Alan Simpson

Mr. SIMPSON

Mr. SIMPSON. Mr. President, I will continue to direct my remarks to the Chair. The issue is that you cannot hide something that is $360 billion a year and pretend that you are doing something to ``balance the books.'' That does not mean that we are then going to ``raid'' or ``loot'' the Social Security System. The constitutional amendment does not in any way injure Social Security, because the trust fund goes into T-bills or notes or obligations regardless. Regardless, the Social Security money still has to be raised in the future out of general revenue. That is what the trustees are telling us. Somebody said, what about the interest? I heard that one. Mr. President, 87 percent of the money that comes in comes from payroll taxes. About 9 percent comes from interest. That is all there is. In the year 2012, you will have to take the notes and go back to the Government and say, ``There is not enough payroll money coming in this month. So we are here to cash these in.'' That is when the double hit comes that we described. If you are trying to build a firewall to protect Social Security, this does not affect a Social Security firewall, which seems to be a very important thing to many, does not affect the long-term unfunded liability of the Social Security system. It does not alter the situation which requires a Social Security surplus to be put in Treasury bills. May I just finish the trustees' quote? It is two more sentences. Then we can get on with the action here and see if we can stick with the trustees' report. Do not bother with what I am saying or Senator Dorgan or any of us. I am reading from the annual report of the trustees. Let me just finish it. ``The cash flow will reverse as the trust fund securities are redeemed. To meet benefit payments and other expenditures, revenue from the general fund of the Treasury will be drawn upon to provide the necessary cash.'' That is pages 78 and 79. The balanced budget amendment in no way changes this. In no way at all does the balanced budget amendment firewall for Social Security change that. This is the way it is. And that is what we ought to be debating. I would be glad to stand here and do that. (Mr. GRAMS assumed the chair.)

Mr. SIMPSON. Yes, sure.

Mr. SIMPSON. I am sorry. Repeat the last part, please, if you would.

Mr. SIMPSON. That is correct.

Mr. SIMPSON. Mr. President, there is no way to avoid doing anything to try to hide Social Security from the budget problems of the United States.

Mr. SIMPSON. I have no idea, Mr. President. For 17 years, this Senator has talked about the absolute certainty of pretending that something is off budget when it is $360 billion a year. You would have to ask a majority at that time. For me, it is absolutely absurd to believe that you do not talk about Social Security when you are trying to balance the budget of the United States of America, which today is $1.506 trillion, and $360 billion of that in there is called Social Security. If you want to leave it out, fine, but it will not be this Senator. I will not be here, but somebody can tap on my box and tell me how it went.

Mr. SIMPSON. Mr. President, I do not believe that my good friend would check through the Senate ethics and financial records and find that I was listed among the millionaires of the Senate. So I think that that was a rather gratuitous shot.

Mr. SIMPSON. Now, Mr. President, if we can get back to the issue, which is the law, and stick with this and try to stick in this debate without going into emotion and who has the bucks and who does not have the bucks, and the rich versus the poor, and all the rest of it, and know that the Social Security Act is right here--(f) and (d). The trustees report is right here, and I am ready to move forward and discuss those and let us do that.

Mr. SIMPSON. Indeed, certainly.

Mr. SIMPSON. No; the dates are not correct. The dates here should be 2020 here, 2025 here, 2030, 2035, and 2040.

Mr. SIMPSON. Mr. President, I said that. I said that the reserves could easily be $2 trillion by 2010. I want the record to be absolutely correct. Nobody needed to palpitate on that.

Mr. SIMPSON. Well, Mr. President, that is a deliberate strategy. The purpose was to build the reserves, and it was going to work beautifully, until this year, in the year 1996. Every 7\1/2\ seconds somebody turns 50, and 15 years from now, in the year 2012, there will be a dramatic drawdown. We ought to link the two cases together, because they are so dramatic that it is hard to describe.

Mr. SIMPSON. Mr. President, that would be a good argument if we were saying that we were going to ``use it to reduce the deficit.'' But it will have already been used because the minute there are surpluses in the Social Security trust funds, they are invested in T bills or notes or whatever, and all the money goes to the general fund. If we can get to the point where you and I are, will you please describe to all of us what you mean when you are describing ``looting and raiding'' of the trust fund?

Mr. SIMPSON. Mr. President, may I ask a question of the Senator from North Dakota? How does the Senator from North Dakota propose to avoid looting, or raiding? Does that mean it will not be in T bills?

Mr. SIMPSON. What does it mean?

Mr. SIMPSON. Mr. President, how do we achieve this result--by suggesting then that we defeat the balanced budget amendment?

Mr. SIMPSON. That is what you have been saying; that we can avoid this result by defeating a balanced budget amendment.

Mr. SIMPSON. Let me ask, Mr. President. And I appreciate your correcting us and getting the correct dates.

Mr. SIMPSON. It is not a correction.

Mr. SIMPSON. Not to give too much credit, but simply these dates are incorrect, 2020, 2025, 2030--you know those facts. I know those facts.

Mr. SIMPSON. This is from the Social Security Administration, and it is listed in their way as to what is going to happen to this. This is 2020. There is 2025. This is 2030. There is 2035, and 2040.

Mr. SIMPSON. Let me ask a question. You have used a figure of $60 billion in your debate about surplus?

Mr. SIMPSON. The accumulated surplus to date is $496 billion to date. So that is rather an incorrect figure. You have used the figure.

Mr. SIMPSON. The accumulated surplus to date in Social Security is $496 billion, and it is going to go way beyond those figures in the outyears. It is going to go to $1.1 trillion--not $1.2 billion. It is going to go to $2 trillion.

Mr. SIMPSON. The cumulated surplus in Social Security is $496 billion. We need to know that. You have listed an annual figure of $60 billion or $69 billion. The present surplus, cumulated surplus, in Social Security today is $496 billion headed for maybe $2 trillion in the year 2010. Then a precipitous decline in accordance with the charts of the Social Security Administration.