March 10, 1982 EXTENSIONS OF REMARKS 3879 EXTENSIONS OF REMARKS SOCIAL SECURITY REFORM IN to develop a consensus on a bipartisan pack­ on a package of long-term reforms for the THE 97TH CONGRESS age of reforms. Mark-up of H.R. 3207, a Social Security System. long-term reform package introduced by The Presidential task force must report by Subcommittee Chairman J . J. Pickle, began December 31, 1982, the same day as inter­ in early May, after a long series of hearings fund borrowing ends. Since the trust funds HON. WILLIS D. GRADISON, JR. and pre-mark-up sessions. will be largely depleted by then, there OF OHIO On May 12, President Reagan introduced should be strong pressure to produce a bill IN THE HOUSE OF REPRESENTATIVES his own set of 13 proposals to restore long­ by the end of 1982, or shortly thereafter. A Wednesday, March 10, 1982 term solvency to the system. Some of the "lame duck" session of Congress, which components of the Administration plan would minimize the political obstacles to e Mr. GRADISON. Mr. Speaker, I were drawn from representative Pickle's reform, is a strong possibility. would like to submit for the RECORD bill, but others were significantly different. As a member of the Social Security Sub­ an article I wrote that will appear in The Administration selected some changes committee, I have been involved closely in the April issue of the National Asso­ in order to reduce certain "welfare ele­ the long legislative battle to reform Social ciation of Manufacturer's Enterprise ments" deemed inappropriate for an insur­ Security. I have tentatively prepared a com­ magazine. ance system. The Subcommittee's proposals, prehensive 8-point plan for saving the on the other hand, were philosophically less system that I believe is just and consistent SOCIAL SECURITY REFORM IN THE 97TH strong, but politically more attractive. with the previous bipartisan movement for CONGRESS At the same time as he presented his pro­ reform. One of the cornerstones of the Reagan posals for long-term reform, the President There are several changes in the system Administration's economic program has also asked the Subcommittee to include cer­ which should have broad support. The first been the drive to increase the efficiency of tain reforms in the Omnibus Budget Recon­ in this category of noncontroversial reforms the government. Almost all programs have ciliation Act. Work on the Reconciliation is the separation of the trust funds from the undergone extensive reevaluation in an at­ Bill interrupted the Subcommittee's efforts general budget, thereby making them an tempt to assure that resources are allocated to achieve long-term reform, but did result off-budget item. Separation would keep ben­ in the most effective way possible. in the passage of certain benefit changes efit cuts from being interpreted as a way to Social Security reform has become one of that were a compromise between the Ad­ help balance the budget, would help depoli­ the top priorities for the 97th Congress be­ ministration's position and that of the Sub­ ticize the issue of reform, and would be a cause the system is quickly approaching committee. Phase I ended with the passage step away from using general revenues. bankruptcy. Not surprisingly, the overall of the Reconciliation Bill. Moreover, it would eliminate biases in the form of the system which most Congress­ Phase II began when the Social Security overall budget process because surpluses in men support is also the most efficient form. the Social Security trust funds could no In particular, it is more efficient to main­ Subcommittee mark-up on H.R. 3207 re­ tain the Social Security System in its origi­ sumed in June. By the end of July, the longer mask budget deficits. I have intro­ nal and present form as a wage-based insur­ House Subcommittee had completed much duced a bill, H.R. 4773, to make this separa­ ance system that contains certain income of a long term reform bill. However, after tion. It has the strong support of a biparti­ the August recess, the House leadership san coalition ranging from Barber Conable transfer elements rather than to change to to Claude Pepper. a welfare type system that is financed with suddenly decided not to allow a bill to come general revenues. By a wage-based system, I out of committee. Most likely this was polit­ The second component of my plan, the mean that the amount of benefit payments ical response to the Reagan victories on the disability reforms contained in the Pickle is related to the amount of taxes paid into tax and budget bills. Social Security seemed bill, should also be included in this list of the system; in a welfare system benefits a promising issue to be exploited by Con­ noncontroversial reforms. These have al­ gressional Democrats. Yet, while House ready been approved in subcommittee mark­ don't depend on the amount of a recipient's up and involve slight savings. tax contribution. Speaker Tip O'Neill stated publicly in Sep­ Because Social Security benefits do tember that benefit cuts were not necessary Third, we also need to reform the adminis­ depend on the amount of taxes paid into because the system's financial needs could tration of benefit payments to avoid pay­ the system, incentives to work are much be met solely through interfund borrowing, ments to deceased persons, such as those higher than in a welfare type system. The Congressmen from both parties generally amounting to approximately $100 million higher incentives lead to a stronger econo­ acknowledged that the crisis was more that were disclosed last September. I have my and in turn to higher government reve­ severe. also introduced a separate bill to accomplish nues. On September 24, the President stepped this, H.R. 5188, but this death fraud reform Therefore, because of its wage-based back from his earlier position by suggesting should be included in any comprehensive nature, Social Security not only establishes specifically the reinstatement of the mini­ package. a national insurance system but also mum benefit and the establishment of a Fourth in my package is the coverage of achieves certain income redistribution ob­ Presidential task force to study the options Members of Congress and new federal em­ jectives in a highly efficient way. Financing for reform. At that point, the House had al­ ployees under Social Security. Exclusion of Social Security with general revenues would ready passed a bill, H.R. 4331, that restored these groups whil.e the rest of society must entail a significant movement towards a wel­ the minimum benefit. The Senate, in re­ participate cannc•t be justified. fare type system. Its independent nature sponse to the President's speech, passed a Fifth, the benefit replacement rate, the would be greatly weakened; its efficiencies somewhat different version of that bill, and relationship of income from Social Security would be lost. included in it a provision for borrowing to pre-retirement earnings, should be re­ The last major Social Security reform, the among the trust funds. After some haggling duced from the 42 percent current level to amendments of 1977, kept the basic system between the two Houses, a final compromise its 39 percent historical level. This would intact by raising taxes dramatically and bill was produced that allows interfund bor­ correct a technical error in the 1972 legisla­ slowing benefit increases. But as the 97th rowing for 12 months and reinstates the tion that allowed the replacement rate to Congress began, significant legislative minimum benefit for present beneficiaries. rise. action was once again necessary to avert These steps by the 97th Congress and the Sixth, starting in 1990, the retirement age bankruptcy of the system. Given the large President brought the second phase of should gradually be raised to age 66. This past increase in taxes, and the future in­ Social Security reform to an end. should close the long term financial gap the creases already scheduled under the 1977 While the first phase began with a biparti­ system faces. Without such a change, the bill, further tax increases seemed an unwise san spirit, it ended with party confronta­ system cannot be maintained intact. way to save the system. This left only bene­ tion. The second phase involved hardening Seventh, interfund borrowing should be fit cuts. of positions on both sides, as each sought to allowed, but only as part of a comprehen­ The first phase of movement toward that gain politically, or at least to minimize sive, long-term plan. legislative objective in the 97th Congress losses. Finally we have come to a third While these seven provisions would pro­ began in the spring of 1981, as the House phase where, I hope, we can put aside parti­ vide sufficient short and long term financ­ Subcommittee on Social Security attempted san differences and come to an agreement ing in a not-too-troubled economy, it is im- e This "bullet" symbol identifies statements or insertions which are not spoken by the Member on the floor. 89--059 0-85-38 (Pt. 3) 3880 EXTENSIONS OF REMARKS March 10, 1982 portant to provide the means of financing if body, in plain contravention of the real benefits that flow from a public very adverse economic conditions come to charter and the principles upon which works project. It is significant that we pass. As my eighth point, I propose the es­ the United Nations was founded. never use the term "pork barrel" for tablishment of a trigger system for the I believe that the U.S. response to projects in our own districts.