shire wants to do is, to index the
amounts so they will retain the value
assigned to them by the Finance Com-
mittee in 1983.
Without indexation, as I have point-
ed out, the value of this threshold will
steadily decline and more and more
taxpayers of modest means, not well-
to-do by any stretch of the imagina-
tion, but more and more taxpayers of
modest means, will find their social se-
curity benefits subject to taxation.
Mr. President, I believe the amend-
ment speaks for itself. It is simple, it is
clear, it is a matter of fairness and
equity, and a matter of doing things
up front and straightforwardly, and I
would urge my colleagues to adopt the
amendment, and I will ask for the yeas
and nays at this point, Mr. President.
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March 22, 1989 CONGRESSIONAL RECORD -- SENATE
The PRESIDING OFFICER. Is
there a sufficient second? There is a
sufficient second.
The yeas and nays were ordered.
Mr. HUMPHREY. I will relinquish
the floor at this point, Mr. President.
The PRESIDING OFFICER. The
Senator from Kansas;
Mr. DOLE. Mr. President, I want to
thank the Senator from New Hamp-
shire for bringing up this amendment.
I just hope it does not pass. I know
precisely what the amendment does. It
is something we considered in the
Commission, but as with all these
other great ideas floating around. they
cost a great deal of money. This one
costs about $6 billion between now and
1989 and I understand about $4.2 bil-
lion every year thereafter.
Mr. HUMPHREY. Will the Senator
from Kansas yield for a question at
that point?
Mr. DOLE. Yes.
Mr. HUMPHREY. Let me back up.
Is it not correct that the Senator from
Kansas. along with the President, sup-
ports retaining indexation of the IRS
tax brackets?
Mr. DOLE. Yes; I view that a little
differently. Yes; I strongly support in-
dexing.
Mr. HUMPHREY. Yes; I am glad to
hear that and I find my understanding
reconfirmed.
Does not the Senator from Kansas
agree that any-the Senator from
Kansas contends this, amendment will
result in a less of revenue but is that
revenue to be lost, is that not ill-
gotten revenue in that it results from
bracket creep with respect to these
thresholds?
Mr. DOLE. You mean we lose reve-
nue?
Mr. HUMPHREY. Yes; the commit-
tee contends in its Opposition to this
amendment that we will lose some bil-
lions of dollars in revenue and I do not
count that is so, that revenue lost is
ill-gotten revenue because it is derived
from the bracket creep.
Mr. DOLE. Let me say to the Sena-
tor from New Hampshire so far as in-
dexing the Tax Code the Senator from
Kansas and the Senator from Colora
do and the Senator from New Hamp-
shire, and I hope the majority of the
Senate, will do all we can to retain in-
dexing starting in 1985. But again I do
not see that as parallel to this.
Second. if, in fact we find that infla-
tion is based on the Senator's "Dear
Colleague" letter, and I do not quarrel
with that, if it moves that quickly, we
can adjust the threshold for inflation,
and we can do it without risk to the
trust funds.
Again, it is a matter we discussed. It
is not a matter we did not think of in
the Commission. In fact, as I recall,
maybe the Senator from Kansas
raised it in the Commission hearings,
and other Senators did also. So when
we got all finished up and added up
how much revenue we were going to
have between now and 1999 and how
much we were going to need, we did
not have any more room. And whether
it is $6 billion in the next 5 years and
then $4.2 billion a year, I think it is a
matter of some concern.
That does not suggest if we have
more money in the trust fund we
could not index the thresholds. Very
honestly, there are some, this Senator
not included, who believe there should
not be any thresholds, that you should
tax the benefits period. That is not
the view of the Senator from Kansas.
So again I am sympathetic with the
amendment. But if we index the
threshold we will have to make payroll
taxes or cut benefits to make up the
difference. So I think we have a
choice. If we want to index the thresh-
old, which is probably maybe a good
idea down the road, but I do not be-
lieve it is a good idea now, then we
have to be prepared.
I hope the Senator would be Willing
to offer another amendment which
would either raise taxes or cut benefits
to pay for it, because we really are in a
tight bind.
I do not quarrel with the Senator
from New Hampshire. I think it is a
great idea-do not misunderstand me-
but we are just not prepared to do
anything about it because we are out
of money. -
Mr. HUMPHREY. If the Senator
would yield, of course he Is aware, in
the event the trust fund falls below a
certain floor, that a mechanism comes
into play that will reduce COLA's cost-
of-living allowances, for beneficiaries
while holding safe lower income, that
is social security benefits with a lower
range of values. So it is not absolutely
correct to any that passage of this
amendment is going to result in some
kind of crisis because that COLA
mechanism will come into play.
Mr. DOLE. I say to the Senator, he
is correct. But I would also say when
we adopted these fall-sate provisions,
we were under the impression in our
committee there would not be index-
ing of the threshold. Had we provided
indexing of the threshold. we might
have provided another fail-safe mecha-
nism. The fact that we index the rate
structure does not mean that we index
every fixed dollar amount in the Tax
Code.
I know the Senator wants a vote on
this amendment. I hope we can per-
suade him not to have a vote. He is
certainly entitled to a vote. It is an
idea that deserves consideration and I
appreciate the Senator offering it. I
only wish we could accept it.
Mr. HUMPHREY. Mr. President, to
conclude, briefly, let me state that I
am perfectly willing to stack the vote
or to handle it in whatever way it is
convenient to my colleagues.
. I find myself, unfortunately, in dis-
agreement with the Senator from
Kansas. Any revenue loss attributed to
this amendment would be revenue dis-
honestly gained in the view of this
Senator because it will result from
bracket creep. It will result from more
and more taxpayers of modest income
S 3623
finding their social security benefits
taxed.
As I pointed out, my table shows
that with a 4-percent rate of inflation,
which is modest, the $26,000 threshold
would fall in value to $16,892 over 10
years, expressed in 1984 dollars; the
$32,000 threshold will fall to $21,622.
So more people will find their benefits
taxed. Tax revenues' will rise, of
course, because of that, but those will
be ill-gotten gains and not straightfor-
wardly secured type of revenues. So it
is a simple matter of equity, especially
in light of the taxation of IRS tax
brackets which should apply the same
mechanism to these thresholds.
Mr. President, if the leadership
wishes, I would be happy to stack the
vote.
Mr. BAKER. Mr. President, if the
Senator would yield to me, I think we
are ready to vote. I believe that after
this vote we will indeed be ready to go
to the jobs conference report.
So If the Senator from New Hamp-
shire wishes to vote, I have no objec-
tion to doing it at this time. ?I appreci-
ate his offer, however.
The PRESIDING OFFICER. Is
there further debate on the amend-
ment?
If not, the question is on agreeing to
the amendment of the. Senator from
New Hampshire (Mr. HUMPHREY). The
yeas and nays have been ordered, and
the clerk will call the roll.
The bill clerk called the roll.
Mr. STEVENS. I announce that the
Senator from Alabama (Mr. DsiiroN),
the Senator from Arizona (Mr. GOLD-
WATER), and the Senator from Illinois
(Mr. PERCY) are necessarily absent.
I further announce that, if present
and voting, the Senator from Alabama
(Mr. DsNTON) would vote "nay."
Mr. BYRD. I announce that the
Senator from California (Mr. CRAN-
STON) is necessarily absent.
The PRESIDING OFFICER. Are
there any other Senators in the Cham-
ber wishing to vote?.
The result was announced--yeas 22,
nays 74, as follows:
[Rolleall Vote No. 43 Leg.]
YEAS-22
Abdnor
Garn
Nickles
Armstrong
Hatch
Roth
Blden
Hawkins
Rudman
Boschwits
Heflin
Symms
Bradley
Helms
Trible
D'Amato
Humphrey
Wilson
DeConcini
Mattingly
East
McClure
NAYS.-74
Andrews
Dole '
Jackson
Baker
Domenic
Jepsen
Baucus
Durenberger
Johnston
Bentsen
Eagleton
Kassebaum
Bingaman
Egon
Kasten
Boren
Ford
Kennedy
Bumpers
Glenn
Lautenberg
Burdick
Gorton
Laxalt
Byrd
Grassley
Leahy
Chafes
Hart
Levin
Chiles
Hatfield
Long
Cochran
Hecht
Lugar
Cohen
Heins
Mathias
Danforth
Hollinga
MsNunaga
Dixon
Huddleston
Melcher
Dodd
Inouye
Metsenbaum
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S 3624 CONGRESSIONAL RECORD - SENATE
Mitchell
Quayle
Stevens
Moynihan
Randolph
Thurmond
Murkowski
Riegle
Tower
Nunn
Sarbanee
Taongas
Packwood
Sasser
wallop
Pen
Simpson
Warner
Pressler
Specter
Weicker
Proxmire
Stafford
Zorinaky
Pryor
Stennis
NOT VOTING-4
Cranston
Goldwater
Denton
Percy
So Mr. HuMPHREY's amendment (UP
No. 116) was rejected.
Mr. DOLE. Mr. President, I move to
reconsider the vote.
Mr. MOYNIHAN. I move to lay that
motion on the table.
The motion to lay on the table was
agreed to.
UP AMENDMENTS NOS. 110 AND 112
The PRESIDING OFFICER The
Senator from Indiana.
Mr. QUAYLE, Mr. President, under
a unanimous-consent agreement, there
are three Quayle amendments that
have been temporarily laid aside pend-
ing the return of the Senator from
Louisiana to try to get his agreement.
He has returned. We have an agree-
ment on two of the three amend-
ments. I ask unanimous consent that
the first and third Quayle amend-
ments, one dealing with IRA and one
dealing with section 1122, be consid-
ered en bloc.
The PRESIDING OFFICER (Mr.
JkPszN). Is there objection?
Mr. DOLE. Mr. President, as I un-
derstand. that is the IRA amendment
and the medicare amendment.
Mr. QUAYLE. The Senator Is cor-
rect.
The PRESIDING OFFICER. Is
there objection?
Without objection it is so, ordered.
Mr. QUAYLE. I move adoption of
the amendments en bloc.
The PRESIDING OFFICER. The
question is on agreeing to the amend-
ments en bloc.
The amendments (UP No. 110 and
UP No. 112) were agreed to en bloc.
Mr. QUAYLE. I move to reconsider
the vote by which the amendments
were agreed to en bloc.
Mr. BAKER I move to lay that
motion on the table.
The motion to lay on the table was
agreed to.
Mr. BAKER. Mr. President, I yield
to the distinguished Senator from
Kansas.
Mr. DOLE. Mr. President, there
have been some questions by Senators
on the two amendments adopted.
They were discU'ssed earlier. They
were laid aside temporarily so they
could be checked with the distin-
guished Senator from Louisiana. He
had the conversation with the distin-
guished Senator from Indiana and two
of the three were cleared. There is still
one pending.
Mr. President, I ask unanimous con-
sent to have the following materials
printed in the RECORD: A list of mem-
bers of the National Commission on
Social Security Reform and a brief
statement of their past accomplish-
ments, a brief summary of the activi-
ties of the Commission, a supplemen-
tary statement on the long-range fi-
nancing of the social security program
which was made jointly by eight other
members of the Commission and this
Senator, the supplemental views of
this Senator and Congressman CoNA-
BLE, and a list of the staff members of
the Commission.
There being no objection, the mate-
rial was ordered to be printed in the
RECORD, as follows:
APPOINTED By THE PRESIDENT
Alan Greenspan, Chairman-Chairman
and President, Townsend-Greenspan and
Company, New York, NY. Dr. Greenspan is
a distinguished economist and a former
Chairman of the Council of Economic Ad-
visers (under President Fbrd).
Robert A. Beck-Chairman of the Board
and Chief Executive Officer, Prudential In-
surance Company of America, Newark, NJ.
(the largest insurance company In the coun-
try). Mr. Beck has played an important role
in developing the position on the Social Se-
curity program of the Business Roundtable
and other important business groups.
Mary Falvey Fuller-Management Consul-
tant, San Francisco, CA. (Ms. Fuller was a
member of the 1979 Advisory Council on
Social Security).
Alexander B. Trowbridge-President, Na-
tional Association of Manufacturers. Wash-
ington, DC. Mr. Trowbridge was Secretary
of Commerce under President Johnson.
Joe D. Waggonner, Jr.--Consultant; Boa-
ster Bank and Trust Company, Bossier City,
LA. Mr. Waggonner was a Member of Con-
gress from Louisiana in the 87th to 95th
Congresses and was active in Social Security
legislation, as a member of the Committee
on Ways and Meaner
APPOINTED BY THE MAJORITY LEADER Or THE
SENATE, IN CONSULTATION WITH MINORITY
LEADER
William Armstrong-Senator from Colora.
do and Chairman of the Subcommittee on
Social Security, Committee on Finance.
Robert Dole-Senator from Kansas and
Chairman of the Committee on Finance.
John Heins-Senator from Pennsylvania
and Chairman of the Special Committee on
Aging and a member of the Committee on
Finance.
Lane Kirkland-President, American Fed-
eration of Labor-Congress of industrial or-
ganizations. Mr. Kirkland has, for many
years played an active role In the develop-
ment of Labor's position on Social Security.
Daniel Patrick Moynihan-Senator from
New York and Ranking Minority Member of
the Subcommittee on Social Security, Com-
mittee on Finance.
APPOINTED BY THE SPEAKER Or THE HOUSE OP
REPRESETATIVES, IN CONSULTATION WITH
THE MINORITY LEADER
William Archer-Representative from
Texas and Ranking Minority Member of the
Subcommittee on Social Security, Commit-
tee on Ways and Means.
Robert M. Ball-Visiting Scholar, Center
for the Study of Social Policy, Washington,
DC. Mr. Ball was Commissioner of Social
Security in 1962-73 and held various posi-
tions with the Social Security Administra-
tion during the preceding 25 years.
Barber Conable-Representative from
New York and Ranking Minority Member of
the Committee on Ways and Means.
Martha E. Keys-Director of Educational
Programs, The Association of Former Mem-
bers of Congress, Washington, D.C. Ms.
March 22, 1989
Keys was a Member of Congress from
Kansas, in the 94th and 95th Congresses
and, asa Member of the Committee on
Ways and Means, was active in Social Secu-
rity legislation. Assistant Secretary of
Health and Human Services, 1980-81.
Claude D. Pepper-Representative from
Florida and currently Chairman of the
Committee on Rules. Previously, he was
Chairman of the House Select Committee
on Aging and formerly was a Senator from
Florida.
SUMMARY or ACTIVITIES Or COMMISSION
On December 16, 1981, President Reagan
promulgated Executive Order 12335, which
established the National Commission on
Social Security Reform. The National Com-
mission was created as a result of the con-
tinuing deterioration of the financial posi-
tion of the Old-Age and Survivors Insurance
Trust Fund, the inability of the President
and the Congress to agree to a solution, and
the concern about eroding public confidence
in the Social Security system.
The Executive Order provided that the
National Commission should:
. review relevant analyses of the cur-
rent and long-term financial condition of
the Social Security trust funds; identify
problems that may threaten the long-term
solvency of such funds; analyze potential so-
lutions to such problems that will both
assure the financial integrity of the Social
Security System and the provision of appro-
priate benefits; and provide appropriate rec-
ommendations to the Secretary of Health
and Human Services, the President, and the
Congress."
In carrying out its mandate, the National
Commission met ten times, on approximate-
ly a monthly basis. Because of the brevity of
the time in which to complete its work, the
National Commission held no public hear-
ings. However. It reviewed the results of the
many hearings, studies, and reports of other
public bodies, including Congress, the 1979
Advisory Council on Social Security, and
the 1981 National Commission on Social Se-
curity. The National Commission on Social
Security Reform Bought the advice of a
number of experts and thoroughly exam-
ined a wide variety of alternative ap-
proaches.
The Commission agreed that there was a
financing problem for the Old-Age. Survi-
vors, and Disability Insurance program for
both the short run, 1983-89 (as measured
using pessimistic economic assumptions)
and the long range, 1983-2056 (as measured
by an intermediate cost estimate) and that
action should be taken to strengthen the fi-
nancial status of the program. The Commis-
sion recognized that, under the intermedi-
ate cost estimate, the financial status of the
OASDI program in the 1990's and early
2000's will be favorable (i.e., Income will sig-
nificantly exceed outgo). The Commission
also recognized that, under the Intermediate
cost estimate, the financial status of the
Hospital Insurance program becomes In-
creasingly unfavorable from 1990 until the
end of the period for which the estimates
are made.
The Commission studied a large number
of options that would solve the financing
problems of the Social Security program,
both short-range and long-range. These are
summarized in some 55 pages of its report.
The Commission was able to reach a con-
sensus for meeting the short-range and
long-range financial requirements, by a vote
of 12 to 3.
The members of the Commission voting in
favor of the "consensus" package agreed to
a single set of proposals to meet the short-
range deficit. They further agreed that the
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March 22, 1983 CONGRESSIONAL RECORD - SENATE S 3625
long-range deficit should be reduced to ap- count the special problems of those between parties were able to work together in study-
proximately zero. The single set 'of reoom- age 62 and the normal retirement age who Ing the social security financing problem . The mendations would meet about two-thirds of are unable to extend, their working careers and of options for the elderly, financial reform
labor and ter-
the long-range financial requirements. for health reasons.
Seven of the 12 members agreed that the re- Under our proposal, the normal retire- new and the general taxpayer were all well
ci~uirement one-third shof the ould long-range meet b a finan- ment age would de- month each year-tooaage gradually in 20015, begin- intensive negotiations which were, large
ferred, gradual increase in the normal re- ning the phase-In with those who attain age extent, absent of the political partisanship
tirement age, while the other 5 members 62 in 2000. Beginning with those who attain that so seriously damaged efforts for re-
agreed to an increase In the contribution age 62 in 2012, the normal retirement age sponsible reform in 1981.
rates in 2010 of slightly less than % percent would be automatically adjusted (on a Finally, we believe the commission's rec-
of covered earnings on the employer and phased-in basis) so that the ratio of the re- ommendations are significant in that they
the same amount on the employee, with the tirement-life expectancy to the potential narrowed the range of realistic options for
employee's share of the increase to be offset working-lifetime (from age 20 to the closing the deficits. Realistic options were
by a refundable Income-tax credit. "normal" retirement age) remains the same not judged to Include. nor was there any
A more complete description and rationale over the years as it was In 1990. The esti- support for, proposals to reduce or eliminate
for the solution of the long-range financing mated long-range savings of this proposal is benefits for people now on the rolls. Op-
problem supported by the Senator from 0.65 percent of taxable payroll. tions under consideration involved restrain-
Kansas Is presented In the next section. The Ing the growth of benefits In future years
second following section gives an overall ADDITIONAZ. Vzsws or SsNATOn Row= J. and providing additional financing through
statement of the achievements of the Com- DoLz AND CowwasssnAN Bnnasa B. CoNA- some form of revenue increase. Current and
mission. as developed jointly by Congress- szs, Js. future beneficiaries should be reassured by
man Conable, a member of the Commission When the National Commission of Social the Ninanimously held view that social secu-
and the Senator from Kansas Security Reform was created on December rity is an important and vital program that
16. 1981, *few people had real confidence In must be preserved. .
STATarmNT ON MISTING TRZ LONG-RANGI FI- what the commission could accomplish. And With these accomplishments under our
NANCING RIQUZIarmm BY ComsszoNSaa little wonder. For the better part of a year, belts, we in Congress are in a strong position
Axczznc, BICx. CoNASZa. Dozes, Fvzzaz, social security had been embroiled in politi- to hammer out the details of legislation in
GIIUN5PAN, HSnNZ. AND TRovnwx I . cal controversy. The system moved closer to the early months of the 99th Congress. The
The recommendations made in the "con- insolvency as proposals for financial reform expiration of interfu nd borrowing and the
sensus" package fall to meet the long-range were subjected to partisan political attack. likely inability of the retirement program to
goal of providing additional financing equly- The 15 selected as commission members. pay full benefits in July make prompt
alent of 1.8 percent of taxable payroll. The moreover, embodied widely divergent views action essential.
shortfall is an estimated .58 percent of tax- At least to outsiders, these members prob- ne11