Patrick McHenry

Mr. McHENRY

Mr. McHENRY. I certainly appreciate the sentiments of the gentlewoman from Florida. I am certain that her constituents appreciate her passion on this issue to ensure that Social Security does not harm those that are at or near retirement age. I appreciate her boldness on this issue and telling many of us things that we do not want to hear oftentimes. Her independence of mind, the independence of her agenda, it is certainly respected here in the halls of Congress. I am proud to call her a colleague. Mr. Speaker, I am here to talk about Social Security, which in my mind is the most important domestic issue facing America today, not just for seniors but for those seniors' children and grandchildren. It is a vital program that we need to reform to ensure that we can continue with this program for generations to come. I am so grateful to be part of a political party that is taking this problem on. We in the majority in the House, we in the majority in the Senate, along with our President, and I am so thankful we have a great President, are taking on this issue. Whether you like President Bush or not, he has guts and you have to respect that. They called Social Security the third rail of American politics. If you touched it, you got fried. Well, things have changed. This is an issue that Americans are beginning to realize needs to be fixed in order to make sure it can be vibrant for future generations. And George Bush showed us all that we can and should tackle this issue, for our seniors and for our grandchildren. We in Congress are serious about taking this on. We are serious about a bipartisan approach, and we are serious about transforming this system into one that will thrive throughout the 21st century and beyond. We want to transform it with three principles in mind, and these are important. First, no reform that will pass this House will dare change the benefits of those that are at or near retirement age. For those that are currently drawing Social Security checks right now, none of the plans we debate will affect your Social Security check. But it will affect your children and grandchildren. So it is definitely important to you to consider those things. Number two, no reform should raise taxes. You will hear a lot about raising taxes or raising the tax cap and say that that will fix the system. It will not. Tax hikes just postpone the problems we will face with Social Security, and tax hikes are not real reform. The third issue is that we must make sure that these are voluntary personal accounts. I will further talk about these issues as my time goes on, but I am proud at this point to recognize one of my favorite colleagues, my majority leader, our Republican leader in this U.S. House, a leader that not only shares our values but works and fights every day to see that we not only just talk about these values but we enact them into law, a man who has won close vote after close vote to even the ire and fire and fury of the minority but a man who has led our House in a great direction over the 10 years we have been in the majority, a man I am proud to call my Republican leader and will continue to call my Republican leader, Mr. Tom DeLay from Texas.

Mr. McHENRY. Mr. Speaker, reclaiming my time, I thank the gentleman. I certainly appreciate his passion on this issue and his devotion to our conservative philosophy and to our great Nation. Mr. Speaker, if I may, I think with the earlier speakers you have heard there is a problem with Social Security. It is a problem we must tackle. I believe we have a moral obligation to step forward and to solve this problem before it results in a doubling or tripling of taxes or 30 percent cuts in benefits, these massive, devastating changes that can really hurt our Nation and hurt communities and hurt seniors. So we have a moral obligation to step forward and come up with a better plan. I want to tell you, the longer we wait, the tougher it becomes to fix the problem and the more expensive it becomes. As I said earlier, $600 billion a year we waste by not fixing the problem. That roughly equates to about $4,500 per person, per working person. Some would say, why do we not just tax more? And there is this concept of raising the Social Security tax cap. I want to tell you, it is not that simple. When you are talking about a $600 billion a year payment we have to make in order to not solve the problem, it is hard to tax enough in order to meet that obligation. Beyond that, even if you take the cap off of the income subject to Social Security, that would only buy about 2 years, about 2 years, of further solvency in the system. So it is not a fix. It is delaying the problem, delaying the pain. And because our Nation is changing, because of the demographics of our Nation and the fact that we are going to have fewer people working per each retiree, we have to change the system in order to make it solvent for future generations. With the baby boomers beginning to retire in 2008 and 2009, baby boomers were born between 1946 and 1964, so the first half of the baby boomers will begin to retire in 2008 and 2009. As they begin to retire, we are going to have to pay out more and more and more in the Social Security system. Certainly we have made that obligation as a great Nation, but I think we need to take on this problem of our change in population and the giant bubble that the baby boomers represent in terms of the population of our Nation and take on this issue to fix it. So the problem is clear. Our demographics have changed in this Nation over the 70 years of the Social Security program, and Social Security is broken. It was designed in 1935 before television, before commercial aviation, before computers, and it needs to be redesigned. We do not drive 1935 automobiles anymore, do we? So what we need is a vehicle for retirement savings that is in keeping with our times. That solution, Mr. Speaker, is personal accounts, personal retirement savings accounts. Personal accounts will eliminate the long-term liabilities of the Social Security system, that long-term liability that the gentleman from Texas (Mr. Hensarling) spoke of, that $11 trillion unfunded liability. We as a Congress need to take on this challenge. But why is that? Why is it that Social Security retirement accounts, personal savings accounts, fix the system? It is because when workers put their own money into personal accounts for Social Security instead of the old system of Social Security, they lessen their own future pull on the system. You see, by having your own accounts, just like IRAs, they accumulate money, they accumulate interest, and interest upon interest, interest upon interest upon interest. That is the power of investments, and that is what is going to allow personal retirement savings accounts to give a better rate of return than our current Social Security system. Money into personal accounts means less of a pull on the system later. Remember, these accounts, as the President has spoken of, these personal retirement accounts, they are voluntary, so there will be no changes if you are at or near retirement age. For those 55 and older, no changes. For those that are younger, they will have the option, the opportunity to choose a personal retirement account for their own Social Security benefits. No effects on seniors currently. They are voluntary for younger workers. It is a wonderful opportunity for us to have this debate about personal ownership. Beyond that, some say, how does this work? How do personal retirement accounts work? Well, first of all, you cannot take the money to Las Vegas. You cannot go and bet your money. You cannot throw it in your brother-in- law's business. You would have to use widely diversified securities, savings accounts, certificates of deposit, bond funds, municipal bonds, bond and stock fund mix, these type of options, well-regulated, very diversified. Some say, well, this seems sort of foreign to me. Currently, in America we have personal retirement accounts all across this Nation. It brings about a story that occurred to me back in my district in Western North Carolina, Mr. Speaker, in the Tenth District of North Carolina. I went out and was out at church one day, at a new church visiting, and I met a fellow there named Dave Roland. Dave Roland works for the Foothills Area Mental Health Developmental Disabilities and Substance Abuse Authority located in Western North Carolina, in Burke and Caldwell Counties. These folks that are out there serving those with mental health issues, they have personal accounts. Wait a second. How does that happen, some are saying. This seems very odd to me. But they have personal accounts. I will not get into the arcane nature of tax law changes and everything else, but between 1935 and 1983 different entities had the ability to opt out of Social Security. They had the ability to provide their own type of retirement plans, many personal savings accounts like we are trying to implement. So some of these governmental entities still have them today. Unfortunately, that option was closed in 1983. Since then, no organization can opt out of Social Security, no governmental entity can opt out of Social Security. But for the groups who opted out beforehand, before 1983, if they wanted to remain outside the system, they could, and many still remain outside the system. Fully 4 percent of the American workforce is outside of the Social Security system. They have some type of personal savings accounts. That is over 5 million people. They work for organizations that have opted out over the preceding years. Just so you know, there is a big myth out there, Congress has not opted out of the system. We are still in the Social Security system. I, along with my staff and all Members here in Congress and on Capitol Hill, pay into Social Security. So we have a good interest in making sure this program continues, because we do pay in. Now, not all the opted-out plans are the same. They are very different. But I found out about the Foothills program because I was lucky enough to meet David Roland. He works at the Foothills Mental Health Authority, as I said, and is one of my constituents. I am trying to find out about other programs like David has, so I ask those, Mr. Speaker, those that hear my voice or see my face to shoot me an e-mail if you know of anyone who has an opted-out system, whether they work for a governmental entity, in any State in the Nation, not just my own constituents in North Carolina. So they can e-mail me at patrick.mchenry@mail.house.gov. That is patrick.mchenry@mail.house.gov. Please let me know. I want to know your story about a system where you have opted out. I want to know the kind of returns you have gotten, whether you like them or not. But everyone I have talked to loves their personal retirement accounts, including David Roland. They are optional at Foothills Mental Health Authority. They are optional. An employee can make the choice to stay in the current Social Security system or have this system of personal retirement accounts. At Foothills, they have the option of paying their portion of Social Security, their 6.2 percent of FICA tax, into a 403(b) annuity plan. It is just like an IRA, very similar to that. Dave Roland told me this. He lives in Morganton, and he is one of the folks that opted out. He has been working at Foothills for 7 years, since March of 1998. He is 34 years old. He is responsible for all the yearly regulatory training at Foothills for all these mental health service providers. He could not be happier with the system. He is not a slick Wall Street investor. No, he is a man that likes spending time with his children, is devoted to his church and works hard every day. He is a regular guy, just like you and me. I want to tell you what he says. I want to quote from him right now. ``I am a common worker. I have the benefit of a plan along the lines of what the President has proposed. In 7 years I have accumulated over $50,000. I control the amount of risk that I want, and it is far better than what I could have gotten from the Social Security plan. I cannot imagine that I would have the same amount had I been in Social Security.'' I am not going to tell you what Dave makes. In fact, I would not ask that question of him. But he is a man that is much like millions of Americans across this Nation. In 7 short years, he has a personal retirement account like we are proposing here in Congress, and in 7 short years he has accumulated over $50,000 of retirement savings. Now that is an amazing feat, if you consider the fact that he began investing in the late nineties and there were ups and downs in the stock market just in the last 7 years, and he has $50,000 in savings. That is a staggering number in a short period of time. But those are the type of benefits that we are talking about. He could buy an annuity when he retires. If he continues to get a similar rate of return, he could buy an annuity and get far more than what the Social Security system could give him. Benefits for Social Security are capped at about $2,000 a month. So a regular guy from my district has a personal retirement account. That is why I am so optimistic about what we are trying to do here in Congress, the type of reforms that we are trying to achieve, with personal ownership, a new retirement system that enables people personal ownership and allows them to pass on to their heirs if they do not spend all the money, to pass on to their heirs if they do not make the retirement age. These are wonderful opportunities for us to give to all Americans, all walks of life. Mr. Speaker, do you know what? When Dave Roland makes his money and gets his check at the end of the week or the end of the month, it is his money. It is his money. Thankfully, he has a personal retirement account that he still controls and still owns, because it is his money. That is what we are trying to do with personal retirement accounts, to give personal ownership, that level of inheritability to pass onto your heirs, that personal freedom, while at the same time having it well-regulated, operating very similar to the way Social Security does today, meaning the money is taken out of your check, you are obligated to be a part of the Social Security system, and that the investments will be well-regulated, the risks minimized. What is fascinating, though, is there have been studies done on the stock market. There are some left-wing liberals that will tell you we should not invest in the stock market. I think we have gotten great rates of return in the stock market. We have gotten a better rate of return certainly than any government program can give. Certainly I would like to be concerned about the rising tide in our Nation, to make sure that all Americans have that same ability to improve their life, to have personal ownership, personal savings and be a part of our marketplace, be a part of our marketplace. I will tell you this: Some say the stock market is risky. Over the last 200 years, the average rate of return in the stock market has been 7 percent. Now, that is over three times the best rate of return for Social Security. In any 20-year period in American history, the stock market has never gone down. Even during the Great Depression in the 1930s and the 1940s, the stock market did not go down. It had a positive return. So we want to give all Americans, Mr. Speaker, that opportunity. We have a moral obligation as a Congress to take on this issue, to solve this problem, not just for a few years, not just push the problem back to another Congress another day; but we have a moral obligation to do what is right for our constituents and do what is right for all Americans, and allow them to have a better system to operate for their retirement savings, not just for the next couple of years, but for generations to come. And with personal accounts, without raising taxes, and while maintaining our commitment to those who are at or near retirement age, we can do this as Americans. We are not going to let those on the other side of the aisle just deny that there is a problem. That, in fact, is denying reality. And do not believe, Mr. Speaker, and do not allow the American people to believe that there is not a problem. This is an issue we have to take on as a Nation, and we are going to take it on. It is going to be the Republican Congress that takes this on. We are hopeful that some Democrats will come to the reality that there is a problem and that the right thing to do is to tackle it now instead of pushing it off to another day. I appreciate this time to speak about this need for Social Security reform.

Mr. McHENRY. Mr. Speaker, reclaiming my time, how much is that per year that we delay reform? The numbers I have are that it is about $600 billion a year.

Mr. McHENRY. Absolutely. And reclaiming my time, Mr. Speaker, the numbers are about $4,500 for every American in the workforce; $9,000 for a married couple. These numbers are so staggering, and so I think it is a moral imperative for Congress to act. And with that, Mr. Speaker, I further yield to the gentleman.

Mr. McHENRY. I thank the majority leader for taking time out of his busy schedule in order to be a part of this special order. I certainly appreciate the passion he brings to his service in the House and his effectiveness as well. Mr. Speaker, as I said, we have three issues that we need to make central to this reform of Social Security. First, no benefit cuts for those that are at or near retirement age. No changes. Second, no reforms should raise taxes. No reforms should raise taxes. And, number three, we must have voluntary personal retirement accounts that allow individual ownership. We want to move to a modern system that is tied to a better approach, with people having ownership and actually having control over their investments and having control over their retirement. So the gentleman from the great State of Texas (Mr. Hensarling), another one of my good colleagues, represents the Dallas area. He is in his second term here in the Congress; and from the get-go in 2003, when he first entered this place, he was recognized as a leader. And he is, indeed, a leader. He has led the fight for conservative budgets. He is a man who is passionate about representing his constituents in Texas well, including his wife and two kids; and he is a man who wants to talk about the family budget, not just about our Federal budget, because politicians oftentimes come to Washington and want to represent government rather than absolutely representing the people that they were elected to represent, and that is the families, those families across America who have to live within their budget in order to make ends meet. So with that, Mr. Speaker, I yield to the gentleman from Texas (Mr. Hensarling), whom I am proud to call a leader and proud to call a friend.

Mr. McHENRY. Mr. Speaker, this evening I have requested an hour to speak about a pertinent issue for our Nation and a large issue for all generations in our country, and that is Social Security. As a Nation, we have to recognize that we have a problem that we are facing with a system that we have had in place for 70 years. It is a problem that we must address, and it is an issue that we must ensure that we fix for future generations while at the same time maintaining our commitment to those that are at or near retirement age. This is a large issue that we need to take on as a Congress. It is a large issue that we need to take on here in Washington, D.C. so that all Americans in all walks of life have the safety and security of their retirement savings. So this evening many of my colleagues will join me to speak about the need for reform of Social Security and to maintain our commitment to those that are at or near retirement age while allowing younger workers a better opportunity and system to operate in. To that end, the gentlewoman from Florida (Ms. Ginny Brown-Waite) is in her second term here in Washington, D.C. representing her constituents of Florida very well. We both serve on two committees together, Committee on Government Reform as well as the Committee on Financial Services. I am proud to call her a colleague. She also shares another distinction: she goes home every weekend, just as I do. She does that in order to maintain her sanity, just as I do. Mr. Speaker, I yield to the gentlewoman from Florida (Ms. Ginny Brown-Waite).

Mr. McHENRY

Mr. McHENRY. Mr. Speaker, tonight we are taking on one of the great moral issues of our day, our basic sanctity of life, our right to life; and what you hear tonight is a lot of emotion. We have all had experiences with situations similar to this, or we know those that have dealt with these tough issues. We know family members that have dealt with these tough issues of end-of-life decisions. And tonight we as a body are wrestling with this issue. Just like America is, we are wrestling with this great issue. But I submit to you, tonight, we are not talking simply about Terri Schiavo. We are not talking simply about Terri Schiavo's family. We are talking about a greater issue: How shall we be judged as a civil society? And I submit to you that we will be judged by how we treat the least among us, those that may not defend themselves, the young, the mentally disabled, the physically disabled. How shall we be judged as a civil society? What kind of government shall we have? As a Federal Government, I believe we have an obligation to step forward and say that we shall protect life. Even when it is tough, we shall protect life, and a woman's right to live. And tonight, Mr. Speaker, there is a woman in Florida that is being starved, and we are acting tonight to preserve her right to live and give her the opportunity of a tomorrow. I say to you, tonight, Mr. Speaker, this is not about Terri Schiavo; it is about every one of us in this room. It is about millions of Americans across this Nation. We are all potentially Terri Schiavos. Mr. Speaker, I urge support for this bill.

Mr. McHENRY

Mr. McHENRY. Mr. Chairman, I do want to respond to only the big dogs eat in this House. I am a small dog, and I think I am doing just fine.

Mr. McHENRY. I yield to the gentlewoman from Florida.

Mr. McHENRY. Mr. Chairman, reclaiming my time, this is an interesting chart on the rapid increase in veterans spending per veteran. I think this is very important. We are spending $2,773 per veteran. We are fully funding our veterans' needs. That is a priority of this Congress. As a small fellow, I must admit, I do think it is important that we keep our taxes low so that we can create economic growth and development which will help us fully fund our programs going forward. A strong economy is what is going to move our Nation forward, not tax increases.

Mr. McHENRY. I am full of charts today, my friends. I do want to address our funding for health and for research. Under a Republican-controlled Congress, we have doubled funding for NIH, the National Institutes of Health. I think it is important to note what we are doing in health research as an American government, and the American people need to know that we are fully funding these programs to look at innovative ways to solve pressing medical issues in our country. We have doubled the funding for NIH over the last 6 years.

Mr. McHENRY. Mr. Chairman, I think I may have a chart on that. Payroll jobs have rebounded because of tax cuts. With a weakness of the economy going into the Bush administration from the Clinton years and with the advent of 9/11, we had a weakening of the economy. But once the tax cuts took hold, we have rebounded. We have got over 3 million jobs because of this. Beyond that, there has been reference to the fact that tax cuts have created the deficit. That is not true. Actually, that is borne out with statistical proof here. The largest cause of deficits between 2001 and 2004 was the economy. And the best way to address the economy and get the economy to rebound is by cutting taxes, spurring growth, reducing regulations, empowering small businesses and businesses all across the country to create more jobs, to increase earnings. So what we see here, the largest cause, 49 percent of the cause of the deficit, was the economy. And because of that, we have been able to rebound. Because of the tax cuts and because of the rebound in the economy, we are reducing the deficit. We are taking on this, and we are going to further cut taxes in order to keep spurring the economy.

Mr. McHENRY. Mr. Chairman, again I want to commend the gentleman from North Carolina (Mr. Watt) for offering this alternative budget. I do commend him for his hard work and efforts on behalf of his constituents, which are my neighbors in North Carolina. I am very proud to have him as a neighbor. I am very proud of his leadership and the stature he brings back home to North Carolina. With that, we do have a disagreement on policy. His version of the budget increase taxes at a time when we are just now recovering from those tough days of the late 1990s and early 2000s when our economy was soft. I think it is important that we keep cutting taxes for years to come so that we can keep this economic growth going. And the best way to lift people up, the best way to give people an opportunity, to give them ownership, is by allowing them to keep more of their own money. In the last few years we have seen numerous people falling off the tax rolls because of tax cuts. We have seen strong job growth, new businesses being formed, greater homeownership in America. Across the board every group in America is increasing in homeownership. And I think it is important that we continue those policies to keep growth going while restraining government spending, cutting deficits, and funding national defense and homeland security.

Mr. McHENRY. Mr. Chairman, I thank the gentleman for yielding me this time. First, I commend the gentleman from North Carolina (Mr. Watt) for offering a budget alternative. I know that the gentleman and his staff, along with the other members of the Congressional Black Caucus, worked very hard to put this budget together. Working on the Committee on the Budget this year, I realize how difficult it is to get agreement on the type of budget we need. Even to get a small group of people to agree on a budget is very difficult, so I commend the chairman of the Congressional Black Caucus for putting this together and I certainly respect what the gentleman has done. But on so many issues we have disagreement on the content of the budget. First, I do not think we need to raise taxes at a time when our economy is trying to get its footing back. And at a time of war, we need to fully fund defense and homeland security. We have so many needs in this country that we have to fund and so many priorities that we must fund. I think our budget that we produced out of the Committee on the Budget is well balanced. I think it is appropriate for the time we are living, the time of war, the time of very strong homeland security needs, and we need to properly fund those items, which I believe our House budget that we produced out of the Committee on the Budget does. So I am very proud of the work that the gentleman from Iowa (Mr. Nussle) has done to get a balanced approach for our budgeting. I would like to talk more about the qualities of our House budget that we have on the floor today. I think that is why we need to pass that budget unamended. First, our House budget fully funds the defense budget request of our President. There is a 4.8 percent increase, which totals $419 billion in defense spending, and a net increase of 2.3 percent in nonmilitary appropriated accounts for homeland security, including $32.5 billion for the Department of Homeland Security. But furthermore, I think it is important that we talk about what it does for veterans. With veterans I have a chart here today discussing, showing our increase in veterans programs and the spending we have increased in veterans programs. There is a rapid increase in veterans spending especially during this time of war. We are funding veterans programs appropriately in this Congress. We are funding more veterans health care programs. We are doing more for those serving to defend our country. The current House budget we have will increase veterans program spending to $67 billion. I think that is a move in the right direction. Furthermore, spending per veteran has increased to $2,700 per veteran. I think it is appropriate to notice the rapid rise in veterans spending. So we are funding priorities. This budget, although restraining nondefense, non-homeland security discretionary spending, and taking on mandatory government programs and finding savings, although slight, we are finding savings in those programs that will enable us to keep continuing to cut taxes and enable us to avoid raising taxes at the same time. Mr. Chairman, as I said, I thank the gentleman from North Carolina (Mr. Watt) for offering this budget alternative. I respect what the gentleman is trying to do, but we have different ways of achieving the same result of funding the priorities and helping the American people.

Mr. McHENRY

Mr. McHENRY. Mr. Speaker, Social Security needs to be fixed. It is a system that is currently broken, and it must be fixed. It will go bankrupt by the time the eldest baby boomers retire. We need to act sooner rather than later to fix this program. Every day we wait it costs us more and more. When Social Security began there were roughly 40 workers working for one retiree. During the 1950s it was 16 workers per one retiree. Soon it will only be two workers per one retiree. Without reform it will go bankrupt, and soon. So it is not a matter of I want to fix Social Security or I think it should be fixed. Social Security must be fixed. And the best way to dothat is to transform the system into one where workers can put a portion of their Social Security savings into personal accounts. Investing in government bonds and stocks will give them a better return on their investment than the current system gives. We must fix Social Security. We must fix Social Security now.

Mr. McHENRY

Mr. McHENRY. Mr. Chairman, I want to first start by thanking the gentleman from Texas for offering this budget alternative. I think it is a fiscally conservative, sane budget and I think it is much needed here in Washington, D.C. Furthermore, I would like to thank the gentleman from Iowa (Mr. Nussle), the chairman of the Committee on the Budget, for putting forward a very strong, fiscally conservative, reasonable budget for the American people that is not just good for our priorities here in Washington, D.C., like funding national defense, like funding homeland security, but it is also a good way to rein in government spending and eliminate government programs that have gotten out of control and maybe are not responsive to individual taxpayers. So I compliment our chairman in that regard. But, Mr. Chairman, the reason why I address the House tonight is because we have a better alternative, a much more fiscally alternative budget put before us by the gentleman from Texas. This budget would further reduce spending, would further rein in government growth, and would take on the mandatory spending programs that are going to bankrupt our country. What the gentleman from Texas does with this alternative budget is rein in government spending and mandatory programs further, further reduce nondiscretionary spending, while at the same time funding the President's budget when it comes to defense and homeland security, two top priorities of this Congress. But, additionally, it continues the tax cuts. It continues returning the taxpayers' money to them at home. So I think it is important that we keep all those notions in mind as we vote for this budget. I encourage those on the other side of the aisle who ask for more fiscal discipline to come on over and vote for this budget because it is a reasonable thing to do, the right thing to do. It is the right thing to do for the taxpayers, the right thing to do for the American people; and I encourage them to vote for the budget.

Mr. McHENRY

Mr. McHENRY. Almost as good as Bob Beauprez.

Mr. McHENRY. Mr. Speaker, that is right.

Mr. McHENRY. In fact, I am.

Mr. McHENRY. Mr. Speaker, I thank the gentleman so much for yielding and for hosting this discussion about the issues that we are facing as a country and I believe the most pressing issue we are facing in terms of our economic outlook and our ability to help those that are at or near the poverty level, especially those seniors. I thank him for affording me the opportunity to talk about Social Security. Social Security is America's most trusted Federal program. My colleagues know this, I know this. I would submit that the American people are beginning to realize how vital this program is, and certainly, the gentleman from Colorado (Mr. Beauprez) knows this, but my constituents in western North Carolina know this distinctly. In fact, my grandmother, my Granny Gooch, in fact, knows this issue as well. My grandmother would be quite offended if I mentioned on the Floor of this chamber how old she is, so I will just submit she is retired, and with that, I will be able to go home at Christmastime and enjoy my grandmother's cookies, but she receives her Social Security payment each month, and she depends on this. As an elected official in the United States, I do not want to take away my Granny Gooch's benefit, and this Congress will not do that. Mr. Speaker, you would not know this from the Democrats' attacks on the President's proposal. You would not know this by the ideas that we are talking about in this Congress and over on the other side of this wonderful Capitol Building. Social Security is broken, and it needs to be fixed. This is not a matter of opinion. This is a fact. We need to strengthen it for future generations so that it will remain a viable and sustainable government program. We must guarantee the promised benefits for current and nearly-retireds. I think that is a vital part of every reform proposal that has been offered this year in this Congress. We must guarantee a government safety net to ensure a retirement benefit. None of my colleagues disagree with this. Those on the other side of the aisle who will deny that reform is even needed will, in fact, agree that we must at least provide a safety net. My colleagues over here on this side, even the most conservative, would agree that we must guarantee a safety net. We are going to do that as a Congress, but many of my Democrat opponents on the other side on this issue, they will not even take a second look at the problem. They believe it is such a great hot button political issue that they can demagogue it to win the next election, and this Republican Congress is taking on the challenge that Social Security is presenting to our budget, that it is presenting to our seniors and that it presents to all generations in America. We are going to make sure it is a sustainable program, and we will make sure that it is viable for generations to come. We are not going to use it as a political issue. We are going to do the right thing. We are going to act to make sure that we can fix this issue and make it a sustainable program. Demonizing the issue does not achieve results. Anyone who proposes a reform plan has an obligation to step forward and do what is right. Anyone who is in Congress has an obligation to do what is right on this pressing issue of the day, and right now, Social Security taxes take more money in than the system pays out in benefits. That is true, but that is not the case going forward. In a few years, we will be paying out more in benefits than the Social Security system arrives at or receives from the American people, and going forward, we have enormous deficits that the gentleman from Colorado (Mr. Beauprez) has shown on charts here earlier today, and by 2042, which just, in fact, happens to be the date that I am eligible for Social Security, the system goes bust. It will only be able to pay about 60 to 70 percent of the benefits pledged and guaranteed or it will necessitate such a crippling tax increase that this country has never seen before the likes of it. Look at the facts. We are going through a demographic shift in this Nation. We are an aging Nation. When the program began, there were about 40 workers per one retiree when Social Security was implemented. By the 1950s, it was roughly 16 workers per one retiree. Today, we have roughly 3.3 workers per one retiree. Clearly, we have an issue with being able to sustain Social Security because of the changing demographics in our country. Therefore, reform is necessary because of our shift in demographics. These are the facts. They are hard facts. They are real. They are undeniable facts. Social Security is a broken system that needs to be fixed, and our Republican Congress is going to take on this issue. My colleagues on the other side of the aisle on the left would say that it is a great political issue. They would like to see it for years to come so that they can try to win elections on this issue, this problem. But to help strengthen Social Security, the President has proposed, and I support, allowing younger workers such as myself to invest a small portion of their payroll taxes, take that small portion and invest it in Social Security personal accounts, diversified bond and stock funds, safe investments, tried and true investments here in the United States of America and, in fact, in the world market. These safe investments will allow every worker to build up a significant nest egg for when they retire. Right now, the returns a person gets on Social Security are about one-and-a-half percentage points on what you invest in Social Security, less than two percent even under the best cases. With bonds and stocks, diversified bond funds and stock funds, taxpayers could get a return of 5 percent, 7 percent, 10 percent. Even the worst returns the stock market has produced on a large scale over the course of 20 years has been about 4 percent. Certainly, it is a better deal than the current Social Security system. Look beyond that. Those that have personal accounts will be able to pass on a nest egg to their children and grandchildren once they pass on. Right now, if you were to die just one month after you retired, you would collect only a check from Social Security after paying in for 40 or 50 years into the system, and what would your spouse, what would your child receive? Certainly not much. I think we have a higher obligation here in the United States, and personal accounts would allow that nest egg to be passed on from generation to generation. That is why I support personal accounts, Mr. Speaker. They are safe. They are smart. They fix the Social Security system, not just for the next few years, but for generations to come, and they strengthen the Social Security program in the Federal Government. Look, I support five guiding principles for reforming Social Security. First, we must guarantee promised benefits for those that are at or near retirement age. They played by the rules. They have paid into the system. We have that obligation, that moral obligation, I believe, as a country to help those that are close to retirement age. Second, workers should have the choice to put a portion of their payroll taxes in prudent diversified investments. These are safe personal accounts that the government will not be able to take away like they could take away a Social Security benefit. There would be a property right to these things. Third, workers should own their accounts, not the government. Property rights are sacred in this country, and I believe that these personal accounts should have a right as private property so that you could actually pass that on to future generations. Fourth, the government should provide a safety net to ensure a minimum retirement guarantee. Folks cannot gamble their retirement accounts in Vegas, I will tell you that much, and there will always be a benefit for every worker. Finally, there should be no payroll tax increase involved with any effort to reform Social Security nor should we subject new income to the Social Security tax, to the payroll tax. Tax hikes are not reform. They are pawning any and all problems with the program on to the backs of younger workers such as myself. Social Security is one of the government's most trusted programs. We are going to maintain that commitment, and we need to make sure it is there not just for me but for my Granny Gooch; not just for me but my children that I hope to have; for my grandchildren; for future generations. But to do that, we need to have serious reforms. We need to have a real discussion and dialogue on the problems of Social Security and the best ways of fixing this program for permanent solvency. Sweden and Britain have personal accounts. Countries around the world have personal accounts. So the U.S. is not leading on this. We can look to other areas in the world that have been successful in this way. We can look at 401(k) accounts that have been widely successful across this Nation. We can look at thrift savings accounts that all Federal employees have that have been so successful, that have changed retirement security in this Nation. I believe that we should look at prudent ways to fix this problem because of the generational shift we have in this country, because of the demographic shift we have in this country. We have an obligation to do this. Mr. Speaker, this Congress must act. We must act now to ensure that we have a viable Social Security system for years to come. That is what my constituents in western North Carolina want; that is what the American people want. They want us to not demagogue this issue, but look at real reforms that have a substantive effect, that have a lasting impact. On a final note, Mr. Speaker, we have to first say to those at or near retirement age, this is not about you. We are going to maintain our commitment to you. You are going to get the same Social Security benefit that we have pledged to you; but at the same time we have to ask those that are at or near retirement age, what do you want to leave to your children? What do you want to leave to your grandchildren? What kind of America do you want to leave them? Do you want a better, brighter day for them, or do you want to sink them into a failing program, like Social Security? Do you want to leave America a better place than it is today? I submit to my colleague that the American people appreciate that. Those that are receiving Social Security checks today do in fact want to help their children and grandchildren get into a better system for Social Security than they were able to benefit from. It is not about current retirees' checks they are receiving. This debate is not about them. It is for those that are younger in this Nation, those under 55 that could benefit from this program, that could benefit from this program. In fact, as a 29-year-old, I believe this is a wonderful opportunity for my generation to actually have great personal savings, a nest egg, a better, brighter future for our country and for our families. Mr. Speaker, I thank my colleague for hosting this Special Order on Social Security. I think the gentleman's constituents as well as mine appreciate the fact that we are willing to talk about the problems we are facing and yet offer substantive solutions. This is not easy lifting, so I thank my colleague for his leadership on this issue.

Mr. McHENRY

Mr. McHENRY. Mr. Speaker, frivolous lawsuits are hurting our economy, and they must be stopped. Lawsuit abuse affects everyone. Frivolous lawsuits and junk lawsuits jam our judicial system. Frivolous lawsuits increase the cost of medicine and medical treatment. They hurt our health care, hurt the American economy, and they hurt American jobs. Mr. Speaker, it is because jury awards in civil trials have become blank checks for plaintiff lawyers. Increased numbers of cases and the absurd rewards they yield have resulted in the highest per-person cost of litigation of any country in the world. They cost small businesses the most and many have closed their doors. It is Congress's duty to ensure that this type of legislation is not abused. President Bush's plan for tort reform lays a strong groundwork to address medical liability reform, class action lawsuit reform, asbestos litigation reform. It is clear that too many of these lawsuits are being abused. Congress must act today to ensure that we have a healthy economy tomorrow.

Mr. McHENRY

Mr. McHENRY. Mr. Speaker, Social Security must be fixed. It is not a question of whether to do it or how to do it. It is a question of when we do it. Because unless we act now, those workers that are 20 years old now, in their mid-20s, when they retire, the system is going to be bankrupt. In the 1950s when current retirees were young workers, there were 16 workers supporting every one retiree. Now there are only 3.3 workers per retiree and by 2040 there are only going to be two workers per retiree. President Bush will outline his ideas to fix Social Security tonight during his State of the Union Address. It is an issue so important to the future of America, to my grandmother as well as future generations of Americans. We must act boldly, and our President tonight will outline his strategy for a lasting solution, not a temporary fix. We must maintain our commitment to those that are at or near retirement age while allowing younger workers such as myself to get a better return on their Social Security investment. Mr. Speaker, Social Security must be fixed, and it is this Congress and this President this year that will take on this task.