Chris Smith

Mr. SMITH of New Jersey

Mr. SMITH of New Jersey. Mr. Speaker, I ask unanimous consent that all Members may have 5 legislative days within which to revise and extend their remarks and include extraneous material on H.R. 1318.

Mr. SMITH of New Jersey

Mr. SMITH of New Jersey. Mr. Speaker, I ask unanimous consent that all Members may have 5 legislative days within which to revise and extend their remarks and include extraneous material on the bill, H.R. 4836.

Mr. SMITH of New Jersey

Mr. SMITH of New Jersey. Mr. Speaker, I have no further requests for time, and I yield back the balance of my time.

Mr. SMITH of New Jersey. Mr. Speaker, I yield myself such time as I may consume. Mr. Speaker, H.R. 1318 would name the Department of Veterans Affairs outpatient clinic in the City of Sunnyside, Queens, New York, for Lance Corporal Thomas P. Noonan, Jr., a Marine, who on February 5, 1969, was killed in action in Quang Tri Province, Vietnam. Lance Corporal Noonan was 25 years old on that fateful morning in Vietnam when serving as a fire team leader he was mortally wounded while valiantly trying to drag a wounded Marine to safety. For his heroic actions, he was awarded the Congressional Medal of Honor, our Nation's highest military decoration. I want to commend my distinguished colleague on the other side of the aisle, the gentleman from New York (Mr. Crowley), for introducing H.R. 1318. This is the second naming bill the Committee on Veterans' Affairs has brought to the floor today to honor servicemembers who gave their lives in Vietnam. These are bipartisan measures which pay homage to our fallen heroes. I am pleased to bring these bills before the House for its consideration. I hope that these stories of bravery and sacrifice are an inspiration to the new generation of soldiers, sailors, Marines, and airmen who are so ably serving our country in the war against terrorism. By naming these facilities to honor Lance Corporals Noonan and Creek, we also signify our intent to continue providing health care to veterans of our Armed Forces now and into the future. Again, I am grateful to my friend and colleague on the other side of the aisle for introducing it. Mr. Speaker, I reserve the balance of my time.

Mr. SMITH of New Jersey

Mr. SMITH of New Jersey. Mr. Speaker, I yield back the balance of my time.

Mr. SMITH of New Jersey

Mr. SMITH of New Jersey. Mr. Speaker, I thank my good friend for yielding me time. Mr. Speaker, most Americans can tell you precisely where they were and what they were doing 3 years ago when the grim news broke that the terrorists had crashed commercial jet liners into both towers of the World Trade Center, the Pentagon, and in a field in Pennsylvania. Sadly, approximately 3,000 innocent people were savagely murdered, including 697 from my own State of New Jersey, with 60 families in my congressional district feeling the pain directly. The extraordinary courage of the victims like Todd Beamer and Captain Chip Burlingame and so many others who sacrificed their lives in an attempt to thwart the terrorists' plots and plans, as well as the first responders who bravely ran into burning buildings, deserve the highest honor and respect a Nation can bestow. Sadly, some 374 first responders died going into skyscrapers as they were engulfed in flames. They died trying to save those who were victimized by the 9/11 attackers. Last week, President Bush very eloquently summed up America's heart and spirit when reflecting on 9/11. President Bush said, ``I have seen the character of a great Nation, decent and idealistic and strong.'' President Bush went on to say, ``The world saw that spirit 3 miles from here,'' he was speaking at the Garden, ``when the people of this city faced peril together and lifted a flag over the ruins and defied the enemy with their courage. My fellow Americans, for as long as our country stands, people will look to the resurrection of New York City and they will say here buildings fell and here a Nation rose.'' 9/11, Mr. Speaker, was America's wake-up call that transnational terrorism, especially from the likes of al Qaeda, is willing and able and determined to murder us in a massive way. Much, however, has been done by the President and by the Congress to mitigate that threat in the 3 years since 9/11. We now know that the President, working with our coalition partners, has captured and destroyed many of the al Qaeda operatives, and the Taliban has been crushed, and we have now entered into a close collaboration with partners like Pakistan and the United Kingdom. Much has been done to assist the victims' families, but no assistance, as we all know, can ever remotely replace their staggering loss. Still, when all is said and done, the victims' compensation fund, while not perfect, will have provided close to $7 billion to the surviving families. We also know that the Federal government has provided about $26.7 billion thus far, which has been awarded to enhance the abilities of State and local governments and first responders to prevent, prepare for, and respond to acts of terrorism and other emergencies. Much has been done to reform our defenses, including the creation of the Department of Homeland Security, no small feat, particularly in this town, to do such a massive reorganization. And the Terrorist Threat Integration Center now has the left hand talking with the right hand so that intelligence is properly shared. We are all on the same page. For its part, the 9/11 Commission, a commission created by the families of 9/11, declared that ``we are safer,'' but they also pointed out that we are ``not safe''. Over the course of the August district work period, some 26 hearings were held to respond to and to try to figure out what a new comprehensive reform bill should look like, and I want to thank the gentleman from Illinois (Mr. Hyde), chairman of the Committee on International Relations, for the two outstanding full committee hearings he put together. We are now poised to act on those recommendations, and in some cases, we may opt to exceed the 9/11 blueprint. Finally, let us all remember, if this is an extremely difficult week for us, the sense of collective violation pales compared to the pain of the families who lost their loved ones, their wives and husbands, their children, their brothers, their sisters. For them, this is the toughest week and September 11th--the saddest day. This is a day of remembrance, a week of remembrance, and our prayers and our hearts go out to the victims' families and friends, because they have lost so much and have stood up so bravely in the years since.

Mr. SMITH of New Jersey

Mr. SMITH of New Jersey. Mr. Speaker, I am a cosponsor of H. Con. Res. 652 which urges the Government of Belarus to ensure a democratic, transparent, and fair election process for its parliamentary elections in October 2004. As the sponsor of the Belarus Democracy Act (H.R. 854), which has also been reported out by the International Relations Committee, it is important that the House call specific attention to these upcoming fall elections. Mr. Bereuter, in his capacity as Chairman of the House International Relations Subcommittee on Europe, has lend his support of the Belarus Democracy Act as well. Belarus' poor track record with recent elections--which were judged as not meeting international democratic standards by the Organization for Security and Cooperation in Europe--and more broadly with the situation with respect to human rights and democracy in Belarus, underscore the need for this resolution. Belarus, under autocratic ruler Alexander Lukashenka, has the worst human rights record in Europe today. Repressions against members of the democratic opposition, non- governmental organizations, the independent media and independent trade unions have become commonplace. Independent thought and action are anathema to Lukashenka, who over the last 10 years has consolidated his power to an alarming extent. Mr. Speaker, I hope that the Belarusian authorities will take this resolution seriously, as it provides them with a blueprint on what they need to do to have their elections conform with OSCE standards. Unfortunately, four benchmarks for free and fair elections established by the OSCE 4 years ago still not been met. Thus far, the pre-election environment has not been encouraging. Last month, three opposition parliamentarians staged an 18-day hunger strike demanding changes in the Election Code, which still includes several undemocratic provisions. The reform bill was overwhelmingly defeated by the Lukashenka-controlled parliament. Belarusians still have no opportunity to receive independent viewpoints through broadcast media. Opposition access to the state media is virtually non-existent; rather the political opposition is often vilified. Just yesterday Lukashenka, talking about his hopes for a pro-government majority in the October elections, said: ``I strongly hope that the people will make the right choice,'' and added that ``the people will take a close look at traitors, black sheep . . . wolves in sheep's clothing, and we will help them if they don't.'' This is not a good harbinger for the elections--and the election campaign has not even begun! Mr. Speaker, it is vital that we convey to the Belarusian authorities our call for a free, fair, open and transparent parliamentary election process consistent with Belarus' freely undertaken OSCE commitments. The long-suffering Belarusian people deserve no less.

Mr. SMITH of New Jersey

Mr. SMITH of New Jersey. Mr. Speaker, I rise in support of H.R. 4598: the Accutane Safety and Risk Management Act. In an effort to improve the health and safety of patients using a pharmaceutical product that has been linked to several major side effects, I recently joined with my friend and colleague Congressman Bart Stupak of Michigan to introduce this legislation that will establish a comprehensive patient registry for users of the drug Accutane and its generic forms. Accutane was approved for use in treating severe acne in the early 1980s. Today, more than 1 million prescriptions are approved each year, and not always for the serious cases of acne for which the drug is intended. The Food & Drug Administration states that, ``Accutane may cause depression, psychosis, and rarely, suicidal ideation, suicide attempts, and suicide.'' Additionally, the makers of the drug state that ``there is an extremely high risk that a deformed infant can result if pregnancy occurs while taking Accutane in any amount, even for short periods of time.'' Four years ago, Congressman Stupak had to endure the tragic suicide of his teenage son, who was using Accutane at the time of his death. Despite the fact that the significant and serious side effects linked to Accutane are well known, the Food and Drug Administration has yet to mandate a program to better monitor the use of this drug and to document its effects in patients. Such a registry has been recommended by FDA advisory panels on two separate occasions. Mr. Speaker, our bill is common sense legislation that will build upon a safety plan first proposed by the makers of this drug themselves. It will still permit doctors to prescribe Accutane, but will also institute several additional patient safety and protection measures and ensure patients and their families know the full risks before beginning treatment. H.R. 4598 will permit physicians to prescribe Accutane only for ``severe, recalcitrant nodular acne'' that has been unresponsive to other forms of treatment. Severe acne is the condition for which Accutane was originally approved by the FDA to treat. For patients with severe acne, Accutane may be the only medication that can successfully treat their affliction. But in far too many cases, Accutane is prescribed in an overly cavalier manner, and patients are being placed at risk to the drug's potential side effects for no medically valid reason. Many teenagers suffer from acne, and doctors and patients need to be cautious and not treat this drug lightly. The legislation will also register all physicians and pharmacists who prescribe and dispense the drug, and institute an education campaign to ensure these providers are well-informed about the potential risks associated with Accutane. All patients will also be educated and be required to receive similar information before starting treatment with Accutane and throughout the treatment regimen. Prescriptions will only be written for 30 days and will not be permitted via the telephone, Internet, or mail. Female patients will also have to undergo a monthly pregnancy test before receiving a renewal on their prescription, and all patients will be required to take a monthly blood test. The makers of the drug and all practitioners who dispense Accutane will also be required to file prompt reports with the Department of Health and Human Services anytime they learn of a negative reaction, including a death, that occurs in a patient while using Accutane.

Mr. SMITH of New Jersey

Mr. SMITH of New Jersey. Mr. Speaker, I recently received this in the mail, and I do not know if the cameras can really pick it up. It is a front page that is sort of startling. It says the budget, bloated with pork. The national debt, soaring past $7 trillion. Is it not time to fight back, is the main headline. Interest rates rising. Entitlement program, $73 trillion in unfunded liabilities. Sort of makes one realize the tremendous burden that we are passing on to our kids and our grandkids. It speaks of $7 trillion dollar national debt, and of course, you have to pay interest on that national debt because you are borrowing the money. Interest on that national debt now represents about 14 percent of the total budget. This pie chart represents how we are spending the $2.4 trillion of expenditures this year. Interest at 14 percent, that represents $800 billion that we are paying in interest, and interest rates now are relatively low. So that means, as interest rates go up, the portion of the total income coming into the Federal Government is going to be used up paying interest. So two things: interest rates are going up, and the debt is going up faster than it ever has. We are now increasing the debt by over $500 billion a year, and that is because we have a propensity to spend. Politicians have found out that they are more likely to be re-elected if they bring home the pork barrel projects. They get on the paper cutting of the ribbon of the new facilities, of the jogging trails or the libraries or whatever, and that overspending, because of efforts to try or politicians to try to be liked by the people back home and to get elected is part of what is driving up our debt. Over $500 billion a year of deficit spending. Deficit spending means how much in 1 year we are overspending, over and above the revenues coming into government. That $500 billion of increased debt a year, how do you put it in perspective? Well, we are a country about 228 years old. It took the first 200 years of this country to amass a debt of $500 billion. Now, we are going deeper in debt $500 billion every year. What does that do to our kids? I am a farmer from Michigan; and the way I was raised, what a farmer did for his kids was try to pay down the mortgage, hopefully make their life a little better than mom and dad's life was. But in this Congress, in this city of Washington, we are driving up that mortgage for our kids and our grandkids to pay off. So two areas: one is the increased debt that we are laying on our kids and our grandkids, and the other is the increased promises of unfunded liabilities. Unfunded liabilities are the green-shade, the economists' words, for how much we are promising in benefits for programs such as Medicare, Medicaid, Social Security, how much we are promising in benefits over and above what revenues we have to pay for those benefits. This is $73 trillion and putting $73 trillion sort of in some kind of a measurable fashion, and I am not sure any of us can do that. Our current spending every year is just a little over $2 trillion, and here is $73 trillion that is needed to go into a savings account today that is going to have a return of at least interest rates that will accommodate inflation to pay for what we have promised in programs over and above what is coming in in revenues from the payroll tax. Let me go around this pie chart, and then we will talk a little bit more about the unfunded liabilities. You can see the biggest piece of pie is Social Security, using up 21 percent of total government spending; and so many people say, well, Congressman Smith, you should not have that as part of the pie. Social Security is separate. I would just point out that the Supreme Court now on two decisions has said that there is no entitlement to Social Security benefits just because you have paid in Social Security all your life. The Social Security payroll tax is simply a tax. The benefits that you might get are a separate, different program that Congress and the President has signed into law saying here are some benefits that you get at age 65; and of course, if you look back at history, we know that over the years we have changed those benefits dramatically. When we run out of money, we increase the tax and reduce benefits usually. Going around the pie quickly, Medicare is at 12 percent. Now, with a prescription drug program, it is estimated that Medicare is going to overtake Social Security as a percentage of total spending within the next 20 years. Medicaid is growing very rapidly at 6 percent. The reason Medicaid is going to be growing is more people who thought they were saving enough for retirement now are living much longer than they anticipated. They are using up their savings; and once they are broke, they go on Medicaid. Of course if you go to a nursing home, you end up paying $40,000, $50,000, $60,000 a year to go into that nursing home facility, and if you are living very long, that means a lot of your savings are used up, and you go on Medicaid and then taxes pay for the Medicaid program. Other entitlements represent 10 percent. Defense, I am going to skip over here to defense at 20 percent. Before Afghanistan and Iraq, defense was a little under 19 percent. Now we are going up to 20 percent, not a huge increase in terms of percentage of total budget, but here is the domestic discretionary spending that uses up 16 percent of the total Federal budget. On those 12 appropriations bills, it is what we spend most of the year, at least half to three-quarters of the year arguing about how we are going to spend that 16 percent of the budget. My point is, unless we look at these other expenditures, the indebtedness and interest on the debt, Social Security programs that are going broke, Medicare programs that are going broke, Medicaid programs that are going broke, the so-called entitlement programs, which means that you are entitled to receive these benefits from other taxpayers if you are at a certain level of poverty, if you are at a certain level of poverty and have children, if you reach a certain age, if you are a veteran that is retiring, if you are a farmer that is in the farm programs. So the entitlements are sort of like on automatic pilot. Unless we deal with some of those problems, the overpromising of those entitlement programs, we are going to leave our kids, grandkids and the future generations not only this massive debt that is now $7 trillion, but the problem of trying to raise enough money to pay for the promises, and I would say the ``overpromising'' that this Congress has done. I asked Art Laffer, an economist that I respect, the originator of the so-called Laffer Curve, I said ``Art, what is worse, increasing taxes or increasing the debt?'' He said, ``Well, in the long run they are about the same because increasing indebtedness is the promise of future taxes,'' and it is. To accommodate that 14 percent that we are now paying in the total Federal spending pie for interest, and that 14 percent is going up very quickly as interest rates go up and as we increase the debt, it is going to mean that we have to come up with money in some fashion to pay for it. So that brings us back to the propensity of politicians to spend more and promise more. How do we get control of the overzealousness to try to solve more and more problems of the country? If we look back at the Framers of our Constitution that were brave enough to declare independence from Great Britain, that wrote a Constitution that designed an economic incentive that those that work hard, that try, that save, that invest, that go to school and use that education are better off than those that do not, that is what has helped us be the strongest, most successful Nation on earth. It is not that we are smarter than anybody else in the world; it is that we have had that kind of motivation and incentive to do our very best, to come up with ideas and work hard. Now, over the years we have sort of said, well, if you work hard and get a second job, and you wanted that second shift so you could have more money for your family, we are not only going to tax you more, we are going to tax you at a higher rate. So dividing that wealth of those that are successful, and so if you work hard and are successful, we are going to tax you more and more, and give it to the people over here. So it is sort of pay in according to your ability to pay in, and take out according to your need. Mr. Speaker, we have to be careful that we do not lose that kind of incentive that has made this country great in our overzealousness to divide the wealth, number one, and to pass on to future generations the overspending that we are doing today. It is really somewhat egotistical, I think probably a better word might be ``unconscionable,'' to think that our problems today are so great that it justifies spending the money our kids have not even earned yet. Next chart, unfunded liabilities. What are they and what are the promises? The three largest categories of unfunded liabilities are Medicare, Medicaid and Social Security. The Social Security and Medicare trustees have calculated that these programs have over $73 trillion in unfunded liabilities. So $73.5 trillion are going to have to be invested today to have a return that is going to accommodate inflation to pay what is needed to make up the difference between the revenues coming in in the payroll tax and what is needed to accommodate the current promises. Breaking them down, Medicare Part A, mostly hospitals, $21.8 trillion unfunded liability; Medicare Part B, $2.2 trillion unfunded liability; Medicare Part D, the new prescription drug program, $16.6 trillion unfunded liability; and Social Security with our promises, about $12 trillion unfunded liability. Those are huge problems. How are we ever going to solve those kinds of promises in relation to what this country is worth, what we can produce in our gross domestic product every year? We are now spending approximately 20 percent of the GDP in our funding at $2.4 trillion. So that means 12, 13, some good years, maybe $14 trillion is the total product, the total gross domestic product that we produce in this whole country in 1 year, and yet we are talking six times that amount that we need right now if we are going to accommodate the future promises, the cost of the future promises we have made over and above what is coming in in revenues. Just huge problems. So what do we do about it? We do not do anything. The longer we put the solutions to these problems off, the more drastic the solution is going to have to be. I have been working on Social Security, and I am going to talk a little bit about Social Security tonight. It was estimated back in 1987 that we were going to run out of money for Social Security. Actually, I was in Michigan, and I was chairman of the Senate finance committee, the Senate taxation committee, if you will. That is where I wrote my first Social Security bill. When I looked at the fact that with people living longer and the birthrate going down, Social Security was going to go broke. It was going to run out of money. So I came into Congress. I was elected in 1992, and every session since I have introduced a Social Security bill. I have had my Social Security bills scored by the Social Security actuaries. They say that my bills would keep Social Security solvent essentially forever, even though they do it for the next 75 years. The way I structured my bills, it would keep Social Security solvent forever. Nobody really wants to deal with Social Security, and let me tell you why. Because most of the seniors on Social Security depend on Social Security for 80 percent or more of their total retirement income. So if you are dependent on that Social Security check, you can understand that it is very easy to scare a senior by saying, well, the gentleman from Michigan (Mr. Smith) wants to ruin your Social Security and take your Social Security away from you. It was tough in my first few elections. I have probably given between 270 and 300 speeches on Social Security in my district. I suspect that my Seventh Congressional District of Michigan is more aware of the problem of Social Security and that it is going broke than maybe any other part of the country. It is a huge problem. I was made chairman of the Bipartisan Social Security Task Force, and we spent a year having expert witnesses come in to explain to the Republicans and Democrats on that task force the problems of Social Security, the fact that it was going broke, the fact that the longer we put off a solution, the more drastic that solution is going to have to be. So when we finished, we had a bipartisan agreement that there has got to be a better way to invest some of the money coming in to get a better return than we have in Social Security. We had an agreement, the longer you put off not dealing with this huge problem, the worse it is going to be, so it was important we all agreed to deal with it as quickly as possible. So we wrote and introduced Social Security legislation. I have had Social Security legislation introduced for the last 8 years which has had bipartisan sponsors of that legislation because those individuals on both sides of the aisle that are aware of the magnitude of this problem agree that we have got to move ahead with a solution to Social Security. We have to do the same thing with Medicare and Medicaid. We cannot go on pretending that it is okay to continue to increase spending because it seems to be popular at home. Why is it popular at home? Here is my two bits worth as a farmer from southern Michigan. We now have approximately 50 percent of the adult population in the United States that only pays 1 percent of the income tax. So you can see that there will be some people in this country that say to Washington, to the President and Members of Congress, to the Senators, well, spend some more tax dollars helping me with my problem because it ends up that they are getting much more out of government than they are paying in in taxes. That is another talk on where we go with this complicated Tax Code and the unfairness of the Tax Code. I think we need the kind of Tax Code that everybody pays at least something in to run the Federal Government so they have a stake in the overzealousness of politicians to spend tax dollars and increase taxes. Now, in an election year and approaching this Presidential election, we have a lot of concerns from the Democrat side of the aisle that we are shortchanging spending on needed programs, such as this needed program and this needed program, so let us increase taxes to make sure that we are doing the right thing to spend money for this program. This evening we heard a lot of comments that we have to go into Sudan and the atrocities which have been occurring in Darfur is partially our responsibility. I think it is, but it is not just singly the responsibility of the United States, it is the responsibility of all the countries of the world. Maybe we sent the wrong signal when we went into Iraq. Maybe other countries sort of heard the message that if they did not do anything, the United States would do it anyway. There were 17 U.N. resolutions condemning Iraq. We knew that there were problems of tyrant dictators, accommodations for terrorists, and developing more and more weapons in several countries, Syria, Libya, Iran, Iraq, North Korea. After the terrorist attack of 9/11, it was appropriate that we go to the source of that problem and go into Afghanistan. But here are countries developing more and more weapons, with tyrant dictators, accommodating terrorists, and so what should the choice be? Our first choice was go to the United Nations to try to get more countries to join with us in going after all of these countries to send a strong signal that we are not going to allow the proliferation of weapons of mass destruction. I bring this up because other countries said, well, why don't you go ahead and do it alone? We sort of did. Thank goodness for Great Britain that has joined us in that venture. But now we are challenged with some of these other countries. Maybe we are moving ahead with North Korea now in their development of nuclear weapons with the help of China because North Korea does not want to offend China and the other five countries that are putting pressure on them to stop their weapons of mass destruction, but my guess is we will do something like President Clinton did and that is essentially paying off the blackmail to get them to stop developing and selling weapons of mass destruction. The decision was made because of the many U.N. resolutions, because of the fact that Saddam had used weapons of mass destruction on his own people, because of the fact that maybe if we could get Iraq to make a transition to a democracy and have an increased standard of living, it would make a huge difference in the countries surrounding them. I think that is true. If we are successful in Iraq, I think the people of Iran will not stand for not moving ahead with more liberty and more freedom in their particular country. I recently visited Libya and met with Colonel Qaddafi. I think it was partially because he did not want to end up like Saddam Hussein did, is sort of my guess. As I talked to Colonel Qaddafi, it was like him coming to confession that he was a terrorist but he saw no reason to continue having those weapons of mass destruction. It is a good start and Colonel Qaddafi and Libya now are more a part of the World Trade Organization. It is going to end up being better for their country. But now we need to encourage the rest of the world to encourage these other countries to move in and be part of the world community, in trade, because in the long run it is going to be good for those countries. It is going to be a huge challenge in stopping terrorism in this world. I am just so convinced that we cannot turn tail and run, that we have got to stick to it, we have got to be dedicated and whether it is Iraq or whether it is a continued fight to do away with terrorists in this world, we have got to work together to do it. Mr. Speaker, next I am going to briefly go through a couple of these charts. This is the general revenue transfer. To make up the difference between what we promised in Medicare, Medicaid and Social Security and what is coming in from the payroll tax, this is in a few years what is going to have to come out of the general fund if we simply do nothing and let it go. By 2020, that means that we are going to have to take 28 percent out of the general fund to make up the difference between what is coming in in the payroll tax and what we promised in benefits for these programs. If we just go to 2030, another 26 years away, it is going to take over 52 percent of the general fund revenues to accommodate those programs. So why do we not deal with it? Partially maybe because it is a tough question and it is a tough solution. There are only a couple of ways to fix the programs. You either increase taxes and have more revenue coming in, or you reduce benefits. Of course, that is what we have done over the years. Every time we have had problems with Social Security, we have either increased revenues or reduced benefits or a combination. That is what I think we need to guard against, simply because most adults in the United States today pay more in the payroll tax than they do in the income tax. Here is a quick visual snapshot of the problems with Social Security. After the Greenspan Commission in 1983, we have surplus revenues coming in because we had a dramatic increase in the payroll tax, increased revenues coming in over and above what Social Security is paying out; and then by 2017 the red portion of the chart begins, and that is the time when we have to come up with money from more borrowing or more taxes to pay promised benefits. Here is how Social Security works. Just very briefly, the payout is very progressive. The taxes being paid in are not progressive. Benefits are progressive, and they are based on earnings at retirement. All of a worker's wages up to the tax ceiling, which is now $89,000 a year, are indexed to present value using wage inflation. Present value means if you had a certain job 20 years ago and wages double every 10 years, then for calculating your Social Security benefits, they up the wages to what that job would be paying on the day you retire. The best 35 years of earnings are averaged, the annual benefits for those retiring in 2004, and here is the progressive part: if you are very low income, you get back in a monthly check 90 percent of what you were getting when you were working. So 90 percent of the earnings up to $7,300 are what you get in your Social Security check. Thirty-two percent of the earnings between the $7,300 and the $44,000. Then everything over that, you get 15 percent of your earnings above $44,000. If you are very rich, you get maybe 16 percent of your average wage back in Social Security benefits. If you are very low income, then you get 90 percent of what you are earning weekly or monthly or biweekly back in a Social Security check. Early retirees receive adjusted benefits, and I added a column on this one. When we started Social Security in 1934, it was interesting going through the archives. Franklin Roosevelt said that there should be a private sector savings account owned by the individual, and actually the Senate passed a Social Security bill that had a savings account owned by the individuals but with the provision that you could not use any of the money until you retired at age 65. Actually, it worked very well then because the average age of death was 62 and so most people died before they became eligible for benefits and this pay-as-you-go program worked very well. Pay-as-you-go, let me just explain that a second. When you have the deduction of the 12.4 percent for Social Security, a total of 15.2 percent payroll tax, your employer sends in that money. By the end of the week, that money is sent out to existing retirees. So there is no savings account with anybody's name on it. It is a pay-as-you-go program. So the taxes come in, and they are immediately sent out to existing beneficiaries, sort of like the chain letter. I remember a cartoon I once saw with the elderly person saying, well, I am going to retire, how does Social Security work? And here is Uncle Sam saying, well, see this long list. You put your name at the bottom of the list, and then you send your money to the person on the top of the list. And so it is sort of like a chain letter and you hope there is going to be some money left when your name at the bottom of the list gets closer to the top of the list. Social Security was supposed to be one leg of a three-legged stool. I would encourage every person under 55 years old to make an aggressive effort to start putting aside savings for your retirement. The challenges for this country in the next 10 years when we start running out of money for Social Security and Medicare and Medicaid, between 10 and 20 years, there is going to be a dramatic pressure to increase taxes and reduce benefits. My argument to try to get business and industry on board in terms of the need to have a Social Security solution and a Medicare and Medicaid solution is the consequences of doing nothing and that is what we see happening in many countries around the world. Mr. Speaker, I would ask everybody to just make a guess of what the payroll tax is, for example, in France to accommodate their senior citizens. It is now over 50 percent of the payroll. So you can see that that makes that country much less competitive. They have either got to pay their workers less wages, and that is why there are a lot of strikes over in France, or they have got to increase the price of their product that makes them less competitive. In Germany, the payroll tax in Germany just went over 40 percent. Japan is hard-pressed in terms of their taxes that are needed to accommodate their senior population. So for goodness sake, let us not keep putting off these problems for the next Congress because we do not know exactly how to deal with it, so we end up with that kind of taxes and that kind of pressure on our businesses that are going to put our businesses at a greater competitive disadvantage as they try to compete in world trade. Social Security is a system stretched to its limits. There are 78 million baby boomers that begin retiring in just 3\1/2\ years; 78 million baby boomers begin retiring in 2008. Social Security spending exceeds tax revenues in 2017, and the trust funds go broke. Insolvency is certain. It does not take a guess. We know how many people there are, and we know when they are going to retire. We know that people will live longer in retirement. We know how much they will pay in and how much they will take out. The actuaries' estimate right now is payroll taxes will not cover benefits starting in 2017, and the shortfalls will add up to $120 trillion between 2017 and 2075, $120 trillion that we are going to need. The $120 trillion is what we need in all those future years one year after the other. That is what would be accommodated if we put $12 trillion into a savings account now that would have a return of at least inflation and the time value of money. Here is sort of a chart that shows what has gotten us into this predicament. That is the demographics. Our pay-as-you-go retirement system will not meet the challenge of demographic change. Back in 1940, we had 28 workers working and paying in their Social Security tax to accommodate every one retiree. So here are 28 people sharing the cost of every one retiree. By the year 2000, it got down to three workers paying in their taxes, and the three of them sharing the cost and benefits for Social Security of every retiree. The estimate by the actuaries is by 2025, we are only going to have two workers trying to pay enough tax to accommodate one retiree. That is what is happening, and that is why our taxes continue to go up; and if we do nothing, it means increasing the tax. I have read by some, some on this side of the aisle, that, look, all we need is a strong economy, so if we can have a strong economy and better jobs and better wages and more profit, it will do it. But here is the problem. Because benefits are directly related to the wages you get in and as there are more jobs and more people working and more wages, that means that temporarily it fixes the problem because you have a little more money coming in; but because benefits are directly tied to the wages that you make, it means the payout in future years is going to be greater. So in the long run it does not fix the program. Growth makes the numbers look better now, but leaves a larger hole to fill later. In my talks around the country and around Michigan, people say, well, if Congress would just keep its cotton-picking hands off the Social Security trust fund. We should do that. What we should be doing with the trust fund is getting a real return on it. But what Congress has been doing, and the President, for the last 20 years is, every time there is a little extra money coming in from Social Security, we spend it on other government programs. Right now, government owes the trust fund, because that is what we do, we write out an IOU. Government owes the Social Security trust fund $1.4 trillion, but the shortfall, what we are going to need, is $12.2 trillion. So just the trust fund by itself is not going to accommodate or solve the problem. Social Security has a total unfunded liability of $12 trillion. The Social Security trust fund contains nothing but IOUs, and to keep paying promised Social Security benefits, the payroll tax will have to be increased by nearly 50 percent or benefits will have to be cut by 30 percent. In this chart I have tried to show that Social Security is not a good investment. The average retiree only gets back a 1.7 percent return over inflation for the money they and their employers send into Social Security. Actually, if one happens to be a minority whose average age is 63\1/2\ right now, they actually end up with a negative return because they die before they hit 65 and start collecting benefits. The average is 1.7 percent return. But the market, in this case I did a graph showing the Wilshire 5000, the average of 5,000 stocks for the last 10 years. Even with the poor returns that we have had for over the past 3\1/2\, 4 years, even with those poor returns, the Wilshire 5000 has returned 11.8 percent over and above inflation. So how about that? How about having some of this money coming in from Social Security, invested in accounts? And I think there has got to be a limitation on accounts, so what I do in my bills is, I do it sort of like the Thrift Savings Account, index stocks, index bonds, index mutual funds, the option of foreign stock funds. Once one has accumulated a certain $2,500 in their retirement account, and they cannot use it, government is going to control it, once they get to that level, then there could be more flexibility as determined by the Secretary of Treasury in terms of additional alternative investments that one might use. This is how many years one has got to live after they retire to break even on the money they and their employer put into Social Security or, if one is self-employed, the money they put in. If people retired in 1960, it was a pretty good deal. They only had to live 2 years after retirement. But now, in 2005, people are going to have to live 23 years after they retire to break even on the money they sent in for Social Security. By 2015 it goes up to 26 years that people are going to have to live after retirement. And, look, that might be possible. The age of life has continued to increase. Here is the chart I want to finish with. And that is the danger of doing nothing. What we have done in the past is increase taxes or reduce benefits every time we have had a problem with enough money to pay out promised benefits. And over the years we have increased benefits, too, for Social Security. In fact, in 1965 we amended the Social Security bill to start the Medicare program. So that was a huge new challenge and huge new promises that are going to put our kids and our grandkids even deeper in debt. Just going up from the 1\1/2\ percent in 1940, we raised it to 2 percent of the first 3,000. In 1960, running short of money again for the increased benefits, we tripled the rate, a 300 percent increase in the rate going up to 6 percent, and we increased the base, too, to 4,800. By 1980, we raised the tax rate to 10.16 percent of the first 25,900. By 2000, again we raised the rate up to 12.4 percent of the first 76,200; in 2004, 12.4 percent of the first 87,900, but now it is 12.4 percent of the first 89,000. So we have continued to increase the tax. And I just plead, Mr. Speaker, with everybody that might be listening that they, as workers in America, or their kids that are going to be working if they retire, should not be asked to pay a higher and higher tax to accommodate the existing retirees. Probably the people that are retiring this year, and I have not seen the statistics, but I would guess they are probably one of the most wealthy generations that ever has retired in America. Six principles of saving Social Security, and here is what I sent out to all the Members of the House and all the Members of the Senate: Protect current and future beneficiaries; allow freedom of choice, and in my legislation, we can guarantee that they are going to have as much return by having their own investment as they would if they stayed in the current system, so we guarantee that the return on their private savings account that they own, that government is going to control it, that they cannot take it out until they are 65 or until they have an annuity that is going to prove that they are never going to fall back on other taxpayers. That, in a sense, says that one can be an average worker and retire as a very wealthy person if they start saving this money. And some of these counties have had the option of not using the Social Security because that is the way the legislation was written. A municipality or a State can have the option of investing their own money or going into Social Security. Some of these counties are giving to their retirees that invested their own money over the last 60 years up to nine and ten times as much as Social Security pays similar wage- earning retirees. Mr. Speaker, I am going to close with the plea that we work together to make this kind of a bipartisan effort. It may be our chance next year after this Presidential election. I would guess that if we cannot do it in the first 4 years of a President's term, then it is going to be difficult to make the tough decisions that are required to solve these kinds of problems in Social Security and solve the kinds of problems that we need to be looking at in Medicare and Medicaid and some of the other entitlement programs. It is just unfair, unconscionable, to pretend that our problems are so great today that we have to take the money and the savings of our kids and our grandkids because they are going to have their own problems and their own concerns.

Mr. SMITH of New Jersey

Mr. SMITH of New Jersey. Madam Speaker, I yield myself such time as I may consume. I want to thank the gentleman from South Carolina (Mr. Brown) and the ranking member, the gentleman from Maine (Mr. Michaud), of the Subcommittee on Benefits for their strong support and work in crafting this legislation; and to my good friend, the gentleman from Illinois (Mr. Evans), the ranking member on the full committee. Madam Speaker, I yield back the balance of my time.

Mr. SMITH of New Jersey. Madam Speaker, I ask unanimous consent that all Members may have 5 legislative days within which to revise and extend their remarks and include extraneous material on H.R. 3936.

Mr. SMITH of New Jersey

Mr. SMITH of New Jersey. Madam Speaker, I move to suspend the rules and pass the bill (H.R. 4608) to name the Department of Veterans Affairs outpatient clinic located in Peoria, Illinois, as the ``Bob Michel Department of Veterans Affairs Outpatient Clinic''.

Mr. SMITH of New Jersey. Madam Speaker, we have no further requests for time, and I yield back the balance of my time.

Mr. SMITH of New Jersey. Madam Speaker, I yield such time as he may consume to the gentleman from California (Mr. Lewis).

Mr. SMITH of New Jersey. Madam Speaker, I yield myself such time as I may consume. Let me urge all of my colleagues to vote for H.R. 4608, offered by my good friend and colleague, the gentleman from Illinois (Mr. LaHood), which would name the outpatient clinic in Peoria after the very distinguished former minority leader, Bob Michel. I cannot think of a person more deserving of this honor. Bob Michel had an illustrious career as a Member of this body for 38 years. Having been elected in the 85th Congress, Bob was the minority leader for 14 years of his time here. Prior to that, he was the whip for three Congresses. Madam Speaker, aside from his political career, which was outlined by the gentleman from Illinois (Mr. LaHood), Bob Michel was a distinguished veteran of World War II. Our colleague, the gentleman from Illinois (Mr. LaHood) talked about that, and for those of us who serve on the Committee on Veterans' Affairs, we look at a guy like Bob Michel and say, he is the quintessential veteran. He is a guy that served honorably, rarely talks about it, was honored by our country for his valor, and for his suffering with a Purple Heart, and he is a real example of the greatest generation. He continues to give and to give mightily. Bob set an example as minority leader of statesmanship and civility in both his words and his actions. He taught those of us who were fortunate enough to serve with him, and I was elected in the 97th Congress, that one can disagree without being disagreeable, and that life in politics can and should be balanced with outside interests and pursuits. Bob Michel was a patriot in all of the meaning that that word has. He was an outstanding Member of Congress, and I salute his fearless leadership, his long service and I salute him for his humility, something you do not hear about too often in this place. He could do great deeds, and he was the last person who would ever tell you about it. He was just a tremendous human being, and is a tremendous human being, and this, plus all of the other accolades that he gets and should get, is just one more that says, ``Bob, we love you, we thank you for your service, and you deserve this.'' Again, I want to thank the gentleman from Illinois (Mr. LaHood) for his sensitivity and his foresight in naming this outpatient clinic in honor of our very distinguished former leader, Bob Michel.

Mr. SMITH of New Jersey

Mr. SMITH of New Jersey. Madam Speaker, I reserve the balance of my time.

Mr. SMITH of New Jersey. Madam Speaker, I yield myself such time as I may consume. I rise in strong support of H. Con. Res. 308, legislation recognizing the members of AMVETS for their service to the Nation and supporting the goal of AMVETS on National Charter Day. I want to recognize the gentleman from New York (Mr. Bishop), the sponsor of this legislation, and thank him for his work on this resolution. From its origins in the middle of World War II, AMVETS has a long and distinguished history of service to our Nation. They held their first national convention in Chicago in October of 1945, and just 2 years later, on July 23, 1947, President Harry Truman signed the AMVETS Charter. Originally organized for World War II veterans, AMVETS had their charter amended in 1966 to include veterans who served honorably during the Korean conflict and the Vietnam War, and again in 1984 to include those who served honorably during peacetime as well. From its humble origins, AMVETS has grown to a national organization, Madam Speaker, with over 250,000 members, in addition to another 60,000 members of its ladies auxiliary. As chairman of the Committee on Veterans' Affairs, I can attest to the important role that AMVETS plays in Washington advocating for stronger Federal policies supporting veterans, their surviving spouses and dependents. Their legislative staff is among the finest, and they have played a key role in many important public policy debates. Members know that they can count on AMVETS for advice, counsel and support as we continue developing national policies to benefit our veterans. Madam Speaker, I want to recognize and commend AMVETS National Commander John Sisler of Groveland, Illinois, who presented AMVETS legislative goals at our joint Senate-House Committee on Veterans' Affairs hearing earlier this year. He should be proud of the fact and of the success of AMVETS that they have achieved and continue to achieve, not just in Washington but also in communities across America. In addition to providing benefits and services to their fellow veterans, they also play an important role in the civic life of their communities. I urge support for H. Con. Res. 308. Madam Speaker, I reserve the balance of our time.

Mr. SMITH of New Jersey. Mr. Speaker, I move to suspend the rules and agree to the concurrent resolution (H. Con. Res. 308) recognizing the members of AMVETS for their service to the Nation and supporting the goal of AMVETS National Charter Day.

Mr. SMITH of New Jersey. Madam Speaker, I yield myself such time as I may consume. Madam Speaker, I too want to thank the gentleman from Maine (Mr. Michaud) and the staff, Pat Ryan, chief of staff and general counsel, and Mary Ellen McCarthy who has done a very good job, and Kingston Smith on my right here. This is truly an effort to try to write legislation that really will make a difference. These four bills, and some of the others that are pending which will soon be before the body, really do advance the ball on behalf of our veterans. I thank them for their cooperation and their partnership on this. That is what it is all about, ``to try to care for him who has borne this Nation's battle, and for his widow and for his orphan,'' to quote President Lincoln. Madam Speaker, I yield back the balance of my time.

Mr. SMITH of New Jersey

Mr. SMITH of New Jersey. Mr. Speaker, on that I demand the yeas and nays.

Mr. SMITH of New Jersey. Madam Speaker, I move to suspend the rules and pass the bill (H.R. 4175) to increase, effective as of December 1, 2004, the rates of disability compensation for veterans with service- connected disabilities and the rates of dependency and indemnity compensation for survivors of certain service-connected disabled veterans, and for other purposes, as amended.

Mr. SMITH of New Jersey. Madam Speaker, I yield myself such time as I may consume. Madam Speaker, H.R. 4175, as amended, would provide a cost-of-living adjustment in the same amount as given to Social Security recipients, to disabled veterans and surviving spouses. The committee ordered this bill reported when it met on May 19, 2004. Five other measures were also ordered reported at that meeting of our committee. All veterans and qualified survivors of veterans who receive disability compensation would receive a full COLA on December 1 of this year. The COLA is actually calculated on September 30; but if calculated today, it would be 2.2 percent. More than 2.5 million veterans, Madam Speaker, were receiving service-connected disability compensation as of April of 2004. The basic purpose of the disability compensation program is to provide a measure of relief from the impaired earning capacity of veterans disabled as a result of their military service. These benefits are paid monthly, and range from $106 for a 10 percent disability to $2,239 per month for a 100 percent disability. Additional monetary benefits are available for our most severely disabled veterans, as well as for their dependents. Spouses of veterans who died on active duty or as the result of a service-connected disability likewise are entitled to monetary compensation, as the Nation assumes, in part, the legal and moral obligation of the veteran to support the spouse and the children. Depending on their spouse's rank or grade in service, a spouse receives between $967 and $2,063 monthly. Currently, there are more than 300,000 surviving spouses and more than 29,900 children receiving dependency and indemnity compensation, also known as DIC. The bill would also expand the list of diseases presumed to be related to a former prisoner of war for which benefits may be paid by adding osteoporosis, an often crippling bone condition. Former prisoners of war are eligible for disability compensation if they are disabled from one of the 16 conditions presumed to be the result of their POW experience. I want to thank the gentleman from Florida (Mr. Bilirakis), the committee's vice chairman, for working with us to include this portion of his bill, which was H.R. 348. Finally, the bill would codify the current rates of compensation for service-connected disabilities and the rates of DIC for surviving spouses and children of veterans who die of service-connected causes, which went into effect last December, pursuant to Public Law 108-147. I urge my colleagues to support this bill. It is a bipartisan bill. Madam Speaker, I reserve the balance of my time.

Mr. SMITH of New Jersey. Madam Speaker, I yield such time as he may consume to the gentleman from South Carolina (Mr. Brown), the distinguished chairman of our Subcommittee on Benefits.

Mr. SMITH of New Jersey. Madam Speaker, I yield such time as he may consume to the gentleman from Colorado (Mr. Beauprez), a distinguished member of the committee.

Mr. SMITH of New Jersey. Madam Speaker, I yield myself such time as I may consume. We do not have any further requests for time. I, too, want to thank the gentleman from Maine (Mr. Michaud) and again the gentleman from Illinois (Mr. Evans) and the gentleman from South Carolina (Mr. Brown). This is again a good, bipartisan piece of legislation. It is very significant and will significantly help our veterans and especially those who are service-connected disabled. Madam Speaker, I yield back the balance of our time.