Frank Lautenberg

Mr. LAUTENBERG

Mr. LAUTENBERG. I am delighted to yield 1 minute to our colleague from North Dakota.

Mr. LAUTENBERG

Mr. LAUTENBERG. If we can let our friend from Iowa make his statement.

Mr. LAUTENBERG. I do. Mr. President, the Senator from Iowa has asked for some time to discuss something, and I would give him 5 minutes off of the resolution to do that, unless there is an objection.

Mr. LAUTENBERG. With that, Mr. President, I yield back the time on our side and hope that we can proceed forthwith.

Mr. LAUTENBERG. Thirty. So I will yield myself some time off of the amendment, which I understand is the time that remains to respond to the proposal by the distinguished chairman of the Finance Committee, the Senator from Delaware, whose proposals we always take seriously. This is a man who is intelligent, who is committed to the proper procedure of getting things done. We have great respect and regard for the Senator from Delaware. But we can nevertheless disagree. On this particular proposal, I do disagree because I see things in perhaps a different light. When I think of the prospect--and I thank the Senator from New York because, as usual, he has a grasp of issues that goes way beyond the capacity of the average human being. And, boy, do we learn, and we learn in a hurry here. But nevertheless, I listened carefully to what the Senator from New York said. He talked about the possibilities of some investment on the private side, and I respect that, when combined with other changes that have to be made. I think otherwise we are rushing almost willy-nilly into a change, if this proves to be law at some time, that would rock the timbers of our society. When we think of Social Security, we think of the foundation that it holds for senior citizens. I kind of ask myself, well, would we recommend to the elderly across this country that they go ahead with some investment adviser, or make a decision on their own, whether it is to buy fund X, A, B, or C? We saw what happened to this investment club that was doing so well, according to the papers, and finally they admitted they made a few accounting mistakes. Would anyone want to have to face that widow who perhaps gets $700, $800 a month and say, ``Sorry, there's an error; you don't have $800 a month, you have $400 a month or $500 a month''? Or would you rather say, ``Listen, what you have is guaranteed. It may not have provided the kinds of things that your husband and you had when you were living together, but you will not be chased out of your room or your house. You will have a chance to continue to live at some scale, modest as it may be.'' But when I look at companies like the Prudential Insurance Company, one of the great companies of the world, one of, if not the largest company in the world--it was among the top five--it had some inappropriate management problems there. And they are good friends of mine, so I do not knock the company. But they, nevertheless, had to reduce the interest they were paying on policies, on cash reserves on their policies. This giant company, the Rock, the Rock of Gibraltar was their trademark, and they had to reduce their interest rates. In October, a few years ago, 1987, the market lost a substantial portion of the holdings. I was at a meeting in Boston and people up there were shaken to their foundation to see their investments, their growth in investments, suddenly whittled away by some 15-plus percent. While I am excited about the market and where it is going, just like everybody else, I know one thing: That going down is always faster than going up when there is any velocity attached to it. I think that without full deliberation about what the consequences might be, pro and con, with this kind of investment, it is excessively hasty. I would not want to be talking to people who suddenly decided they wished they had had Social Security IOUs, as they were described here. I do not know about you, but I know that I still feel pretty good about an IOU owed by the U.S. Government, by the people of America. Those are, as they say in the movies, as good as it gets, not high- paying but everybody pretty much feels that, listen, the worst that happens, we are going to get paid. We may even have it monetized a little bit with inflation, but the fact is we know it is there. So when I look at the proposition that is offered, I say that I hope my colleagues will vote against it. When you cast your vote, you must look or try to look in the eyes of an elderly parent or grandparent, or perhaps, at some of our ages, a brother or sister, who are totally dependent on Social Security for their survival--for their survival. I tell you, I would not recommend on a personal basis--and I have had a lot of experience. I ran a big company. And I managed, as part of my responsibilities, the company's investments. I managed acquisition. I had a lot to do with the financial side of things. I could hardly imagine myself recommending to someone whose principal asset, exclusive asset in some cases, was Social Security, that they invest in the market a little bit, buy a hedge fund maybe or, gee, your adviser--I remember when one of the great unions, I say to Senator Moynihan, sued a bank in New York, who I will not identify here, for the poor performance that this bank had with hundreds of millions of dollars that belonged to this union's pension funds because it underperformed. Who, with an investment of a couple thousand dollars a year or a thousand dollars a year or less, is going to be able to pick just the right adviser? There is some genius sitting there waiting to take your $1,000 a year and monitor it and watch it? Come on, what do we think this is? The guys who get that kind of attention are the guys who hit the new scales on the heights--$500 million in net worth, $1 billion in net worth, the people who are outside. I know of one university fund, common among investments, being made today by university endowments, who wants to get into investments that they can be out of in 5 years. They do not want to be stuck in investments that carry them indefinitely. And you will find that true in place after place. I say also that everyone is aware today that capital is not a problem in this country. Capital is chasing investment all over. I know people in the real estate business. I know people in the investment business and merchant banks. And people are coming to them--institutions, universities, companies, individuals--with money saying, ``Please help me invest it properly. Please help me place it securely. Please help me make sure that it's safe.'' So how is a person who has a modest Social Security income going to have the security to know that they have the right person advising them or whether they know how to read a financial statement? It is an interesting idea, but an idea, in my view, whose time has not come. I hope that we will stand securely against it, give it a chance, led by the leadership that the chairman of the Finance Committee can so aptly provide, and have a full review of what it means. We have discussed it. We have discussed it in the Budget Committee, and we have discussed it with other committees, with Alan Greenspan and with other distinguished economists: What does it mean? What about privatization? Some say yes, some say no. I tell you this, I would far rather be one who said no, just leave it where it is, than take the risk that we have to face someone who is depending on Social Security and not finding the reserve there when they need it. So I hope this amendment does not pass. I urge my colleagues to vote against it. No disrespect to the chairman of the Finance Committee or those who are supporting it, but it just needs more time than we have. Mr. President, as I stated, I must oppose the proposal to allocate the surplus for personal savings accounts. In my view, this proposal has serious ramifications for the future of Social Security. And we shouldn't endorse it without first carefully examining all of its implications. Mr. President, let me just discuss a few of the concerns raised by this amendment. First, this proposal represents a major step toward privatizing Social Security. And privatization, in my view, is directly inconsistent with the fundamental purpose of the program. Social Security is supposed to guarantee that all American seniors can avoid poverty and live their lives with a basic level of dignity. It is a social insurance program. It is not supposed to be the only source of retirement income for most seniors. Moving to a system of private accounts represents a dramatic shift in risks. Away from government. And onto the backs of individual senior citizens. Under a privatized system, seniors would lose: protection against declines in stock prices; protection against inflation through cost of living adjustments; and protection against outliving their assets. Mr. President, protections against these kinds of risks--which are completely beyond the control of any individual--are why we need social insurance in the first place. Let me be clear. I'm all for private retirement savings. I support IRAs and 401(k)s, and believe Americans need to save more. But private savings should supplement, not replace, social insurance. Otherwise, most Americans will spend their old age walking a financial high wire, without a safety net. And as someone who lived through the Great Depression, that is not what I want for my children and grandchildren. If we use a surplus to roll back payroll taxes and force people to put this money into private accounts, money would be drained from the Social Security trust funds. That would accelerate the date when the program will go bankrupt. And that is the opposite of what we should be doing. There are many other points I could make about this proposal, but I will not get into great detail here. Let me just say again that this is not the kind of change that we should endorse without a great deal of careful and thoughtful debate. That discussion is only now just getting underway. And it would be premature to rush to judgment on such a fundamental change in our system. So I hope my colleagues will oppose this proposal. Let us fix Social Security. But let us do it carefully. And let us do it right. I ask unanimous consent to have printed some editorials in the Record. The Senator from New York has asked us to do that, and I put them forward.

Mr. LAUTENBERG. We to this point have used a total of?

Mr. LAUTENBERG. Mr. President, just to be certain, if we combine the time that was yielded off the resolution and off of the amendment, the proponents used a total of?

Mr. LAUTENBERG. I will be happy to yield up to 5 minutes, as needed, by the Senator from New York.

Mr. LAUTENBERG. Mr. President, I yield up to 15 minutes to the Senator from New York, Senator Moynihan.

Mr. LAUTENBERG. Mr. President, a few moments ago I had an opportunity to discuss with the chairman of the Budget Committee how we might proceed, because one of the things we are running into is that, although we had agreed to have a half-hour limit on amendments equally divided, as a result of courtesy, we have extended time on the resolution. It, thusly, then challenges whether or not we are ever going to get done here, because we have almost 30 amendments. If we take 30 amendments, you have 2 hours each, 7 or 8 hours of votes to accompany that, that is another, who knows, 7, 8, 10 hours. So what we are going to do, unless there is a difference in the conversation as I remember it from what the distinguished Senator from New Mexico agreed, we are going to permit approximate time on this side equal to the two speakers that we just had. Then we are going to eliminate further time off the bill itself for amendments. With that, I yield some time to the Senator from North Dakota, as he sees fit.

Mr. LAUTENBERG. Mr. President, I yield such time as needed to my colleague from Illinois so that she may discuss her amendment. And until such time as my colleague is ready----

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

Mr. LAUTENBERG. Mr. President, I yield 10 minutes, or such time as may be needed, to the Senator from North Dakota. The time is to come off the resolution.

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

Mr. LAUTENBERG. I appreciate the fact the manager is going to yield to our friend from South Dakota. Amendment No. 2210, as modified (Purpose: To express the sense of the Senate regarding repair and construction needs of Indian schools)

Mr. LAUTENBERG. Mr. President, I yield to the Senator from Wisconsin who just wants to make an introduction. I give him 1 minute of my time.

Mr. LAUTENBERG. I am happy to yield 2 minutes to the Senator from Vermont.

Mr. LAUTENBERG. Mr. President, I raise a point of order that this amendment is nongermane.

Mr. LAUTENBERG. Mr. President, I yield back the balance of my time.

Mr. LAUTENBERG. Mr. President, first I make the point that the pending amendment is not germane, and therefore I will raise a point of order. Also, Mr. President, I rise in strong opposition to the McCain- Coverdell amendment. The amendment would cut domestic programs like education, child care, law enforcement, veterans, environmental protection, and would violate current budget rules. I think it is fiscally dangerous and irresponsible, and I hope we will marshal a vote against this amendment.

Mr. LAUTENBERG. Mr. President, I have 2\1/2\ minutes to respond. I won't take 2\1/2\ minutes because I want to yield some time to Senator Conrad. But I want to tell you something. My father kept 100 percent of his wages. They were so meager he couldn't pay taxes on them. But he had an opportunity to work whenever he could, and he held his head high and he loved America every day that he lived here, and that is what we are talking about. We can beat ourselves to death about how terrible conditions are here when people are living longer, living better, and enjoying life better than ever before in the history of mankind-- including in America. I am proud of this country and, as I said earlier: America, America the beautiful. I yield the remainder of my time to Senator Conrad.

Mr. LAUTENBERG. Mr. President, I note the second vote would be limited to a 10-minute vote so Senators who come down here should know that they cannot go back and expect to spend 15 or 20 minutes back in the office and still be able to vote.

Mr. LAUTENBERG. Mr. President, I thank the Senator from Illinois. We are ready to proceed with the next piece of business. I think the manager, the chairman of the Budget Committee, has something he wants to put down.

Mr. LAUTENBERG. I will have to raise an objection because there is an understanding being proposed that would include some time for Senator Coverdell. And I will ask unanimous consent, before there be any further discussion about this, that at 2 o'clock the floor be returned to me so that I can engage in a UC with my Republican counterpart.

Mr. LAUTENBERG. I would be happy to yield the floor.