SOCIAL SECURITY ACT AMENDMENTS OF 1983-CONFERENCE REPORT

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• Publication Date: March 24, 1983
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S 4084 CONGRESSIONAL RECORD
interest that can keep Senators up
until after midnight discussing them.
Unless anyone else wants to com-
ment on this subject, Mr. President, I
suggest the absence of a quorum.
The PRESIDING OFFICER. The
clerk will call the roll.
The assistant legislative clerk pro-
ceeded to call the roll.
1Mr. MATSUNAGA. Mr. President, I
ask unanimous consent that the order
the quorum call be rescinded.
e PRESIDING OFFICER. With,
objection, it is so ordered.
[The following proceedings Occurred
after midnight.]
REPORT
SENATE March 24, 1989
SOCIAL $RCURITY
Clearly the heart of this legislation
is the package of provisions designed
to assure the solvency of: the social se-
curity system over both the short term
and the long term. As my colleagues
know, the basic features of both the
House and Senate bills reflected the
recommendations of the National
Commission on . Social Security
Reform. However, there were some
significant differences, and their reso-
lution will be of interest to the Senate.
With regard to revenue provisions,
the conference agreement implements
the national Commission recommen-
dations to tax social security benefits
for certain higher income persons, ac-
celerate payroll tax rate increases al-
ready scheduled by law between now
and 1990, and conform payroll tax
rates paid by the self-employed to the
combined rates paid by employers and
employees. The conferees agreed to
the Senate provision to include inter-
est from tax-exempt bonds in the tax-
payer's income base solely for pur-
poses of determining whether the tax-
payers income exceeds the threshold
for taxing social security, benefits. In
addition, the conferees agreed to a
compromise with regard to the payroll
tax credit provided for the self-em-
ployed as a partial offset to the higher
rates that class of taxpayers will pay.
The compromise goes, much further
than the House -bill did in providing
relief for the self-employed-the credit
will be 2.7 percent of self-employed
income in 1984, 2.3 percent in 1985,
and 2 percent in 1986 through 1989. In
1990 and thereafter, a combined de-
duction and wage base modification
will put the self--employed on the same
footing as employers from a combined
income tax and payroll tax standpoint.
That is a good result, and it should be
of greater benefit to the self-employed
in the long run.
Mr. BAKER. Mr. President, the
social security conference report is
here. I must tell Senators that I do
expect a record vote on this tonight. I
have been advised by more than one
Senator that there will be such a re-
quest and, of course, the" request will
be honored.
I hope,that the Senate can proceed
promptly to debate this issue and to
dispose of it. The' adjournment resolu-
tion has been passed. It is now almost
12:10 am. I have no desire to cut off
Senators or to truncate their remarks
or statement of their position. but I do
sincerely hope that we shall finish
with this and be able to ask the Senate
to stand. in urnment.
Mr. BASER. Mr. President, I submit
a report of the committee of confer-
ence on Hit. 1900 and ask for its im-
mediate consideration.
The PRESIDING OFFICER. The
report will be stated.
The assistant legislative clerk read
as'follows:
The committee of conference on the disc-
greeifig votes of the two Houses on the
amendment of the Senate to the bill (H.R.
1900) to assure the solvency of the Social
Security Trust Funds, to reform the medi-
care reimbursement of hospitals, to extend
the Federal supplemental compensation
program, and for other purpo having
met. after full and free conference, have
agreed to recommend and do recommend to
their respective Houses this report, signed
by a majority of the conferees.
The PRESIDING OFFICER. With-
out objection, the Senate will proceed
to the consideration of the conference
report.
(The conference report is printed in
the House proceedings of the RacoRn
of today March 24, 1983.)
Mr. DOLE. Mr. President, I am
pleased that we are able to lay before
the Senate the conference report on
H.R. 1900, the Social Security Act
Amendments of 1983. The House and
Senate conferees have been at work
full time on this agreement since the
Senate passed its version of this legis-
lation, and I believe we have worked
out a good agreement. For the benefit
of the Members I would just like to
outline some of the major. features of
this package.
LONG-RANGI PINANCf!O
Mr. President. there were major dif-
ferences. between the__ House and
Senate in dealing with the long-term
financing problem. While the confer-
ence agreement will not satisfy every-
one, there was real give-and-take on
both sides. The conferees agreed to
raise the retirement age to 67 years as
in the House bill, rather than 66 as in
the Senate bill. And rejected the ac-
companying benefit adjustments in
the Senate bill. The House conferees
also could not agree to accept the fail-
safe mechanism that could have re-
quired cost-of-living adjustments if
trust fund reserves fell below a certain
level. However, instead the conferees
would move up the stabilizer provision
from 1989 to 1985. As Members know,
this provision would provide cost-of-
living adjustments based on the lower
of wages or prices. Under the confer-
ence agreement this stabilizer would
be triggered by a 15-percent reserve
ratio before 1988, and by a 20-percent
reserve ratio thereafter. -
Finally. with regard to long-range fi-
nancing, the conferees agreed to
modify the earnings limitation begin-
ning in 1990. The chanige is to reduce
benefits by a ratio of 1 to 3 against
other income, rather than the 1 to 2
ratio. under present law. While this
does not do as much as we hoped to
eliminate disincentives for the elderly
to stay in the work force, it is a signifi-
cant change in that direction, and a
welcome one.
IIll MOWYX !T OOYPII18ATXON
The conferees agreed to extend the
Federal supplemental compensation
(FSC) program for 8 months (from
March 31, 1983 to September 30.1993).
The program will provide additional
weeks of benefits for current FSC re-
cipients as well as a redesigned basic
tier of benefits.
The conferees agreed to the Senate
proposals modifying the cap and inter-
est provisions in current law dealing
with State borrowing. A new interest
deferral is authorised as well as a re-
duced interest rate which is available
to States taking substantial legislative
action to restore the solvency of the
State UI programs. Several provisions
were adopted making changes in the
date interest is paid and clarifying the
authority of the Federal Government
to collect the interest when dlie.
The conferees adopted provisions
dealing with participation in training
programs by FSC recipients. Training
will be permitted 'unless the State
agency disapproves such training.
Additionally, for recipients of ex-
tended benefits and Federal supple-
mental compensation benefits, the
conferees agreed to a provision which
permits States to, determine weekly
eligibility for such recipients who are
hospitalized or serving on jury duty. A
State would be required to treat these
individuals in accordance with their
own State unemployment compensa-
tion law.
MIDICARR iaesraC1TVt tAY T
Mr. President. finally I would like to
note that the conferees reached a good
agreement on a new prospective pay-
ment system for medicare. Payment
rates would be developed for nine
census' divisions. with a separate urban
and rural rate i#t each. Payments
would be fixed based on classification
by "diagnosis related group." This
system would be phased in over a 3-
year period. Capital expenses of hospi-
tals would be included;in the prospec-
tive payment system beginning Octo-
ber 1. 1986, based on a return to equity
equal to that earned by the trust fund.
Psychiatric, rehabilitation, long-term,
and children's hospitals would be
exempted from prospective payment,
as would institutions.in the territories.
Mr. President, all in all this is a good
piece of work that I hope our Mem-
bers will accept. We have not, by any
means, achieved all we would have
liked to achieve-but we have achieved
a great deal, considering the urgency
and political sensitivity ' of the prob-
lems we faced. Those members who
have a different view of how we ought
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CONGRESSIONAL RECORD - SENATE S 4085
to have proceeded have had an oppor-
tunity to make their views known and
they have made a valuable contribu-
tion to the debate even when other
views have prevailed. But now the
time for debate is over, and the time
to complete action on this legislation
is here. The President is ready to sign
the bill-we should not keep him wait-
ing.
Mr. President, as my colleagues are
aware, the Senate in its version of the
social security financing bill agreed to
make coverage of Federal workers con-
tingent on the development of a sup-
plemental civil service retirement
system program. That decision was
made when the Senate adopted the
Long amendment by voice vote. As
members also know, the Senate voted
overwhelmingly to insure that Federal
workers would be covered under social
security.
Under the conference agreement,
Federal workers will come under social
security-that is, new hires-as of Jan-
uary 1, 1984. The requirement pro-
posed by Senator LoNG that coverage
be made contingent on a supplemental
civil service program was rejected by
the House conferees, and the Senate
conferees voted to recede to the House
because of that objection. I would like
to assure my colleagues who supported
the Long amendment, however, that
every effort will be made to insure
that Federal workers are provided an
adequate supplemental retirement
system in connection with the require-
ment that new hires be brought into
the social security system. I am sure
the Senator from Alaska, Senator Sra-
vaNs, joins me in this assurance. There
is not, and never has been, an inten-
tion to leave Federal workers with less
than adequate retirement coverage.
We will insure that Federal workers
are treated fairly and squarely as they
come Into the social security system.
Mr. LONG. Mr. President, I cannot
support the conference committee
report on the social security bill be-
cause it will permit the transfer of
General Treasury funds to the social
security system.
I stated in October 1982. more. than
3 months prior to. issuance of the
Social Security Reform Commission's
recommendations, that I could not
support any legislation that financed
social security by merely increasing
the national debt.
The concept of social security, when
it was established under the Franklin
Roosevelt administration, was that it
should be a system wholly supported
by the contributions of employers and
employees. That has been the case up
until now.
This legislation calls for an infusion
to social security of $48 billion from
the General Treasury over the next 7
years. I consider this highly irresponsi-
ble and dangerous to the financial sta-
bility of our Nation.
Most of social security's financial
problems were caused by Congress ea-
gerness to liberalize benefits, relying
on rosy assumptions to pay the cost,
coupled with the. subsequent lack of
courage to either fupd Its comxpitment
with taxes, or to reduce future un-
funded benefits when the optimistic
assumptions proved to be erroneous.
What Congress now has done is open
the floodgates to future massive infu-
sions of General Treasury funds to
social security. The general fund will
soon be $2 trillion in the red, and it is
running up deficits at the rate of $200
billion each year.
Such a procedure can only lead to
needlessly high interest rates and
reckless inflation. In the long run it
will not save social security to under-
mine the faith of the people in the
money of their government.
We cannot long keep the social secu-
rity system afloat by bankrupting the
Federal Government which has the
burden of funding It.
There are other features which
make the remainder of the bill a fur-
ther travesty, but to go further at this
time would merely confuse the issue.
I voted to report this bill out of com-
mittee with reservations, hoping that
it would be improved on the Senate.
floor. My vote to send the bill to con-
ference was cast with the forlorn hope
that by some miracle the bill might fi-
nally be drastically overhauled and re-
shaped. That has not happened- and,
therefore, Mr. President, I refuse to
vote for fiscal irresponsibility.
Mr. EXON addressed the Chair.
The PRESIDING OFFICER. The
Senator from Nebraska is recognized.
Mr. EXON. Mr. President, I should
like to ask my colleague from Louisi-
ana to yield for a question. I listened
with great intent to the remarks from
my esteemed colleague from Louisi-
ana. When I came to the floor a few
moments ago, after essentially wasting
my time all day, I had hoped that
something would come out of the con-
ference that I could vote for.
Let me phrase my question mani-
fold. I voted for the social security
measure that came out of the U.S.
Senate not because I thought it was a
perfect piece of legislation but because
I felt that we had to do something
constructive to make sure that those
citizens of this Nation who rely on
social security would be assured that
their checks would keep coming.
Could the Senator from Louisiana
please explain to this Senator, since
he voted for the bill I assume that
there must have been some rather sig-
nificant change that took place during
the conference that has caused the
Senator from Louisiana to come back
and make the statement that he just
made. I would simply advise my col-
leagues that if my friend and col-
league from Louisiana, who I consider
most knowledgeable in these matters,
finds it impossible to support this con-
ference report, it is going to be most
difficult for the Senator from Nebras-
ka to go along with it.
Could the Senator from Louisiana
kindly advise me in some more detail
than he did in his brief statement as
to what happened in the conference
report that evidently has caused the
Senator from Louisiana to change his
mind about support for the measure
that passed out of this chamber with
an overwhelming vote not very long
ago?
Mr. LONG. Mr. President, to be ab-
solutely honest with the Senator, it
was not what happened in the confer-
ence that made the difference. One of
the conference decisions that does go
contrary to fiscal responsibility was
dropping out the fail-safe amendment
that we agreed to in the Senate. I am
frank to say to the Senator that I told
the Senate conferees that if to reach a
conference ' agreement they needed to
drop that provision, as far as I was
concerned they could go ahead and
drop it. I did not have any objection to
their dropping the provision in order
to get an agreement because I really
did not think I was going to be able to
vote for the conference report anyway.
That was not said for the record, but I
told that to the Senators in our own
discussions.
The reason I did that was because I
have had a chance to think about the
bill. When I voted to pass this bill in
the Senate and to send it to confer-
ence, I was hoping that I could yet
find a way to vote for it, that we might
shape it in such a fashion that I could.
I had grave doubts about voting for it
even though my colleague (Mr. JoHN-
STON) voted against it when it passed
the Senate. He consulted with me
before he did that and told me his
doubts about the bill, and I told him,
frankly, he was probably right and that
if I were him I would probably vote
against it. Being one of the managers
of the bill and a prospective conferee
on the matter and hoping that some-
how we might yet shape it up to some-
thing I could vote for, I voted for the
bill to send it to conference just as I
voted in the committee to report the
bill, with reservations. It was an-
nounced in the committee I was voting
with reservations. .
Mr. President, here is what is wrong
with- the fail-safe provision in this bill.
Once you establish a precedent, as this
bill does, that you are going to make
up the social security shortfall by just
adding it to the Federal debt-once
you start doing business that way,
from that point forward suppose you
did have a situation that my fail-safe
amendment was aimed at, that you are
not going to have quite enough money
to pay the cost-of-living increase.
Then, without fail, every time that
would happen a Senator would rise on
this floor and say:
Wait a minute, there is no need that these
old people should have to settle for any-
thing less than the full cost-of-living in-
crease. All we have to do is to add the extra
to the national debt and go ahead and pay
it.
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S 4086
CONGRESSIONAL RECORD - SENATE March 24, 1983
Furthermore, every time a Senator
wanted to pay an additional benefit
without a tax to pay for it-and in
years gone by I have been one of those
Senators, back in the times when they
had a surplus in the fund-he could
rise up on the floor and say, "Let's pay
grandma an extra $10 a month; she
needs the money," and offer the
amendment and sometimes have good
luck with it without any additional tax
paid into the fund.
Any time someone wants to do that
in the future, all he has to do is follow
the precedent set by the House and
the Senate committees and by the
Presidential Commission, to simply
say that we pay for the amendment by
adding its cost to the national debt.
Just look at how the money is being
funded, appropriated for the short
run.
Here is a proposal that is in the bill
now, one that we voted for. We would
take the money that will be paid on an
annual basis out of appropriations to
take care' of the increased amount that
servicemen would get because of their
service in the World War II. Instead of
handling that with an appropriation
year by year of about $300 million, we
just calculate how much that is going
to cost over the life of those soldiers
and transfer that amount to the trust
funds now. And so you see $22 billion
added to the fund in 1983. That money
is not going to be spent on those serv-
icemen over a period of 50 years. That
is going to be spent right now to take
care of the shortfall in the fund. That
is the big item the first year, in 1983.
But then you go on to 1984 and you
see these other items, for example pro-
viding general fund transfers in lieu of
a portion of the self-employment pay-
roll tax. They raise the self-employ-
ment tax, but do the people pay all
the higher tax? Oh, no. They give
them a credit against the General
Treasury for most of that amount.
They do not even say on the tax
return that they paid it and get it back
when they file the tax return. That is
all taken care of in the complexity in
the language, so they pay somewhat
more than they were paying before,
but you put a much larger amount in
the trust fund as though a higher
amount were paid. How much is that
good for? Well, in 1984 that is good for
$900 million out of the General Treas-
ury.
All right, then you provide general
fund transfers in lieu of a portion of
the employee tax. Well, the first year,
in 1984, that is good for $3.2 billion.
Then you provide an increase in gener-
al fund appropriation for Federal re-
tirement benefits to replace the
amounts that new Federal employees
will now pay in the social security
system. In other words, you tell the
new Federal employee, "Pay your
money into the social security system
and we will appropriate an equal
amount out of the General Treasury
to make that up to the Federal em-
ployee retirement fund."
It starts out as $100 million, but it
rises eventually to $1.8 billion a year.
Here is an item: Transfer amounts
raised from taxing social security
benefits at the beginning of each quar-
ter, based on estimated accrued liabili-
ty in the upcoming quarter, rather
than when the money is actually re-
ceived from the taxpayer. That is good
for $800 million in 1985.
Then there is a big item: Estimate
social security payroll taxes for the
upcoming month and transfer that
amount to the trust fund at the begin-
ning of the month, rather than when
taxes are actually received. That is
good for $12.8 billion in 1984 and
lesser amounts thereafter.
Once you start doing business that
way, it is such an appealing way to do
it that even the Finance Committee,
which I believe to be the most conserv-
ative and fiscally responsible commit-
tee in the Senate, faced with a com-
plaint on the part of the self-employed
that their tax is being increased, said,
"Wait a minute. There's no reason to
raise the tax so much on the self-em-
ployed. Let's give them a tax credit."
Where is the money coming from for
that? Out of the General Treasury.
So we added several billion dollars of
general revenue funding in the Fi-
nance Committee. I did not vote for it.
I was not there at the moment. The
Finance Committee already engaged
in increasing the use of general funds
to do some goodies like relieving the
taxes the would otherwise be levied on
the self-employed-and that is in the
bill already.
We had Senators on the floor offer-
ing amendments, during the considera-
tion of the bill, to pay for something
by providing a tax credit. Where was
the tax credit going to come from?
From the General Treasury. There is
no real general fund from which to
take this. The general fund is $200 bil-
lion in debt for the year we are facing
now. You are getting the money by
adding it to the national debt.
In earlier days we would say, you are
printing money, you are issuing print-
ing-press money. But it is not a print-
ing press any more. They have num-
bers in these computers, so all you
have to do is add a numeral into a
computer at the Federal Reserve; you
just say, "Let's pay them another $100
billion of benefits, and we'll pay for it
by increasing the national debt by an
equal amount." All you have done is
put an electric impulse in a silicon
chip in a computer. Then you say,
"We have $100 billion more in the
Social Security Fund."
Once we start down that road, I be-
lieve we are in trouble, and that why I
cannot vote for the conference report.
Mr. EXON. Mr. President-
The PRESIDING OFFICER. The
Senator from Nebraska yielded to the
Senator from Louisiana, so the Sena-
tor from Nebraska is recognized.
Mr. EXON. Let me ask a further
question of the Senator from Louisi-
ana.
Were the concerns just expressed on
the floor of the Senate by the Senator
from Louisiana discussed at any
length in the Finance Committee
before this bill was reported to the
floor of the Senate?
Mr. LONG. Representative ARCHER
appeared before the committee and
discussed these concerns. Former Rep-
resentative Joe Waggoner, of Louisi-
ana, who was a Presidential appointee
to the Social Security Commission, ap-
peared before the committee and gave
us the substance of his minority
report. The Senator will find the same
problem discussed in his minority
report.
I must admit that the full impact of
those comments did not dawn on me
when they first said it. If the Senator
will read the transcript of the record,
he will see that I was very concerned
about the matter, but the full impact
did not dawn on me at that time. The
more I thought about it, the more I
found it necessary to inquire into it,
and the more I became concerned
about it.
Mr. EXON. Mr. President, I am very
concerned about this, because what
the Senator has just said is something
we should zero in on.
One of the reasons the social secu-
rity system is in the financial difficul-
ties it is in today is the fact that over
the years, I suggest, a whole series of
ornaments have been hung on that
tree, the way we hang ornaments on a
Christmas tree. They were never fi-
nanced or paid for, and now we find
ourselves in a critical situation.
Let me ask a further question. I un-
derstood from the reply that my
friend from Louisiana gave me that at
least those objections were not raised
or fully discussed when the Finance
Committee reported this bill to the
floor of the Senate. Is that generally
true?
Mr. LONG. I did not dwell on that
subject, as one who voted to report it
out of the committee with reserva-
tions.
Mr. EXON. Were the matters that
are now being brought to the atten-
tion of the Senate by the Senator
from Louisiana brought up in open
debate on the floor of the U.S. Senate?
I say that because I notice that Sena-
tor LoNG'3 colleague, the junior Sena-
tor from Louisiana, voted the other
way the other night. I thought that
was a little strange, because I know of
the relationship, and most Members of
the Senate do, between the senior and
junior Senators from Louisiana. Is it
possible that this Senator from Ne-
braska was not privy to all the infor-
mation that was available to the
junior Senator from Louisiana from
his senior colleague?
What I am asking is this: As one
Member of the U.S. Senate, did I miss
something in the debate on this bill,
which the Senator from Louisiana is
not bringing up, that I would have
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March 24, 1989 CONGRESSIONAL RECORD - SENATE
been attuned to if I had been listening
better, or is this something new?
Mr. President, if it is true, and I
think it is, that the Senator from Lou-
siaian is now saying that he has been
very concerned about this and that he
now is opposing this, at this very late
hour, because of the reasons he has
outlined, then that is of grave concern
to the Senator from Nebraska; because
one thing I think we should not do is
to attempt to fool the people of the
United States that we are correcting
something without relying on the gen-
eral fund to bail out the social security
system from the difficulty it is pres-
ently in, If we are not doing that. That
is why I am asking the questions I am
asking, because I think I am about to
cast a rather important vote; and I am
not going to vote for this unless I can
be convinced that we actually have
done something other than the net
result of relying on the general fund
to bail out the social security system
in the near future.
Mr. LONG. I say to the Senator
that, to the best of my recollection, I
have not voted against a social secu-
rity bill in 34 years. But I will vote
against this one.
As I say, my reasons do not have
much to do with the items that were
in conference, or that were dropped in
conference. I have been troubled
about the matter of general revenue
financing throughout.
While the Senator might not have
heard much of it in my remarks, I
think if he were listening to the Sena-
tor from Colorado (Mr. Aaecsrxxoxs)
discuss the matter, he would have
picked up some of that.
I discussed this matter with one of
the more conservative conferees on
the House side, and I told him-
Mr. EXON. Mr. President, there is
not order in the Senate. May we have
order, so that I can hear the Senator
from "Louisiana?
The PRESIDING OFFICER. The
Senator is correct. The Senate will be
in order.
Mr. LONG. I told that particular
House Member I felt that perhaps I
had been derelict in my duty to the
Senate because I had not opposed the
bill on that basis at an earlier point.
He told me not to worry about'it. He
said he had been opposing it on that
basis for months.
He had made the points until he was
blue in the face, but he had achieved
nothing on the House side, and I
should not worry about the fact that I
had not stressed the point prior to this
in this Senate.
I do think if I had to do it over again
I would have made this point to Sena-
tors when the matter was before the
Senate, and having failed to do it' per-
haps I. owe the Senator an apology.
But at least I am explaining it now, be-
cause I do not feel that I can vote for
the bill as much as I would like to vote
for a bill to help solve the financing
problems of social security. I do not
think this is the way we should do it.
I am just one person who has his
own conscience to live with. I cannot
vote for this conference report. I ex-
plained to the Senator why I could
not.
Mr. ARMSTRONG. Mr. President,
will the Senator yield?
Mr. EXON. I am going to yield the
floor in a moment.
I thank my friend from Louisiana,
and my line of questioning I think
clearly indicated that the Senator
from Nebraska was not particularly
pleased, that he did not feel he had
been properly advised by the ranking
minority member on the Finance Com-
mittee. The Senator from Louisiana,
though, has said it very well. He felt
that this is the time to lay it out.
I have great respect for his judg-
ment. I am very pleased that he laid
out his concerns at this time which I
think is helpful to all of us, and I
thank him for his candor.
I yield the floor, Mr. President:
The PRESIDING OFFICER. The
Senator from Kansas is recognized.
Mr. DOLE. Mr. President, I wish to
take just a few minutes to talk about
what the Social Security Commission
recommended and the conference
agreement we have on the Senate
floor right now.
We have in this agreement what the
Social Security Commission recom-
mended. Some are concerned about
the use of general revenues. The bill is
just the same tonight as it was last
night on general revenues. We did not
change a thing in conference pertain-
ing to general revenues.
I do not quarrel with the Senator
from Louisiana for indicating his con-
cern about the use of general rev-
enues. But I wish to assure the Sena-
tor from Nebraska and others that
there is no change in the Senate's po-
sition on any of those provisions. The
House bill is the same as the Senate
bill on those provisions so they were
never in conference.
What I wish to focus on is what we
have before us. Everyone can find
something wrong. But not everyone
can be a conferee and not every con-
ference can please everyone in the
Senate.
We have what I believe is a good
package. I did not want to raise the re-
tirement age to 67. However, it is not
going to happen for 40 years. I think
we should look at it in that light.
I was satisfied with the fall-safe pro-
vision of the Senator from Louisiana.
However, after 4 or 5 hours in the con-
ference there was no way that the
House of Representatives would buy
that fall-safe provision. The Senator
from Louisiana told us at that point in
the meeting of our conferees, "If the
fail-safe is a problem, put it out on the
table," and we did that. In return for
the loss of that fail-safe, we obtained a
concession on the stabilizer. The stabi.
lizer was not to take effect until 1988
and now it will take effect in 1984. To
me that was a fair trade, not quite as
good as the provision of the Senator
S 4087
from Louisiana, but a fair trade. We
traded a horse for a horse, not a horse
for a rabbit.
There is not a single change in this
bill on taxing benefits. That provision
has not changed one bit since it left
the Senate Chamber. There is not a
single change on the acceleration of
payroll taxes. It has not changed one
bit since it left the Chamber. There is
not a single change in the COLA
delay. It has not changed one bit since
it left the Chamber last night.
The one change that some Senators
approved and some do not approve is
bringing in Federal workers. I can tell
my colleagues now that I visited Yes-
terday morning with some of the
union people who represent Federal
unions. I asked them, "Why do you
not work out something so that we can
accept the Stevens amendment and
fight for that in conference?" The
union people said, "You know, we do
not have any problem. We just want to
take our chances on the Long amend-
ment and see what happens." As Sena-
tors know, the Stevens amendment
lost by five votes.
The House of Representatives was
adamant about this coverage provision
because it was the National Commis-
sion's recommendation that new Fed-
eral hires be brought into the system.
Tonight we have almost precisely,
with some improvement, what was rec-
ommended by the National Commis-
sion. Yes, there are some general rev-
enues in the package but they were
there when the recommendations were
made by the Social Security Commis-
sion. They were there in the Finance
Committee amendment. They were in
the Senate amendment last night, and
they are in the bill before us,tonight.
They have not been changed. They
have not been increased.
We have also done a great deal in
the area of unemployment compensa-
tion. We have specW provisions for
West Virginia, special provisions for
Michigan, special provWons for Illi-
nois. And we provide a lot of coverage
and benefits that are going to start
coming due April 1. We have to pass
the bill.
On prospective reimbursement
under medicare, I think we have a
good package. The Senator from Min-
nesota, who was not a member of the
conference, was there to help us on
that.
We have an alien provision that was
not in the House bill. It is not as
strong as the one we had in the Senate
amendment, but we worked today with
Senator Ganssrs?, the Senator from
Iowa, who in turn contacted the Sena-
tor from Indiana, Senator LvoAR. and
the Senator from Maine, Senator
Mrrcxrsa., and now we have an alien
provision. We have accommodated the
Senator from Hawaii in that provision
and he is no longer concerned with the
provision in this bill.
We accommodated the Senator from
Washington, both Senators from
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CONGRESSIONAL RECORD - SENATE March 24, 1983
Washington, on the paymaster, provi-
sion that they thought was very im-
portant.
I believe if Senators look at the
entire package that someone can find
some fault. It is not the way they want
it. It is not the way I want it either.
But I defy anyone who has ever been
to a conference to come back and say,
"Oh, we got all we wanted."
I preferred raising the retirement
age to 66. To get age 66, the Senate
bill had to make some changes in the
bend points, benefit reduction. I think
changing the age to 67 is a benefit re-
duction. But the House of Representa-
tives was convinced that since it had a
vote on that age, they could not go
back and say we are going to take 66. I
even tried 66%. It seemed like a corn-
promise-we had 66, they had 67. I as-
sumed we split the difference in some
of our conferences. So we tried 66%.
But they would not buy it. That was
without any benefit formula changes
in the next century.
Mr. LONG. Mr. President, will the
Senator yield?
Mr. DOLE. I yield.
Mr. LONG. Mr. President, permit
me to say to the distinguished chair-
man of the committee and the chair-
man of the Senate conferees, I hope he
understands that nothing I have said
about this matter is intended to reflect
upon him or any other member of the
conference. As the chairman of the
conferees, the Senator did his utmost
to uphold the Senate position. And al-
though some of us may be disappoint-
ed that the Senate did not prevail on
more of its provisions, my objection
and the reason that. I shall vote
against the conference report, as the
Senator correctly stated, has to do
with the initial bill and the general fi-
nancing phases of it which I simply
came to understand better and better
as the matter proceeded through the
legislative mill. I do not for a moment
question the good intentions and the
very fine way in which the chairman
of the committee has conducted him-
self, and I think the Senate is indebted
to the chairman because he did faith-
fully defend the Senate position and I
think we all are indebted to him for
that.
Mr. DOLE. No; I appreciate that
very much, and coming from the Sena-
tor from Louisiana I doubly appreciate
it. Certainly I appreciate the Senator's
assistance in the conference. I do not
suggest that the bill is perfect. The
Senator from Louisiana said he has
been focusing on the general revenue
aspect of the financing package for
some time and he is coming down on
the side of saying, "Well, I cannot
accept it." That is the principle the
Senator from Louisiana has held for a
long time.
I was not here at the beginning of
his speech. I know when President
Carter suggested general revenue
funding the Senator from Louisiana
said no. We had that battle in our
committee, and I joined the Senator
from Louisiana in opposing such a so-
lution, so I know a little about that.
Some are saying we did not get all
we should have on the SECA tax. As
the Senator from Louisiana and the
Senator from Nebraska pointed out,
that is taking money out of general
revenue for tax credits for the self-em-
ployed.
The Senator from Missouri worked
very hard on that, and he is going to
speak on it. He is not perfectly satis-
fied with what happened. However, let
me repeat that we insisted that the
House Members vote on that provision
because we were told that they had
enough votes to come around to our
position. But I could not detect that in
the vote. It was a rather weak voice
vote, and the chairman announced
that he prevailed. The chairman can
do that from time to time, and he is an
outstanding chairman. The chairman
of the Ways and Means Committee is
a good man.
I believe that under the so-called
SECA proposal, we did quite well in
the conference agreement. Someone
with $15,000 in income would pay a
SECA tax under present law of $1,478.
The Commission would have raised
that to $2,100. The House bill would
have said $1,785 and the Finance Com-
mittee said $1,665. So the conference
agreement results in a $30 difference.
I think we have come most of the way.
Mr. President, I ask unanimous con-
sent that a table be included in the
RECORD.
There being no objection, the table
was ordered to be printed in the
Record, as follows:
EXAMPLES OF 1984 TAX BURDENS OF SELF-EMPLOYED
INDIVIDUALS UNDER VARIOUS PROPOSALS
(Assesses that lodialuals Os un dt no if emt ed deductions ad has no
i al Plairment income]
Present law with speedup:
SECA ......................... -.........................................
$1,481
$2 7
Income tax .............. -..........................................
1,801
55
Total ............................. _.................................
3,279
8,728
Commission proposal with extension to HI:
SECA.- .................................................................
2,100
4200
ii ;ii tax ................................... _....................
1,591
5,136
Total .................................................................
3,691
9,335
(Increase over present law) ..........- ...................
(412)
(607)
House till (2.1 percent credit):
SECA ....................................................................
1,785
3,570
Income tax ...... ...................................................
1,801
5,773
Total
586
3
343
9
_........................... _................................
Increase
over
law Finance Committee t ill (2.9 percent credit)
SECA ............................ -......................................
,
(307)
1,665
,
(615)
3,330
Income tax ............................. -...........................
1,801
5,773
Total ................................................................
3,466
9,103
(Increase owx present law) ..............................
(187)
(375)
antenna agreAneM (2.7 percent craft
SECA ............... ...... .--.......... ..............................
105
3,390
Income tax .........................................................
1,801
5,773
Total ......... - ................ ............. ......................
3,496
9,163
(increase over present law) ...............................
(217)
(435)
Mr. DOLE. So, Mr. President, I know
some are disturbed because the new
Federal hires are included in this bill.
But again that was a Commission rec-
ommendation. Democrats and Repub-
licans and others said, "OK, if the
system is going to work, we are going
to bring in new hires." Maybe we
should not have done that, but that
was the position of the House, and
they were adamant on that.
I happen to think it is a good provi-
sion. I visited again with some of the
labor representatives following that
decision and I can say that they are
not too upset. They gave it a good shot
and they lost. Now they are going to
try to work out the supplemental plan
with the committee of that jurisdic-
tion, which happens not to be the
Senate Finance Committee.
So, Mr. President, I believe that
having participated in the conference
and having been on the Commission, I
can tell you honestly that I think ev-
erything the Commission recommend-
ed is in this bill. In fact, there is some
improvement because when we gave
up the fail-safe we tightened up the
so-called stabilizer. I would like to
convey to the Senator from Montana
that I tried on his amendment. I could
not find one House Member who
would take up the battle. But that
happens in a lot of conferences.
I hope that my colleagues will take a
look at this and decide that this is an
opportunity, not a perfect one, but an
opportunity, to say to people "We be-
lieve in the system." I am not going to
stand up and say, as some were saying,
"We took care of it for 75 years," be-
cause I know what happened in 1977.
We said we would take care of it for 40
years, and 4 or 5 years later we were
back saying we did not do enough.
Mr. President, I hope we might
adopt the conference report. It has
just received an overwhelming vote in
the House, 243 to 102. It passed with a
greater than 2 to 1 margin and I think
that is an indication that it has broad
support.
Mr. HEINZ. Mr. President, I rise in
support of the conference report on
H.R. 1900. This bill will restore solven-
cy to social security. It should insure,
under our current economic forecasts,
the financial integrity of the old-age,
survivors, and disability insurance
(OASDI) trust funds for both the rest
of this decade and the foreseeable 75-
year future. It is a bill which reaffirms
the soundness of the basic structure of
social security by making only mini-
mal adjustments in the program to re-
store the program to a sound financial
footing.
Mr. President, I am pleased that the
Congress has been able to move quick-
ly to enact this legislation and provide
beneficiaries and workers, who have
feared for the future of the social se-
curity system, the reassurance that
the system will remain solvent in the
future. The most serious problem for
social security has not been the short-
term financing problem or the long-
term financing problem, but rather
the loss of public confidence in the
social security system itself. In the last
few years, the proportion of the popu-
lation between 18 and 49 with little or
no confidence in the future of social
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S 4090 CONGRESSIONAL RECORD - SENATE March 24, 1983
crease in taxes not be too large in the carted 75-year deficit in the program. I every battle. We got about halfway in
first few years. Unfortunately, the commend all of my colleagues who most of these cases.
House provision which was adopted have worked so hard to complete this I think you can always ask to do
provides a smaller tax credit in the ini- legislation. With its passage tonight better but when you go, through nego-
tial years than the Senate provision. I we can demonstrate once again to tiation you are not going to win them
can only hope that this smaller credit today's younger workers our commit- all and we did not.
will not result in an excessive and ment to preserving the social security Well, Mr. President, I thank the
unfair added tax burden for the self- system. Senator from Kansas for yielding and
Mr. President, I must say I also
regret that the House conferees were
unwilling to accept the very limited
exemption from social security for em-
ployers and employees who are consci-
entiously opposed to accepting insur-
ance. My amendment, incorporated in
the Senate bill, would have permitted
mostly Amish employees who worked
for an Amish employer to avoid paying
contributions to social security. While
I believe coverage under social security
should be universal, I also believe that
we should respect the religious convic-
tions of our citizens, and where these
convictions conflict with the law,
make an effort to exempt them if pos-
sible. In this case, the Amish would
have waived their right to all future
social security benefits. Their convic-
tions would have placed no burden on
their non-Amish neighbors. I think it
is shameful that we were unable to
make this adjustment in the law,
which to the Congress is so minor, and
to the Amish is so important.
Finally, Mr. President, although I
am pleased that the conference agree-
ment would remove the social security
trust funds from the unified budget in
1992, I regret that the House confer-
ees insisted upon removing the two
medicare trust funds-HI and SMI-
along with the OASDI trust funds.
The medicare program is really quite
different from the cash benefit pro-
gams. First, there is not the inherent
relationship between the workers
earnings and the benefits received
under medicare that there is in
OASDI. More importantly, the medi-
care program faces extremely serious
financing problems beginning in the
next 2 or 3 years-problems which
have not yet been addressed in legisla-
tion. It is quite possible that the entire
system of financing medicare will need
to be restructured in the near future
to assure its financial health. Since
this effort will in all likelihood involve
spending and revenue decisions quite
different than those which might be
made for a stable, well-financed retire-
ment system, I believe it was inappro-
priate for the House to decide to move
this program outside the unified
budget at this time.
Despite my concerns about these
specific elements of the conference
agreement, Mr. President, I believe
this legislation is, all things consid-
briefly that when the Senator from
Kansas says that this conference
report is better than the original pro-
vision agreed to by the President, by
the majority leader, by the Speaker of
the House, and the majority of the
members of the National Commission
on Social Security Reform, he is right.
This is better, and it is better for one
reason principally which he has re-
ferred to and that is it has a better
stabilizer. It is more likely to do the
job even than that which the Commis-
sion, with the President's concurrence,
recommended to this and the other
body.
Yes, I know there are probably some
.things in the bill we would all like a
little bit differently. I was the princi-
pal architect of the long-term provi-
sions where we had a balance between
raising retirement age 1 year, reducing
the replacement rate by about 5 per-
cent, and then bringing in much faster
the delayed retirement credit and
phasing out much faster the retire-
ment test, and I would be dishonest
with you if I did not say our provision
was better than the House provision,
going from 65 to 67. I think we have a
better provision in terms of incentive
for people to work because of the
delay in retirement credit phasing be-
cause of the phaseout of the retire-
ment test.
I think we spread the burden around
in terms of slowing the growth of
benefits a good deal more evenly, not a
great dramatic difference perhaps, but
more evenly.
I would have liked to have seen that
prevail. We lost most of the speedup
from S. 1, the delayed retirement
credit, but what we have in this bill is
exactly what was in S. 1, the delayed
retirement credit.
We have a better provision of the re-
tirement test that was in S. 1 but not
as good as what we sent to the House.
I regret we lost that but on a bal-
ance this bill is a reasonable bill and it
complies with about everything the
National Commission recommended.
So, Mr. President, I hope my col-
leagues will join us in supporting this.
It is a gopd start and it is going to do
the job, and I guess that is the best we
could really ask.
Finally, one last observation: I think
the Senator from Kansas did a superb
ered, a reasonable solution to our job, as did the Senator from Louisiana
pressing social security financial prob- and the other conferees, Senator DAN-
lems. It will meet the financing needs FORTH, Senator CHAFEE, Senator
of this program in this decade as long MOYNIHAN, to name just a few. The
as the economy performs as well as or Senate conferees rigorously upheld at
better than our purposely conservative every opportunity the Senate posi-
projections for it. And in the long run, tion. I have never seen a more faithful
this legislation will resolve the fore- group of conferees, and we did not lose
I commend him on his good work.
Mr. DOLE. I will yield for a ques-
tion.
Mr. EXON. I thank my friend. One
brief question: Please clarify for me
one of the other parts of this which
seems to have a great deal of confu-
sion. The House, as I understand it,
would not put language in the bill that
deleted the payments of social security
to illegal aliens. We included that on
this side. During the explanation by
the chairman of the committee he said
something about illegal aliens. As I un-
derstand it, we basically came out of
conference with the House position
that we essentially would continue to
make social securitiy payments to il-
legal aliens. Am I misinformed or is
that accurate?
The PRESIDING OFFICER. The
Senate will be in order.
Mr. DOLE. I will just say to my dis-
tinguished colleague there was no
House provision on illegal aliens. We
did not get everything we wanted in il-
legal aliens, but they had no provision.
Mr. EXON. I would simply inform
my friend from Kansas that one of the
Congressmen from my State intro-
duced such a proposal and was turned
down in that committee so you would
not know about that. But is it not true
that we did address that matter on
this side and we went to conference
with the provision that would have
provided for not paying social security
to illegal aliens, and was not that basi-
cally eliminated in the conference?
Mr. DOLE. It was modified.
Mr. EXON. That is what I want.
Was it just watered down or did we
sink the ship.
Mr. DOLE. No, it was modified. The
ship did not sink. I must say that even
on the Senate side there were differ-
ent views on illegal aliens. The Sena-
tor from Kansas was a strong support-
er of the Senate position and we indi-
cated to the House conferees we could
not come back to the Senate without a
substantial provision on illegal aliens.
So I contacted the Senator from Iowa,
Senator GRASSLEY, who has a domi-
nant interest in this, and I understand
he contacted some other Senators. He
came to the conference. He discussed
it with staff. He discussed it with Mr.
Svahn of HHS, the former Social Secu-
rity Commissioner, and advised us
that he was satisfied with the
provision.
Mr. EXON. The Senator does not
have to satisfy him, he has to satisfy
me.
Mr. DOLE. I understand.
Mr. EXON. That is the reason for
the question.
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CONGRESSIONAL RECORD - SENATE March 24, 1989
benefits. They give a little restraint on
their COLA if the trust fund got into
trouble, but not the person down to
$250 or $300 a month. We took care of
them.
The effect of dropping that out of
the package is simply to leave in doubt
whether or not we can make it
through 1985 and 1986.
Now, that is my opinion, but it is not
just my opinion. That is the opinion of
the experts, because before I came to
the floor to advise my colleagues that
they run the risk as they adopt this of
not having the fund on a sound basis,
I consulted not one but two experts,
and not just two experts but the two
foremost experts I personally know on
this subject, the two men who are in
the position of professional expertise
to know the most about it.
I asked them this question: I said:
Last night I told some of my colleagues
who sought my advice that with that fail-
safe in the bill, it was a virtual certainty
that social security would be on a sound
basis and we would not have to come back
and patch it up at any time in the decade,
that with any reasonable circumstances we
would make it through. is that true?
They both agreed, "Yes, that is
true."
I said, "Can I make the same state-
ment after they take the fail-safe
out?"
They said, "No, you cannot."
I said, "What statement shall I
make? What shall I tell them if any-
body wants to know about this?"
What I was told was this: "There is
no certainty that the thing is going to
default. There is no certainty that we
are going to go off the cliff in 1985 or
1986. But there is," and I quote exact-
ly, "a significant possibility that pre-
cisely that will happen."
Therefore, after 2 years of fiddling
around with this thing and debating
and jockeying for position and terror-
izing 36 million people around this
country who are wondering is their
social security benefit going to be safe
or is it going to be held hostage at
some point of deadline in the future as
it has been so often in the past, we are
right back where we started.
I am not going to vote for all of the
things to this bill, most of which I do
not approve of, when the bottom line
is that we are really not sure we are
solving the problem, that we might be
back here-
Mr. DANFORTH. Will my colleague
yield?
Mr. ARMSTRONG. I will yield in a
moment-that we might be back here
in 1985 or 1986. That is why I will vote
against it.
My closing remark is, Mr. President,
have the yeas and nays been ordered?
The PRESIDING OFFICER. The
yeas and nays have not been ordered.
Mr. ARMSTRONG. 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 would
like to point out that the bill that
passed last night was not as solid as
the bill before us today.
The bill that passed last night was
$9.3 billion short in the short run and
in long-run deficit 1.2 percent of pay-
roll (almost $3 billion per year for the
next 75 years).
The actuaries tell us that these
short falls have been eliminated in the
conference bill in both the short and
long range.
The Senator from Colorado ex-
pressed displeasure with the fact that
the retirement earnings test is not
phased out in the conference report.
In fact, the conference report liberal-
izes the retirement test in 1990-the
same date as in the Senate bill. Rather
than phasing out the test, the confer-
ence report liberalizes the test so that
instead of penalizing an elderly worker
by $1 in benefits for each $2 they
earn, they will have benefits reduced
by $1 for each $3 of earnings. This
substantially reduced the penalty for
working-while admittedly not going
as far as we would have liked.
The PRESIDING OFFICER. The
Senator from South Carolina.
Mr. HOLLINGS. Mr. President, my
distinguished colleague from Louisi-
ana has referred to the fail-safe. That
is the deficit problem. As long as you
have deficits, which we will have for
many years to come, then the social
security payments will be made. There
is a difference bp' ween the funds
being sound and the recipients being
soundly paid. We are going to do the
latter.
Two years ago, when we raised this
question in the Budget Committee,
many of the blue ribbon commission
and others questioned that the social
security trust fund was even in trou-
ble, and we cautioned at that time, Mr.
President, that before long we were
going to be using general revenues to
pay social security benefits. They said,
"Do not worry. That will never occur."
Now the distinguished Senator from
Louisiana has shown us that this fear
has come true.
He put my statement into the
REcoRD on last evening. I am grateful
to him.
I want to associate myself with his
remarks. We have now not only taxed
the benefits but now we have gone
into the general revenues to pay bene-
fits. We are on a means tested pro-
gram and, in reality, then, instead of
'this evening crossing a historic mile-
stone and solving the social security
problem, and reestablishing the peo-
ple's confidence in the solvency of the
social security system, on the contrary
we are really now starting to create
the problem.
They will learn that it is not only
means tested by taxes, but they really
are going to the deficit each time
benefits are paid.
If we do get in trouble, I say to the
Senator from Colorado, in 1985 or
1986, we will just come back to the
general fund because the precedent
has been set to finance benefits from
the deficit.
The only thing we have to fear is the
lack of fear of deficits in this national
Congress. We are going on willy-nilly.
This social security bill adds $48 bil-
lion over a 7-year period of general
revenues, about a $7 billion a year in a
new spending program, unable to be fi-
nanced out of the trust fund. There-
fore, I will oppose the conference
report. I thank the Chair.
Mr. DANFORTH addressed the
Chair.
The PRESIDING OFFICER. The
Senator from Missouri.
Mr. DANFORTH. Mr. President, I
will vote for the conference report. I
have supported this bill from the
outset. I was one of the original co-
sponsors of S. 1. I believe this is the
only responsible alternative we have.
But I would like to point out the fact
that while we have made the effort
and have succeeded in holding harm-
less employed individuals from the
effect of tax increases on them, we
have far from held harmless those
who are self-employed. We have pro-
vided some credit on income taxes for
social security taxes paid. But the net
effect of the conference report that is
now before us is that for a self-em-
ployed, unmarried person with an
income of $15,000, we are increasing
the total tax liability of that individu-
al by $217.
For a self-employed, single individu-
al with a $30,000 income, we are in-
creasing that individual's net tax lia-
bility by $435.
Mr. President, the effect of this will
be that when, for these individuals,
the social security tax and the income
tax liabilities are added up, the indi-
vidual with a $15,000 income will pay a
total of $3,496 in taxes, and the person
with a $30,000 income will pay a total
of $9,163 in taxes.
We are landing a haymaker punch
at the self-employed people of this
country, and the low- or middle-
income self-employed people of this
country.
Mr. President, who are these individ-
uals? These people constitute the
backbone of our country. Most farm-
ers are self-employed individuals. Most
farmers are hit by this tremendous in-
crease in tax liability.
We know that the real estate sales
people have been particularly interest-
ed in the self-employment tax. They
are certainly not doing too well in
their business these days. Aside from
them, the small contractor, the home
repair person, the person who owns
the comer grocery store, some of the
most tenuous people in our society,
economically, are going to be hit by a
very significant increase in their tax li-
ability.
We in the Senate recognized this
problem and did our best to expand
the credit that was recommended by
the Commission and the credit that
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was in the House bill. We still would third tier, Federal supplemental bene- provision to finally, years later, assist
have hit these individuals with a very fits, expires March 31. Today Is March widows who find themselves, after 20
substantial tax increase. It was my 24. In 7 days, if we do not pass this, or 30 years of raising kids and keeping
view that we should have held the line 738,000 working men and the families house suddenly widowed. Because they
in the conference, that we should have behind them will have their benefits are not yet 60 and they are not work-
insisted on the Senate provision. cut off. We provide not only that they ing, they have no social security bene-
We did not do so. We came out with continue, but there is a reach back for fits. We provided a very modest transi-
a pretty fair compromise in that we those whose supplemental benefits tion benefit of 6 months for those
were closer to the Senate position have already expired. widows 55 years or older. It costs only
than the House position in the confer- I say to you, the fail-safe provision $25 million. I have two questions for
ence. But the effect of this is very sub- which my distinguished friend and my my friend from Kansas. .
stantial on self-employed individuals. I beloved chairman put into this provi- One Is, Did the House conferees
point this out to the Senate because it sion was not accepted. But had we had refuse to accept our provision in this
is my judgment that in the very near the stabilizer, which during the long matter?
future we are going to have to face up month at Blair House was replicated Mr. DOLE. I say to the Senator from
to this fact or we are going to be driv- for the years 1977-82 the funds would Michigan that the House conferees did
ing even more peoplq who are now on never have been in any difficulty. refuse to accept that provision. I can
the brink of bankruptcy over that The stabilizer says that when the also my that the record will reflect
brink, funds drop to a certain proportion of that on two occasions the Senator
Mr. BOSCHWITZ. Will the Senator expected outgo during the year, you from Kansas raised that specific provi-
yield for a question? switch to the lower of price or wage in- sion and indicated that it was impor-
Mr. DANFORTH. I yield. creases for the adjustment in the tant to the Senator from Michigan.
Mr. BOSCHWITZ. I believe the Sen- benefit. That stabilizer, reduced to 15 On the last occasion, the chairman of
ator has well expressed this provision percent, is moved up to 1985. We have the conference and the chairman of
in terms of dollars now. I believe the been given the 1984 budget and now the Social Security Subcommittee,
figure in the Senate bill was 3 percent we have a stabilizer at 15 percent from Representative Pion., promised the
for 1984. 1985 through 1988, then its flips up to conference and everyone there that
Mr. DANFORTH. The Finance Com- 20 percent and stays that way indefi- they could not accept this provision or
mittee bill was 2.9 percent in 1984 and nitely. the dropout year provision which was
the conference was 2.70. I last say that, yes, we have put gen- added by the distinguished Senator
Mr. BOSCHWITL. And for 1985 and eral revenues into this fund. We have from Colorado. However, they prom-
1986? done so for a period of, at a very di- ised that, along with other issues deal-
Mr. DANFORTH. I will have to call minishing rate, 7 years. The men who inB with discrimination against
on the committee staff for that; 2.3 in devised this arrangement in the 1930's women, they would soon be having
1985 and 2.0 in 1986. that is the con- expected it to be a one-third-one-third- hearings on the broader issue of the
ference report. one-third arrangement by now. We treatment of women under social secu-
Mr. ? BOSCHWITZ. What was it have had a very gentle infusion. And rity.
before? In a very short order, this particular Mr. LEVIN. The second question is,
Mr. DANFORTH. We went down to set of funds goes into a major surplus. Can I count on the chairman's support
2.1 in the Senate. This last Sunday, in the Washington on future efforts in this?
Mr. MOYNIHAN addressed the post, a respected journalist, Mr. John Mr. DOLE. The answer is unequivo-
Chair. M. Berry, had a front-page article that cslly yes.
The PRESIDING OFFICER. The went on at some length and which
Senator from New York. adked what the Federal Government Mr. LEVIN. I thank the Chair and
Mr. MOYNIHAN. Mr. President, the was going to do with the surpluses this commend him on his efforts. The
hour is late and I shall be brief. With legislation would generate beginning problem here is so tragic and so stark,
the indulgence of my friends on the in 1990? It is a problem to which the we must step up our efforts to correct
other side of the aisle, I should like to Senator from New Mexico could use. it.
speak to my fellow Democrats on this fully address himself with more pleas- Mr. DOLE. Mr. President, I would
side. ure than with which he deals with the like to point out to the Senators from
I wish to point out first of all that problems of this very moment. Michigan and Colorado, who are con-
this bill passed the U.S. House of Rep- We have a short-term problem we cerned about the absence of certain
resentatives by a margin of 2% to 1. have resolved, a long-term problem we provisions for women, each of the four
Among the Democratic majority in have dealt with with a high order of equity provisions recommended by the
that body, it passed 3 to 1. A Demo- bipartisan competence. It passed the National Commission were adopted. In
cratic leadership has been willing to House of Representatives 2% to 1-243 addition, the conference report includ-
cooperate in this singular bipartisan to 102. A Democratic measure-if Jen- ed a modification that will provide
effort to save the single most Impor- nings Randolph were on that floor to great relief for older women on social
tant domestic program our party has night as he was 48 years ago, he would security survivors or dependents bene-
ever brought this Nation. None other have voted for this bill, would he not, fits who also receive a public pension.
than JENNINGS RANDOLPH, if he will sir? Next July, they would have suffered a
forgive the personal statement of his Mr. RANDOLPH. My friend, I voted $1 for $1 reduction in their benefits on
name, who spoke on this floor, was on for the initial bill 48 years ago. It was account of their other public pension.
that floor 50 years ago when this legis- a monumental document. The conference report will provide for
lation passed. None the like has ever Mr. MOYNIHAN. Would you not a one-third disregard of the public
passed either body and none is more have voted for it tonight, sir? pension-elderly spouses and widows
singularly our heritage to preserve and Mr. RANDOLPH. I will vote aye! I and widowers will only have two-thirds
pass on. By 3 to 1, our fellow Demo- do so with the inner knowledge that I of their pensions offset.
crats voted for this. do right. It is a vote for people, our Mr. DOMENICI. Mr. President, I
Second, I. say to you that this is not citizens of this great and good land! wish to ask the Senator from New
one subject matter. This is medicare, Mr. MOYNIHAN. You never fail us. York a question and I do not ask this
this is unemployment insurance. For Let us not fail them. They happen to question to in any way prejudice the
the first time in history, we add a be the American people. conference report before us. There is a
fourth tier of unemployment benefits Mr. LEVIN. Mr. President, I have significant difference between the fail-
for those who have exhausted their just one brief question for my friend safe and the stabilizer, as I see it, in
final Federal supplemental compensa- from Kansas. One small important that the fail-safe is measured in terms
tion benefits. The new programs part of this bill added as set aside. By of going below the reserve. The stabl-
begins when this bill is enacted; the a small bipartisan effort, we added a lizer-I do not know where the word
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CONGRESSIONAL RECORD - SENATE ' March 24, 1983
came from-but it is not measured
against the reserve. As I read the bill,
either CPI or wages, whichever is
lower, you get but you could still go
below the reserve. So It is not a fail-
safe, it is merely saying if CPI is lower
than wages, you get the lower if the
reserve is too low. But it is not at-
tached to keeping the reserve. You
could to below the reserve, accepting
the lower of the two, as I understand
it. Is that not correct?
Mr. MOYNIHAN. The Senator is
correct in that very technical sense.
The stabilizer-the word came from
the distinguished Chairman of the
President's Commission, Mr. Green-
span. It is triggered by the reserve and
the language added by the House
Members is that when it goes below 15
percent for this 4-year period. then 20,
the trustees are to automatically go to
the lesser of the two Indices and
report in writing to the Congress as to
what other, if any, measures are re-
quired.
Mr. ARMSTRONG. Mr. President,
will the Senator yield to me briefly?
Mr. DOMENICI. I am pleased to
yield.
Mr. ARMSTRONG. I want to point
out that while I favor the stabilizer
provision, it will have absolutely no
effect whatsoever on the stability of
the fund or the ability of the fund to
meet its projected payments during
the balance of this decade under
either of the two economic scenarios,
that is, 2(b) and 3, which were under
consideration by the Finance Commit-
tee and by the National Commission.
It is a worthy provision, it is a useful
provision, but it is irrelevant to the
question of whether or not we are
going to make it through 1985, 1986,
and 1987, according to the staff direc-
tor of the National Commission on
Social Security Reform with whom I
have discussed this matter tonight.
Mr. DOMENICI. I say to the Sena-
tor, I understood that very clearly and
I think that is -why I asked the ques-
tion, not because that should be the
conclusive issue but "stabilizer" some-
how sounds like--
Mr. ARMSTRONG. It sounds better
than it is.
Mr. DOMENICI [continuing]. Fail-
safe.
Mr. ARMSTRONG. Exactly.
Mr. DOMENICI. The point I was
making is they are not the same be-
cause as the Senator has indicated,
even if you go with the lower of the
two, it is not triggered up against pre-
serving a reserve but, rather, triggered
up against making a report that you
are in trouble, as I understand the bill.
Mr. ARMSTRONG. That is right.
Mr. DOLE. Will the Senator yield
briefly?
Mr. DOMENICI. I am pleased to
yield.
Mr. DOLE. I do not think the fail-
safe is fail-safe either. We can argue
semantics all night long, but if you
reduce the COLA to zero with the fail-
safe and the fund still does not have
enough money to pay the checks, it is
obviously not fail-safe. This is all sort
of a semantic game.
I must also say that the same actu-
aries being cited tonight for forecasts
were the same ones who told us in
1977 that we did not have a thing to
worry about for 40 years. Now, if they
are the same actuaries the Senator
from Colorado Is relying on tonight, I
think one is the same one I relied on
this afternoon. I hope he gave me ac-
curate information when he told me
this afternoon that the stabilizer as
modified was a good trade. That was
his statement to me.
Mr. ARMSTRONG. Mr. President, if
the Senator will yield, it is not my pur-
pose for a second to dispute the value
of the stabilizer provision but only to
underscore, as the Senator from New
Mexico said, that it has a different
function.
I had not intended to get into a de-
tailed explanation of this. But under
both economic scenarios which were
within the contemplation of the Com-
mission and the Finance Committee
and the Ways and Means Committee
and the House and the Senate, it is an-
ticipated that wages will rise more rap-
idly than prices and since that is the
case the so-called stabilizer would have
no effect.
Now, if some different set of eco-
nomic conditions prevail than any
than were considered, it is conceivable
it would have some effect but under
the conditions which we deemed as
the outer parameters of what we
would think about in preparing this
bill it would not have any effect. It is,
nonetheless, a worthwhile provision.
Let me also emphasize to the Sena-
tor-I said it earlier but I want to say
it again-that I am not predicting the
trust fund will go broke in 1985 or on
any other particular date. My bottom
line for support of the bill was a rea-
sonable assurance, not an absolute,
ironclad guarantee, but the assurance
that a trustee would expect a pruden-
tial assurance, a coverage of all reason-
ably foreseeable circumstances-not
every manageable circumstance but
just what can be reasonably foreseen
by people who see themselves as the
trustees of a system that we have got
the job done. Last night's bill did that.
In my opinion and in the opinion of
experts, there is a significant possibil-
ity-I quote, "a significant possibil-
ity"-that the bill in its present form
will not fulfill that requirement.
I am not willing to take that risk but
I do not predict that we are going
bankrupt in 1985 or 1986, just that
there is a significant possibility that
we will not be able to make ends meet,
and that is not good enough after all
we have been through.
The PRESIDING OFFICER. The
Senator from New Mexico.
Mr. DOMENICI. Mr. President,
having distinguished between the sta-
bilizer and the fail-safe. I think it is
only fair to say that from the stand-
point of possibilities, I agree with the
distinguished Senator from Kansas
with reference to the fail-safe provi-
sions. They are fail-safe with respect
to getting down to no COLA at all, and
then if you have to go below it, obvi-
ously you would be in a state of re-
serve bankruptcy. The fail-safe only
provided for adjusting the cost of
living. It did not provide for going
below it. So in that respect I did not
mean to imply to the contrary, and I
indicate in my opinion he is correct in
that observation also.
The PRESIDING OFFICER. The
majority leader is recognized.
Mr. BAKER. Mr. President, if the
managers of the bill are prepared to
do so, I am prepared to suggest that
time has arrived when we should go
ahead and put the question to the
Senate. Mr. President, I make only
these general observations and do so
briefly at 1:25 in the morning.
I do not recall in my years in the
Serrate ever seeing the Congress of the
United States pass a bill that we
agreed was perfect. I do not recall one
that I have ever seen that I was
wholly pleased with. Some I like
better than others. But I really do not
think it is in the nature of representa-
tive government that we often achieve
perfection.
It is the genius of this system per-
haps, though the Republican concept
in general, that the very pluralism
that puts us here in the place of trust
guarantees that there will be an exqui-
site diversity of opinions and ideas
that will result in something that is es-
sentially unsatisfactory in some re-
spect to virtually every Member of
Congress.
I acknowledge the reservations, I re-
spect the concerns that Members have
about this conference report. -
Mr. President, I believe there is a
broader and deeper perspective at
hand. In the course of our history,
there are times when the country de-
mands that we do something-in civil
rights, in national defense, in environ-
mental legislation. Whatever it may
be, in its own inimitable, unmistakable
way, the people of this country gather
up and demand that we do something
to correct, to innovate or to change
the status quo. I believe this is such a
decisive moment.
I think the country is telling us to
get on with the business of fixing the
social security system. I do not think
the country is telling us we have to do
all of it tonight. I think they under-
stand that we understand we are going
to do the best we can but we will come
back for another bite. There will be
other bills. There will be the inevita-
ble cleanup hitter. There will be the
corrections that have to be attended to
next month or the month after that or
in the next session because, Mr. Presi?
dent, we learn from our experience
But there is a fundamental responsi
bility to deal with the demand of the
Nation to deal with this issue.
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Mr. President, if the Congress of the
United States fails to do so, I believe
we will incur the wrath of the Repub-
lic. If the bipartisan Commission ap-
pointed by the President and the col-
lective leadership of the Congress can
subordinate their differences and pro-
duce a virtually unanimous report,
then surely the country has the right
to expect that we will implement it. If
the House of Representatives on both
sides of the aisle can adopt this imper-
fect vessel as the best- effort of this
Congress at this time, then surely we
should take account of the responsive-
ness of this body in attending to the
needs of the Nation.
This is not a perfect bill, Mr. Presi-
dent. But we are not a' perfect body.
This is not the last word to be spoken,
Mr. President, but is the first best
effort that we can make at this time.
Mr. President, I urge that the wrath
of the people of this country will not
come down upon the head and shoul-
ders of this Senate for failing to
attend to the clear responsibility that
the Nation is asking of it.
Mr. DOLE addressed the Chair.
The PRESIDING OFFICER. The
Senator from Kansas is recognized.
Mr. DOLE. I thank the distin-
guished majority leader, and I will just
take 1 minute to say as sincerely as I
can that every major provision recom-
mended by the Social Security Com-
mission is in this bill, every major pro-
vision unchanged, every major provi-
sion.
The bill that left the Senate last
night was $9.3 billion short in the
short run and 0.2 percent of payroll,
almost $3 billion a year, in the long
run-the next 75 years. The actuaries
tell us that the bill we brought back is
actuarially sound in the short term
and long term.
I say, as just one member of the
Commission, that we have done a lot
of work on this proposal. As the ma-
jority leader said, it is not perfect. We
have 7 years to address the earnings
test, for example, if the Congress de-
sires to go further in this area. It does
not take effect until 1990. We have a
bit of the alien piece too, and that is
enough to sustain it. We will be happy
to have additional hearings and work
in that area. If anything is not quite
satisfactory, we have time to make
changes.
My point is that every major provi-
sion-the taxing of benefits, the COLA
adjustment, the acceleration of pay-
roll taxes, the expansion of coverage-
in this case, to Federal workers-is
almost identical to the recommenda-
tions of the bipartisan Commission.
These recommendations were en-
dorsed by the President of the United
States, endorsed by the Speaker of the
House of Representatives, endorsed by
the majority leader of the Senate, and
endorsed by liberals, conservatives,
Republicans, and Democrats all across
this country.
I say to my colleagues that I think it
would be a tragedy if-just because ev-
erything was not perfect and did not
suit every Member of this body-we
say that we cannot take this, package.
There is nothing wrong with this
package. If you supported the Social
Security Commas ion recommenda-
tions, they' are in this package, plus a
lot of other- things, as pointed out by
the Senator from New York.
We have _a massive medicare pros-
pective payment program that I think
is a good one. We have an unemploy-
ment cempepsa-tion program in this
package. It i& essential that it start on
April 1 of this year, with special provi-
sions for a number of States because
they deserve special consideration.
I say to my colleagues that if we
failed to do our duty in the confer-
ence, then the Senator from Kansas
will accept the responsibility, but let
us not punish the American people for
a shortcoming that may have occurred
in the conference. I do not think it oc-
curred. I am certain many could have
done better.
I suggest, as the majority leader has,
that we adopt the conference report.
We are going to meet again on social
security. I have never stood on the
floor or in public or privately and said
this package is going to last for 75
years, but I am convinced that it can
last until 1990; said that we can have
surpluses in the retirement fund in
the 1990's. Let us give it a chance.
Again, I thank my colleagues for tol-
erating this debate at this late hour,
but I think it is essential that we get
on with this tonight.
The PRESIDING OFFICER (Mr.
Srsvalrs). The question is on agreeing
to the conference report.
Several Senators addressed the
Chair.
The PRESIDING OFFICER. The
Senator from New York.
Mr. D'AMATO. Mr. President, al-
though I intend to vote for final pas-
sage of this conference report, I do so
with great reluctance. In my opinion,
this package is unfair: many of its pro-
visions are absurd. There is however,
no other available alternative.
To vote against this package, there-
fore, would be irresponsible. The social
security system must be saved. I will
vote "aye," but I feel that I must first
express my strong reservations.
As Chief Justice John Marshall said
in the 1819 case of McCulloch against
Maryland, "[T]he power to tax in-
volves the power to destory[.]" Well,
we have certainly demonstrated this
fact with this bill. This Congress has
used it power to tax to destory the
economic well-being of millions of
Americans. This Congress may have
saved the social security system, but it
has done so at tremendous, unneces-
sary costs which will be borne not by
the rich, not by-the well-to-do, but by
the hard-working middle-class Ameri-
can taxpayer.
Allow me to detail just a few of the
more ridiculous provisions of this bill,
a few of the more onerous require-
ments imposed by this legislation.
S 4095
First is the cruel burden this bill im-
poses upon our Nation's philanthropic
organizations, the nonprofit charitable
organizations which are the very back-
bone of America's private sector.
These organizations exist on shoe-
string budgets. The employees-when
they are paid-are generally low-
income workers. These institutions are
barely making ends meet now. Yet
here we come, imposing new economic
burdens that may force many to close
their doors, to cease the good work
they now do. Employees may be laid
off and those who are not avill have
their take-home pay substantially re-
duced. Why is this happening? Be-
cause this Congress has ruled that em-
ployees of not-for-profit organizations
must be included in the social security
system now. No phase-in period will be
allowed. No exception will be granted.
No transition period will be provided.
We will reduce the ability of America's
philanthropies to continue their full
efforts to help this Nation's poor and
needy. -
A second example of an unwarrant-
ed provision in this legislation is even
more ridiculous. In fact, it is just plain
stupid. In order to save the social secu-
rity system, we need to raise tens of
billions of dollars. Yet, in an effort to
raise a measly $5 million over the next
7 years, we have imposed additional
costs on State and local governments
that will run anywhere from $240 mil-
lion to $1 billion each and every year.
A letter I received from the Municipal
Finance Officers Association estimates
the annual cost to States and munici-
palities at $725 million, nearly 1,000
times more than the annual revenue
which will be raised as a result of this
just plain silly provision. .
You may ask me, to what section of
the bill am I referring? I am talking
about the requirement that interest
on tax-exempt municipal bonds will be
included in an individual's gross
income when determining whether he
or she exceeds the income level at
which one-half of the received social
security benefits become subject to
Federal income taxation. By including
tax-exempt interest in this calculation
we may push a few individuals over
the limit and thus recover a few dol-
lars for the trust fund by taxing their
benefits, but the very fear that this
provision will place in the hearts and
minds of those investors who purchase
municipal bonds will drive up the in-
terests rates that our municipalities
must pay to market their securities.
The municipal finance officers with
whom I have spoken have estimated
this increased interest cost at any-
where from 25- to 250 basis points, in
other words, at anywhere from one-
quarter of 1 percent to ,234 percent in
additional interest.
Simply speaking, this is lots of
money. And you know as well as I do
who will ultimately pay these in-
creased municipal financing cysts:
None other than the middle-class
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CONGRESSIONAL RECORD - SENATE March 24, 1983
property owner. The ultimate source
funding for most municipal interest
payments is the property tax. Thus, to
raise an additional $5 million in reve-
nue for the social security trust fund
over the next 7 years, we have in-
creased the property taxes of home-
owners across this Nation by $240 mil-
lion to $1 billion each and every year.
And who, you may' ask, will receive
these increased interest payments?
Who will reap this windfall? Not the
Federal Government. Not social secu-
rity recipients. Remember, we only
raise $5 million from this provision.
This windfall will accrue to none other
but the wealthy investor in municipal
bonds! This windfall will go to those
very individuals who some in this
Chamber feared might escape without
paying a few measly dollars in income
tax on their social security benefits!
Sometimes the workings of the legisla-
tive process boggle the mind. This is
one of those times, for this provision
can be described as nothing less than
incredible.
A third flaw in this legislation is the
limits at which social security benefits
become taxable: $25,000 for an individ-
ual and $32,000 for a couple. We have
provided no phase in. We have built in
no progressivity. We have simply spec-
ified a cutoff. If you are below, even
by one dollar, you pay no tax on your
benefits. If you are above, whether by
one dollar or $1 million, you have half
of your benefits taxes. Thus the mar-
ginal rate of taxation is highest on the
middle class, those with incomes only
slightly over the limits. The more you
earn, the lower your marginal rate of
taxation on social security benefits be-
comes. I, for one, can simply not
fathom the logic in this provision.
Another problem with this bill is the
way that new civil service employees
have been thrust into the social secu-
rity system. This may be a quick fix
for social security, but what does it do
to our civil service retirement system?
Again, we have provided no transition.
Again, we have no plan on how we will
deal with the future. Social security
must be saved. Does this mean that we
must destroy the civil service retire-
ment system to do it?
The self-employed are also treated
cavalierly by this bill. "Raise their
taxes, they can afford it" seems to be
the prevailing opinion around here.
But this is not true. Not all of the self-
employed are doctors, lawyers, or
heads of thriving businesses. Most, in
fact the vast majority, are hard-work-
ing, middle-class American taxpayers
barely making ends meet. We have
here imposed a vast new burden on
the shopkeepers of America, on the
skilled artisans of America, and on
those individuals who would rather be
their own boss than work for another,
even if it meant they would have to
get by on less money. These are the
people whose taxes we have increased
with this legislation.
In this bill we have overused our
power to tax. We have misused our
power to tax. In many cases we have
imposed the tax burden inequitably
and on the wrong people. We may
have saved social security, but at a tre-
mendous and misplaced cost.
At the beginning of my remarks I
stated that I would vote for this con-
ference report, and I will do so despite
all of its faults. To do otherwise would
be irresponsible. There is no other al-
ternative. No one here believes that if
we defeated this legislation that Con-
gress would bring forth a better bill.
In fact if this conference report is de-
feated, there might very well be no bill
at all, and this alternative is totally
unacceptable.
Thus, Mr. President, with great re-
luctance, I will vote in favor of this
conference report.
Mr. LEAHY. Mr. President, every
day this Congress debates legislation
of significance to some element of our
economy, some segment of our society.
The legislation before us today-to
preserve the integrity and insure the
solvency of social security now and in
the future-affects our entire economy
and three-quarters of this Nation's
population, 110 million workers and 36
million retirees. This is one of the
most important measures which this
Congress or any Congress will ever
consider.
The National Commission on Social
Security Reform in late 1982 took a
great step toward restoring public con-
fidence in social security by achieving
a bipartisan consensus on the dimen-
sions of the financing problems facing
the system. Since that time, both the
Senate and the House have acted
swiftly, and in a bipartisan fashion, to
achieve legislative compromise.
The Congress goal has been to guar-
antee the ultimate stability of social
security and the ability of retired
workers to maintain a decent standard
of living. The Congress goal has been
to insure that no single segment of our
population-the elderly and disabled,
today's employers and workers, tomor-
row's retirees, solely bear the burden
of resolving the system's financial con-
dition. The Senate, in adopting all of
the recommendations of the National
Commission on Social Security
Reform, and acting to eliminate both
the short- and long-term deficits pro-
jected for social security, has achieved
these goals.
But these are not goals which are
achieved without pain. I oppose, as do
many other Members , of Congress,
many of this legislation's individual
provision. And I have voted in favor of
amendments to make further improve-
ments in it. This legislation contains
elements which are abhorrent to advo-
cates for the elderly. It would delay
until January 1, 1984, the cost-of-
living increase due in July of this year.
The legislation contains elements
which are abhorrent to advocates for
the Nation's small business men and
women. It would increase the tax on
the self-employed for both social secu-
rity and medicare health insurance. It
increases taxes to employers and em-
ployees in a time of economic reces-
sion. And it would include new Federal
employees under the social security
system beginning in 1984, a change
which I voted against.
Why, then, could I vote in favor of
final passage of this legislation? For
several reasons. First, without it, there
could be no social security system. If
no action is taken, in just a few
months, benefits could no longer be
paid out to the Nation's retirees. Every
minute of every day, the system goes
$17,000 further in the hole. One hour
from now, it will be $1 million more in
debt. The National Commission on
Social Security Reform has reported
that between $150 and $200 billion is
necessary to meet our obligations to
retirees between now and the end of
the decade. To insure payments to
future generations of retirees, a long-
term deficit of $6 trillion must be
closed. This legislation closes both
deficits.
The second reason I could support
the overall package approved by the
Senate Finance Committee is that it
asks for a shared sacrifice. It is not a
perfect balance, but, overall, it calls
for a just division of responsibility to
guarantee the viability of social secu-
rity. The bill before us asks current
and future retirees to contribute. It
asks the self-employed, current and
future workers to "contribute. Federal
workers, for the first time, will be
asked to contribute to social security.
One-third of the revenue needed to
shore up social security would come
from coverage of new employees, an-
other third from tax increases, an-
other third from a change in benefits
for retirees.
Third, the only alternative methods
of improving the condition of social se-
curity are far worse than those recom-
mended by the Commission and adopt-
ed by the Senate Finance Committee.
Some Members of Congress favored
resolving social security's problems
primarily by cutting benefits to the
Nation's retirees. I vehemently op-
posed those efforts. An amendment
was offered to delay until 1985 any
cost-of-living adjustments to retirees.
An amendment was offered to elimi-
nate any social security tax increase
whatsoever, and to require benefici-
aries to make up the $40 billion loss in
benefit cuts. Amendments were of-
fered to immediately advance the age
of full retirement under social security
from 65 to 68, with a reduction in
benefits for those forced to leave the
work force before the age of full re-
tirement. I voted against each of those
amendments and an pleased that the
Senate overwhelmingly disapproved
them.
Other Members of Congress favored
resolving social security's problems
through even higher taxes than those
approved by the National Commission
on Social Security Reform. If taxes
alone were used to meet the long-term
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CONGRESSIONAL RECORD - SENATE March 24, 1989
fled with the way the conference com-
mittee dealt with my contribution to
the package: But here, again, it is
something. We have never dealt with
these issues before. It is a start, and
we hope there will be greater accom-
plishments down the road.
With or without provisions on aliens,
I am going to support the provisions,
because I am not going to let down the
36 million Americans who depend
upon social security. Consequently, I
am going to support the compromise.
Mr. President, we have finally
reached that point when we must
make a decision on the fate of the
social security system. We are all
aware of the hard work and bargain-
ing that shaped this package. Once
again, I want to compliment all the in-
dividuals who served on the Commis-
sion and their staff for their tremen-
dous efforts. Without the foundation
laid by the Commission report. I fear
we would not now be within the grasp
of final passage.
As I have indicated previously, .I was
dissatisfied with the original plan rec-
ommended by the National Commis-
sion. It left a third of the long-term
problem unresolved, and placed far too
heavy an emphasis on tax increases.
We in the Senate Finance Committee
were able to modify and supplement
that plan until it was acceptable not
only to myself, but to 17 of my col-
leagues. With further modifications,
the bill passed the Senate by an over-
whelming 88-to-9 vote.
With the arrival of the conference
report we are at the end of that
amending and fine-tuning process. We
now have one last vote to cast. From
the time the plan left the Commission-
ers' hands to the present, it has been
shaped and amended to achieve the
broadest possible support.
By way of the conferees' decision, we
have moved up the effective date of
the so-called COLA stabilizer, and
have therefore provided a reasonable
fall-safe plan. The Senate Finance
Committee had adopted a prudent and
fair fail-safe measure with Senator
Loxo's committee amendment, but I
can also lend my support to this alter-
native. Although the Senate had opted
for a combination of measures to solve
the long-term funding gap, I find the
House's version of the retirement age
increase to be acceptable.
I am able to support this ultimate
plan for several reasons. While it still
contains many provisions I could not
support in isolation, it is obvious care-
ful and precise negotiations went into,
the construction of such a compro-
mise. I have outlined on numerous oc-
casions those provisions I endorsed,
and those which I found difficult to
accept. I will not further elaborate on
every provision and the merits of each.
Suffice it to say that I am willing to
vote for this plan in order to signal to
every American that we are committed
to local security and its preservation.
We have been playing politics with
this issue for far too long. We have
caused a .great deal of fear and uncer-
tainty in the minds of a great many
citizens and workers. We have let a
good many Americans down with our
past efforts in resolving problem areas
in social security.
With the passage of this bill we can
say to this Nation's elderly: "You will
get your benefit checks." To the cur-
rent workers, we can assure them that
a plan will be there when it is their
turn to collect.
No one is claiming this bill is a per-
fect plan, but it does meet both the
short- and long-term needs in funding,
and does so in a manner which causes
every individual touched by social se-
curity to share in the sacrifices requi-
site to return the system to solvency.
Those goals have guided my delibera-
tions throughout this long process,
and I am therefore able to lend my
support to this social security package.
The PRESIDING OFFICER. The
question is on agreeing to the confer-
ence report. The yeas and nays have
been ordered.
Mr. DOMENICI addressed the
Chair.
The PRESIDING OFFICER. The
Senator from New Mexico.
Mr. DOMENICI. Mr. President, I
came here tonight truly undecided. I
spent a few hours looking at the
matter, and I think the majority
leader is right. We should adopt the
conference report. If it does not have
everything we want in it, I think we
have an ample opportunity to fix it.
I think those who are undecided
ought to decide whether or not their
precise and specific objection is worth
as much as the social security system.
That is the balance-a system that has
served us well, and it is serving mil-
lions of Americans. If you look at it
that way, I think you cannot come out
any other way than to say that, with
all our faults, we have come up with
something relatively good in terms of
trying to save the basic system on
which so many people depend. I hope
we will adopt the conference report.
Mr. BRADLEY. Mr. President, I
know it is late, and I shall be brief.
I ask my colleagues before they cast
this vote to think of the senior citizens
that they have talked with in the last
2 years. Think of the faces that they
have seen, the fear and confusion.
Think of the looks that they have
given you as a Senator in their belief
that indeed you might make, it right.
Think of the workers that you have
talked to in the last couple years, who
have seen their taxes go up 363 per-
cent since 1972 and heading higher,
who do not believe you when you say
indeed you think you can get a solu-
tion and might actually convince them
that social security will be there when
they are ready to retire.
Mr. President, social security. is the
best expression of community that we
have in this country today.
This has been a long and painful
battle. I hope the Senate tonight,
though, will reaffirm the bonds of
that community and support this con-
ference report.
Mr. STENNIS. Mr. President, I shall
not detain the Senate.
Mr. President, let me comment that
we had first-class debate here tonight.
This is like old times. Both sides splen-
didly presented these major points of
great concern and far-reaching conse-
quences.
I sum up my position by just saying
that I wish some of these provisions
were better, but we have to have a
plan that is sound and dependable,
and I think the time has come, as the
majority leader said, when we have to
have it now.
The faults of this bill are human
faults because we had some of the
finest talent collected in modern times
on this far-reaching problem.
I am glad to support the bill.
Mr. ABDNOR. Mr. President, today
marks another historic moment in the
history of the social security program.
I commend my colleagues for reaching
a consensus on this important issue.
The task was not easy because widely
varying views exist on the purpose and
objectives of social security. I also
extend my heartfelt thanks and grati-
tude to the members of the National
Commission on Social Security
Reform, whose leadership and courage
forged the foundation of the legisla-
tion now before us.
In addition, many organizations
have made substantive contributions
to this legislative effort. Among them
were the Employee Benefit Research
Institute, American Enterprise Insti-
tute, American Association for Retired
Persons, Heritage Foundation, Cham-
ber of Commerce, and National Feder-
ation of Independent Business. I was
impressed with the sound, sensible,
and practical suggestions of these
groups. Their involvement was con-
structive and provided valuable ideas.
Besides receiving information from
these organizations representing
people throughout the Nation, I also
received suggestions and comments
from hundreds of South Dakota citi-
zens during the past year. Their input
was very helpful and revealed to me
the concerns and expectations of
people of all ages and incomes.
The social security system has been
in existence for almost 50 years. The
program has survived many social and
economic changes, and today resem-
bles only partially the original plan.
Our Nation places the elderly in
prominence and high regard and has a
strong social commitment to assisting
disabled, and social security properly
addresses those priorities. In the
1960's the need for health care assist-
ance was recognized and medicare was
created to attend to providing elderly
and certain disabled citizens with
medical services at reasonable rates.
When our economy was subjected to
inflation, the Congress benevolently
protected social security beneficiaries
with cost-of-living adjustments.
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CONGRESSIONAL RECORD - SENATE March 24, 1983
while programs of the U.S. Govern-
ment.
LEGISLATIVE HISTORY FOR SOCIAL SECURITY
COMMON PAYMASTER PROVISION
? Mr. GORTON. Mr. President, I
want to commend the conferees for
their fine work on this vital legisla-
tion, and to comment on one of the
Senate amendments which corrects an
unintended double payment of the un-
reimbursable employers' share of
FICA by the regionalized medical
school for the States of Washington,
Alaska, Montana, and Idaho.
The House and Senate bills and the
conference report extend social secu-
rity coverage on a mandatory basis to
all employees of nonprofit organiza-
tions. As a result, employees of such
organizations who are also employed
by a State university of a State which
has agreed to provide social security
coverage to its employees under sec-
tion 218 of the Social Security Act
would have been, without this amend-
ment, subject to . unreimbursable
double payment of social security
taxes. Although present law prevents
such double taxation where the em-
ployers of the same individual are re-
lated corporations-section 3121(s) of
the Code-or are instruments of politi-
cal subdivisions of the same State-
section 218(e)(2) of the Social Security
Act, there is no provision which would
prevent double taxation where one
employer is a nonprofit organization
and another employer is an instrument
of a State. Indeed, since exempt orga-
nizations up to now could voluntarily
decide whether or not to participate in
social security, such a provision was
not needed.
By mandating participation in social
security, the bill has eliminated the
only mechanism to avoid double tax-
ation and created the need to allow
exempt organizations to have equiva-
lent relief to that available through a
"single paymaster" system.
The amendment is specifically de-
signed to prevent double taxation
where one employer is a State univer-
sity medical school and the other em-
ployer is a related nonprofit organiza-
tion which also employs faculty mem-
bers of such medical school. At least
30 percent or more of the organiza-
tion's employees must also be em-
ployed by such medical school.
Under the amendment adopted in
the conference report, a State univer-
sity and nonprofit organization which
meet the stated requirements are con-
sidered to be related corporations
under section 3121(s) of the Code. Fur-
thermore, solely for purposes of sec-
tion 3102, 3111, and 3121(a)(1) of the
Code, a portion of the remuneration
actually paid by the nonprofit organi-
zation from its own funds and on its
own paychecks will be deemed to have
been paid by the university. Such re-
muneration will not be subject to the
section 3102 deduction from the em-
ployee's wages or to the section 3111
employer tax since employment by a
State is not subject to social security
taxation under sections 3101, 3102 and
3111 of the Code. Such employment is
subject to social security coverage only
pursuant to section 218 of the Social
Security Act and for the purpose of
that section, a university meeting the
requirements of this amendment will
not be deemed to have paid any
amounts actually paid by the nonprof-
it organization. Therefore, there is no
question that the amendment does not
affect the duty of a State university to
report wages subject to social security
or to pay or make a return of social se-
curity contributions.
The portion of remuneration paid by
the related nonprofit organization,
which is deemed paid by the university
is that portion which, when added to
the total amount of remuneration ac-
tually paid by the university during
the entire calendar year, exceeds the
social security wage and contribution
base. If the employee by the end of
the calendar year has been paid less
than the wage and contribution base
by the university, that part of the em-
ployee's remuneration from the non-
profit organization needed to bring his
entire compensation up to the wage
and benefit base will retain its charac-
ter as wages paid by the nonprofit or-
ganization and therefore will be sub-
ject to the social security tax. If the
employee by the end of the year has
been paid an amount equal to or great-
er than the wage and contribution
base by the university, then the entire
amount paid by the nonprofit organi-
zation will be considered as paid by
the university.- Thus, where the em-
ployee's total wages from both the
university and .the nonprofit organiza-
tion exceed the wage and contribution
base, it is intended that social security
contributions will be made in full on
the base amount but will not be paid
more than once. Similarly, where the
employee's total wages from both
sources do not exceed the base, social
security contributions will be made on
the full amount paid to the employee.
The determination of whether remu-
neration paid by the nonprofit organi.
zation, when added to remuneration
paid by the university during the cal-
endar year, exceeds the wage and con-
tribution base will be made through-
out the year as wages are paid to the
employee. Any excess amounts deduct-
ed from an employee's wages by the
nonprofit organization would be recov-
ered by the employee under sections
31 and 6413(c) of the Code. Any excess
amounts paid as an employer tax by
the organization will be treated as
amounts paid in error. Of course, the
organization will be deemed to have
sufficient knowledge of the error to be
able to correct it with respect to each
employee only when the organization
has sufficient knowledge to be able to
determine the total amount of the
excess paid for the entire taxable year.
Usually, the organization will have
such knowledge in whichever of the
following social security reporting pe-
riods occurs first during the year: The
period in which remuneration to date
paid by the university to the employee
reaches the wage and contribution
base, the period in which the employ-
ee permanently terminates employ-
ment, or the last reporting period for
the calendar year. Any overpayments
of the employer tax will be the subject
of a claim for refund or credit by the
nonprofit organization in the social se-
curity reporting period in which the
organization first has sufficient knowl-
edge of the error to correct it or in the
next subsequent reporting period..
? Mrs. HAWKINS. Mr. President, I
want to join my colleagues in praising
the 15 members of the National Com-
mission on Social Security Reform,
who contributed a great deal of their
energy and valuable expertise to solv-
ing a very grave crisis in our country.
In December 1981, President Reagan
gathered together these experts to
review the current and long-term fi-
nancial condition of the social security
trust funds, to identify the problems
that may threaten long-term solvency
of the funds, to analyze solutions to
such problems, and to make recom-
mendations to Congress. Such a major
undertaking requires great skill, deter-
mination, and, above all, patience.
While I do not concur with all their
recommendations, I believe they
should be commended for successfully
accomplishing a mission once thought
to be impossible.
I have always been a strong support-
er of the social security program be-
cause of its spoFit and intent. While
Florida is the seventh largest State in
terms of population, Florida ranks
third in the total number of Social Se-
curity beneficiaries. In 1981, the total
amount paid from retirement, survi-
vors, and disability insurance trust
funds was $140 billion. Florida re-
ceived $8 billion of that amount,
making Florida the fourth largest
State in terms of social security re-
ceipts. I have consistently fought to
insure that all elderly Americans are
afforded the retirement they have
earned. My record, during my first 2
years as a U.S. Senator, on this issue
speaks for itself. I have never voted to
cut or reduce benefits. I voted five
times to restore the minimum benefit.
I voted 12 times against any attempt
to reduce, modify, or delay cost-of-
living adjustment of social security,
Federal, and military retirees. I voted
to authorize interfund borrowing to
insure that all social security benefits
are paid in a timely manner. Last year
during consideration" of the first con-
current budget resolution, I sponsored
an amendment to insure Federal and
military retirees a 4-percent COLA in
1983, instead of no COLA at all, as
proposed in the budget resolution. Al-
though my amendment was defeated
on the Senate floor, the House and
Senate conferees agreed to give these
retirees a 4 percent COLA in 1983.
Thursday, after 6 days of debate on
the social security reform legislation, I
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March 24, 1983 CONGRESSIONAL RECORD - SENATE
voted for H.R. 1900 as amended, reluc-
tantly. This legislation, based on the
Commission's recommendations, is a
very fragile compromise. While there
are some pro ions with which I dis-
agree, it do make many worthwhile
reforms. But what really prompted me
to vote for this bill was sheer necessi-
ty. If Congress did not act immediate-
ly to make some changes in the social
security program, benefit checks
be delayed indefinitely. This
4s not perfect but I voted
agislation because it will pre-
.id protect the social security
a for the time being. Some provi-
s are absurd but I cannot make
perfect the enemy of the good..
Mr. LEVIN. Mr. President, I am
going to support the conference report
on the social security package because
it represents the best available hope of
insuring the solvency of the system,
both in the short and long run, and it
contains critically needed provisions
for the unemployeed.
But as a compromise, it includes ele-
ments which, standing alone, I could
never support. Raising the retirement
age to 67 by the year 2027 risks impos-
ing significant burdens on those work-
ers who are engaged in strenuous ac-
tivities. During Senate consideration
of this bill, I supported the Bradley
amendment which would have taken
steps to soften the impact of increas-
ing the retirement age on these work-
ers. Unfortunately, it was not adopted.
However, between now and the year
2000 when the phase-in will begin over
a 6-year period to age 66, the Congress
must monitor closely whether the im-
provements in health care are likely to
be reflected in the increased stamina
of workers in order to determine if in-
creasing the retirement age is a realis-
tic and humane goal.
Further, the tax increases which
have been imposed on self-employed
individuals, even after taking into ac-
count the tax credit designed to ease
that burden, stretch to the limit what
this segment of our work force can be
expected to absorb. These tax in-
creases, along with those affecting all
other workers, only merit considera-
tion when they are part of a package
which have as its goal something as
important as guaranteeing the solven-
cy of the social security system.
In addition, the coverage of new
Federal employees in social security
without having first set up a supple-
mentary pension system for them is a
precipitous action. Fortunately, this
coverage will not begin until 1984,
leaving the Congress some time to ad-
dress this situation in an equitable
fashion.
These are just some of the concerns
I have about this package. They are
troubling. But there is for all of us one
overriding concern-saving the social
security system. It is primarily for this
reason that I am voting for the pack-
age.
Some further points. I am pleased to
see that this legislation includes an ex-
tension of the Federal supplemental
compensation program, which pro-
vides unemployment benefits on top of
both the.regular State benefits of 26
weeks and the extended benefits of 13
weeks for which some States are eligi-
ble. This program has been set to
expire on March 31 and is now ex-
tended to September 30. In the first
week of this session of the Congress I
introduced legislation to extend the
program until September 30, and I am
pleased to see this proposal included
as part of the package. Also, this bill
contains up to an additional 10 weeks
of unemployment benefits for those
workers in Michigan who will have ex-
hausted their Federal unemployment
benefits by the end of this month. The
people of Michigan, who are now en-
during the 39th consecutive month of
double digit unemployment need this
extra assistance.
In addition, I was pleased to see that
the conference report retains the
amendment that I offered which will
do away with the requirement that
Michigan pay interest on the interest
it owes for loans it has taken out from
the Federal unemployment trust fund
and on which it has deferred payment.
This amendment will save Michigan
$11 million over the next 3 years. At a
time of fiscal crisis on the State level,
every little bit helps. For the same
reason, I was also pleased to see that
the package includes a reduction in
the rate of interest charged on these
loans for those States, like Michigan,
which are willing to take extraordi-
nary steps to improve the solvency of
their State unemployment compensa-
tion programs.
I regret, however, that the conferees
did not retain two other amendments
which I offered and which were passed
by the Senate. The first amendment
which I offered with strong bipartian
support, would have given widows be-
tween the ages of 55 and 60 a transi-
tion social security benefit for 6
months so that they could have a
chance to adjust to the death of their
spouse and to the requirements of the
work force, which they may be enter-
ing for the first time in 20 or 30 years
after a lifetime of service to their hus-
bands and, families. I have been seek-
ing action on the issue of the "widow's
gap" since October of 1981, and I am
indebted to Eva Baclawski, president
of the Widows' Organization of Dear-
born, Mich., for bringing this issue to
my attention. The cost of this amend-
ment was modest and well within the
capacity of a solvent social security
trust fund. I will be pursuing this issue
again during the hearings before the
Finance Committee which have been
promised on this issue and am pleased
that the chairman will be supporting
my effort in this regard.
The second amendment which I of-
fered but which did not survive the
S 4101
conference pledged the full faith and
credit of the United States in support
of the payment of accrued benefits
under the civil service retirement
system to past and present Federal
employees. Although my specific lan-
guage was dropped in the conference, I
am pleased to see that it gave the
Senate conferees' leverage. so that
they could successfully insist on the
language in the original Senate bill
which contained some assurances to
current and retired Federal employees
that the House version lacked.
The conference report on the social
security package has many flaws. If I
had been able to, I would have done
some things differently. But the social
security system must be saved, and
Federal unemployment benefits must
be continued and improved. This pack-
age will help to do these things..
? Mr. MOYNIHAN. Mr. President, to-
night the Senate concludes its work on
legislation that is, I believe, of truly
historic significance. It is significant, I
would suggest, not only because it was
difficult to pass-though it was-and
not only because the social security
system's solvency is maintained-and
it is-but because this Congress has
demonstrated that it possesses the
ability to govern.
Of late it seems to have become
somewhat fashionable to denigrate
our system of government-to suggest
that Government, and not this or that
program or policy, is. at bottom, the
problem. I fear that some have forgot-
ten Just how precious a free and demo-
cratic government is. Tonight we have
preserved one of Franklin D. Roose-
velt's crowning achievements. But
even more, we have come to grips with
a politically explosive issue of great
importance to tens of millions of
Americans-and we have fashioned a
successful compromise acceptable to
the majority of both Houses. In so
doing, we have demonstrated that our
system of government deserves the re-
spect and trust of the people it repre-
sents.
Mr. President, it is my conviction
that the bill before us today is a fair
and just compromise. It is very much
like the set of recommendations ap-
proved by the National Commission on
Social Security Reform, on which I
have the honor to serve.
No one of the Commissioners was
satisfied with every recommendation.
No one of my colleagues here today is
completely satisfied with every part of
this legislation. But the final bill re-
tains the basic elements of a package
which the Washington Post has gener-
ously described as being "as close to
absolute fairness as any social security
revision can ever be."
The Commission report did not in-
clude a recommendation for solving all
of the long-term social security financ-
ing problems. That was left to the
Congress. The bill that we agreed to in
conference raises the retirement age
to 67 without cutting benefits as much
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CONGRESSIONAL RECORD - SENATE March 24, 1983
as under the Senate version. In fact,
whereas under the Senate version
benefits would have been reduced by
an amount equal to 0.8 percent of pay-
roll, the final bill limits the benefit re-
duction to 0.68 percent. This, I would
suggest, is a considerable improve-
ment.
I would like to conclude by extend-
ing my heartfelt appreciation for the
efforts of my colleagues who served
with me on the Commission, and espe-
cially to the Senator from Kansas for
his tireless work on the Commission,
in the Finance Committee, and most
recently in the House-Senate confer-
ence. A great many other people have
devoted long hours and hard work
toward an end that is finally in sight,
and while I cannot thank each by
name, permit me to extend my sincere
gratitude. And to all my colleagues
here with me today, I share with you
in the pride of a truly historic achieve-
ment.*
? Mr. LAUTENBERG. Mr. President,
I am pleased to vote for passage of the
social security financing bill to imple-
ment the consensus recommendations
of the National Commission on Social
Security Reform. The recent financial
problems of the social security system
have placed benefit payments in jeop-
ardy. I find it unthinkable that elderly
and retired eitisens should have to be
concerned that their monthly social
security checks wiD not arrive on time.
The legislation which the Senate has
approved assures that benefits will
continue to now for the rest of this
decade and for a long time beyond
that. It should lay to rest the fears
and uncertainties of the people who
depend on social security for their live-
lihood.
The recommendations of the Nation-
al Commission on Social Security
Reform were developed after a year of
study and debate. They represent a
compromise between conflicting points
of view on the pri4 er balance between
the level of payroll taxes, the level of
benefits, and the role of general rev-
enues. Maintaining the integrity of
the package of recommendations,
keeping all the essential elements
intact, has been crucial to the success
of this effort to safeguard social secu-
rity benefits. In general, my own views
on the individual elements of the
package have been guided by the need
to keep the compromise from falling
apart. I was not pleased with every
provision in the bill, but I thought the
package as a whole achieved the very
important goal of stabilizing the social
security system. Workers and benefici-
aries alike have some unpleasant medi-
cine to take; however the cure should
be lasting. The system will continue to
function and fulfill its unique mission
of providing vital benefits to retired
workers, widows, orphans, and dis-
abled people.
From a program providing old age
benefits to workers in a limited
number of job categories, social secu-
rity has grown to include workers in
virtually all jobs, and their spouses,
children, and survivors. Benefits have
also been provided for people who are
unable to work because of a disability,
and their families. These benefits are
protected from inflation through
annual cost-of-living adjustments.
With 36 million beneficiaries and over
120 million workers paying taxes to
support the program and build their
own eligiblity for benefits, no other
Government program, except the mail,
affects the lives of so many citizens.
Social security has been a success; it
must not be allowed to falter. The leg-
islation approved by Congress today
will continue to serve the needs of the
elderly and the disabled today and to-
morrow.
The major provisions of the bill in-
clude: Delaying the 1983 cost-of-living
adjustment for 6 months, from July to
January, with future annual adjust-
ments coming every January; moving
up payroll tax increases already sched-
uled for 1985 and 1990; taxing one-half
the benefits of high-income benefici-
aries; bringing new Federal employees,
and the President, Vice President, cur-
rent Members of Congress, and con-
gressional staff-into the social secu-
rity system beginning January 1, 1984;
and increasing the tax rate an self-em-
ployed individuals to equal the com-
bined rate .of employees and employ-
ers. To offset the tax increase in 1984,
a one-time tax credit equal to the in-
creased payroll tax will be given to em-
ployees. The bill also includes several
provisions which will not have an
effect for a decade or more, including
phasing out the retirement earning
test for people 65 and older beginning
in 1990, gradually increasing the credit
for delaying retirement beyond the
normal retirement age from 3 percent
to 8 percent between 1990 and 2010,
and gradually increasing the age for
full retirement benefits to 67, begin-
ning in the next century.
Mr. President, several features in
the legislation provide safety valves if
the economy does not do as well as
projected and the:system again needs
some short-term assistance to meet its
benefit obligations. An immediate
lump-sum cash payment will also be
made from the general fund of the
Treasury to finance benefits provided
for military service before 1957, in-
stead of the annual payments that
have been made in the past.
During the Senate debate on this
bill a number of amendments were of-
fered. One of the most controversial
and difficult issues involved the ques-
tion of including new Federal employ-
ees under the social security system
and the related question of a supple-
mentary retirement system for them.
The bill before the Senate would have
covered new Federal employees under
social security, but made np changes in
the existing civil service retirement
system. As a result, new employees
would be paying into both systems and
receiving unnecessary duplicate cover-
age. Of strong and additional concern
to me is the future soundness of the
civil service retirement system for cur-
rent employees. Federal employees
certainly have as much right to assur-
ances that their retirement benefits
will be paid in the futu he as do social
security beneficiaries. The important
considerations in my thinking about
the Federal employees issue were- the
need to keep the social s'=curity pack-
age from falling apart and an absolute
commitment to protect the curren+
tirement system for Fc
Postal employees. WitL
thoughts in mind, I voted for
vens amendment which would h.
lowed the new employees to defer
ments into the civil service retirem
system until a supplemental systei.
could be developed. When this propos-
al failed, I supported the Long amend-
ment to delay putting new Federal em-
ployees into social security until a sup-
plemental plan is put into law.
Unfortunately the House version of
the social security bill did not include
protection similar to the Long amend-
ment and the conference report resolv-
ing the differences between the House
and Senate bills failed to include it
either. I regret this inaction. Although
the social security legislation does not
address the concerns of current and
future Federal employees about their
retirement system in the years to
come, Congress must not ignore this
vital issue. I will do what I can to see
that the concerns of these employees
are given all due attention as soon as
possible.
Another amendment considered by
the Senate dealt with the age for full
retirement benefits. The amendment,
which was defeated, would have raised
the retirement age to 68. I prefer that
the age remain as it is in existing law,
but I reluctantly accept the age 67
provision in the final bill. In return for
raising the age to 67, the conference
agreement has deleted a provision
which would have slightly reduced
benefits in the future.
Because of the increase in the retire-
ment age, during the Senate debate, I
supported the Bradley amendment to
establish a special disability program
to ease the effect of the increased re-
tirement age on workers who are not
healthy enough to continue working
but are not III enough to qualify for
the regular social security disability
program. This proposal was defeated
Current workers will have to pay
slightly higher taxes sooner than pre-
viously planned and, beneficiaries will
have to wait a few months for their
benefits to catch up with inflation.
The prospect of these changes will not
be welcomed by workers whose taxes
will go up or by those beneficiaries
missing their benefit increase in July.
However, these sacrifices are not
nearly as undesirable as the alterna-
tive-which would be the failure of
social security to pay its benefits on
time. In addition, these changes are
accompanied by some improvements in
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CONGRESSIONAL RECORD
SENATE S 4103
benefits and relief for taxpayers. Allin
all, I was pleased to support the bill
which assures the continuation of the
social security system.e
Mr. PROXMIRE. Mr. President,
there is one aspect of the prospective
reimbursement system that I would
like to discuss briefly with the man-
ager of the bill and that is the matter
of separate urban and rural reimburse-
ment rates. ;
As-i understand the bill, it provides
'-+?' reimbursement rate for
rocated in urban areas-re-
.o as SMSA's (Standard Met-
.an Statistical Areas) and hospi-
Aocated in rural areas often re-
ed to as non-SMSA's.
Phe logic underlying that distinction
is that the market basket of goods and
labor purchased by hospitals in urban
areas will be higher than those located
in rural areas. Those assumptions
have been challenged in some quarters
and the conferees wisely requested the
Secretary of Health and Human Serv-
ices to study that question and report
back to the Congress on the possibility
of a single nationwide reimbursement
rate in the future.
My concern is that, in the interim.
there may be some extraordinary
cases which would result from a rigid
adherence to the SMSA/non-SMBA
distinction, and would require remedy
before we receive the Secretary's
report.
For example, in my own State, Wa-
tertown Memorial Hospital faces a
problem based upon a fluke of geogra-
phy. Watertown Memorial is one. of
two hospitals, located just 12 miles
apart, which draw their employees
from the Oconomowoc labor market.
Under the committee's bill, the one
hospital, which is located just inside
the SMSA line, would be reimbursed
at the higher urban rate; Watertown
Memorial which is located just outside
the SMSA line, would be reimbursed
at the lower rural rate. Needless to
say, both hospitals face the same labor
costs.
Thus, instead of properly recogniz-
ing and reimbursing higher labor costs
as the SMSA/non-SMSA distinctions
were meant to do, the system in this
case inadvertently hurts one hospital
while treating the other hospital prop-
erly.
I fully recognize that the merits of
this case must ultimately be evaluated
by the Department of Health and
Human Services, Mr. President. That
is only proper. But my question to the
manager of the bill is this: Would the
Secretary have sufficient flexibility
under this bill to consider appeals
such as this one?
Mr. DOLE. , Mr. President, the
answer to the Senator's question is the
conferees recognized the fact that it
was impossible to fully anticipate
every exceptional or extraordinary
case. That is why we adopted a House
provision, enabling the Secretary, by
regulation, to make such adjustments
or exceptions :Chat the. ? Secretary
deems necessary.
While the Senator recognizes that I
am not In. a position to. judge the
merits of the case he has outlined, the
Secretary would be given the opportu-
nity to identify different types of ad-
justments and exceptions.
I would hope that the Department
would use that authority very, very
sparingly. Exceptions criteria should
be carefully crafted to assure that
hardship cases are given careful con-
sideration without encouraging frivo-
lous appeals by other hospitals.
Mr. PROXMIRE. Mr. President, if
the Senator would yield on that point.
I agree completely. This Senator
would be the last one to support spe-
cial interest exemptions to this new re-
imbursement system. The burden of
proof must remain on hospitals to
prove their case--clearly, forcefully,
convincingly.
My sole concern is that during the
transition to this new system that the
Secretary have the flexibility to grant
hardship exemptions if they are war-
ranted by the facts. I am reassured by
the Senator's comments that this is
the case.
I thank the Senator.
Mr. CHAFES. Mr. President, this
social security measure does not please
me totally just as it apparently does
not please many others. I was opposed
to increasing the age of retirement
above 65 and voted against it in the Fi-
nance Committee. I likewise voiced my
disapproval of increasing the retire-,
ment age in the conference committee
this afternoon.
Nonetheless. this was the best bill
we could get and we must pass this
legislation in order to insure the sol-
vency of the social security fund so it
will be there to pay benefits for mil-
lions of current retires and millions of
future retirees.
The House was adamant on many
provisions, including the retirement
age of 67.
It is my fervent hope that what we
have done in this measure will insure
the social security fund's solvency for
as long as we can foresee into the next
century.
Mr. STENNIS. Mr. President, this
bill makes a fair start and a step for-
ward toward necessary reform of our
social security system, but it is by no
means a complete answer to the de-
mands of our present industrial econo-
my and the needs of our people gener-
ally.
In the course of this debate, I hope
that all of us have obtained a far
clearer view of our needs and the re-
quirements of a fair system.that can
be properly maintained over the years.
The debate has shown us that we must
continue to have active congressional
attention to the problem of the social
security system each year.
We must continue to provide careful
scrutiny to the operation of the
system so that in the future we do not
allow it to come as close to the point
of collapse as it has now. We cannot
just leave it alone now. that we have
put together this reform package. We
must. continue to watch it and super-
vise it closely.. Setting social security
aside as a special function of the Fed-
eral budget will help us in this effort.
The Federal Government has an ob-
ligation to effectively police the entire
social security operation. Effective
management, sound administration,
and careful surveillance of the entire
system are essential. Just as--we must
detect and eliminate waste, fraud and
abuse, so also must we insist on the
best business management of the
social security trust funds.
During the course of the debate we
have heard differing projections about
how much particular provisions of this
legislation will cost. In part these fig-
ures will depend upon how well the
system is managed. as well as upon
how our economy performs. This
merely points up the need for Con-
gress to continue its oversight over
social security in order to insure that
the system remains solvent, that it
stands on a sound financial basis, and
that it is operated in a responsible
manner.
Like most broad. sweeping depart-
ments or activities of Government,
there are some elements of this meas-
ure that I do not favor. However, after
a deep study during several months
concerning the present shortcomings
and conditions of our, system, it is
clear to me that some drastic changes
must be made promptly. We must
build the system on a more sound
foundation and With adequate financ-
ing.
I accept and support the present bill
in spite of its objectionable features
because it is a new and sounder base
for an improved social, security system
as a whole, and it can be further im-
proved with proper attention and dili-
gence by our present and future Con-
gresses..
The PRESIDING OFFICER. The
question is on agreeing to the confer-
ence report.
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 Oregon (Mr. HATFIELD).
the Senator from North Carolina (Mr.
Hmm ), the Senator from Nevada (Mr.
LAxALT), the Senator from Maryland
(Mr. MATHIAS), the Senator from
Alaska (Mr. MuxxowsxI), the Senator
from Oregon (Mr. PACKWOOD), the
Senator from Illinois (Mr. PsaCY), the
Senator from South Dakota (Mr.
PSEssLER), the Senator from Indiana
(Mr. QUAYLE), the Senator from Dela-
ware (Mr. RoTH), the Senator from
Vermont (Mr. STArroan). the Senator
from Texas (Mr. Towsa), and the Sen-
ator from Connecticut (Mr. WEICasa).
are necessarily absent.
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CONGRESSIONAL RECORD - SENATE March 24, 1983
I also announce that the Senator
from Arizona (Mr. GoLDwATzR), is
absent due to illness in the family.
I further announce that, if present
and voting, the Senator from Arizona
(Mr. Gol.DwATn ), the Senator from
Alaska (Mr. MuRKowsxi), and the
Senator from Connecticut (Mr.
Wsxcsaa), would each vote "yea."
Mr. CRANSTON. I announce that
the Senator from Texas (Mr. BENT-
sEN), the Senator from Florida (Mr.
CHILES), the Senator from Arizona
(Mr. DECoxcINi), the Senator from
Missouri (Mr. EASLvroN), the Senator
from Colorado (Mr. HART), the Sena-
tor from Alabama (Mr. HEFLrx), the
Senator from Kentucky (Mr. HuDDLE-
sTox), the Senator from Hawaii (Mr.
Ixouya), the Senator from Louisiana
(Mr. JOSwSrox), the Senator from
Massachusetts (Mr. KENm ), the
Senator from Ohio (Mr. MaTzamnA.vM),
the Senator from Rhode Island (Mr.
PELL), the Senator from Arkansas l11Er.
PRYOI), and the Senator from Mary-
land (Mr. SitRBAI,ES) are necessarily
absent.
I further announce that, if present
and voting, the Senator from Rhode
Island (Mr. Pau.) would vote "yea."
The PRESIDING OFFICER. Are
there any Senators in the Chamber
wishing to vote?
The result was announced-yeas 58,
nays 14, as follows:
[Rollcall Vote No. 54 Leg.]
YEAS-58
Abdnor
Dole
Mefcher
Andrews
Domenici
Mitchell
Haller
Daranber!er
Moynihan
Basses
Pbed
Proxmire
Biden
Glenn
Randolph
Bingaman -
Gorton
Riegle
Bosebwitz
Grasso y
Rudman
Bradley
Hawkins
Sasser
Bumpers
Hecht
Simpson
Burdick
Heins
Specter
Byrd
Su w.y
Stennis
Chafee
Jackaen
Stevens
Cochran
Jepsen
Thurmond
Cohen
Kaseebaw n
Trible
Cranston
Kasten.
Tsongas
D'Amate
Iautmberg
Wallop
Danforth
Leahy
Warner
Denton
Levin
Wilson
Dixon
Lugar
Dodd
Matsuraga
NAYS-14
Armstrong
Hatch
Nickles
Boren
Hollings
I.
East
Long
Symms
Exon
Mattingly
Zorinsky
Garn
McClure
NOT VOTING-28
Bentsen
[moose
Pressler
Chiles
Johnston
Pryor
DeConcini
Kennedy
Quayle
Eagleton
Laxalt
Roth
Goldwater
Mathias
Sarbanes
Hart
Metzenbaam
Stafford
Hatfield
biurkowski
Tower
Heflin
Packwood
Weicker
Helms
Pell
Huddleston
Peru
So the conference report was agreed
to.
Mr. MOYNIHAN. Mr. President, I
move to reconsider the vote by which
the conference report was agreed to.
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, if I were
not afraid that someone might laugh
at me, I would announce that there
will be no record votes.
[Laughter.]
Mr. BAKER. Mr. President, there
are certain other matters that need to
be taken care of, but before I do that,
I promised earlier today that we would
keep the REcoRD open so that Sena-
tors could insert statements.
Mr. President, I ask unanimous con-
sent that Senators may submit state-
ments relating to the social security
conference report for the REcoRD
upon the reconvening of the Senate an
April 5, until April 8, and that such
statements be printed in the perma-
nent REcoRn prior to the vote on the
adoption of the conference report.
The PRESIDING OFFICER. With-
out objection, it is so ordered.
PREVENTING THE TEMPORARY
TERMINATION OF THE FEDER-
AL SUPPLEMENTAL COMPENSA-
TION ACT OF 1982
Mr. BAKER. Mr. President, there is
one other matter that I would like to
take up if the minority leader is agree-
able.
I ask unanimous consent that the
Senate now turn to the consideration
of H.R. 2369, a bill to prevent the tem-
porary termination of the Federal
Supplemental Compensation Act of
1982.
The PRESIDING OFFICER. The
bill will be stated by title.
The assistant legislative clerk read
as follows:
A bill (H.R. 2369) to prevent the tempo-
rary termination of the Federal Supplemen-
tal compensation Act of 1962.
The PRESIDING OFFICER. Is
there objection to the present consid-
eration of the bill?
There being no objection, the Senate
proceeded to consider the bill.
Mr. DOLE. Mr. President, this bill
would simply allow the Senate to pass
a provision to insure that the exten-
sion of the Federal supplemental com-
pensation program will be in effect on
April 1. This precautionary measure is
being taken in as much as enrollment
of the massive Social Security Act
Amendments of 1983 may well not be
completed in time to sign it into law
prior to April 1. This bill does nothing
more than simply make sure that the
provisions relating to unemployment
compensation are enacted in a timely
manner.
The PRESIDING OFFICER. The
bill is open to amendment. If there be
no amendment to be proposed, the
question is on the third reading of the
bill.
The bill was ordered to a third read-
ing, read the third time, and passed.
Mr. BAKER, Mr. President, I move
to reconsider the vote by which the
bill was passed.
Mr. BYRD. I move to lay that
motion on the table.
The motion to lay on the table was
agreed to.
ADJOURNMENT UNTIL TUESDAY,
APRIL 5, 1983
Mr. BAKER. Mr. President, I have
looked forward to this moment for
some time. Before I move in accord-
ance with the provisions of House
Concurrent Resolution 94, I will first
inquire if there is any other Senator
seeking recognition. I see none.
If the minority leader is prepared to
do so, I am prepared to adjourn.
Mr. BYRD. I am equally preps
Mr. BAKER. The minorit,
dicates he is equally prepares.
Mr. President, in that event,
in accordance with the provisi,
House Concurrent Resolution 94,
the Senate stand in adjournment u,
April 5.
The motion was agreed to; and, at
2:06 a.m., the Senate adjourned until
Tuesday, April 5, 1983, at 12 noon.
NOMINATIONS
Executive nominations received by
the Senate March 24, 1983:
DEPARTMENT OF COMMERCE
Alfred Hugh Kingon, of New York, to be
an Assistant Secretary of Commerce, vice
Raymond J. Waldman, resigned.
ACTION AGENCY
Constance Homer, of the District of Co-
lumbia, to be Associate Director of the
ACTION Agency, vice Lawrence F. Daven-
port, resigned.
NATIONAL COUNCIL ON THE HANDICAPPED
R. Budd Gould, of Montana, to be a
Member of the National Council on the
Handicapped for a term expiring September
17, 1985 (new position).
IN THE COAST GUARD
The following officers of the U.S. Coast
Guard for promotion to the grade of com-
modore:
Capt. Theodore J. Woinar, USCG
Capt. Joseph A. McDonough, Jr., USCG
Capt. Arnold M. Danielson, USCG
IN THE NAVY
The following-named officer to be placed
on the retired list in the grade indicated
under the provisions of title 10, United
States Code, sections 5133 and 1370.
To be vice admiral
Vice Adm_ J. William Cox, Medical Corps,
497-30-3145/2100, U.S. Navy.
The following-named captains of the Re-
serve of the U.S. Navy for permanent pro-
motion to the grade of commodore in the
Line and staff corps, as indicated, pursuant
to the provisions of title 10. United States
Code, section 5912:
UNRESTRICTED LIDIE OFFICER
John Joseph Sweeney
John Edward Love
Kenneth Edward Myatt
John Edward Summers
SPECIAL DUTY OFFICER (CRYPTOLOGY)
William Joseph Miles
SPECIAL DUTY OFFICER (INTELLIGENCE)
Robert Patrick Tiernan
MEDICAL CORPS OFFICER
John Duncan Tolmie
James Glen Roberts
SUPPLY CORPS OFFICER
Philip Arthur Whitacre
JUDGE ADVOCATE GENERAL'S CORPS OFFICER
Robert Edward Wiss
DENTAL CORPS OFFICER
Edward John O'Shea, Jr.
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