Nick Smith

Mr. SMITH of Michigan

Mr. SMITH of Michigan. Mr. Speaker, it is with great respect for the outstanding record of excellence he has compiled in academics, leadership and community service, that I am proud to salute Randy VanWagen, winner of the 1998 LeGrand Smith Scholarship. This award is made to young adults who have demonstrated that they are truly committed to playing important roles in our Nation's future. As a winner of the LeGrand Smith Scholarship, Randy is being honored for demonstrating that same generosity of spirit, intelligence, responsible citizenship, and capacity for human service that distinguished the late LeGrand Smith of Somerset, Michigan. Randy VanWagen is an exceptional student at Columbia Central High School and possesses an impressive high school record. He has been involved with the National Honor Society. Randy is also involved with the Student Council, the English Essay and Social Sciences Academic Teams, and is the founder and president of the Varsity Club. He is a member of the varsity Football, Wrestling, and Track teams. Outside of school Randy has been involved in volunteer work and computer graphics. In special tribute, therefore, I am proud to join with his many admirers in extending my highest praise and congratulations to Randy VanWagen for his selection as a winner of a LeGrand Smith Scholarship. This honor is also a testament to the parents, teachers, and others whose personal interest, strong support and active participation contributed to his success. To this remarkable young man, I extend my most heartfelt good wishes for all his future endeavors.

Mr. SMITH of Michigan

Mr. SMITH of Michigan. Mr. Speaker, it is with great respect for the outstanding record of excellence he has compiled in academics, leadership and community service, that I am proud to salute Andrew Newhouse, winner of the 1998 LeGrand Smith Scholarship. This award is made to young adults who have demonstrated that they are truly committed to playing important roles in our Nation's future. As a winner of the LeGrand Smith Scholarship, Andrew is being honored for demonstrating that same generosity of spirit, intelligence, responsible citizenship, and capacity for human service that distinguished the late LeGrand Smith of Somerset, Michigan. Andrew Newhouse is an exceptional student at Jackson County Western High School and possesses an impressive high school record. He has been involved with the National Honor Society. Andrew is also involved with the Science Academic Games Team and the Jazz band. He is a member of the varsity cross country tack team. Outside of school Andrew, has been involved in volunteer work at his local church, taking a college class, and tutoring learning disabled students. In special tribute, Therefore, I am proud to join with his many admirers in extending my highest praise and congratulations to Andrew Newhouse for his selection as a winner of a LeGrand Smith Scholarship. This honor is also a testament to the parents, teachers, and others whose personal interest, strong support and active participation contributed to his success. To this remarkable young man, I extend my most heartfelt good wishes for all his future endeavors.

Mr. SMITH of Michigan

Mr. SMITH of Michigan. Mr. Speaker, it is with great respect for the outstanding record of excellence he has compiled in academics, leadership and community service, that I am proud to salute Amy Feldcamp, winner of the 1998 LeGrand Smith Scholarship. This award is made to young adults who have demonstrated that they are truly committed to playing important roles in our Nation's future. As a winner of the LeGrand Smith Scholarship, Amy is being honored for demonstrating that same generosity of spirit, intelligence, responsible citizenship, and capacity for human service that distinguished the late LeGrand Smith of Somerset, Michigan. Amy Feldcamp is an exceptional student at Saline High School and possesses an impressive high school record. She has been involved with the National Honor Society. Amy is also involved with the high school marching band, S.A.D.D., 4-H, and FHA. Outside of school, Amy has been involved as a Sunday school teacher, providing music in her church, and teaching violin lessons. In special tribute, Therefore, I am proud to join with her many admirers in extending my highest praise and congratulations to Amy Feldcamp for her selection as a winner of a LeGrand Smith Scholarship. This honor is also a testament to the parents, teachers, and others whose personal interest, strong support and active participation contributed to her success. To this remarkable young woman, I extend my most heartfelt good wishes for all her future endeavors.

Mr. SMITH of Michigan

Mr. SMITH of Michigan. Mr. Speaker, I would like to call to the attention of my colleagues a bipartisan bill that we will be introducing. It deals with Social Security, the money that we are borrowing from the Social Security Trust Fund. It does two things. It says, in the future when we borrow money from the Social Security Trust Fund, they will not be blank IOUs, as they are today, but they will be marketable Treasury notes that the trustees of the Social Security Administration can walk around the corridor and cash in when they need them. The second thing this bill does is that it says, in the future, when CBO and OMB, the Congressional Budget Office and the Office of Management and Budget, issue projections of deficits or balanced budgets, they will not include the money that is borrowed from the Social Security Trust Fund. I invite my colleagues to cosponsor that bill with us. It seems very important that we move ahead honestly and that we achieve a real, honest budget. Even though we have made great progress over the last several years, cutting down the deficit by $300 billion, let us move ahead.

Mr. SMITH of Michigan

Mr. SMITH of Michigan. Mr. Speaker, I would like to do a bipartisan presentation, I think; and that is about Social Security, where are we going, what shall we do. I suspect a lot of people are going to be tired of hearing about Social Security. But I think it is so important that every American, either retired or somebody that is going to be retired some day, look at the problem of Social Security, what is happening, and at this summer and fall election, talk to their candidates that are running for Congress about what they are doing for preserving Social Security. I have this chart here that represents the bleak future of Social Security. As my colleagues see, on the top left of this chart that goes from up until about 2013 is the new projection of where there is going to be more tax revenue coming in from the working taxpayers of this country than is needed to pay benefits. Now, what happens in Social Security since we started in 1935? The existing workers pay in their taxes and immediately it goes out to pay benefits for existing retirees. This chart shows that we are going to have more tax revenue coming in than is required to pay out benefits for the next 12 to 14 years. Dorcas Hardy, by the way, thinks we are going to actually run out of money as early as 2005 or 2006. Now, in terms of what the excess money is, and that money is approximately $70 billion this year, $80 billion this year, $100 billion the year after next, is being borrowed from Social Security to balance the budget. Now, when the trustees came out with their report last week, they said, well, really Social Security is not going to go broke until the year 2032. But what does that mean? If there is less money coming in as early as 2005, maybe 2014, maybe 2013, maybe earlier, how is government going to come up with the funds that are necessary to fill our obligation to meet Social Security benefits? Now, looking at this chart, if we are looking at the year 2018, in terms of today's dollars, there is going to be $100 billion that the general fund is going to have to come up with to pay the existing benefits, to pay back what it is has been borrowing from the Social Security Trust Fund. In terms of the 2018 dollars, it is going to be approximately $600 billion, $600 billion that is either going to have to be borrowed, have other expenditures of the Federal Government reduced to come up with that money, or increase taxes. Let me say a word about tax increases that have been used to solve the Social Security dilemmas in the past. Listen to this one: Since 1971, Social Security taxes have been increased 36 times in the rate or the base. More often than once a year we have increased the taxes on American workers in order to solve the shortage problems. Whenever there is less money coming in in Social Security taxes than is required for benefit payments, we have increased taxes. Over the years, since 1935 when we started the program, any time there are more revenues, what the tendency has been for politicians is to increase benefits. And of course, the largest change to the Social Security program was an amendment to the Social Security Act in 1965 that started our Medicare program, another serious problem that we need to face up to. But, look, my message today is, let us not put off our efforts to work towards a solution. I have got a couple of bills introduced, in fact, the only bill that has been introduced in the House that has actually been scored by the Social Security Administration to keep Social Security solvent for the next 100 years. I have got another bill that says, look, if there are any surpluses, let us start using those surpluses coming into the Federal Government. And ``surpluses'' is defined, if my colleagues will excuse the technical expression, under a unified budget. That means where we are including everything we borrow from Social Security, we consider revenue; and therefore, that is the way we have come up with a definition that there is going to be a surplus this year. But let us start getting that surplus out of town, using it to set up private retirement investment accounts for everybody that is paying a FICA tax so that they can decide what they want, how they want to invest their money, within limitations. It is going to be required, it can only be used for their retirement. But let us not pretend that the problem is not serious. Let us get at it. Let us take Social Security seriously, and let us look at the solutions; and hopefully, next year we will come up with a legislative solution that will be passed into law.

Mr. SMITH of Michigan

Mr. SMITH of Michigan. Mr. Speaker, I thank the gentleman for yielding me this time. Very quickly, in terms of whether it is bankrupt or not, if we just kept increasing taxes on the American workers, there would always be tax revenues coming in. But just to caution everybody on the danger of tax increases, that is how we solved the problem in the 1970s, that is how we solved the problem in 1983. In fact, we have increased the Social Security tax 36 times since 1971. More often than once a year we have put additional tax on American workers. I would just suggest that it is very dangerous if we continue to rely on tax increases to solve this problem. Today, the American working families pay more, 75 percent of American working families pay more in the FICA tax, Social Security tax, than they do in the income tax. So I would hope, even though I suggest we keep everything on the table, let us at least consider the imposition of increased taxes. I would plead with my colleagues not to use as an excuse the fact that if the government pays back everything that it has borrowed from the Social Security Trust Fund, that we will continue to have enough money until the year 2032. Just look at this chart a minute. The little blue blip up here on the left is the additional money that is coming in from current taxes that is over and above paying out the existing benefits. That runs out, in the new estimate, in 2013. But look at this year, for example. And the rest of the chart in red is how much money the general fund is going to have to come up with to pay back what has been borrowed. In the year 2032, for example, somehow the general fund is going to have to come up with $200 billion, and we either do that by cutting other spending, by increasing taxes or by more public borrowing, but again, it is not all that easy to pay back what has already been used up and is now in the Trust Fund. Some people suggest that using the surplus is a way to start solving the problem. I agree, let us do it. I just got the actuary's report today, though. Based on using all of the projected surplus up until the year 2016, it would only solve less than 20 percent of the Social Security problem. Some people have suggested if government would just simply stop borrowing from the Social Security Trust Fund, it would be okay. I agree again. Let us stop that. Let us at least make that borrowing marketable certificates so the trustees at any time can go around the corner to the local bank when they need additional benefits and cash that in to pay those benefits. But as we see from this chart, we are now spending the surplus, which is approximately $72 billion this year, $84 billion next year, $100 billion the year after that, and then we start going downhill with less and less of a surplus going to the Trust Fund. Let us not put off this very serious problem. Let us deal with it. The longer we put it off, the more drastic the solution.

Mr. SMITH of Michigan. Mr. Speaker, I thank the gentleman for yielding this time to me. I hope everybody might be as excited as I am about moving ahead with a solution to Social Security. I introduced my first Social Security bill when I arrived in 1993 and then three years ago in the 104th session and again last year I introduced H.R. 3082 and H.R. 3560, the only bills, by the way, that have been scored by the Social Security Administration to keep Social Security solvent for the next 75 years. It seems to me that, as we develop a national dialogue, as we inform the American people of what the situation is, there are about four or five things that we need as our guidelines: number one, the solution needs to be bipartisan; number two, we keep every possible solution on the table so that we can evaluate all of them. No. 3, that we do not reduce the benefit for current or near term retirees. Four, that any proposal for investment contain a ``safety net'' of guaranteed minimum benefits. And finally, that we do not play politics with this important issue. The danger that I see in an election year is the demagoguing of particular solution. I will fight the demagoguing of solutions by Republicans or Democrats. Let us keep everything on the table as we develop this national dialogue over the next ten months. Mr. Speaker, I have given over 200 speeches in my district, around the State of Michigan and around the country on Social Security. I still find many people that believe if Congress would keep their hands out of the Social Security Trust Fund, that everything would be okay. In that Trust Fund is about $600 billion; $600 billion in relation to what we spend every year on Social Security would last about a year and 7 months. Even so, we have to make sure that we pay it back; and we stop using the extra money coming in to the Trust Fund to mask the deficit. Let us save all the unified budget surplus for Social Security. But again the actuaries at Social Security today estimated that using all of the surpluses for the next eighteen years would solve less than 20% of the problem. Social Security solvency is a very serious problem with an estimated actuarial debt or unfunded mandate of $3 trillion. Mr. Speaker, I am excited about the fact that we are going to bring this issue to light talking about facts not fiction. Current and future retirees deserve our honesty.

Mr. SMITH of Michigan

Mr. SMITH of Michigan. Mr. Speaker, I rise to join the citizens of Hillsdale and Branch Counties to pay special tribute to our representative in the Michigan legislature. So many people talk about the kind of leader they want to represent them in government and Mike Nye fits that definition by every measure. This week, my friends in Hillsdale County will honor Mike Nye for his sixteen years of dedicated leadership in Lansing. They know, as I do, that few people have accomplished more in that time for the people of Michigan. Mike Nye's retirement from the state legislature is a great loss. As a member of the House, he fought for commonsense legal reform and worked to provide better health care to poor children and was the innovator of reforms that have resulted in a better education system for Michigan. Mike Nye's improvements in court reform, school reform, tort reform, and juvenile justice reform will be a continuing legacy of his knowledge, ability and leadership in the Michigan legislature. In an era of overheated rhetoric and blatant partisanship, Mike Nye stands out as a conciliator--a legislator who brought people together. Mike Nye was often the man people turned to when they needed a leader to finalize and pass legislation. Mr. Speaker, my colleagues and I here in Washington can learn a lot from the service of Mike Nye. His contributions to public policy are equaled by his and his wife, Marcie's, dedication to their community. Marcie's leadership in working in the prison system with her Kids Need Moms program is a great example of their commitment to help people. I know Mike's future contributions will be just as worthwhile to all of us, regardless of what path he may take. God bless you, Mike, and good luck.

Mr. SMITH of Michigan

Mr. SMITH of Michigan. Mr. Speaker, a word on Social Security. Today the Social Security trustees released the annual report on their new projections when Social Security runs short of money to pay benefits. Because of the economic growth, because of the good economy with more jobs and higher incomes, they are now projecting that we are going to have an extra year or so before Social Security has less tax revenue coming in than is required to pay benefits. We still have a very, very serious problem. Mr. Speaker, I urge my colleagues in the House and the Senate, I urge the President not to use this as an excuse to delay and put off and not deal with the serious problems of Social Security. The current good economy is an opportunity to move ahead with long term solutions giving more flexibility for transition. Mr. Speaker, Social Security is one of the important problems that is facing us right now with an unfunded liability of over $3 trillion. Let us move ahead aggressively with a solution and really put Social Security first.

Mr. SMITH of Michigan

Mr. SMITH of Michigan. Mr. Speaker, there has been a lot of talk recently about what we are going to do to save Social Security. I would report to my colleagues this evening, Mr. Speaker, that today the Social Security trustees presented their new analysis of when Social Security is going broke; in other words, when there is going to be less money coming in from tax revenues than is required to pay current benefits. That projection indicated that we have maybe a year, maybe 2 years' additional time before less is coming in than is needed to pay benefits. I think today is a day that we should all remind ourselves of the real problem of Social Security. The estimate continues that the unfunded liability or the actuarial debt of Social Security is over $3 trillion. In other words, we would have to take $3 trillion today and put it in some kind of an investment fund to keep Social Security going for the next 75 years. The problem that we are running into, Mr. Speaker, is the demographics of Social Security. Social Security is a pay-as-you-go program where existing workers pay in their taxes, and immediately those taxes are sent out to existing beneficiaries. Because of that and because demographics have changed in the last several years, there are fewer and fewer workers paying in taxes to support an increasing number of retirees. Let me give my colleagues some examples of that changing demographics. In 1942 there were about 40 people working, paying in their Social Security tax for each retiree. By 1950 it got down to 17 workers working, paying in their Social Security tax for each retiree. Guess what it is today? Today, there are three people working, paying in their Social Security tax for each retiree. And the estimate is that by 2027 we will be down to two workers. What has happened is there has been a decline in the birth rate after the so-called baby boomers. Then additionally, there has been an increase in the longevity or the length of time people are expected to live. When we started Social Security in 1935, the average life span was 62 years old. So, therefore, since the retirement age was 65, that meant most people never lived long enough to collect anything from Social Security. Today the average life span at birth is 74 years old for a male and 76 years old for a female, but if one is I will use the word ``fortunate'' enough to reach retirement age 65, on the average, he or she will live another 20 years. So what do we do about this pay-as-you-go system? How do we change it? The estimates are that there is going to be less money coming in as taxes than is needed for benefits as early as 2007 to 2013. Sometime in that time period, there is going to be less money coming in than is required to pay out benefits. The longer we delay in solving and coming up with a solution for Social Security, the more drastic that solution has to be. I have the only bill that has been introduced in the United States House of Representatives that has been scored to keep Social Security solvent for the next hundred years. That is House bill H.R. 3082. But I also put in a companion bill a couple months ago, that is H.R. 3560, that says--in addition to keeping Social Security solvent for the young people and allowing them to own a private retirement investment account that bears money that if they die before age of retirement goes into their estate--this proposal says, ``let us start using some of the surplus money that is coming into the Federal Government.'' And we now expect the surplus this year, as we now define ``surplus'', to be upwards of $40- to $50 billion. So I say, let us start using some of that money to set up private investment retirement savings accounts for people that pay a FICA tax, for people that are working. Let us not put off this problem simply but let us take advantage of today's current positive economy, with more jobs and higher pay in many cases, to create a Social Security program that preserves benefits for current retirees, and makes sure that future retirees have even more savings when they retire. Mr. Speaker, let us do put Social Security first.

Mr. SMITH of Michigan

Mr. SMITH of Michigan. Mr. Speaker, I think it is reasonable to carry on the discussion of what has happened in the last 5 years. I was elected, and my first year in Congress was 1993. In that year we had a deficit under the unified budget of $322 billion. In the next, that year for the budget for 1994, President Clinton sent us a budget with a deficit of $265 billion, a deficit in terms of a unified budget. So it was not only on the $265 billion that we were short, it was also what we were short borrowing from the Social Security Trust Fund and the other trust funds of this country. I think, number one, we have got to start being very honest with the American people of what has happened. When the Republicans took the majority of this House in 1995, we changed the budget and started rescissions and started cutting down spending, getting rid of one-third of the staff in this Congress, cutting out committees, cutting out up to 200 different agencies and departments and divisions to try to reach a balanced budget. The Republicans really were demagogued in that election that eventually followed because we were doing all sorts of budget cuts, cutting down on the spending of the Federal Government in order to get a balanced budget. We ended up winning. We ended up in the spring of 1996 sending a reconciliation bill to the President saying the operational budget, to keep government open, to keep it operating, is not going to go into effect, Mr. President, unless you send Congress a balanced budget. Finally, the President did send Congress a balanced budget, and now we have moved ahead. We have reframed the debate in Washington, D.C. so both sides of the aisle are now saying, great, we need a balanced budget. Let us be more frugal in our spending. We have come a long ways, but we have still got a long ways to go. We have got a long ways to go because we are still borrowing the money that is coming in surplus from the Social Security Trust Fund to use for other government spending, and that has got to stop. Here is my proposal of how we stop it. I introduced the only Social Security bill that has been introduced in the last session of Congress three years ago and again this session that has been scored by the Social Security Administration to keep Social Security solvent. So if we really want to put Social Security first, let us stop talking about it and start doing it. Now that we are looking at a surplus in terms of the unified budget that is coming in this year, and the estimates are as high now as a $40 to $50 billion surplus. Let us start taking that surplus money and allowing workers in this country to have their own personal retirement savings account that will partially offset their fixed benefits and Social Security eventually when they are ready to retire. But giving these workers some of this surplus money that is coming in, which is, after all, overtaxation, allowing them to see the creation of wealth, allowing them to see the magic of compounding interest where our money can double every 4 or 6, 8 years; and when we are ready for retirement at age 65, we are going to see much more money in those funds. So with even a partial offset, in my bill that I call for using these surplus monies to beef up Social Security, to start down the road of solvency, I am suggesting that for each $2 these people earn in the investment market of limited investments, of so-called safe investments, for every $2 they earn there be a $1 offset in their Social Security benefits, so there is really a safety net. But what we have got to do is make sure that existing retirees continue to have the benefits that have been promised to them, but at the same time we make provisions that our kids and our grandkids and our kids' grandkids and great-grandkids can have an opportunity to have even more revenue returns in their retirement years. Look, we have got a demographic situation where there are fewer workers paying in their FICA taxes to more and more retirees. When we started out in 1935 we had an average age life-span of 62 years old. That meant most people that paid into Social Security all their working life never received any benefits. Now the average age of mortality, the life-span today at birth is 74 years old for a male, 76 years old for a female. But if we live to be 65 years old, then on the average we are going to live another 20 years. Let us get at it. Let us really put Social Security first.

Mr. SMITH of Michigan

Mr. SMITH of Michigan. Mr. Speaker, I rise to pay special tribute to four of my constituents who have demonstrated the true meaning of community service. So many people talk about the need to get involved and pitch in when they see a problem, but in my district is blessed to have four young people who put those words into action. This week, the Make A Difference Day committee, organized by USA Weekend, named the group of Christi Stoker, Natalie Eisenmann, Amanda Nicolai, and Stephanie Powell among ten recipients of a national award from the Make A Difference Day Foundation. These girls offered some helping hands to a homeless shelter in Toledo, not too far from their hometown of Blissfield, Michigan. The girls, who are 13, organized a coalition of community members to donate books, games, wallpaper, and other materials to make this shelter more of a home for the kids and their parents who sought refuge there. They ended up collecting more than $800 in contributions for the shelter. And, these special young people didn't stop there. They helped a young girl at the shelter and her mother find a place to live. The girls still stay in touch with the family to whom they gave this precious gift. Mr. Speaker, we are a nation that turns famous people into heroes--TV and movie stars and our national journalists. But to me, America's true heroes are those who devote time and energy in their communities to give or offer assistance and compassion to those who need it. Few people who have performed that task better than Christi Stoker, Natalie Eisenmann, Amanda Nicolai, and Stephanie Powell.

Mr. SMITH of Michigan

Mr. SMITH of Michigan. Mr. Speaker, I rise to pay special tribute to four of my constituents who have demonstrated the true meaning of community service. So many people talk about the need to get involved and pitch in when they see a problem, but my district is blessed to have four young people who put those words into action. This week, the Make A Difference Day committee, organized by USA Weekend, named the group of Christi Stoker, Natalie Eisenmann, Amanda Nicolai, and Stephanie Powell among ten recipients of a national award from the Make A Difference Day Foundation. These girls offered some helping hands to a homeless shelter in Toledo, not too far from their hometown of Blissfield, Michigan. The girls, who are 13, organized a coalition of community members to donate books, games, wallpaper, and other materials to make this shelter more of a home for the kids and their parents who sought refuge there. They ended up collecting more than $800 in contributions for the shelter. And, these special young people didn't stop there. They helped a young girl at the shelter and her mother find a place to live. The girls still stay in touch with the family to whom they gave this precious gift. Mr. Speaker, we are a nation that turns famous people into hereoes-- TV and movie stars and our national journalists. But to me, America's true heroes are those who devote time and energy in their communities to give, offer assistance and compassion to those who need it. Few people have performed that task better than Christi Stoker, Natalie Eisenmann, Amanda Nicolai, and Stephanie Powell.

Mr. SMITH of Michigan

Mr. SMITH of Michigan. Mr. Speaker, I rise to join the citizens of Hillsdale and Branch Counties to pay special tribute to our representative in the Michigan legislature. So many people talk about the kind of leader they want to represent them in government and Mike Nye fits that definition by every measure. This week, my friends in Hillsdale County will honor Mike Nye for his sixteen years of dedicated leadership in Lansing. They know, as I do, the few people have accomplished more in that time for the people of Michigan. Mike Nye's retirement from the state legislature is a great loss. As a member of the House, he fought for commonsense legal reform and worked to provide better health care to poor children and was the innovator of reforms that have resulted in a better education system for Michigan. Mike Nye's improvements in court reform, school reform, tort reform, and juvenile justice reform will be a continuing legacy of his knowledge, ability and leadership in the Michigan legislature. In an era of overheated rhetoric and blatant partisanship, Mike Nye stands out as a conciliator a legislator who brought people together. Mike Nye was often the man people turned to when they needed a leader to finalize and pass legislation. Mr. Speaker, my colleagues and I here in Washington can learn a lot from the service of Mike Ney. His contributors to public policy are complimented by his and his wife, Marcie's dedication to their community. Marcie's leadership in working in the prison system with her Kids Need Moms program is a great example of their commitment to help people. I know Mike's future contributions will be just as worthwhile to all of us, regardless of what path he may take. God bless you, Mike and Marcie and good luck.

Mr. SMITH of Michigan

Mr. SMITH of Michigan. Mr. Chairman, the first question it seems like we should ask ourselves: How do we most efficiently and most effectively get bridges and roads repaired in this country? One problem with the money coming to Washington and then going back to the States is there is too many strings attached when it goes back to the States. Gabriel Roth, in his book ``Roads in a Market Economy,'' estimates that the Federal regulations that go back with that money increase the cost of roads and bridges by 50 percent. Other road economists estimate that it is 40 percent. Talking about politics played, we use this money as blackmail. We say to States, ``Unless you do things our way, we're not going to give you the road money. Unless you do your environmental regulations our way, you don't get your road money.'' If we want to get rid of the politics, if we want to have more efficient construction and utilization to build a road and bridge system in this country that is badly in need of repair, then let us let the money stay in the States in the first place instead of running it through the Washington bureaucracy.

Mr. SMITH of Michigan

Mr. SMITH of Michigan. Mr. Speaker, if the gentleman would yield, first off, I want to tell everybody that might be watching this special order that we thank the gentleman from Colorado (Mr. Bob Schaffer) for providing this leadership. And anybody that does not know, the gentleman from Colorado, president of the freshman class, has really spearheaded this legislation through. I am just starting my sixth year in Congress. And what is great about the new freshman class is they bring in new energy and new ideas. So I commend the gentleman from Colorado on that. In terms of balancing the budget, I think this country needs to start making decisions of how big do we want government to be, how much of the money that we earn do we want to pay out in taxes? Of course, if you are an average American, you pay about 40 cents out of every dollar you earn in taxes at the local, State, and national level. Of course, taxes are especially appropriate at this time of year because most Americans, by the April 15 date, are going to be required to shell out of their pockets and pay money into the Federal Government in taxes. So I would just urge everybody as they look at their taxes, make sure that you look at your W-2 form. How much has already been deducted from your paycheck to send to the Federal Government, and how much has been deducted from your paycheck in the so-called FICA taxes, the amount that is deducted for Social Security and Medicare, because it is getting larger and larger. We have had a system of government where so often, the Members elected to the Congress, and even the President of the United States, they say, look, we are going to do more things for more people, and they do not say we are going to tax you more, or we are going to borrow you more so you have to pay more in interest. But it has become sort of a system where, if you come with more spending and more programs and more pork barrel projects, then you take these home to your districts and get on the front page of the paper, cutting the ribbon, or on television. So in the past, it has increased the propensity that you are going to get reelected if you do more things and spend more money and tax the Americans more. I think the Americans are starting to wise up to these pork barrel projects. I would just encourage everybody, as we go through the election process for this fall's election, that everybody start going to those debate meetings. Everybody start asking those Members that are running for Congress, look, when are you going to stop taxing us so much? Let us start keeping some of that money so that we can spend it the way we want to, or we can start saving it and investing it to help secure our retirement future.

Mr. SMITH of Michigan. That has got to be an ultimate goal. The other goal that the gentleman from Colorado and I both agree with is we have got to start paying down the Federal debt. Right now, the interest on that $5\1/2\ trillion that the Federal Government has borrowed represents 15 percent of the total Federal budget. So we are going to use a lot of this extra money that it looks like it is coming in in surplus and, to be sure, it is not a real surplus, because we are borrowing from the Social Security trust fund. I thank the gentleman from Colorado very much for participating in this hour.

Mr. SMITH of Michigan. So often what happens is, though we are not authorized under the Constitution to pass laws, what we do is a combination of bribery and blackmail in trying to impose the will of the Federal government on local jurisdictions. So we say, look, if you do it the way we in Washington think you should do it, if you do it the Washington bureaucratic way, then you can have some of the money back that you paid us in the first place in taxes. In the transportation bills in the past, we said, look, you cannot have the transportation dollars that you sent us in the first place unless you do such things as lower your speed limit. You cannot have the education money the President is suggesting unless you use it to build a building or unless you use it to do this or unless you use it for the things that we say. The propensity of Washington is that they are elitist. They think they can make the decisions better than the people at the State and local level. I think it is important that we start looking at reducing the tax burdens so the American workers can start experiencing the creation of wealth. If we would tax a little bit less, then they would have the opportunity to start saving and investing and see the magic of compound interest where, at some of the interest rate, some of the returns that we have experienced, for example, has been very astonishing. We need to give that opportunity for the creation of wealth to more people.

Mr. SMITH of Michigan. Yes.

Mr. SMITH of Michigan. Should all good causes be implemented into Federal law? And I think what I hear you saying is no.

Mr. SMITH of Michigan

Mr. SMITH of Michigan. Mr. Speaker, I would like to compliment the President for saying let us put Social Security first. I would like to compliment Senator Moynihan for moving the solutions of this issue to the front burner. I would like to invite my colleagues to really put Social Security first by co-sponsoring a bill with me today. The bill that I will be introducing accomplishes two major objectives. Number one, it provides that the money that we are borrowing from the Social Security trust fund this next year be marketable certificates. Instead of the nonmarketable IOUs, they would be marketable so we could, in effect, take it around the corner to the local bank anytime the Trust Fund needed that money for paying benefits. The other provision takes some of the surplus money and allows younger workers on a ten year pilot to invest some of that surplus money in their own 401(k)--Thrift savings-type retirement accounts. That will help in the long term to keep Social Security solvent and let these workers accrue more wealth than they would have under the current system. Mr. Speaker, I invite my colleagues to look at this bill and consider cosponsorship.

Mr. SMITH of Michigan

Mr. SMITH of Michigan. Mr. Speaker, I would like to spend a couple of minutes talking about the future of Social Security. Last Saturday there was a National town hall type discussion among citizens in 10 cities of the country linked by interactive television. The purpose was to discuss the problems of Social Security, and possible solutions. I compliment the Pew Foundation for starting this kind of discussion that I think is so vital in deciding how we make Social Security more secure. The first step is to understand what the problems are and understand the seriousness of the problems in terms of keeping Social Security solvent. I was asked to participate with President Clinton, with both of us making statements and listening to suggestions. Speaking at Cobo Hall in Detroit I said there were certain guidelines that need to be adhered to as we move ahead on solving Social Security. Number one, that it be bipartisan; number two, that we need to keep all solutions on the table in our discussions over the next several months in looking at the best possible ways to keep Social Security solvent; number three, that we do not reduce the benefits for existing retirees or near-term retirees; number four, that we have a system where our kids and our grandkids, and their children can have retirement incomes that will last them through their expected longer life span, and; number five, that we stop government using Social Security Trust Fund money in exchange for non marketable I.O.Us. Finely, that we have a system that is not going to be privitized, but rather a system that allows forced saving and investment in retirement accounts owned by the worker. Let me very briefly describe some of the problems in Social Security. Right now, because it is a pay-as-you-go program, where existing taxpayers pay in their Social Security tax and immediately that tax is used to pay out benefits, to existing retirees. It is sort of a pay-as- you-go system, in effect a Ponzi scheme. When we started this program in 1935, it was easy to keep the system going because actually at that time the average age of death at birth was 61 years old. That means most people never reached the age where they would draw any benefits. They would give up what money they and their employers had put into the system. Over the years since 1935, every time there was a little more money coming in than was necessary to pay out benefits, politicians in this city made popular decisions to expand the benefits. Every time there was less tax money coming in than required to pay out those expanded benefits, Congress and the President would increase the Social Security tax on working Americans. Actually since 1971, Social Security, taxes on these working Americans, has been increased 36 times. More often than once a year since 1971 we have increased the rate or the base on the Social Security taxes. We started out taxing 1.5 percent on the first $3,500. Now it is 12.4 percent on the first $68,000. I would like to suggest as I conclude this, Mr. Speaker, that Social Security in its current configuration is not a good investment. The National Tax Foundation estimates that anybody that retires after the year 2000 will receive back between a negative \1/2\ percent and a negative 1\1/2\ percent on the money they and their employers put into Social Security. So if you could take some of this money and allow as an option some of the younger workers to invest in any return that is going to be greater than that kind of negative return in Social Security, then we are much better off. I suggest, Mr. Speaker, that it is so vitally important to preserve Social Security that we forget the rhetoric and get down to business. We get down to the nitty-gritty of the alternatives of how we are going to make it work. I mentioned when we started the program in 1935 the average age of death was 61. Today the average age of death at birth is 74 years old for a male, 76 years old for a female. But if you are lucky enough to reach the retirement age, then on the average you are going to live another 20 years. There are fewer and fewer workers supporting more and more retirees. Hopefully voters, Mr. Speaker, will demand of the people running for office this fall that they have suggestions on how to proceed with this very serious problem of keeping Social Security solvent.

Mr. SMITH of Michigan

Mr. SMITH of Michigan. Mr. Speaker, this last Saturday, the Pew Foundation, responding to the President's comments in the State of the Nation address, had a forum where 10 cities in the United States were linked together in interactive television. In each one of those cities there were 10 tables. At each table there were 10 participants talking about the problems of Social Security and what we might do with Social Security. One thing that came from almost all the cities was that we should stop using the Social Security trust fund money to mask the deficit and that we should stop using, taking that money, and in return giving nonmarketable IOUs. One point I made on Friday night, the Pew Foundation called me and said that they understood the President had requested time and asked if I would like to also have 12 minutes of time making my comments as far as the situation with Social Security. The first thing I said was my concern about using Social Security trust fund money to really mask the deficit. Mr. Speaker, I suggested that we really did not have a surplus in this country and that only because this current year we are borrowing about $85 billion from the Social Security trust fund, next year we are going to be borrowing closer to $100 billion from the Social Security trust fund, that borrowing is what is allowing us to say that we have a balanced budget. I think it is very important that we stop, in effect, hoodwinking the American people. Even though it is nice to brag about a balanced budget, the fact is that the only reason we are pretending the budget is balanced is because we are borrowing all of this money from the Social Security trust fund. I told the people, I was at Cobo Hall in Detroit in Michigan, and I suggested that there has got to be several guidelines as we proceed in making sure that Social Security stays solvent. Number one, that it be bipartisan. Number two, that all possible solutions be kept on the table. Number three, that we do not reduce the benefits for existing retirees or near retirees. Number four, that we have some kind of a system where our kids and our grandkids and their kids and grandkids can expect retirement accounts that are going to last them through what is expected to be an even longer life span, and that we have a system that is fair and equitable. That we not privatize the system, but rather that we have a system that allows forced savings and investments in accounts that are owned by the individual workers that can accrue dividends throughout their working lifetime. I pointed out an interesting fact from what has been suggested by the Tax Foundation, and that relates to the fact that there is unlikely to be a positive return on the money that is paid into Social Security by the employee and the employer. They estimate that anybody that retires after the year 2000 will have a return of between a negative one-half percent and a negative 1\1/2\ percent. Another way of saying the serious dilemma of Social Security is that if a worker retires after the year of 2015, then they are going to have to live 26 years after they retire in order to break even and just get back the money they and their employer put in. Part of the problem is that when we started Social Security as a pay- as-you-go program where existing workers pay in their tax to pay for the benefits of existing retirees, the average age of death in this country in 1935 was 61 years old. That meant most people never lived long enough to collect anything from Social Security, but simply paid in their money. Now the average age of death is 74 years old for a male and 76 years old for a female. But if Americans are, I will say, lucky enough to live to retirement age, age 65, then on the average they are going to live another 20 years. At the same time, we have more people living longer, we are seeing a larger population that are retired because of the decline in the birth rate after the baby boomers of World War II, and we have a smaller and smaller number of people working. In 1942 we had 40 people working, paying in Social Security tax for each retiree. By 1950 it got down to 17 people. Today guess what it is. Today, Mr. Speaker, it is three people working, paying in their tax for each retiree, and what has happened is that we keep increasing the Social Security tax on that fewer number of workers. Since 1971 we have increased the Social Security tax 36 times. More often than once a year, we have increased the rate or the base. Mr. Speaker, in concluding, I suggest that we face up to the very serious problem that is facing us, both in Social Security, in Medicare, and that we not continue to put off the solutions but start talking about the best possible ways to do it, and we do it as quickly as possible.

Mr. SMITH of Michigan

Mr. SMITH of Michigan. Mr. Speaker, continuing the discussion on do we really have a surplus, yesterday the Congressional Budget Office estimated that this year we would have a surplus of $8 billion. However, this year we are borrowing about $90 billion from the Social Security trust fund, so we are hoodwinking the American people, pretending there is a surplus. We have come a long ways. We have cut down overspending by over $200 billion over the last 3 years, but it is not a surplus. We still have a long way to go, and it is important that we put Social Security first. Anybody that would like a copy of this survey, please let me know. I will include this for the Record. In this survey, the voters profoundly dislike using Social Security surpluses to subsidize the remainder of the Federal Government. Ninety- three percent want Congress to balance the budget without using the Social Security deposits. Let us still stay on track. Let us get a more efficient, more constructive government that is going to serve the needs of government at a lesser tax rate and more efficiently and not use the surplus to mask the deficit. We have asked questions about Social Security on three national surveys this year. The primary observations are: Voters profoundly dislike using the Social Security surpluses to subsidize the remainder of the federal government. 93% want Congress to balance the budget without using SS deposits. Voters overwhelmingly reject ``raiding'' of the Trust Fund. 74% approve of a new federal law prohibiting Congress and the President from raiding the Social Security Trust Fund to cover deficit spending. Voters are inclined to believe that the federal government is using Social Security Trust Fund surpluses to mask the size of the deficit. The President's credibility on Social Security is not secure. Voters would rather use the overall budget surplus to shore up Social Security than to cut taxes, pay down debt or spend on federal programs. Younger voters don't believe they'll get Social Security when they retire, and Republicans are especially dubious. Voters do not consider the Social Security system to be basically sound. Personal Savings Accounts is the preferred approach to strengthen Social Security. ------------------------------------------------------------------------

Mr. SMITH of Michigan

Mr. SMITH of Michigan. Mr. Speaker, I rise today to say a few words about a group of constituents in Saline, Michigan whose contributions to their community merit respect and recognition. Tom Kirvan is managing editor of the Reporter newspapers. His friends and colleagues have named him their Citizen of the Year for his tireless work on behalf of others. Through his involvement with Big Brothers/Big Sisters or the Council on Alcoholism, Tom has been in every way a true public servant. Rick Kuss is Saline's mayor and is well-known for his work on historic preservation and his efforts to improve Saline. Rick is a person with a great sense of community. The Chamber has rightly recognized his contributions by awarding him the Georgia A. Anderson Vision Award. Dale Rothfuss is a recipient of a Lifetime Achievement Award from the Saline Chamber. A retiree, Dale has spent his free time helping others at the area Senior Center, the American Legion, and Saline Community Hospital. Joann Steiner has also been awarded a Lifetime Achievement Award. A dedicated public servant, Joann has served the Department of Public Works for 35 years. I am proud to join the Chamber in commending her achievements. Mr. Speaker, in my opinion, one of the hallmarks of good citizenship is the willingness to take of your own time to devote to others. I therefore think it fitting that we recognize these four people for their significant achievements.