[Congressional Bills 107th Congress]
[From the U.S. Government Publishing Office]
[H.R. 4780 Introduced in House (IH)]
107th CONGRESS
2d Session
H. R. 4780
To reject proposals to partially or completely substitute private
saving accounts for the lifelong, guaranteed, inflation-protected
insurance benefits provided through Social Security.
_______________________________________________________________________
IN THE HOUSE OF REPRESENTATIVES
May 21, 2002
Mr. Matsui (for himself, Mr. Gephardt, Ms. Pelosi, Mr. Rangel, and Mrs.
Thurman) introduced the following bill; which was referred to the
Committee on Ways and Means
_______________________________________________________________________
A BILL
To reject proposals to partially or completely substitute private
saving accounts for the lifelong, guaranteed, inflation-protected
insurance benefits provided through Social Security.
Be it enacted by the Senate and House of Representatives of the
United States of America in Congress assembled,
SECTION 1. SHORT TITLE.
This Act may be cited as the ``Rejection of Social Security
Privatization Act of 2002.''
SEC. 2. FINDINGS.
The Congress finds the following:
(1) President Bush promised to partially privatize Social
Security, and appointed a commission to develop a plan on his
behalf.
(2) The commission developed three alternative plans that
would partially privatize Social Security.
(3) The plans divert substantial monies from the Social
Security Trust Funds to pay for the private accounts, which
threatens benefits for current beneficiaries by significantly
weakening the financial condition of the Trust Funds, in direct
violation of repeated assurances that current beneficiaries
would not be affected by privatization of Social Security.
(4) Plan 1 diverts Social Security revenues from the Trust
Funds to fund the private accounts, which worsens the solvency
of the Social Security Trust Funds by 25 percent over the next
75 years, demonstrating that privatization makes Social
Security's financing challenges more difficult rather than
less, and which would require across-the-board benefit
reductions of 20 percent over just the next 10 years in order
to fill the gap created by the diversion.
(5) Plans 2 and 3 also divert Social Security revenues to
private accounts, and in addition substantially reduce
guaranteed Social Security benefits for future retirees, as
well as for disabled workers and their families, and the
survivors of deceased workers.
(6) The plans' cuts in disability and survivor benefits
directly contradict the President's promise that disability and
survivor benefits would be preserved under privatization.
(7) Furthermore, these reductions in guaranteed benefits
apply to all workers, regardless of whether they chose to have
an individual account or not.
(8) On top of these reductions in the basic Social Security
benefit, all three of the President's privatization plans
impose additional reductions in Social Security benefits for
those who chose to have an account, so they would not receive
both their full Social Security benefit and the full proceeds
from the account, as many Americans have been led to believe in
the debate about privatization to date.
(9) Independent actuarial analysis by the Social Security
Chief Actuary shows the following:
(A) Plan 1 of the President's commission drains
$1.2 trillion from the Trust Funds over the next 10
years, a revenue loss equal to 20 percent of benefit
payments over the same period.
(B) Plan 2 reduces Social Security benefits for
future retirees by up to 46 percent, and drains $1.5
trillion from the Social Security Trust Funds in the
next 10 years.
(C) Plan 3 reduces benefits for future retirees by
up to 30 percent, it effectively raises the retirement
age, and it drains $1.3 trillion from the Social
Security Trust Funds in the next 10 years.
(10) Substituting private accounts for guaranteed Social
Security benefits increases financial risk for retirees,
disabled workers and their families; reduces Social Security
protections for women, low-income workers, and many members of
minority groups; and erodes benefits for the dependent children
of workers who retire, become disabled, or die.
(11) The President's plans have demonstrated beyond a doubt
the difficult tradeoffs inherent in privatization: cuts in
guaranteed benefits; new financial risks for workers and their
families; damage to the Social Security Trust Funds; and the
need for massive subsidies from general revenues to cover the
cost of the transition to private accounts.
(12) Moreover, other proposals to privatize Social
Security, such as the ``Social Security Guarantee Plus'' plan
or the ``Social Security Ownership and Guarantee'' plan,
establish private accounts that directly or indirectly reduce
Social Security benefits through clawbacks or benefit offsets,
thus placing on workers the responsibility to individually
assure their own retirement income, which is the very essence
and purpose of ``privatization''.
(13) Such privatization plans are not fiscally sustainable,
in that they require massive resources to finance the accounts,
accompanied by new Federal borrowing on an unprecedented scale.
According to independent actuarial analysis--
(A) the Social Security Guarantee Plus plan would
require $3.6 trillion in new Federal subsidies over the
next 40 years, which would equal $8 trillion if the
funds were borrowed, and
(B) the Social Security Ownership and Guarantee
plan would require new Federal subsidies whose
accumulated value would reach $20.4 trillion over the
next 75 years, plus borrowing of $21.3 trillion over
the same period.
Thus, their adoption would lead to deep cutbacks in guaranteed
benefits for current and future retirees, disabled workers and
their families, and the survivors of deceased workers.
(14) Therefore, these forms of privatization also do damage
to the Social Security Trust Funds and undermine Social
Security's ability to pay lifelong, guaranteed, inflation-
protected benefits.
SEC. 3. REJECTION OF PRIVATIZATION.
The Congress hereby commits--
(1) to preserve the guaranteed, lifelong, inflation-
protected benefits provided under title II of the Social
Security Act to retirees, disabled workers and their families,
and the survivors of deceased workers; and
(2) therefore to reject--
(A) the President's plans to partially privatize
Social Security, which would reduce the retirement
security of current and future beneficiaries, and which
would reduce guaranteed Social Security benefits for
retirees, disabled workers, and survivors;
(B) other proposals to privatize Social Security by
establishing private accounts that would undermine
traditional Social Security benefits, such as the
``Social Security Guarantee Plus'' plan or the ``Social
Security Ownership and Guarantee'' plan; and
(C) any and all proposals that would threaten the
ability of the Social Security Trust Funds to sustain
the lifelong, guaranteed, inflation-protected benefits
provided under the Social Security Act today by
establishing private accounts that divert resources
from the Trust Funds, require fiscally unsustainable
subsidies, or are integrated with Social Security
benefits or financing.
<all>
Introduced in House
Introduced in House
Referred to the House Committee on Ways and Means.
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