Judd Gregg

Mr. GREGG

Mr. GREGG. No, that is not the same at all.

Mr. GREGG. Mr. President, I ask unanimous consent that the order for the quorum call be rescinded.

Mr. GREGG. I suggest the absence of a quorum.

Mr. GREGG. Mr. President, I ask unanimous consent that the order for the quorum call be rescinded.

Mr. GREGG. That is absolutely correct. We will now proceed to the Durbin amendment. I ask unanimous consent that the debate on the Durbin amendment and second-degrees--I will reserve my unanimous-consent request. I suggest the absence of a quorum.

Mr. GREGG. I ask unanimous consent that the Gregg amendment be modified to reflect the first degree status which is at the desk.

Mr. GREGG. I yield 10 minutes to the chairman of the Budget Committee.

Mr. GREGG. Mr. President, let me begin this discussion, although the discussion has already proceeded. Much of what the Senator from South Carolina and the Senator from Wisconsin talked about, I agree with in the area of Social Security reform. There is absolutely no question but that the single, biggest fiscal policy issue facing this country today is the question of how we make the Social Security system a strong and vibrant system for generations to come and how we avoid what will be a fiscal disaster for our Nation if we do not address this issue in the near term. This problem is generated by the fact that we have a baby boom generation headed towards retirement. It is now turning age 50. In 15 years, it will be fully retired. In 12 years, we will begin to retire a baby boom generation that is the largest generation in the history of this country. And as that generation has moved through the system, it has affected this Nation in every decade throughout its life experience. In the 1950s, the baby boom generation created a huge need for elementary schools and baby carriages. In the 1960s, it created a tremendous restructuring of our social fabric with occurrences involving civil rights, involving rights of women, involving Vietnam. In the 1970s, we saw further impact, and in the 1980s we have seen the huge economic impact, and as we move into the 1990s, we are also seeing the impact of that generation as it begins to save for retirement and that is one of our primary reasons of this economic boom. But the biggest impact this generation is going to have is when it retires, and it begins to retire in the year 2008, and not unusually, or not to be unexpected, in the year 2008 the Social Security system begins to lose money. In fact, that is the year when we start paying out more in Social Security benefits than we are taking in. By the year 2015, the Social Security system is paying out so much more than it is taking in it basically cannot right itself. By the year 2029 or 2030, essentially the country has such a large debt and obligation under the Social Security system that it will be unable, in my opinion, to afford to maintain that system and we will face a fiscal meltdown of sorts. The way I describe it, it is as if we could pick a date when we know as a nation we were going to have a major earthquake, a major flood, a major hurricane come ashore, and we know that date exists and we know it is going to occur. Obviously, it would be irresponsible for us as a Congress not to react to that, not to take preventive action, not to get our people prepared for that. But we know the date when we are going to hit a fiscal crisis of inordinate proportions because the people are already born who are going to create such a huge demand on the system. That date is approximately the year 2015. So what should we do? We should address it today. Why should we address it today? Because, basically the sooner we address this, the sooner we can solve it in a constructive and effective way and in a positive way where everybody will end up being more of a winner than end up being a loser. It is a lot like that old oil filter ad, ``You can pay me now or pay me later.'' If we begin to address this problem today, we can significantly improve the system in the long run for everyone. If we wait even 2 years, certainly if we wait 4 or 5 years, the capacity to address it becomes much more acute and we go off a cliff. So how should we address it? The proposal we put forward in our sense-of-the-Senate is that we should address it by using the surplus first to address it, and that is absolutely right. That is what should be done. I would note this was not the President's position. The President said we should reserve the surplus, reserve the surplus until we have solved the Social Security problem. That is what he said in his State of the Union Address. Our position as Republicans is we should use the surplus to protect the Social Security system. And one way to do that, one way that has been proposed by myself and a number of other Members in this body, including the person sitting in the Chair, is to give people who are presently working and paying taxes into the system and who, unfortunately, are looking at a very low rate of return for all of the taxes they are paying into the system--in fact, if you just happened to go to work, say, you were 20 years old and you went to work today, the likelihood that you would get very much back from what you paid into the system in Social Security taxes is extremely low. If you happen to be an African American, actually it is a negative number. You get less back than you will pay in. So the system has some very serious problems in the way that it returns benefits to people who are younger today. What we have suggested is to give people today who are earning money, paying into the system, let's give them some ownership. Let's give them the ability to have an asset which they physically own as part of their Social Security retirement structure. And these are called personal accounts. Under the present system, what happens is, you pay in taxes all your life. And, unfortunately, let's say you died when you were 58. If you did not have a wife and you did not have children, you have nothing for all those taxes you paid in--absolutely nothing. You have absolutely no vested interest which pays your estate anything. If you had a wife or children, they might get a little bit, but not a whole lot compared to what you paid in. We are suggesting that some portion of the taxes that you pay into the Social Security system today you should have ownership of; you should actually, physically, have the right to claim, upon your retirement, as yours. Every year you should get a statement. You should have a little savings book, basically--I didn't bring mine with me today as an example; the Senator in the chair may have his--but you should have a savings book which says how much you have in your account at the Social Security Administration, which is yours, physically yours. No matter what happens, it cannot be taken away from you. Those are called personal accounts. Thus, if you were, unfortunately, to die before you reached the age of retirement, your estate would actually get an asset. It would get that money that was built up in that account. That is one plus of this. A second plus of this is that under the proposal we have, you would, essentially, get the benefit structure which Social Security gives today, but on top of that benefit structure you would be able to get the benefit of the investment of that personal account. What would that investment be in? Under the proposal we put forward, it would be in one of a variety of what amounts to mutual funds, three or four different mutual funds, which you would choose, which would be under the control and operation of the Social Security Administration, so there wouldn't be any outrageously risky investments taken. But you would have a choice. You could choose a conservative investment, you could choose a moderate investment--you could choose a moderate investment in equities. Why is that important? Today, the entire Social Security fund is invested in Government bonds. And what do they yield? They yield about 2.5 percent interest. Over no 20-year period in history has the equity market yielded less than 5.5 percent. So you can see the rate of return people are getting--because the average working life is 40 years--the rate of return people are getting on the amount which they are paying in Social Security taxes really is pretty weak, 2.5 percent. As I mentioned earlier, if you are an African American who happens to go into the workforce today and you are in your early twenties, your rate of return is zero--it is actually a negative number. But the fact is, you would have a personal account, which you would have some control over, which is invested by the Social Security Administration in probably three or four different mutual funds which you have the right to choose from but which are set up under the Social Security auspices, much like we have, in the Federal Government, the Thrift Savings Plan. If you are a Federal employee today, there is something called a Thrift Savings Plan, and the Thrift Savings Plan trustees, who work for the Federal retirement plan, set up three different options: You can choose a high-growth fund, a moderate-growth fund, or a low-growth fund--or a low-risk fund. You can put your money, your savings and your retirement, into whichever one you want. This would be the same idea under Social Security. You would get to choose which one of those funds you want to put your money in --a low-risk fund, a moderate-risk fund, a higher-risk fund. When you retired, you would then own that asset. The appreciation on that asset would be significantly better, we are absolutely sure, than the 2.5 percent that you are presently getting under the Social Security Administration. So that is an effective way to begin the process of making the Social Security system solvent. That would be a type of plan that would work. The problem, of course, is, to make this work effectively, you have to act sooner rather than later. You cannot wait for 3 or 4 years in order to put this in place, because people need time to build up the accounts. The accounts we are suggesting do not represent your entire Social Security tax. What we are suggesting is, you use 2 percent of your Social Security tax. We would basically give you a tax cut for that 2 percent. You would then be able to invest that in this retirement fund or be required to invest it in a savings fund which would be managed by the Social Security trustees and would give you a much better rate of return. There are a lot of other ideas out there. The point is, we need to get on to this issue, we need to get on to the specifics of how you are going to make the Social Security system solvent. The President has been traveling around the country. He has been talking about this. Many of us on the Republican side of the Senate have been traveling around, also talking about this. We had a bipartisan group which involved myself and Senator Breaux on the Senate side, and Congressman Stenholm and Congressman Kolbe on the House side, and a whole group of people who are expert in this area. We met for 18 months, and we put together an excellent plan, part of which I have outlined, which would make the system solvent for the next 100 years. But it is a plan; it is not specific legislation. So, what we need is specific legislation. This sense of the Senate comes forward, which essentially restates what everybody wants to do, which is make Social Security solvent. But it does not move along the plan. It doesn't move along how you get to actual legislation. If we really want to be constructive as a Senate, what we should do is probably have a sense of the Senate which calls on the President to come forward with a specific plan, and have it to us at the end of this year, so the beginning of next year we could actually begin to legislate on the Social Security system and Social Security reform, because our window of opportunity here is really quite small. If we don't put in place Social Security reform legislation by June of 1999, I am not sure we are even going to be able to put it into place, because then we are going to do a Presidential election. If it gets slid past the Presidential election, we have basically missed the window of opportunity to begin to build up equity in some kind of personal account or any sort of equity activity which involves investing in the market; we have given away 2 years of opportunity for that type of investment activity. So, what we really need is specific action. Another sense of the Senate is nice. It is very appropriate, I suppose, to keep making this point over and over again, so it does not end up being overly politicized. But the fact is, what we need to do is go from the sense of the Senate situation to specifics. What is the difference between the two sense of the Senate amendments here? I am not sure the differences are all that substantive, to be very honest with you. Where the difference is, essentially, is in the third point: ``save Social Security first by reserving any surpluses in fiscal year 1999 budget legislation.'' Our sense of the Senate adds a fourth item: Third, ``save Social Security first,'' which we all agree on, and, fourth, ``return all remaining surpluses to the American taxpayers.'' So we take it a step further. We basically add another point to the sense of the Senate by saying, once you have saved Social Security, let's take the other part, the surplus that is left over--there may not be any, but hopefully there will be--and return it to the American taxpayer. I would say this language, ``save Social Security first by reserving any surplus in the fiscal year 1999 budget legislation,'' is a little confusing, because fiscal year 1999 budget legislation could either mean the year 1999 or it could mean the 5-year period that budget legislation covers. So it is not really clear to me exactly what surplus they are talking about here. Is it a 1-year surplus or is it a 5-year surplus? In any event, what we are saying is, independent of that issue, let's save Social Security first. But if there is a surplus above saving Social Security, let's do the right thing with it; let's return it to the taxpayer. Who can disagree with that? We don't want to spend it, that is for sure. We might want to use it to reduce debt, but of course the best way to reduce debt is to save Social Security. Once you have saved Social Security, you have significantly reduced debt, dramatically reduced debt, because the biggest debt the Federal Government owes is to the Social Security system. So let's take that extra money, if there is any, and return it to the American taxpayer. I think our sense of the Senate maybe takes the Hollings sense of the Senate, which was a good attempt, good statement on its face, in many ways, and makes it a lot stronger, because it makes it absolutely clear that not only do we want to save Social Security but we also want to return any extra surplus, after we have saved Social Security, to the American taxpayer. Several Senators addressed the Chair.

Mr. GREGG. I amend that request: Instead of 60 minutes, there be 90 minutes equally divided.

Mr. GREGG. Mr. President, I ask unanimous consent that reading of the amendment be dispensed with.

Mr. GREGG. Mr. President, I thank the Senator from Maryland for those words--those type of words. She could speak all day. We appreciate that, to say the least. I want to especially thank her for her extremely supportive and aggressive assistance in the ``Innocent Images'' effort, which she has pointed to and explained to us that arose out of a situation in Maryland. The central nervous system for the FBI initiative is now in Baltimore. What they are doing, I think, is very appropriate. They are developing protocol so they can spread this knowledge of how to fight cybercrime against kids across the country to other levels of law enforcement, and they are using the protocols developed at Baltimore to do that. It has really been a tremendous success story for the agency. It is in large part because of the support this committee has given to the FBI that they have been successful in this. Although they were the ones who initiated it and they should get the credit for it, that support has come as a result of the strong and firm commitment of the Senator from Maryland, and her understanding of the threat. The threat is very significant. As she knows, because she has gone to the actual site of the activity where the FBI is pursuing these sort of sting operations--I have seen it done at remote sites--the amount of attempts by people who are clearly not pursuing a positive use of cyberspace for our children, the amount of hits in a chat room, which appear to have very significant negative potential for our kids, is overwhelming. You can turn on a chat room, introduce yourself as a 12-year-old girl, and within a very brief period of time--30 seconds--have five or six hits in that chat room, which will ask for illicit or lead to illicit activity in an attempt to get pornographic material, or in an attempt to expose that child to pornographic material. Regrettably, they create travel cases where they try to get the child to go and meet with the pedophile. In fact, we had a situation in New Hampshire where somebody actually traveled all the way from Norway to Keene, NH, because that individual thought they were going to be able to have some sort of sexual activity with a child. Luckily, in this instance at least, it was a police officer who was using the Internet following the protocols that the FBI set out of ``Innocent Images'' that was able to stop and apprehend that individual. But it is a very serious issue because the Internet is a great and expansive source for our kids and something that our kids should have access to with the opportunity to learn, the opportunity to communicate with people across the world. It is just a unique and special opportunity or activity that our generation did not have and the next generation does have. Making it safer for our kids is critical. So I thank very much the Senator from Maryland. I am in support of her FBI initiatives in this area and certainly appreciate her kind comments. Amendment No. 3255 to Amendment No. 3254 At this time, I send to the desk a second-degree amendment to the pending Hollings amendment and ask for its immediate consideration.

Mr. GREGG. For the purpose of debate only, I yield 15 minutes to the Senator from Wisconsin and 5 minutes to the Senator from Maryland. I ask unanimous consent that I retain the floor upon the conclusion of their statements.

Mr. GREGG. How much time does the Senator need?

Mr. GREGG. I ask unanimous consent that the Senator from Wisconsin be recognized for up to 15 minutes and that the floor then be returned to me, unless the Senator from Maryland also wishes to speak. How much time does she wish?

Mr. GREGG. Mr. President, for the purpose of debate only, I ask unanimous consent that the Senator from Wisconsin be recognized. How much time does he need?

Mr. GREGG

Mr. GREGG. I ask unanimous consent that when the Senate completes its business today, it stand in adjournment until 9:30 a.m. on Wednesday, July 22. I further ask that when the Senate reconvenes on Wednesday, immediately following the prayer, the routine requests through the morning hour be granted and the Senate then resume consideration of S. 2260, the Commerce-State-Justice appropriations bill.

Mr. GREGG

Mr. GREGG. For the information of all Senators, when the Senate reconvenes on Wednesday, there will be potentially two back-to-back votes beginning at 9:40 a.m. In addition, I ask unanimous consent that following the stacked votes, Senator Sessions be recognized to offer an amendment relative to juvenile justice.

Mr. GREGG

Mr. GREGG. If there is no further business to come before the Senate, I now ask unanimous consent that the Senate stand in adjournment under the previous order. Thereupon, the Senate, at 8:55 p.m., adjourned until Wednesday, July 22, 1998, at 9:30 a.m.

Mr. GREGG

Mr. GREGG. Mr. President, I bring to the Senator's attention that it is inappropriate under the Rules Committee's rules to bring an item for demonstration to the floor. So I say that if this debate is going to continue, we will not proceed with the demonstration.

Mr. GREGG. That is correct. The Senate rules object to your showing that on the floor.

Mr. GREGG. I object.

Mr. GREGG. That is up to other Members who wish to take the floor. I have no objection.

Mr. GREGG. Reserving the right to object, I just noticed the Senator from Idaho. Did the Senator desire further time? There is a unanimous consent request by the Senator from California. The essence of the request was that this amendment be set aside, that Senator Smith from New Hampshire go forward for 20 minutes, then Senator Biden would be next, and we would be back on your amendment, with Senator Biden speaking at the conclusion.

Mr. GREGG. Mr. President, is the Senator asking for the yeas and nays on the second-degree amendment?

Mr. GREGG

Mr. GREGG. I ask unanimous consent that S. 442 be referred to the Committee on Finance and, further, if the bill has not been reported by July 30, it be automatically discharged from the Finance Committee and placed on the calendar.