SOCIAL SECURITY ACT AMENDMENTS OF 1983

• Document Type: CREST
• Collection: General CIA Records
• Document Number (FOIA) /ESDN (CREST): CIA-RDP85-00003R000200130004-8
• Release Decision: RIFPUB
• Original Classification: K
• Document Page Count: 138
• Document Creation Date: December 21, 2016
• Document Release Date: October 29, 2008
• Sequence Number: 4
• Publication Date: March 9, 1983
• Content Type: OPEN SOURCE

Approved For Release 2008/10/29: CIA-RDP85-00003R000200130004-8
H 946
CONGRESSIONAL RECORD - HOUSE March 9, 1989
chairman of the Committee on Ways and
Means or his designee. At the conclusion of
the consideration of the bill for amendment,
the Committee shall rise and report the bill
to the House with such amendments as may
have been adopted, and the previous ques-
tion shall be considered as ordered on the
bill and amendments thereto to final pas-
sage without intervening motion except one
motion to recommit.
The SPEAKER. The gentleman
from Florida (Mr. PEPPER), is recog-
nized for 1 hour.
Mr. PEPPER. Mr. Speaker, I yield
30 minutes to my able friend, the gen-
tleman from Tennessee (Mr. QuiLLEN),
and to myself I yield such time as I
shall consume.
(Mr. PEPPER asked and was given
permission to revise and extend his re-
marks.)
Mr. PEPPER. Mr. Speaker, House
Resolution 126 provides for the consid-
eration of H.R. 1900, the Social Secu-
rity Act Amendments of 1983. By the
way, this is an historic day in our land,
Mr. Speaker, as we consider one of the
most important measures ever to come
before this House.
The committee bill proposes sub-
stantial changes in the social security
cash benefit programs, the medicare
hospital insurance program, the Fed-
eral unemployment compensation pro-
gram, and the supplemental security
income program:
Mr. Speaker, House Resolution 128
is a modified closed rule which is de-
signed to permit the House to proceed
to the consideration of H.R. 1900 in an
orderly and expeditious manner. The
rule provides 4 hours of general debate
to be equally divided between the
chairman and the ranking minority
member of the Committee on Ways
and Means.
There are several waivers of points
of order for violations of provisions of
the Congressional Budget Act. First,
the rule waives section 303(a) which
prohibits consideration of legislation
which provides new budget authority
or increases revenues in a fiscal year
prior to the adoption of the first
budget resolution for such fiscal year.
This waiver is necessary because var-
ious provisions of the bill provide for
increased revenues into the social se-
curity trust fund, effective in fiscal
year 1984, and as a consequence, new
budget authority automatically cre-
ated for fiscal year 1984. Since the in-
creased revenues and the new budget
authority flowing from those revenues
are first effective in fiscal year 1984,
and since no first budget resolution
for that fiscal year had been adopted,
the bill violates section 303(a) of the
Budget Act.
Second, the rule waives section
311(a) of the Budget Act which pro-
hibits consideration of measures which
increase spending in a fiscal year in
excess of the ceilings set forth in the
most recently agreed to budget resolu-
tion. The current level of spending is
over the budget ceiling for fiscal year
1983, and since this bill provides addi-
tional spending for fiscal year 1983, it
would be subject to a point of order
under the provisions of the Budget
Act.
The final budget waiver is of section
401(b)(1) of the act which bars consid-
eration of any legislation which pro-
vides new entitlement authority which
is to become effective before the first
day of the fiscal year which begins
during the calendar year in which the
bill is reported. This waiver is neces-
sary because section 401 of the bill
provides for an increase in the Federal
supplemental security income benefit
standard for individuals and couples,
effective July 1, 1983, and thus vio-
lates section 401(b)(1) of the Budget
Act. While the Committee on Rules
does not intend to routinely waive
these provisions of the Budget Act,
the Committee on Rules recognized
the need to support these emergency
waivers to permit consideration of this
crucial piece of legislation.
Mr. Speaker, House Resolution 126
waives clause 5(a) of rule XXI which
prohibits appropriations in a legisla-
tive bill. Various provisions of the bill
provide transfers of money from the
general fund to the trust fund, direct
payments from the trust fund or oth-
erwise constitute an appropriation
without any further action of the Ap-
propriations Committee, and thus a
waiver of clause 5, rule XXI, is needed.
This is a necessarily tightly struc-
tured rule to preserve the delicate bal-
ance of the compromise of the Social
Security Commission and the Ways
and Means Committee amendments.
However, the committee drafted a rule
to permit consideration of the two dif-
ferent approaches to resolving the
problem of the long-term social secu-
rity deficit. The bill shall be consid-
ered as read for amendment. The rule
provides that no amendments shall be
in order in the House or in the Com-
mittee of the Whole except: First,
Ways and Means Committee amend-
ments-and we were advised by the
chairman of the Ways and Means
Committee at the hearings before the
Rules Committee that the committee
has no amendments; second, the
amendment by Representative PICKLE,
which is printed in the CONGRESSIONAL
REcoan of March 8, 1983; and third,
my amendment printed in the CoN-
GRESSIONAL RscoRD of March 7, 1983.
These amendments shall be consid-
ered in the specified order, are not
amendable, but shall each be open to
debate for 2 hours. I would point out
to the Members that the Pepper
amendment would be in order even if
Mr. Picsa s's amendment is adopted.
Under the normal parliamentary pro-
cedure, the last amendment adopted
would be the amendment prevailing.
Finally, upon conclusion of the con-
sideration of the bill, one motion to re-
commit would be in order.
Mr. Speaker, H.R. 1900 is primarily
focused upon the refinancing of the
social security cash benefit programs,
and title I of the bill reflects the rec-
ommendations of the National Com-
mission on Social Security Reform.
The Commission recommended that
additional financing come from the
following sources: First, extension of
social security coverage; second, in-
creased revenues from the payroll tax
and general revenues; third, decreased
outlays through certain limited bene-
fit charges; and fourth, mechanisms to
automatically "stabilize" the system
and to assure benefit payments during
periods of poor economic performance.
The Commission also recommended
benefit enhancements targeted to cer-
tain divorced, disabled, and surviving
spouses, as well as workers who delay
retiring.
^ 1015
And, by the way, that is a very sig-
nificant part of the bill, because it
gives an incentive to the people to
keep on working rather than taking
their retirement benefits at an earlier
age.
For example, the present law pro-
vides for a 3-percent increase in pri-
mary benefits for every year between
65 and 70 in which retirement is de-
layed. The Commission recommended
and the Ways and Means Committee
has adopted the recommendation of
the Commission that the delayed re-
tirement credit be increased to 8 per-
cent annually. As a result, older per-
sons who remain in the work force
until age 70 would receive a 40-percent
bonus, whereas under the present law
these workers would only receive a
total 15-percent increase.
Title I of the bill addresses two-
thirds of the projected 75-year actuar-
ial deficit, and the entire short-range
(1983-89) deficit in the cash benefit
programs.
The remaining one-third of the long-
range deficit is addressed in title II of
the bill.
The revenue provisions of title II
raise average income to the system of
0.28 percent of payroll, and the benefit
provisions decrease system outlays by
0.43 percent of payroll. In general,
benefit reductions account for 60 per-
cent of the additional long-range fi-
nancing, while revenue increases con-
stitute the remaining 40 percent.
Title III includes the miscellaneous
provisions relating to cash manage-
ment contained in H.R. 660 introduced
by Mr. PICKLE. This title also embodies
some of the recommendations of the
Commission which have little or no fi-
nancing impact.
The consequences of the 6-month
cost of living, adjustment allowance
delay on lower income OASDI
beneficiaries are addressed in title IV
of the bill, which amends the SSI pro-
gram. Under the bill, an across-the-
board increase of $20 per month would
offset the impact of a 6-month cost of
living adjustment delay in both the
OASDI and SSI programs.
In short, what that means is that
the lower income social security
Approved For Release 2008/10/29: CIA-RDP85-00003R000200130004-8
 Approved For Release 2008/10/29: CIA-RDP85-00003R000200130004-8
H 948 CONGRESSIONAL RECORD - HOUSE
delay of the effective date of this pro-
vision until we come up with a new
civil service retirement program for
Federal employees who will be covered
by social security, or until the end of
1984, whichever date would be the ear-
liest, made the most sense.
Suggested by our colleague, the gen-
tleman from Minnesota (Mr. OSEB-
sTAR), this amendment would have
made coverage under social. security
for new Federal employees a certain
thing.
At the same, the Oberstar amend-
ment would have given those of us
who serve on the Committee on Post
Office and Civil Service a better op-
portunity to write a new civil service
retirement law for these employees. I
offered the motion in the Committee
on Rules to give Mr. OsaasTAa the
right to offer his amendment on the
floor of the House, but my motion was
not agreed to.
Nevertheless, Mr. Speaker, I support
this rule and I urge the House to
adopt the rule. I think it is important
for us to keep in mind our common
goal as far.as a social security financ-
ing package is concerned.
The Congress needs to reach a solu-
tion that will preserve the financial in-
tegrity of the social security system;
insure that benefits paid to current
beneficiaries will not be reduced;
insure that benefits are not cut below
their current levels; and insure that
the funding problems of future years
are met in the most fair and humane
manner.
^ 1030
Mr. PEPPER. Mr. Speaker, I yield 3
minutes to the able gentleman from
Maryland (Mr. BAxxas).
(Mr. BARNES asked and was given
permission to revise and extend his re-
marks.)
Mr. BARNES. Mr. Speaker, I thank
the very distinguished chairman of
the Rules Committee and one of my
heroes for yielding this time to me
this morning.
Mr. BARNES. Mr. Speaker, Federal
employee constituents have told their
Representatives in Congress that they
do not want new Federal hires covered
by social security. Federal employees
have been lobbying for weeks on this
issue. For weeks, many Members have
relayed two messages to their constitu-
ents: First, that the bipartisan agree-
ment would disintegrate if new Feder-
al hires were removed- from the pack-
age; and second, that there would not
be sufficient time to negotiate a new
bipartisan agreement if the first pack-
age fell apart.
This explanation has not been
warmly received. Social security cover-
age, to no one's surprise, is the No. 1
bread and butter issue for Federal em-
ployees. It threatens both pay and re-
tirement benefits. A great deal has
been written and publicized by both
proponents and opponents of coverage
in recent weeks on the impact of ex-
tending social security coverage to new
Federal hires. Much of what has ap-
peared has attempted to dismiss em-
ployee concerns as unfounded-based
upon misstatement of fact and distor-
tions about the intent of Congress.
Mr. Speaker, I believe that it is vital-
ly important that Members under-
stand the impact of extending cover-
age to new Federal hires. On January
1, 1984 new Federal hires must begin
paying 7 percent of their income to
social security and another 7 percent
to the civil service retirement trust
fund. We have chosen to extend social
security coverage to new Federal hires
well in advance of the development of
a supplementary pension program.
Such legislation should dovetail these
two very dissimilar retirement pro-
grams and insure that all Federal re-
tirees, present and future, could main-
tain retirement income commensurate
to what the Federal Government pres-
ently offers.
Therefore, Mr. Speaker, for the for-
seeable future, Federal employees en-
tering the service will have to pay
nearly one fifth of their net pay
toward their retirement at a time in
which Federal employee compensation
lags 20 percent behind comparable
wages paid in the private sector. Our
Federal retirement program, until re-
cently, attracted the Nation's finest in-
dividuals to Federal service. It offered
attractive, if deferred, compensation
that insured a dignified retirement fol-
lowing years of service, In the wake of
the social security amendments, Fed-
eral retirement would become the
single greatest disincentive to joining
Federal service. The fact that 94 per-
cent of all private retirement plans re-
quire no employee contribution em-
phasizes the point.
Current Federal retirees and Federal
employees nearing retirement have-ex-
pressed fears that extending social se-
curity coverage to new Federal hires
undermines the solvency of their re-
tirement trust fund. Their trust fund
is currently in excellent condition with
$109 billion securities reserves project-
ed for fiscal year 1984. Depriving the
trust fund of the contributions of new
hires would reduce the annual flow of
funds to the trust by $665 million in
fiscal year 1984. If no satisfactory sup-
plementary plan is enacted in fiscal
year 1985, the figure grows to $1.12
billion.
In short, retirees know with certain-
ty: First, their retirement system is
under attack. the administration
claims that Federal retirement is too
expensive and too generous; second,
Congress is moving legislation which
would reduce the flow of funds into
the retirement trust fund; third, a sup-
plementary retirement plan remains
an absolute unknown-and we now
have reports from the Senate that the
other body may not be willing to move
quickly to shape a new retirement pro-
gram, especially before a Presidential
election.
It seems, Mr. Speaker, readily appar-
ent why retirees balk when we ask
March 9, 1983
them to put their faith in Congress'
willingness to fully fund their retire-
ment program-as we promised to do
when they went to work for the Feder-
al Government. Pressured by continu-
ing huge budget deficits, the tempta-
tion to pare down Federal retirement
will continue to haunt employees and
retirees. They understand that inas-
much as their program depends upon.
Congress' will to fund it, the level of
congressional commitment must, in
turn, depend upon the outcome of po-
litical struggle and economic progress.
We have asked Federal employees
and retirees to buy a surprise package
with their limited incomes in the
midst of the worst economic times in
50 years.
For these reasons, I have tried to ex-
plore every possible way to delete or at
least delay implementation of new
hire coverage. The Federal Govern-
ment Service Task Force, which I
chair, has researched alternative
means to achieve the revenue gains
sought by the package in connection
with covering new Federal employees.
I sincerely regret that we were unable
to find a way to at least delay imple-
mentation of new hire coverage, a pro-
posal developed by my colleague, Ms.
OAxAR, so that we could have had time
to shape a supplementary retirement
plan and give employees and retirees
some peace of mind.
Since the rule provides Members
with no opportunity to act on issues
affecting the short-term funding of
the package, Members have been left
with no choice but to vote for or
against the package as a whole. For
Members concerned about the integri-
ty of the civil service retirement
system, such an absence of choice is
plainly intolerable. I fully recognize
the dangers implicit in expanding the
existing rule. Nevertheless, the leader-
ship has impressively demonstrated its
authority in successfully shepherding
this bill in a manner that insures its
passage.
I support the leadership's efforts to
pass this flawed, but important legisla-
tion in a timely and responsible
manner. Millions of retirees expect to
receive their social security checks on
time this summer. Their expectations
should not be displaced by anxiety.
Mr. Speaker, I would merely point out
to my colleagues that our responsibil-
ities do not end with passage of this
legislation. We have a continuing re-
sponsibility, as Board of Directors of
the Federal Service, to maintain the
integrity of a sound retirement
system.
Mr. Speaker, today we have reaf-
firmed our commitment to the Na-
tion's most important supplementary
retirement program. In opposing the
rule, I hope that the House affirms its
commitment to the Nation's most im-
portant pension program-civil service
retirement. It is not a program that
simply puts civil servants out to pas-
ture at the end of their careers. It is
Approved For Release 2008/10/29: CIA-RDP85-00003R000200130004-8
 Approved For Release 2008/10/29: CIA-RDP85-00003R000200130004-8
H 950 CONGRESSIONAL RECORD - HOUSE March 9, 1989
rather than later. This may come as
early as the next 3 to 5 years. This
view is shared by groups- as diverse as
CHART 1.-THE IMBALANCE OF H.R. 1900-THE RELIANCE Percent of Percent of
taxable
OF REVENUES total bill
the American Association of Retired [Expressed as percentage of the to_ savings in the NU
Persons, the National Federation of
Independent Business, the American
Farm Bureau Federation, and the Na-
Source: Based on figures of March 4, 1983, from the Committee on Ways
and ndurMum sing the estimates of the Office of the Chief Actuary, Social
a
tional Taxpayers Legal Fund. By the handed coverage .......................................... 15.1 18.9
report of the National Commission on ?i '"x"18 ( income tam) 51.6 4.5
Social Security Reform, we are told ram' ............ 10.4 1 1.3
that the short-run deficit, that is from TOW ................ -.......................................... 77.1 67.1
now until the end of the decade, is in
the range of $150 billion to -$200 bil-
lion. Yet, the package before us only
comes in at a net figure of $165 billion.
Mr. Speaker, there are alternatives
to this package which could be ex-
plored if the rule would permit more
open debate and greater consideration.
Many outside groups and experts have
come forth with their own thoughts
and recommendations. They are too
numerous to mention at this point,
but I would refer my colleagues to the
report of the Commission wherein var-
ious staff memoranda and reports are
cataloged, each of which explored al-
ternatives of various shapes and sizes.
The additional and minority views of
members of the Commission are also
fertile ground in the search for a more
balanced approach.
In general, the thrust of any alterna-
tive proposals would be to reduce
future benefit increases under social
security. No one, including this
Member from California, is advocating
the reduction of social security bene-
fits below those that are now paid to
our Nation's retirees. Much could be
done, however, along the lines of per-
manent reform of the cost-of-living ad-
justment mechanism, rather than the
standby "stabilizer" under the ways
and Means Committee bill that would
kic$ in after 1987 only if the trust
fund balance falls below specified
levels. Initial benefit amounts for re-
tirees into the future could also be al-
tered with sufficient lead-time to
permit individuals to adjust their own
financial plans for retirement. We
could also separate out the welfare
functions of social security from those
more directly related to pension Insur-
long-run reform might even expand
upon the existing individual retire-
ment account (IRA) program.
The Point, Mr. Speaker, is that we
do not lack other options and advanta-
geous alternatives. What we lack is the
political courage to see beyond the im-
mediate horizon and address the need
for structural reform of social secu-
rity, not just the infusion of yet more
revenue.
For all of these reasons, I must
oppose the rule and the legislation as
reported from the Committee on Ways
and Means.
CHART 2.-BREAKDOWN OF SOCIAL SECURITY ACT AMEND-
MENTS OF 1983, AS REPORTED FROM THE COMMITTEE
ON WAYS AND MEANS
Short term Percent of
(hill-) total
Summary
1. Expanded coverage ...................................... $25.0
N. Benefit changes (COLA) ............................. 39.7
Ill. Revenues (increased taxes) ...................... 85.2
N. General revenues........................................ 11.2
I. Expanded coverage:
New Federal employees ...................................
Nmryrofit awes ........................................
Prohidt lemdeahp d State and bpi
governnesd ................... -........................... Subtotal ........ ............................ -........ -.... N. Benefit cempuAw.
COLA Six-month delay ...................................
Needled termlit change ............... -...-............
subtotal....... _ ........................ -......... ...........
Shat run Lon term
(1983-90) (75 yr)
9.3
12.5
3.2
25.0
15.13
24.04
51.55
10.41
5.63
7.56
1_94
15.13
23.84
.20
24.0
N. Other: General revenue for military credit and
miscellaneous ....................................................... .03 1.3
Gross total .................................................. 2.34 100.2
Women's benefit changes ........................................ -.07 .....................
Increased delayed credit ........................................... -.10 ......................
Net total ..................................................... 2.17 ......................
Mr. PEPPER. Mr. Speaker, I yield 6
minutes to that great champion of the
cause of need in this House, the able
gentleman from Kentucky (Mr. Plut-
KINS).
(Mr. PERKINS asked and was given
permission to revise and extend his re-
marks.)
Mr. PERKINS. Mr. Speaker, I shall
vote against the modified closed rule
proposed by the resolution.
In my humble judgment, neither the
committee bill, the recommendations
of the National Commission on Social
Security Reform, nor the two amend-
ments that would be allowed-none of
these get to the heart of what is wrong
with social security.
At the very least, the Members
ought to have a chance to propose
meaningful amendments to H.R. 1900,
and to engage in full debate on the
long-range problem.
This bill is not going to cure social
security. No bill will cure it that does
Ni Revenue Ikovislons: not take dead aim on the illness that
Taxation of hag of SS benefits of "high
income" I ......................................... 27.3 16.52 afflicts the economy that supports
Payrol tax Increases ........................ -.......... -. 39.4 23.84 social security.
Tax an 304niebyed at same rate as
Gum .......................................................... 18.5 11.19 Notwithstanding the cheery bulle-
... 85.2 51.55 tins that come out of the White House
N. other: Gearel tea reimbursement b SS these days, the American economy is
trust haws for past military wage crafts........... 11.2 10.41 still sick. No amount of high pressure
Teas net of Increased beaeas for political hype from 1600 Pennsylvania
widowed and divorced women, costing Avenue is going to convince those 11.5
$1.5 billion) ................................................ 1165.0 ............... -..... million Americans standing in the un-
'The National Commission had estimated the short run (1983-89)
deficit at $1504200 billion.
CHART 3.-LONG TERaa BREAKDOWN
The revised estimate of the 75-year short-
fall, based upon the analysis of the Chief
Actuary of the Social Security Administra-
tion is 2.09 percent of taxable' payroll. The
long term breakdown of the contribution of
each of the elements of the bill is noted
below. They actually total over the 2.09 per-
cent, although on an estimated basis.
Percent of Percent of
tuft teal big
Met
L Expanded coverage:
New Federal employees ...................................
PrehRR tefmlhatel. d...Shale and IOd~
Borer W-L- .............................................
subtoal ......................................................
N. e x4 t10"
5x-month MA Si delay ..................................... .30 128 disability of its own.
NOrafal aewhs change ................................. .03 1.3 I am standing here today and telling
Return replacement rate from 2880-2008.... .43 18.4 you that if we do not get this economy
s ....................................................... .76 32.5 back on an even keel, there will be
pi Reverend I very few solvent pension plans any
Taxation of onetaN of SS bad ts of "high
income". .................................................
.61
26.1
FICA tax Naxeeaa (1980'x)........ _...... _......
.03
1.3
Tax an sefenNdeyed ......................................
.19-
8
1
FICA tm increase b 2015.......- ..................-
.28
.
12.0
&, tie .......................... _.... --....... -........ _
1.11
47.5
employment lines that recovery is
here.
In my'judgment, the President has
listened to advisers who are more in-
terested in the balance sheets of big
banks than they are in the welfare of
ordinary Americans. Lines of credit
are more important to them thasi lines
of unemployed.
One prominent economist after an-
other has told us during hearings
before the Education and Labor Com-
mittee that high interest rates-and I
mean real interest rates-are a major
factor in this sick economy.
Those high interest rates are forcing
business failures by the thousands all
across this country, and they are the
direct cause of the loss of millions of
American Jobs.
And that is certainly a factor in the
reason social security is suffering a
where in the country. Social security
will have plenty of company.
If we really want to cure the eco-
nomic illness, we will open up this leg-
islation before us today and reestab-
Approved For Release 2008/10/29: CIA-RDP85-00003R000200130004-8
 Approved For Release 2008/10/29: CIA-RDP85-00003R000200130004-8
March 9, 1988
lish machinery to control interest
rates, wages, prices, credit-right
across the board. .
Now, I can count. I know that the
probabilities are that this bill is going
to pass pretty much as it came from
the committee. It is much easier to go
on fooling ourselves than to take the
concrete action that is-needed.
? If, by some chance this rule is voted
down and we have a chance to offer
amendments, I will have an amend-
ment to provide for controls on the
economy.
Actually, this can be done fairly
easily. The language of the Council on
Wage and Price Stability Act is still on
the books. All we need is one sentence
to authorize the Council to Impose
mandatory economic controls with re-
spect to prices, rents, wages, salaries,
corporate dividends, and all other sim-
ilar types of economic efctivity.
And as for the all-important Interest
controls, all we need to do is to repeal
the expiration date of the Credit. Con-
trol Act which is already on the books.
This short, one-page amendment
would give the President all the power
he needs to get the economy under
control, to get people back to work, to
shorten the unemployment lines, to
get people to work building homes,
and making it possible for other
people to buy them.
I believe this is possible. I believe we
could act here today to turn the econ-
omy around, and that our action
would go a long way toward curing the
problems of the social security system.
Mr. Speaker, I am sure we all re-
member it was just a little over 5 years
ago, in December 1977, that we gave
final passage to a social security tax
Increase bill that was hailed at that
time as the answer to all of the sys-
tem's deficit problems until the begin-
ning of the 21st century, at least.
We said "We have saved social secu-
rity. We will not have to have any
more social security bailout legisla-
tion. Hooray for us."
We believed the propaganda that
was put out then, so we all voted for
the bill and went home for Christmas.
Well, as it turns out we did not do
anything of the kind. Here we are, 63
months late, puckering up to "save
social security" again.
I just. do not believe the country Is
going to have much confidence In.
what we do here today if we no not
bite the bullet and do what has to be
done.
We can make a start by voting down
the rule and by letting H.R. 1900 be
brought to the floor under conditions
that will at least permit the House to
debate the suggestions for improving
it that I and others have to make.
0 1045
Mr. PEPPER. Mr. Speaker, I yield 2
minutes to the able gentleman from
Minnesota (Mr. OBERBTAR).
Mr. OBERSTAR. I thank the gentle-
man for yielding.
Mr. ADDABBO. Mr. Speaker, will
the gentleman yield?
CONGRESSIONAL RECORD - HOUSE H 951
Mr. OBERSTAR. I yield to the gen-
tleman from New York.
Mr. ADDABBO. Mr. Speaker, I rise
in opposition to this rule and I strong-
ly urge my colleagues-to vote down the
previous question. It saddens me to be
in opposition to the House leadership
on such an Important question, but I
am fully convinced that this rule does
not allow the Members of this body to
work their will on a bill which may be
the most critical piece of legislation to
come before this Congress in this ses-
sion. It is a bill which effects all of our
citizens and carries severe economic
impacts upon those citizens well into
the 21st century.
With that in mind, I would have
thought that the sponsors of this leg-
islation would have allowed full discus-
sion on the many critical and highly
sensitive aspects which are included
within the bill. That the sponsoring
committee, the leadership, and the
Rules Committee decided against that
course of action is no substitute for
the fact that that would have been the
right way to proceed. Since they have
allowed the Members to vote on only
two amendments to the bill as brought
out by the committee, it Is my belief
that the rule is faulty and must be re-
jected. I say to my fellow Members
that to accept this gag rule is to fail to
perform your duty to your constitu-
ents and to all of the people of this
country who look to this body to cor-
rect the inequities In the social secu-
rity financing system, to assure the or-
derly payment of benefits to recipients
and to assure wage earners their sala-
ries will not be plundered.
This rule does not even allow the
Members the right to act on the most
basic questions which effect millions
of American workers; namely, the In-
clusion of Federal and postal employ-
ees and the Inclusion of all nonprofit
organizational emplpyees. It further
preempts the rights of State and mu-
nicipal governments to decide for
themselves whether or not they wish
to be in the social security program.
I think it must be stressed that
those of us who are opposed to the bill
as it now stands and who want to open
this rule so that correcting amend-
. ments can be offered are not against
the social security system.
I for one have been a strong advo-
cate of the social security system for
the 22 . years I have served in this
House and people. who will examine
my voting record will learn that I have
supported increases in benefits for
social security recipients without fail
throughout those years. My record of
support for the senior citizens of this
country stands second to none to
anyone serving in this body and I
reject the arguments that because
some who speak for senior citizens
support this bill that all of us must
fall in line with It.
I will say further- that the most in-
sidious turn of events has been the
ability of this administration to turn
senior citizens against Federal and
postal workers in this matter and vice
versa. These groups should be stand-
ing together because they are in gen-
eral the groups that this present ad-
ministration seeks to take benefits
from so that they might be given else-
where. This ploy, Mr.8pebaker, will not
hold up in the long run because the
goals and aspirations of each is inevi-
tably tied to the other. What we ought
to be doing is finds' a way to solve
the financial problems' of the social se-
curity system without bringing harm
to other Innocent, groups whose only
fault as far as I can "see is to be part of
a financially sound retirement system.
o~ Once
I have been saying
under i
the programs, under the
e
social security um were valid-
and- I believe they are-then it ought
to be the responsibility of the Federal
Government to fund those programs
as it funds any other worthwhile pro-
gram It operates. What we have done
Instead throughout the years Is to
seek to lay the costs of these programs
outside the normal budgetary process
each year and to lay the burden for
eso these onto the
payingpayrolltax for
f the . earner.
I do not believe to good faith of
this administratim, Insofar as the
needs and requireme$yfe ; of our senior
citizens are coneerrie4 Ulntil it became
a political embarr to it, the
present administratl more than
willing to cut bad[ is to social
security recipients an to eliminate a
number of Wbi(ler the social
security unit a Eves as we speak
today, throughout this. country help-
less citizens receive termination no-
tices of disability.. bents even before
an investigation has been conducted to
determine If they are receiving those
benefits properly. Is this the mark of
an administration with a kind and
warm heart for the a who can no
longer help themselvI do not think
so and it distinctly bothers me that
the leaders of this 1110un are so quick
to join with this Won to
bring a bill to the that contains a
political quick fix f a system that
truly needs a major overhaul.
There Is no doubt that the bill that
will be brought to the floor under this
rule is better than the elne which the
administration would have offered had
it controlled the House of Representa-
tives. But that is only a. marginal im-
provement and as it stands the inequi.
ties created by passage of this legisla-
tion would far outweigh the benefits.
I sincerely hope, Mr. Speaker, that
the House takes the courageous stand
of refusing to go along with this rule.
This entire charade has been s politi-
cal blitzkreig In which those of us who
have raised questions ! about the valid-
ity of what we are'-doing and the
extent of harm we are causing inno-
cent people have been! brushed aside in
the rush. to bring this bill to the floor
before reason canaaseft itself.
The previous question must be de-
feated. If it is not than this entire rule
Approved For Release 2008/10/29: CIA-RDP85-00003R000200130004-8
 Approved For Release 2008/10/29: CIA-RDP85-00003R000200130004-8
H 952 CONGRESSIONAL RECORD - HOUSE
must be rejected and this measure
sent back to the Rules Committee to
open it up so that everyone who has a
stake in what we do here can get a fair
hearing.
I thank the gentleman for yielding.
Mr. OBERSTAR. Mr. Speaker, I rise
on a matter of simple justice and
equity for Federal workers. There will
be no opportunity in this rule to give
them just one small measure of fair-
ness and that is to allow a period of
time for this Congress to fashion a re-
placement retirement pxosram for
Federal workers before this legislation
goes into effect and taxes new hires in
the Federal Government system. I ap-
preciate the remarks of the gentleman
from Missouri (Mr. TiY o$) earlier. I
made my case- before the Rules Com-
mittee. Apparentiy the deck was
stacked, the train was loaded, it did
not stop at any stations to let anyone
on or anyone off. And that is regretta-
ble. We ought to have the opportuni-
ty, this body ought to have the cour-
age to face up to one of the most
pressing social Justice questions and
that is double taxation of new hires in
the Federal Government system.
As the gentleman from Ohio yester-
day in the Rules Committee, Mr.
LATTA, pointed out, a person hired on
January 1 will pay 5.7 percent more in
taxes than the person hired on Decem-
ber 31 of the preceding year under the
provisions of this bill. That is wrong.
That means that out of the average
salary of a new hire which Is $14,800, a
worker will pay $2,072 In retirement
tax to the civil service retirement
system, OASI,? and medicare. Of that
amount, a worker will pay $1.136 in
civil service retirement, in addition to
the social security tax which that
person will pay. The lowest entry
level, GS-5, will have to pay an addi-
tional $935 in civil service retirement.
That is just not fair. We ought to
fashion a retirement plan that deals
with the two issues of civil service re-
tirement and social security retire-
ment at the same time. That could be
done in the timeframe of the amend-
ment which I proposed that the Rules
Committee allow for this body to con-
sider.
Regrettably we will not have that
opportunity. I mast ask for a vote
against the previous question and
against the rule.
Mr. QUILLEN. Mr. Speaker, I yield
2 minutes to the gentleman from New
York (Mr. CAS:NSY).
(Mr. CARNEY asked and was given
permission to revise and extend his re-
marks.)
Mr. CARNEY. Mr. Speaker, I rise in
strong opposition to the rule. I believe
that legislation of this magnitude
which affects every American is too
important to be considered under a
modified closed rule, allowing for the
consideration of only two amend-
ments. Members of this body who do
not serve on the Ways and Means
Committee have not been given ade-
quate opportunity to express either
their support of, or reservations of,
the various aspects of this historical
legislation.
The impact of this bill on all Ameri-
cans is as profound as it is complex.
The legislation today calls for a
change in the Government's long-
standing commitment to Federal em-
ployees. A change of this magnitude,
alone, deserves a separate vote.
There are other issues as well requir-
ing separate attention: Deferring the
cost-of-living allowance; the issue of
general revenue financing; the issue of
the ratio between taxes and benefits;
the extension of unemployment bene-
fits; the changes in medicare pay-
ments; and the changes in welfare
benefits. These are all concerns which
suggest that limited debate is inad-
equate to Insure full consideration by
this body of these issues.
Mr. Speaker, along with my col-
leagues, I am deeply concerned about
the -future of the social security
system. This program must continue
to operate so that our Nation's older
citizens will be guaranteed a secure
livelihood when they retire. However,
the provision in the bill which would
force future Federal workers into
social security, would not solve the fi-
nancial problem$ of that system, but
would bankrupt the fiscally sound civil
service retirement system. In essence,
the so-called universal coverage pro-
posal is a classic example of "robbing
Peter to pay Paul."
The National Conunnission on Social
Security Reform has asserted that the
inclusion of new Federal employees
under social security would generate
approximately $12 billim in revenue
for the system between 1983 and 1989.
Yet, some independent actuaries are
claiming that the real figure could be
much lower-as low as $4 billion.
In addition, the Commission, as well
as the Social Security Administration
actuaries, have projected a long-term
shortfall in the system. This problem
would occur at the same time Federal
and postal workers begin to collect
social security benefits. It is apparent,
therefore, that the inclusion of these
workers under the system would help
create a long-term funding problem in
return for a small stopgap infusion of
revenue.
I would also point out that the evi-
dence is clear that the enactment of
the universal coverage proposal would
endanger the civil service retirement
system. There is an ominous possibil-
ity that, without the contribution of
new hires, the civil service retirement
fund will face bankruptcy by the end
of this century. At that time, the bene-
fits would have to be paid out of the
U.S. Treasury, at a cost of at least
$185 billion, in constant dollars. In my
view, it is unwise to either force such a
financial burden on the taxpayer or
endanger the level of benefits that
have been promised to Federal em-
ployees.
Although the social security legisla-
tion before us provides for a new sup-
March 9, 1989
plementary retirement program for
Federal employees, the bill falls to de-
scribe such a system. We are kept in
the dark concerning the level of bene-
fits under a new pension program. We
are not told what contributions, from
the Government and the employees,
would be required to finance the
system. Congress, if you will, is being
asked to buy a "pig in a poke."
I maintain that it would be prudent
to at least delay the provision to in-
clude Federal employees under social
security until a supplementary pen-
sion program is developed. But, unfor-
tunately, this body has been denied
the opportunity to vote on an amend-
ment to delay the proposal.
Let us not go forth in haste and
commit mistakes that will jeopardize
the future retirement benefits of mil-
lions of older- Americans. Although
some of you may disagree with my
views regarding social security, I hope
you will agree that we should at least
have the occasion to pass judgment on
specific provisions of this legislation
that will affect so many. Both the
public's interest and democratic proce-
dure are ill-served when legislation is
placed on the fast-track without
proper scrutiny.
Mr. Speaker, as H. L. Mencken once
said, "For every problem there is a
simple solution-quick, cheap, and
usually wrong." So it is with H.R.
1900. I urge my colleagues to vote no
on this gag rule so that 435 Members
may more adequately express their
views on this issue.
Mr. QUILLEN. Mr. Speaker, I yield
1 minute to the gentleman from Penn-
sylvania (Mr. GxaAs).
(Mr. GEKAS asked and was given
permission to revise and extend his re-
marks.)
Mr. GEKAS. Mr. Speaker, I, too, am
concerned about the structure of the
rule and rise in opposition thereto. I
do so on the basis that if we did in-
dulge in the? present provisions of the
rule we will be withdrawing from the
Congress the right to exercise fore-
sight, for a change. It is absolutely a
truism that if we do not incorporate
into our total deliberations some as-
pects of what is going to happen to
the Federal civil service retirement
system, within a very short time after
today, then we are failing in our total
commitment to solve our totality of
problems with the various retirement
systems, including the social security
system. It seems to me that we ought
to have this go back to committee and
come forth with a plan that will take
into account what is the future of the
Federal civil service retirement
system; just as the Federal employees
themselves are saying what good is it
to make one system well while making
the other ill? It will hurt our taxpay-
ers in the long run if in the next few
years we are going to come back to
these tables to deliver another com-
mission report on what to do with the
Approved For Release 2008/10/29: CIA-RDP85-00003R000200130004-8
 Approved For Release 2008/10/29: CIA-RDP85-00003R000200130004-8
H 956 CONGRESSIONAL RECORD - HOUSE
funds is less than 20 percent. A catch-
-up benefit would be paid if the ratio
exceeds 32 percent.
The bill gradually increases the de-
layed retirement credit from 3 percent
to 8 percent per year between 1990
and 2010.
The bill includes in taxable income,
beginning in 1984, aportion of social
security benefits and tier 1 benefits
payable under the Railroad. Retire-
ment Act for taxpayers whose adjust-
ed gross income combined with 50 per-
cent of their benefits exceeds a base
amount of $25,000 for an individual,
$32,000 for a married couple filing a
joint return and zero for married per-
sons filing separate returns. The
amount of benefits that could be in-
cluded in taxable income would be the
lesser of one-half of benefits or one-
half of the excess of the taxpayers'
combined income over the base
amount. The proceeds from the tax-
ation of benefits, as estimated by the
Treasury Department, would be trans-
ferred to the appropriate trust funds.
The bill advances the payroll tax in-
crease scheduled for 1985 to 1984 and
part of the increase scheduled for 1990
to 1988. Conforming changes would be
made in the tier 1 Railroad Retire-
ment Tax rates.
The bill provides for a one-time
credit of 0.3 percent of wages to be al-
lowed against 1984 employee FICA
and tier 1 railroad retirement taxes.
Appropriations to the old age and sur-
vivors and disability insurance trust
funds would be based on a 7-percent
rate. Conforming changes would be
made in tier 1 railroad retirement tax
rates.
The bill provides that, beginning in
1984, the OASDHI rates for self-em-
ployed persons will equal the com-
bined employer-employee OASDHI
rate. In addition, self-employed per-
sons would be allowed a SECA tax
credit of 2.1 percent of net self-em-
ployment income in 1984, 1.8 percent
from 1985 through 1988, and 1.9 per-
cent thereafter.
The bill provides for a lump-sum
payment to the OASDI trust funds
from the general fund of the Treasury
for additional benefits and potential
taxes arising from gratuitous military
service wage credits.
The bill increases the Federal SSI
benefit payment by $20 a month for
individuals and $30 a month for cou-
ples, effective July 1, 1983, to cushion
the effects of the COLA delay.
We have learned some sobering les-
sons about the fallibility of economic
projections since 1977. Today we give
you no false promises about guaran-
teeing the solvency of the social secu-
rity system well into the 21st century.
We have based our decisions on
conservative, if not pessimistic, as-
sumptions regarding economic and de-
mographic performance.
We have designed a series of three
fail-safe provisions to assure full re-
tirement benefit payments-particu-
lary in the short run-should econom-
March 9, 1983
is conditions dramatically worsen. The Therefore, as the Nation's economy
first permits interfund borrowing from expands, and workers' productivity in-
the disability and hospital funds from creases, a slight increase in taxes will
1983 to 1987, with repayment of prin- not harshly affect workers.
cipal and interest no later than 1989. The bill then moderates future in-
The second credits the OASDI trust creases in real benefit levels, without
funds, at the beginning of each reducing their purchasing power. The
month, with the amount of payroll tax tax increase called for takes place at a
revenues expected to now in over that time when the scheduled tax burden
month. And the third requires the will be proportionately lighter for
ately to Congress any threats of short-
fall in the trust funds, along with cor-
rective recommendations.
Perhaps the most courageous choice
the House makes today is to reach
beyond the immediate deficit and con-
front the system's financial troubles
beyond the turn of the century. Solv-
ing the near-term financing crisis re-
sponds to the fears of those at or near
retirement age. Responding to the
deficit that looms in the next century
makes a promise to our children-
workers than it is right now. Those ex-
pecting to receive benefits in the next
century would be assured that the
system is solvent, while those who will
be working to support those benefits
will have the assurance that only a
modest increase in taxes will be re-
quired to maintain a sound social secu-
rity program for their parents and
them.
Under the rule, the House will vote
on two long-term alternatives to the
committee compromise. The first
would close the deficit gap by simply
many of whom doubt the system's ca-
workers.
pacity to pay benefits when they sing second d the
achieves tax the same end by
nd by
____L retirement ___ a
In that regard, the committee's bill
reaches beyond the commission's
report to confront the long-term-or
75-year-deficit-which rises sharply
after the turn of the century as the
"baby boom" begins to claim its retire-
ment benefits.
Agreeing that Congress must bring
the system into long-range balance
proved easier than agreeing on a par-
ticular formula.
The committee bill reduces initial
benefit levels by 5 percent in each of 8
years, beginning in the year 2000, and
increases the OASDI tax rate by 0.24
percent for employers and employees
in 2015.
A majority of the committee believes
that making slight adjustments in
taxes and benefits remains true to the
enduring theme of this social security
bill-to ask both those contributing to
the system and those receiving bene-
fits to share the price of long-term sol-
vency.
The committee's solution attacks the
problem head on by reducing overall
benefit levels through the formula.
The primary reason for the longrun
deficit is the increase in real benefits
guaranteed by the current benefit for-
mula. A minimum wage worker in the
year 2045 will get benefits with the
same purchasing power as a maximum
wage earner gets today. H.R. 1900 will,
therefore, cut back only slightly on
the future real benefit increases al-
ready guaranteed. Furthermore, this
reduction will affect all beneficiaries
in the same way, regardless of their
benefit level or work history, or when
they choose to retire.
The committee solution also raises
taxes slightly in 2015-the first in-
crease since 1990. Because social secu-
rity is a pay-as-you-go program, it is
reasonable to raise taxes from time to
time. In fact, future social security
taxes as a percent of GNP actually
fall, while the program's cost as a per-
cent of GNP remains fairly steady.
only raising the age at which full
benefits are paid. One proposal puts
the burden on future workers. The
other puts the burden on future
beneficiaries.
The committee approved two addi-
tional measures which we believe are
timely and necessary.
First, in response to the alarming
rate of unemployment and the hard-
ships faced by millions of unemployed,
the committee extends for 6 months
the Federal supplemental compensa-
tion program (FSC). This program,
which is due to expire on March 31,.
1983, will provide up to 14 weeks of
benefits to individuals who have ex-
hausted all other unemployment com-
pensation.
When this program was enacted last
fall, it was hoped that strong signs of
economic recovery would emerge
during the program's 6-month dura-
tion. Unfortunately, the unemploy-
ment rate remains over 10 percent and
holding. Over 11 million Americans
are out of work. Jobless workers are
exhausting their unemployment bene-
fits at the rate of 300,000 per month
and are depending on these additional
weeks of FSC in order to provide for
themselves and their families until
they find employment.
In addition, the committee was con-
cerned about the 1.2 million people
who will have exhausted their original
FSC benefits by April 1, 1983. A simple
extension of the program would not
help these individuals. Recent unem-
ployment statistics indicate that as
the economy improves, these long-
term unemployed individuals will be
the last to be rehired. For these rea-
sons, the committee bill provides up to
10 more weeks of FSC to individuals
who have or soon will have exhausted
their original FSC entitlement. These
additional weeks of FSC benefits will
help those who have been unemployed
for the longest period of time and who
are in the greatest need of assistance.
Approved For Release 2008/10/29: CIA-RDP85-00003R000200130004-8 r
 Approved For Release 2008/10/29: CIA-RDP85-00003R000200130004-8
H 958 CONGRESSIONAL RECORD - HOUSE
tion's recommendation, and on its
own, would not be supportable at the
levels provided.
The medicare changes are for the
most part worthwhile, and, although
they should have been handled sepa-
rately, their inclusion is not a bad
thing.
Overall, the choice may not be the
one each of us wants, but it is a clear
choice. If we vote, as we should, for
H.R. 1900, we can save the social secu-
rity system, absent some unusual eco-
nomic conditions. If this bill fails, we
will deserve the chaos that results.
Mr. ROSTENKOWSKI. Mr. Chair-
man, I yield 15 minutes to the gentle-
man from Texas (Mr. PICKLE).
(Mr. PICKLE asked and was given
permission to revise and extend his re-
marks.)
Mr. PICKLE. Mr. Chairman, I rise
in strong support of the bill. The re-
sponsibility this House faces today
goes beyond assuring our elderly that
their social security benefits will be
paid, and beyond that, assuring future
generations the social security pro-
gram will be there when their turn
comes. When we can pass this bill
today, and I hope we can pass it expe-
ditiously and with a minimum of bitter
debate, then we will have enhanced
confidence in our ability to govern.
And we will do more for our economy
than just about anything else we could
do.
More than passage of a social secu-
rity bill is at stake here, and pass a
social security bill we must.
Social -security affects 38 million
beneficiaries every . month, and
through them every American family.
It pays out benefits in monthly checks
of $170 billion a year, and an addition-
al $40 billion in medicare hospital pay-
ments. Any program this large gets to
be terribly important. Social security
is even more important because it is
not just large-it is also part of the
fabric of our family life and of the eco-
nomic life of our Nation.
We know the issues we face. We
have squeezed, massaged, molded, ig-
nored. and finally faced up to these
issues many times over in the past few
years. Simply put, social security
needs a substantial boost in this
decade and real structural reform in
the next century. The vote the House
Members face today is to do what we
can to insure social security benefits
for the coming years and the coming
generations. We must restore confi-
dence in our young wage earners.
Even before we begin, we have to ac-
knowledge the extraordinary coopera-
tion that goes into the shaping of any
major bill such as-this one. Republican
and Democrat, liberal and conserv-
ative, have come together to do what
is right-preserve social security, make
it strong, and restore the peoples' con-
fidence in her.
My own subcommittee-all the mem-
bers that have served this Congress
and last-have shown an extraordi-
nary courage, restraint, and willing-
ness to move forward for the common
good regardless of our personal prefer-
ences.
I pay my respects to the members of
my subcommittee, the gentleman from
Missouri (Mr. GEPHARDT). the gentle-
man from Massachusetts (Mr. SHAN-
NON), the gentleman from Georgia
(Mr. FOWLER), the gentleman from
California (Mr. MATSUI), the gentle-
man from Arkansas (Mr. ANTHONy),
the gentleman from Indiana (Mr.
JACOBS). These men have worked har-
moniously together to help us keep
this package together and advance it
to the floor.
My own chairman, the gentleman
from Illinois, Mr. DAN RosTENxowsxl,
has entered into this contest and
pushed and pushed to do what is right
and what is responsible. His leadership
has been more than essential. His
leadership has been important and
helpful and has been enlightened and
we cannot overplay the importance of
the role he has played, Mr. Chairman,
in advancing this bill to the floor.
I am mindful of the remark the. gen-
tleman made to the gentleman from
Texas and I reciprocate manyfold, but
I appreciate the gentleman's leader-
ship, Mr. Chairman. We have had co-
operation from the other side of the
aisle. We have had the clear thinking,
as usual, of the gentleman from New
York, BARBER CONABL.E, and we have
had excellent cooperation from the
gentleman from Ohio (Mr. GRADISON)
and the gentleman from California
(Mr. THowAs). We hive had the coura-
geous presentation and views of the
gentleman from Texas (Mr. ARCHER)
and the gentleman from Illinois (Mr.
PHILIP CRANE) and we have done it in
the spirit of cooperation, although we
might have had some differences, and
I appreciate that.
Other individuals from outside the
Congress have played key roles. In
particular we currently are indebted to
Alan Greenspan and the other mem-
bers-in and out of Congress-of the
National Commission on Social Secu-
rity Reform who took on an herculean
task and stayed with it until the last
moment-until the task was complete.
The National Commission put to-
gether from unacceptable provisions
an acceptable package,- and that is
what we must move forward today.
The bill presented to you by the
Committee on Ways and Means paral-
lels closely the recommendations of
the National Commission on Social Se-
curity Reform. It is a bipartisan bill. It
was reported from the committee by a
vote of 32 to 3, an extraordinary, an
impossible achievement.
While any one of us could make a
case of the harshness or the undesira-
bility of any one of the provisions in
this bill, taken together, it works.
Only one major question remains, and
that is for the House to work its will
on how to go about addressing the
long-term deficit. All of the options we
face there will raise the sufficient
funds. It is a matter of deciding what
March 9, 1983
is the route that will be believable and
acceptable to the public-what will do
the best job of restoring confidence in
this program.
The committee bill raises $165 bil-
lion in the short term between now
and 1989. It raises 2.12 percent of pay-
roll, which is slightly over the deficit
projected under intermediate assump-
tions into the next century. It diverges
from the Commission recommenda-
tions only where there seemed a clear
need to refine a recommendation to
make it more practically feasible or to
fill in actual gaps left to the Congress.
First, the bill has several provisions
extending coverage. It would cover
newly hired Federal workers, all non-
profit employees, Capitol Hill employ-
ees not participating in the civil serv-
ice retirement program, and all Mem-
bers of Congress. judges, and other
elected officials and high-level politi-
cal appointees. It provides- for the
elimination of the so-called windfall
benefits which accrue to individuals
who also work in employment not cov-
ered by social security and it would
prohibit State and local governments
from pulling out of social security.
These provisions, combined, raise $25.4
billion of the $165 billion in the legis-
lation and 0.47 percent of payroll, or
almost one-quarter of the long-term
needs of the program. Let me empha-
size that again, because there is much
rhetoric which has flowed around as-
serting that extension of coverage
would be bad for social security in the
long run. Extension of coverage is
good for social security both in the
short term and in the long term and
the facts are just indisputable on that.
It is the committee's belief that ex-
tension of coverage is good for the in-
dividuals involved as well, and I would
like to insert in the RECORD at this
point a letter from a career civil serv-
ant-and a great statesman-Mr.
Robert Ball, which addresses this
point. I would like also to insert some
materials which the Members-will find
useful in addressing the questions
which naturally come up regarding
the effect coverage will have on civil
servants and others involved and on
the Government.
WASHINGTON, D.C.,
February 17. 1983.
Hon. J. J. PlcKIZ,
Chairman, Subcommittee on Social Secu-
rity, Committee on Ways and Means,
Washington, D.C.
DEAR MR. Ciuuu AN: I fully support the
coverage of Federal civilian employees
newly hired after January 1, 1984, as recom-
mended by the National Commission on
Social Security Reform and the establish-
ment for such newly hired employees of a
benefit plan within the Civil Service Retire-
ment system that would build on social se-
curity coverage, Just as is the case with the
pension plans of private employers. I would
like to tell you why I take this position.
I spent most of my working career, 30
years, as a Federal employee, and although
during the last 11 years of that period I was
a Presidential appointee, I have always
thought of myself as a career civil servant. I
believe that the business of the United
Approved For Release 2008/10/29: CIA-RDP85-00003R000200130004-8
 H960
Approved For Release 2008/10/29: CIA-RDP85-00003R000200130004-8 , -
CONGRESSIONAL RECORD - HOUSE ' March 9, 1983
B. IMPACT ON CIVIL SERVICE RETIREMENT
SYSTEM (CSRS)
Coverage of new workers will not affect
benefits being paid out of the current CSRS
system, and current workers will continue to
pay their contribution to the system.
Revenues to the CSRS trust fund will be'
reduced as new workers pay into the OASDI
trust fund instead of into CSRS. The extent
of the reduction will depend on the nature
of the supplemental plan designed for new
workers. If this plan is part of the CSRS,
then the reduction will be less than 7%. It
should be remembered that the CSRS
system is primarily funded by general tax
revenues; out of an estimated cost of 36% of
payroll, only 7% is paid by employee contri-
butions.
Some of the 29% paid by general revenues
is interest on the CSRS unfunded liability
which is treated as an investment. Thus, re-
serves of the CSRS trust fund do not
depend on revenues coming in from outside
the Federal government; they are deter-
mined by the amount of benefit obligations
the system is calculated to have in the
future and the interest on those obligations.
Long-run CSRS benefit obligations (the
unfunded liability) will decrease as workers
receive more of their total pensions from
social security; the exact impact will depend
on what sort of supplemental civil service
pension is designed for the new workers.
Congress could appropriate funds to the
CSRS trust fund to make up for revenues
lost because of social security coverage.
However, there would be no real effect on
the security of the retirement benefits due
hr the future, since CSRS benefits are not
guaranteed by existing revenues in the trust
fund. but by the taxing power of Congress.
Civil service retirement benefits are entitle-
ments, similar to social security benefits,
and can be increased or reduced at any time
by Congress, regardless of the reserves in
the CSRS trust fund.
C. IMPACT On THE FUNERAL BUDGET
Covering new Federal workers under
social security does not change the total
amount being paid out in either civil service
benefits or social security benefits in the
short run; in the long run, there is a Savings
to social security.
The difference in revenue to the Federal
government would be between the 6.7 per-
cent workers now pay to social security, and
the 3.3 percent Federal workers now pay (7
percent to CSRS, 1.3 percent to Medicare).
If no change were made In the CSbRS law at
all, workers would pay both taxes; if a sup-
plemental plan to which workers contribut-
ed were enacted, some of this difference
would be made up. This difference in reve-
nue is not substantial.
Even if additional payments were made to
the CSRS trust fund to make up for losses
frogs social security coverage, the payments
would have no effect on the Federal deficit,
since general revenue payments into a gov-
ernment trust fund are inside the budget
and don't affect total outlays or total rev-
enues.
D. IMPACT ON AFFECTED WORKERS
Civil service retirees would not be affect-
ed; their retirement benefits now in the
future will depend on the Congress' commit-
ment to continue to pay full benefits.
Many Federal workers would be better off
if covered by social security:
(1) Social security provides family and sur-
vivor benefits with no reduction in the bene-
fit of the worker, unlike CSRS, which re-
quires retirees to take a reduced annuity in
order to provide benefits to their survivors.
(2) Disability protection under social secu-
rity requires recent covered employment, so
that workers leaving Federal service are
without disability protection for several
years.
(3) Over half of air workers who enter
Federal employment will eventually leave
Federal service with no eligibility for CSRS
benefits; if they take their contributions
with them, they receive no interest on con-
tributions after the first 5 years, or employ-
er-share on any contributions. Thus, their
eventual social security benefits may be
lower than if their Federal employment had
been covered, and they will not have re-
ceived any benefit at all from their contri-
butions to CSRS.
(4) The Federal employees who are low-
paid would receive the advantage of the
social security weighted benefit formula.
The Civil Service benefit formula gives a
greater advantage to higher-paid long-
career workers.
QUESTIONS AND ANSWERS ON CowERAGE OF
PEDERaL Wo18IEES UNDER SOCIAL SECURITY
EFFECT ON soCIAL SECURITY
Q. How can covering new Federal workers
under social security save money for social
security since these workers will draw bene-
fits out in the future? Won't this just make
social security's long-run problem worse?
A. Social security would realize a large
long-term savings from covering new Feder-
al workers:.28 percent of taxable payroll, a
sizable contribution to solving the 1.8 per-
cent long-term deficit. The long-term sav-
ings results mainly from two factors:
(1) Elimination of the windfall now availa-
ble to the large majority of Federal retirees
who collect social security based on very few
years of work covered by social security.
The weighted benefit formula treats these
workers like low-wage workers so that they
receive a relatively large benefit based on
many fewer years of covered employment
years compared to similar workers covered
their whole careers.
A recent study (Social Security Bulletin,
February 1983) has found that 73 percent of
as Federal retirees over 62 are entitled to
social security benefits, and that the per-
centage Is steadily increasing. Most of these
workers are collecting a heavily weighted
social security benefit that they paid rela-
tively little for, in comparison with a worker
in private industry who made similar wages
that were covered by social security.
This windfall means that all workers in
covered employment are subeidi$ing the
weighted benefits for Federal retirees,
whose civil service benefit is already sup-
posed to take the place of both social secu-
rity and a private pension. These weighted
benefits were meant for long-term, low-wage
workers with few other sources of retire-
ment income, not for retirees with pensions
that already are meant to replace social se-
curity.
(2) Another reason for the long-term sav-
ings to social security is that average sala-
ries for Federal workers are higher than
average covered wages. Therefore, higher
payroll tax contributions would be made
over the long term for Federal workers than
for a similar number of private sector work-
ers.
Q. Why can't you just eliminate the wind-
fall in the social security benefit formula
and leave Federal retirees' benefits alone?
A. The long-term savings could be
achieved in part by addressing the windfall
question alone, and changing the formula
for workers with non-covered empldyment.
However, no short-term savings would be re-
alized, and the Commission's consensus
package depends heavily on the immediate
revenues from coverage.
Furthermore, eliminating the windfall
would only reduce social security benefits
for those Federal workers who actually do
qualify for civil service retirement benefits.
It would do nothing for the majority of Fed-
eral workers who leave Federal service with-
out qualifying for civil service retirement
benefits. Over half of all Federal workers
never collect anything from CSRS: they are
the least likely to have social security cover-
age when they leave Federal service, and
the most likely to need the protection social
security provides for families against dis-
ability and death of the worker. It should be
remembered that social security as the Na-
tion's basic social insurance system, was
founded on the principle of universal man-
datory protection for all workers. In the ab-
sence of universal coverage, both windfalls
for workers gaining protection under both
social security and CSRS, and gaps in pro-
tection for workers who move between the
two systems are created.
Q. What will happen to the retirement
benefits of new Federal workers who come
under the social security system?
The retirement benefits of new Federal
workers will depend on the supplementary
plan enacted in addition to social security
coverage.
Many Federal workers would be better off
if covered by social security:
(1) Social security provides family and sur-
vivor benefits with no reduction in the bene-
fit of the worker.
(2) Disability protection under social secu-
rity requires recent covered employment;
workers who leave Federal service are with-
out disability protection for several years.
(3) Over half of all workers who enter
Federal employment will eventually leave
Federal service with no eligibility for CSRS
benefits; if they take their contributions
with them, they receive no interest on con-
tributions made after the first five years, or
employer-share for any of their contribu-
tions. Thus, their eventual social security
benefits will be lower than if their Federal
employment had been covered, and they
will not have received any benefit at all
from their contributions to CSRS.
IMPACT ON CIVIL SERVICE RETIREMENT SYSTEM
(Cass)
Q. The CSRS trust fund is fully and
soundly financed now. Cowering new work-
ers under Social Security will cut off new
revenues from CSRS, and the CSRS trust
fund will eventually go bankrupt. How are
future retirement benefits of current work-
ers and retirees going to be guaranteed?
A. The basic answer to this question is
that the political will of Congress must
guarantee Federal retiree benefits in the
future, just as it does now.
Revenues to the CSRS trust fund will de-
cline as new workers pay into the QASDI
trust fund instead of into CSRS. However,
the CSRS system is primarily funded by
general tax revenues; out of an estimated
cost of 36% of payroll, only 7% Is paid by
employee contributions.
Reserves of the CSRS trust fund do not
depend on revenues coming in from outside
the Federal government; they are deter-
mined by the amount of benefit obligations
the system is calculated to have in the
future and the interest on those obligations.
A large part of the 29% paid by general rev-
enues is interest on the CSRS unfunded lia-
bility which is treated as an investment.
Long-run CSRS benefit outlays will de-
crease as workers receive more of their total
pensions from social security; the exact
impact will depend on what sort of supple-
mental civil service pension is designed for
the new workers.
Congress could appropriate funds to place
in the CSRS fund to make up for revenues
Approved For Release 2008/10/29: CIA-RDP85-00003R000200130004-8
 H 962
Approved For Release 2008/10/29: CIA-RDP85-00003R000200130004-8
CONGRESSIONAL RECORD - HOUSE March 9, 1983
Fifth, the bill enacts a series of
changes which are designed to contin-
ue smooth benefit payments this year
and insure benefit payments through-
out the decade; namely, it would pro-
vide for a general revenue transfer of
some $17.4 billion which will reim-
burse the trust funds for military
wage credits in advance and credit the
trust funds for uncashed OASDI
checks. Let me be very clear that these
provisions do not provide to the funds
general revenue that would not come
to them anyway and that these provi-
sions are necessary to continue retire-
ment payments through 1983 without
further depleting the other trust
funds.
The committee bill follows this with
a three-part procedure to safeguard
payments for the rest of the decade:
First, it would institute a new account-
ing procedure proposed by the admin-
istration for crediting tax receipts to
the treat funds at the first of the
month, when the money to needed for
benefit payments. This will have a sig-
nificant impact an trust fumdb re-
serves, which will be very important in
the immediate years ahead. Second, it
would allow taterfumd borrowing be-
tween the funds for 1963-89. And
third, it would require the trustees to
report immediately to the Cbngress
with a spectre legislative plan of
action whenever the amount in any
trust fund is unduly small.
Sixth, the b@t makes several other
charges, some of which are of general
interest, but most of which are techni-
cal in nature. I mention only three
here.
INVESTMENT OF SOCIAL SECURITY TRUST FUNDS
The bill made several changes to in-
crease income and reduce public criti-
cisms.. The two most important
changes are:
First, investments would be made at
the higher of two interest rates, the
current law rate or a new short-term
rate;
Second, long-term obligations, that
is, from I to 15 years, would be elhnf-
noted and the rate earned by the trust
funds would change monthly.
ELDERLY AND DISABLED TAX CREDIT
The bill provides a new credit for
the elderly and disabled who do not re-
ceive social security. The credit is de-
signed to phi out at approximately
the same levels that taxation begins
for those who do get social security re-
tirement or disability benefits
The credit is equal to 15 percent of a
base amount which is reduced by
amounts received under social security
and half of adjusted gross income
above a certain point, $7,500/$10,000.
The base amount is $5,009 for a
single, $7,500 for a joint return.
? ELECTIVE COMPENSATION
Under a cash-or-deferred arrange-
ment (section 401(K)), a covered em-
ployee may elect to have the employer
contribute an amount to the plan on
the employee's behalf or to receive the
amount directly in cash. Amounts con-
tributed to the plan are excluded from
income tax and FICA.
Employees who participate in 401(K)
plans whose total annual earnings are
below the social security annual tax-
able wage base ($35,700 in 1983) or
whose contributions to the 401(K)
plan reduce the amount of their social
security earnings below the annual
taxable wage base forego social secu-
rity benefits which would have been
based on the amounts which they con-
tributed to the plan (up to the differ-
ence between his actual earnings and
the wage base).
Therefore, the participation of some
workers in a 401(K) plan-which is de-
signed to provide retirement income-
may actually result in the loss of cer-
tain amounts of social security bene-
fits (including. but not limited to, re-
tirement benefits).
In addition, similar elective arrange-
ments and tax treatment exist under
cafeteria plans (section 125)) (which
provide a choice between taxable and
non4axabie amounts) and tax-shel-
tered annuities (section 403(b)) (which
often take the form of salary reduc-
tion agreements).
The committee bill provides that, to
the extent that an employee could
have elected to receiv'g cash, employer
contributions to these three elective
compensation arrangements will be
treated as wages for social security tax
and benefit purposes.
This treatment is justified, in part,
on the grounds that when an employ-
ee is offered a c noire, between cash or
a fringe benefit that is eaeluded from
social security coverage and taxation,
he has "constructively received" the
amount of the cash. Under this view-
point, the employee is considered to
have been paid the cash and chosen to
spend it for the fringe benefit himself.
Since there is no exclusion for pay-
ments a worker makes from his own
funds to these benefits, the value of
the fringe benefit will be treated as
wages for social security coverage and
tax purposes.
Seventh, the bill takes perhaps the
most important step of all and, com-
bined with the rule and the floor
amendments to be offered. gives the
House a chance to determining how it
will. solve the remaining long term
needs of the social security program.
I say how, not whether, because we
must reduce the current long-term
deficit as best we can if we are ever to
restore confidence in this program.
The committee bill takes the route of
using a combination of benefit reduc-
tions and tax Increases. Two amend-
ments will be in order-one wholly to
raise taxes and one to raise the age of
fail retirement. Whichever route we
take, our victory will be that we will
resolve the current long-term deficit.
There simply is no question that
social security faces long-term prob-
lems.
It is true that, once we pass the
1980's, matters look fairly favorable
for the social security retirement pro-
gram for a number of years. But that
does not mean we should ignore the
long term. To do so suggests that
there is no firm basis or pattern to the
long-term projections and that the po-
tential imbalance, especially in the
later years. is caused more by putting
random numbers together than by dis-
cernible economic or demographic
events. The fact is the projected im-
balance in the final 25-year period of
the long-term projections is over 26
percent of program costs, way above
the 5 percent standard of leeway
which has often been used.
Moveover, this imbalance is driven
by already discernible demographic
circumstances. And it is not as far off
as many assume: Actually the first
wave of the baby boom generation
reaches retirement by 2008. And even
under intermediate assumptions,
outgo begins to exceed income some-
time between 2010 and 2015. The fa-
vorable financial projections for the
program beginning in the mid-1990's
and continuing into the first decade or
so of the next century rely on reserves
actually being built up sufficiently
during this period to carry the pro-
gram for several years. But these pro-
jected surpluses rely on real wage
growth averaging 1.5 percent per year,
when real wage growth for the last 30
years has averaged only 1.2 percent.
They also rely on a slight increase in
the birth rate and an no major break-
throughs in average mortality im-
provement.
All of this is simply by way of saying
that we must act. There is as much
reason to believe that the'long-term
problems of social security may not be
so long off as we might think as there
is to believe that things will improve
somewhat.
The people do not perceive social se-
curity as just Government welfare pro-
gram; every worker of every age is con-
stantly aware that he or she has a
stake in it. If we do not address its
problems when they are brought to
our attention. then the worker will
adopt an ever more guarded attitude
toward the program-to his detriment
and to the detriment of social security.
In summary, the hour has come. We
cannot go back to the drawing board
at this point because we do not have
time to put together a package of
amendments which can garner the
support of so wide a variety of groups
and indlviiduals as the one which is
before us today. The choice is not one
of our personal preferences. The
choice is whether or not we want the
checks to go out on time come July
this year. We have all had to swallow
hard on something in this package-
but as a package, it can hold up.
I strongly urge adoption of these
social security amendments.
^ 1130
Mr. ROSTENKOWSKI. Mr. Chair-
man, I yield 10 minutes to the gentle-
Approved For Release 2008/10/29: CIA-RDP85-00003R000200130004-8
 Approved For Release 2008/10/29: CIA-RDP85-00003R000200130004-8
H 964
tion, as I did when he gave me the
privilege of testifying before his sub-
committee, his words back in 1977 on
the subject of that bill that was sup-
posed to solve the problems.
The gentleman from Texas (Mr.
PICKLE) said:
In passing this bill, we can say to the
American people that we are putting social
security on a sound financial basis for the
next 25 to 50 years. Nothing can be more re-
assuring to the public than taking this
strong action.
Mr. Ullman, who then was the dis-
tinguished committee chairman, said
at the same time, "(this bill) puts us in
a surplus posture in social security for
the next 25 years."
When President Carter signed the
legislation in 1977, he assured all
Americans that the system was on
firm footing into the 21st century.
President Carter said, "Now this legis-
lation will guarantee that from 1980 to
the year 2030, the social security will
be sound."
Well, Mr. Chairman, obviously that
did not happen, and the guarantees
that we had at that time just have not
been brought to fulfillment.
What gives me additional concern,
Mr. Chairman, is that the committee's
report itself includes a letter from Mr.
Richard Poster, the Acting Deputy
Chief Actuary. In his memorandum,
Mr. Foster says this:
Thus H.R. 1900 as reported by the Ways
and Means Committee would substantially
improve the financial outlook for the
OASDI program. It must be said, however,
that this bill would not offer assurance that
the OASDI program would operate satisfac-
torily under adverse economic conditions.
What I am saying, Mr. Chairman, is
that I am prepared to support this
package. But I hope that the manag-
ers of this bill will be able to convince
us that this time, in 1983, the assur-
ances we are getting are more realistic
than they were in 1977. I think the
Members of the House deserve that
kind of consideration, I believe the
American people deserve that, and I
am hoping that the managers will be
able to convince this Member and
other Members that this is a package
that is fair and one that will definitely
work and solve the problems of the
social security trust fund.
Mr. CONABLE. Mr. Chairman, I
yield 3 minutes to the gentleman from
New Hampshire (Mr. GREOG).
(Mr. GREGG asked and was given
permission to revise and extend his re-
marks.)
Mr. GREGG. Mr. Chairman, I ap-
preciate the opportunity to address
this issue which I consider to be the
most critical issue this Congress will
address possibly in this decade, but
certainly in this session.
We have not seen a great deal of
leadership out of this Congress on the
issue of social security. In fact, this
Congress has over the last 2 years and
maybe the last 4 years cringed from
this issue for too long, hiding in the
shadows of political gamesmanship.
But for 36 million people who are on
CONGRESSIONAL RECORD - HOUSE March 9, 1989
the social security system and for 110
million people who must pay into the
.system, the issue of social security
cannot be ignored. It is to them the
key economic issue which the Govern-
ment addresses to them at this time.
Therefore, we as an institution have
the opportunity today to fulfill our
past history of leadership. As we look
at the history of this institution, yes;
it is one which has been carried on
mostly by perpetual motion, but in in-
stances throughout its whole history,
when it has confronted a crisis of ex-
treme proportions which have affected
a great majority of people, this institu-
tion has been able to rise up and to
make the difficult decisions, whether
those were the Great Compromises
before the Civil War, or after the Civil
War, during the period of Reconstruc-
tion, or whether it was during the
1930's when this legislature took so
many aggressive.steps to try to reverse
the trends of the Great Depression.
This is again an opportunity for
Congress to stand up and be counted
and to make the difficult decisions of
our time. We are going to hear today
many arguments about why this spe-
cific item of this compromise is wrong
or that specific item of this compro-
mise is going to fail to carry it to its
fruition. But the simple fact is that if
we are going to bw honest and we are
not going to play hypocritical games,
this is the only proposal before us
which has an option of survival. This
is the only proposal which this Con-
gress can legitimately say it is willing
to address to allow a correction in the
social security system which will cause
the survival of that system.
If we ignore this compromise, if we
reject this compromise because we do
not like this item or that item, then
we will have failed as a body to have
taken the option of delivering a rea-
sonable response to one of the most se-
rious problems which this country
faces and which the people of this
country face.
I call upon the Members of this Leg-
islature to look to our past and recog-
nize that, we have an obligation here,
an obligation which is written in the
words of Daniel Webster, the words
that are above us from a great states-
man, one who came from New Hamp-
shire. "Let us leave here and perform
something worthy to be remembered."
Mr. Chairman, this is our opportuni-
ty to perform for my generation and
for future generations which will be
part of the social security system
something worthy to be remembered.
Mr. ROSTENKOWSKI. Mr. Chair-
man, I yield 15 minutes to the gentle-
man from Tennessee (Mr. Foan).
(Mt. FORD of Tennessee asked and
was given permission to revise and
extend his remarks.)
Mr. FORD of Tennessee. Mr. Chair-
man, I thank the chairman of the full
Committee on Ways and Means, the
gentleman from Illinois (Mr. RosTEN-
xowsxl), along with the chairman of
the subcommittee, the gentleman
from Texas (Mr. Picxi.E) for their ef-
forts. I would like to commend the two
of them, as well as my other col-
leagues on the full Committee on
Ways and Means.
Mr. Chairman, I rise to go over title
IV and title V of the bill that is before
the House today.
0 1150
Mr. Chairman, title IV of the bill
would raise the Federal benefit stand-
ard for supplemental security
income-MI-by $20 for a single indi-
vidual and $30 for couples. The benefit
standard is the maximum amount of
881 payable. Currently, this is $284 for
a single individual and $426 for a
couple. This Increase in the Federal
SSI payment will take effect on July 1,
1983. The July COLA for SSI will be
delayed until January 1984 in the
same manner as the social security
COLA.
The SSI program provides income
assistance to poor, aged, blind, or dis-
abled individuals. 881 recipients re-
ceive a cost-of-living adjustment-
COLA-at the same time and in the
same amount as social security recipi-
ents.
Of the 4 million 881 recipients,
about 2 million receive both SSI and
social security income. Current law
"disregards" $20 of social security
income in determining SSI eligibility
for these concurrent recipients. Most
of the remaining 2 million SSI recipi-
ents are completely dependent on
their SSI income.
The Commission on Social Security
Reform recommended, along with the
6-month delay in the social security
COLA, an increase in the disregard
from $20 to $50. The purpose of this
was to protect those social securty re-
cipients receiving very low social secu-
rity payments from the loss of their
COLA. Such an increase in the disre-
gard, however, protects only half of
the SSI population, those that are re-
ceiving social security.
The committee bill delays both the
social security COLA and the SSI
COLA for 6 months. In order to pro-
tect the poorest individuals, the bill
raises the benefit standard for all SSI
recipients by $20 for single individual
and $30 for couples. This allows the
two systems, social security and SSI,
to remain on track, while more than
protecting the poorest recipients from
loss of their COLA in July.
Mr. Chairman, title V of H.R. 1900
extends for 6 months the Federal sup-
plemental compensation program.
This program, which is due to expire
at the end of this month, provides ad-
ditional weeks of unemployment com-
pensation to individuals who have ex-
hausted their regular State benefits
and any extended benefits to which
they were entitled.
As originally enacted, the FSC pro-
gram provides up to a maximum of 16,
14, 12, 10, or 8 additional weeks of
benefits. Under the extension con-
Approved For Release 2008/10/29: CIA-RDP85-00003R000200130004-8
 Approved For Release 2008/10/29: CIA-RDP85-00003R000200130004-8
H 966
CONGRESSIONAL RECORD - HOUSE March 9, 1983
cally the Secretary could deny pay-
ment, in whole or part, or take other
corrective action for such things as un-
necessary admissions or other inappro-
priate medical or other practices.
In addition, the bill provides for rec-
ognition and use of State hospital pay-
ment systems where such systems
would not cost medicare more than
payments under the federal system
and meet certain other standards.
I view this prospective payment pro-
posal as a dynamic first step toward
the implementation of the market-
place forces of competition in the
health care field which will ultimately
stabilize health care costs in a manner
far more acceptable than the alterna-
tive of increased regulation. Our goal
is to continue to make quality health
care available to all, which goal is be-
coming increasingly imperiled due to
the spiriling cost of health care.
Mr. Chairman, the committee has
fashioned a good proposal and I urge
my colleagues to join with us in this
bipartisan effort to make economic
sense out of the way the medicare pro-
gram pays for hospital services.
01200
Mr. CONABLE. Mr. Chairman, I
yield 2 minutes to the gentleman from
Nebraska (Mr. DAUB).
(Mr. DAUB asked and was given per-
mission to revise and extend his re-
marks.)
Mr. DAUB. Mr. Chairman, I would
like to enter into a colloquy for a
moment with my good friend from
Texas (Mr. Piciax) chairman of the
subcommittee. I introduced a bill
which is know as the nonresident alien
social security bill, H.R. 765. I have
been most encouraged by the interest.
Some 111 Members, a very bipartisan
membership from the House, have co-
sponsored the legislation.
In the full Committee on Ways and
Means the gentleman may recall the
vote to include a provision to eliminate
certain nonresident foreign aliens
from social security benefits failed
after a tie vote 16 to 16. I would like to
ask the chairman of the subcommittee
what his intentions might be with re-
spect to hearings on that particular
matter so that it might enhance the
solvency of our social securtiy system.
Mr. PICKLE. Mr. Chairman, will the
gentleman yield?
Mr. DAUB. I yield to the gentleman.
Mr. PICKLE. I thank the gentleman
for his question. I have promised the
members of the Ways and Means
Committee and other Members such
as the gentleman who is speaking that
we will have committee hsirrings on
this subject, I hope in April or in May.
We do not have a specific plan ad-
vanced.
I think we are all agreed that we
must take action on this nonresident
alien problem. What we do not want to
do is take away benefits from the wage
earner who actually has earned bene-
fits. But we must stop any of the
abuses that may take place when
benefits go to survivors or to new
members of families. This area needs
to be tightened up.
We do not have a specific recommen-
dation from the Department of Health
and Human Services yet. We have
asked for it because we must do some-
thing abut this.
I had attempted at one time to.bring
this into the bill but we could not get
a consensus to move forward at this
time. But this must be done and I
hope we can hold hearings by April or
May.
Mr. DAUB. I thank the gentleman
for his encouraging statement of hear-
ings to be held at an early date, in
April or May.
There is approximately a $4 billion
savings that could be forged by that.
Today is important because it gives
the soolal security system a clean
slate-so to speak-with regard to its
financial soundness. This was some-
thing that the Congress had thought
it accomplished in the past, but each
time circumstances changed and the
system was again in need of additional
moneys.
Rather than rest on our laurels we
should today make a commitment that
we are not going to wait until the
system again is teetering on the edge
of bankruptcy before we initiate re-
forms. We know how small changes in
the system can amount to savings of
billions of dollars, and when those
changes are possible, they should
happen and should not be allowed to
go unaddressed until the last possible
minute.
One change that I recommend the
Congress address as soon as possible is
the issue of nonresident aliens draw-
ing social security benefits. This
matter is not unexamined. We have
the facts, and we know today that the
cost will be in billions of dollars over
the coming years. This is a cost that
the system, even in its newly found
health, cannot afford, and it is dollars
that would be better spent in the form
of benefits for benficiaries or left in
the pockets of the working Americans
who finance the system.
The lessons of the last 2 years
should not be lost. The American
people expect us to act responsibly
and promptly when their interests are
at stake. It would be a great tragedy
were we to see additional reforms ig-
nored now because we have solved
most of the problem for the time
being. Let us do the job the American
people expect from us today and not
wait until tomorrow when our backs
are pressed against the wall.
The alien social security bill which I
introduced, H.R. 950, would limit bene-
fits to nonresident aliens and their de-
pendents. Aliens would receive only
the amount of benefits they paid into
the system. Dependents would receive
benefits only if the relationship to the
beneficiary existed before the wage
earner's 50th birthday.
This legislation will correct the cur-
rent abuses to the system by alien
beneficiaries. Currently, benefits are
paid to 313,000 individuals living
abroad, amounting to about $1 billion
per year. In 1981, 62 percent of these
beneficiaries were aliens.
The General Accounting Office
(GAO) has reported that on the aver-
age, beneficiaries living abroad had
worked fewer years in social security
covered employment, paid less social
security taxes, and had more depend-
ents than the average social security
beneficiaries.
The average alien beneficiary living
abroad earned only one-half the quar-
ters of social security credits before re-
tirement as the average social security
beneficiary did. Also, alien dependents
outnumber wage earners by 169 to 100.
while there are only 40 dependents to
every 100 wage earners in the overall
beneficiary population.
The GAO estimates that the average
alien family receives about $23 in
benefits for every $1 in FICA taxes
paid before retirement. This is in
marked contrast to the $5 in benefits
for every $1 in FICA taxed for the
average social security beneficiary
family.
These facts clearly highlight the im-
portance of addressing this situation.
It would allow a substantial savings to
our social security system and show
Americans that we are truly prepared
to correct abusive social security situa-
tions in order to insure the solvency of
this important program.
As I said, today marks a return to
solvency for the social security system.
My support for H.R. 1900 is not un-
qualified. It had been my hope that
this body could produce a solution to
the financing problem without bring-
ing in Federal employees. It is my firm
belief that this will not result in a
better solution but will instead create
further problems in the future.
We have met our first responsibility,
however, and that is to bring back to
Americans the peace of mind they de-
serve regarding social security. And we
should never again allow the system to
deteriorate to the point where Ameri-
cans young and old are uncertain
about their future benefits under the
system. There is no question that
social security presents a continuing
problem for Congress and America.
We must retain a benefit level that ac-
complishes social security's purpose
without imposing a tax burden on the
American worker that is too high. Al-
ready we have a burden that is far
greater than could ha' a been imagined
20 years ago and could if driven higher
seriously affect employment.
H.R. 1900 is a consensus bill. There
is no one in this body who if given
carte blanche to write a social security
measure would have presented this bill
to the full House, but no such bill
would have had a chance of passing
the full House. This bill represents
compromise. It is a good compromise
that spreads the sacrifice evenly
throughout our society. The people in
Approved For Release 2008/10/29: CIA-RDP85-00003R000200130004-8
 Approved For Release 2008/10/29: CIA-RDP85-00003R000200130004-8
H 968 CONGRESSIONAL RECORD - HOUSE
to do so, but we ought to get out on
the table what he is talking about.
There is nothing in this legislation-
never has been, and under the rule
never can be-that affects the present
civil service retirement system. There
is no requirement that there be a sup-
plemental system instead of the pres-
ent systems. We have no intention of
writing something to replace the pres-
ent systems.
We have no intention of, touching
the existing systems in any way at all.
However. there is pending before
this House and before the Senate the
President's budget request. And in his
budget request he asks that In 1984 we
raise the employee's contribution to 9
percent and in 1985 to 11 percent: He
asks that we change the system to re-
quire annuities to be computed on the
average pay of the high 5 years of
service instead of the high 3 years. He
also asks for a 65-year-old retirement
age with a provision that you lose 5
percent of your pension base for each
year you are under 65 at the time of
retirement.
The result if you retire at 55 years of
age with 30 years of service would be
that your pension would be reduced by
50 percent. Those are not proposals
that are in the Ways and Means bill.
Those proposals have been rejected
out of hand by a bipartisan vote in the
Post Office and Civil Service Commit-
tee and in our report to the Budget
Committee, which is available for ev-
eryone. It is a matter of record. It has
gone to the Members. And to suggest
to these Federal workers that they are
in danger, by the enactment of this
bill, of hurting their pension, is not
serving your Federal constituents well,
sir. And I suggest that you take a look
at what is really happening and not
wave around some smoke and mirrors
fear.
The only person In this town that
they have to fear is your President
who wants to kill their pension.
Mr. PARRIS. Mr. Chairman, would
the gentleman yield?
Mr. FORD of Michigan. I yield to
the gentleman from Virginia.
Mr. PARIS. I thank the gentleman
for yielding.
I have the privilege of representing a
great number of Federal employees. If
there Is an overriding fear in the
hearts of most of them it is what I call
depending on your point of view,
phase in or the phaseout problem.
Mr. FORD of Michigan. We are not.
If I can claim back my time. You are
using the expression "phase in-phase-
out," there is no phasing in or phasing
out. Starting January 1, 1984, new
Federal employees will be covered by
social security, new Federal employees
will be covered by the existing pension
system. That is not phasing in, that is
clear, clean and simple. Nobody
coming to work for the Federal Gov-
ernment after 1984 has the right by
reason of anything In this bill to opt
out of the civil service retirement
system. Nothing in this bill permits
the Federal Government to reduce its
commitment to and its payment to the
civil service retirement fund and I
want you to quit using terms like
phase in. We are not giving Federal
employees an alternative, we are
giving them coverage under both sys-
tems.
Mr. PARRIS. Would the gentleman
yield?
Mr. FORD of Michigan. I yield.
Mr. PARRIS. I thank the gentleman
for yielding.
I think the real concern of most Fed-
eral employees is as their number is
reduced over the next 5, 10, to 20
years, this Congress, which cannot
bind future Congresses, the future
Congress may in fact as a result of the
reduction of their political leverage
then dump the balance of them into
social security to their detriment and
that is what concerns them and their
is no way the gentleman from Michi-
gan or the gentleman from Virginia
can preclude that from happening.
Mr. FORD of Michigan. I do not
want to turn what has been a fine bi-
partisan exchange here into a partisan
one, but the only persons in this town
talking about reducing future Federal
benefits are David Stockman and your
President. And we are, so far, success-
ful in resisting the most draconian
proposals that they have for reduc-
tion.
We will have 300,000 net new em-
ployees next year on the basis of what
happened this year and presumably a
similar amount next year, because we
lose about 5,000 people a week from
the Federal Government.
Mr. Chairman, unfortunately there
has been considerable misunderstand-
ing about a provision of this bill that
would place newly hired Federal work-
ers under the social security system.
At the same time, there has been a
lot of apprehension on the part of
Federal workers and retirees. This
indeed is understandable given the
present administration's assault on
their benefits.
I want to set the record straight.
This bill does not, and is not intended
to, affect in any way the existing civil
service retirement provisions or the
applicability of such provisions to the
newly covered employees.
Put simply, new Federal workers will
be required initially to contribute 7
percent of their pay to the civil service
retirement system, the same amount
as those now covered pay. Newly hired
employees will also be required to pay
the social security tax.
I want to assure my colleagues that
the Post Office and Civil Service Com-
mittee will- act deliberately and re-
sponsibly to develop a supplemental
plan that will be fair to new workers
coming into the system and insure the
integrity of the retirement fund for
present workers and annuitants.
We want to avoid, however, rushing
mindlessly and recklessly into adopt-
Ing a plan without benefit of study
and advice. Certainly we do not want
March 9, 1983
to create a monster that could cause
more problems than we are attempt-
ing to solve today. And that is precise-
ly what we could do through hasty
action.
Last month the Speaker, along with
Chairman ROSTENKOWSKI of the Ways
and Means Committee, and I sent a
letter to our colleagues explaining our
position on the question of extending
social security coverage to newly hired
Federal workers. I feel it is important
today to reiterate that position. We
said:
We support the recommendation of the
National Commission on Social Security
Reform to extend social security coverage to
newly hired Federal employees.
We believe that new Federal employees
who become covered under social security
should be provided retirement benefits com-
parable to those under the civil service re-
tirement system.
We oppose the Administration proposals
that would reduce civil service retirement
benefits and increase employee contribu-
tions to the civil service retirement fund.
We oppose the Administration proposal to
treat cost-of-living adjustments. for Federal
retirees differently from those of social se-
curity recipients.
We will oppose any proposal which would
threaten or,Liversely affect the financial in-
tegrity of the civil service retirement fund,
or the ability of that fund to continue to
pay benefits promised to participants in the
civil service retirement fund.
The bill before us today will allow us
to achieve these goals.
It is not encumbered with the heed-
less proposals of this administration,
espoused by OPM Director Donald
Devine.
All of us in Congress are keenly
aware of our Nation's tragic economic
dilemma and the urgent need to
reduce the towering budget deficits
created by this administration's costly
supply-side economics failure.
But where Federal workers are con-
cerned, enough Is enough.
For 2 years this administration has
used Federal workers and retirees as
convenient scapegoats. In the most
blatant demagoguery I have witnessed
in my political career, this administra-
tion has gone to extraordinary lengths
to portray Federal workers as indolent
paper shufflers who are overpaid and
underworked. It has done this, I must
conclude, to enlist public support for
draconian budget cuts against Federal
workers and those who have retired
from the Federal service-to reenforce
the popular misconception about Fed-
eral workers.
At this point in time, there can be no
doubt that the Reagan administration
has sought deliberately to make Fed-
eral employment less attractive.
And I cannot help but wonder what
price we will pay down the road in
terms of efficiency and quality. If we
continue this mindless diminution of
pay and benefits, how will we attract -
the best and brightest to work at NIH,
NASA, the Food and Drug Administra-
tion, the Department of Agriculture,
the FAA and all those other depart-
Approved For Release 2008/10/29: CIA-RDP85-00003R000200130004-8 I
 Approved For Release 2008/10/29: CIA-RDP85-00003R000200130004-8
H 970 CONGRESSIONAL RECORD - HOUSE March 9, 1989
But, it is we, the elected Represents- a hospital straightens out a broken leg details. I have already alluded to the
tives of the people, who must be held that will be worth approximately the problem of arriving at a fair price. The
accountable for actions affecting same amount of money, no matter originally proposed legislation had es-
social security. where it is done in one of the-nine re- sentially one price from coast to coast.
We cannot evade our responsibility gions and the other division is between Then it was decided by the Ways and
as lawmakers by simply ratifying the rural and urban hospitals. In other Means Committee, after a consider-
recommendations of an unelected words, the effort has been made to able amount of testimony, that at
panel. arrive at a fair price in the context of least for the first 4 years of this pro-
am responsible for representing more operates.
than 65,000 senior citizens, more than Now, what does that mean in terms
10,000 Federal workers, and tens of of Just commonsense and ordinary
thousands of farmers and small bass- logic? It means that if you get $50 to
ness men. set a broken leg and you can sharpen
I take that responsibility seriously your pencil and your costs fall below
and. therefore, must oppose this well- $50 that whatever the difference is be-
meaning measure. We must not rush tween your costs and that $50 is your
to Judgment on a proposal which does profit on the deal.
not have a strong likelihood of success If, on the other hand, your costs
and which does not adequately so- exceed $50, you have already made the
count for the added hardship for mil- agreement and you still have to accept
lions of Americans. the $50 in full payment as a hospital
^ 1220 and you gargle your loss.
Mr. ROSTENKOWKSI. Mr. Chair-
man, I yield 15 minutes to the gentle-
man from Indiana (Mr. JAcoss), chair-
man of the Subcommittee on Health.
Mr. JACOBS. Mr. Chairman, I hear
It said that this legislation Is a rush to
Judgment. There is another rush
under way and that is the trust funds
are rushing toward the cliff.
Before the end of this decade the
medicare trust, fund. If nothing is done
about it, is going to be in a very, very
deep well of red Ink. I think the reason
for that is the reason that the same
can be said for the profligacy across
the Potomac River in another depart-
ment of Government where cost-plus
contracts characterize the financial re-
lationship between that department
and its suppliers.
The cost-Phu system has character-
ized the medicare program since its in-
ception in 1965. Medicare is a good
idea, it has prevented a lot of unneces-
sary and tragic suffering In this coun-
try, but even a diamond has its flaws.
And in its concept the medicare pro-
gram by providing the cost-plus or re-
imbursement system to the hospitals
of the country has cost the taxpayers
more than it ought to and before this
decade Is out, it will be necessary to
say, "You ain't seen nothing yet." -
Here is a proposal by the administra-
tion to change the manner of payment
for medicare services to the providers.
And here is a happy coincidence where
the two political parties, where Con-
gress and the White House, can come
together on a proposal which makes a
lot of commonsense. What is the pro-
posal In essence?
Well, It Is somewhat complicated in
some of its detail, but it is quite simple
In its concept. It simply provides that
hereafter the medicare program, the
U.S. Government through the medi-
care program will compensate hospi-
tals according to a schedule of reason-
able prices for reasonable services. It Is
called diagnostically related groups,
and there are quite a few of them. But
each category is set up to make a rea-
sonable price in advance so that when
Now at this point the free enterprise
system may have come to your mind.
That is Just exactly what we have in
mind.
A cost-plus system means whatever
your costs are your profit is going to
be on top of that. There is no incen-
tive to use a sharper pencil, there is no
incentive to find out whether maybe
you are laundering towels too many
times, or too many towels, or you are
hiring too many people, or all the
other things that go into managerial
decisions.
On the other hand, If there is a
fixed price for your service, then you
are in the role of other people in busi-
nesses in this country and you have an
incentive to cut the costs.
Now, we have tried for more than a
decade to cut the costs of the medicare
system through the bureaucracy.
Somebody looking over somebody's
shoulder, somebody second-guessing
the hospital administrator or adminis-
tratrix as to what that person or what
that hospital ought to be spending.
And you get an army of bureaucrats,
as the word goes, you get confusion,
you get, as I say, bureaucracy looking
over the shoulders of the people who
are charged with the immediate re-
sponsibility of doing the Job and
trying to figure out without being on
the Job what makes sense in terms of
cost.
This really eliminates that problem.
This gives the incentive to the man-
ager in the first place to find out in his
or her own situation what the best
ways are to cut costs.
Now the next question that might
come to mind is: What about the qual-
ity of the service then?
If you have a situation where you
pay $50 to set the broken leg and
there is incentive for the provider to
cut his or her costs as much as possi-
ble, would they not start cutting into
the leg, would they not start cutting
into the service?
Well, there are provisions in this
proposed legislation to look after the
quality of the service also. As a matter
of fact, there are a great number of
gram there ought to be nine regions in
the United States where the costs are
determined, where the price will be de-
termined according to labor costs in
those respective areas, et cetera, other
costs in those respective areas.
It was recognized, too, that there
may be a fundamental distinction be-
tween rural and urban hospitals. That
category has been established, too.
^ 1230
We might hope that at the conclu-
sion of 4 years' time a national fair
price might be arrived at for the medi-
cal service, so that if there are ineffi-
ciencies indigenous to any of the given
regions, those Inefficiencies by grada-
tion over the 4-year period of time
might be eliminated; but due consider-
ation has been given to the providers
to phase in this commonsense ap-
proach from the taxpayers' point of
view.
That, in essence, is what we offer.
I think it is an idea not only whose
time has come, its time probably came
at the time that we began the medi-
care system, but happily it is an idea
that has converged, that is to say, var-
ious parties to this action, this cre-
ation of legislation, have converged In
the opinion that it ought to be en-
acted. It ought to be the least contro-
versial part about this legislation, and
yet at the same time It could very well
be one of the more salutary elements
of this legislation.
Mr. CONYERS. Mr. Chairman, will
the gentleman yield?
Mr. JACOBS. I yield to the gentle-
man from Michigan.
Mr. CONYERS. Mr. Chairman, I
want to compliment my colleague for
many of the issues he has raised in his
committee in connection with this leg-
islation.
Has the gentleman unfolded the
saga of Government employees being
folded Into the social security system
and does the gentleman still oppose
that provision?
Mr. JACOBS. I think the proper
answer to the gentleman is that it Is
not one of the provision of the bill
which animates me to support It. It Is
well know that I opposed it in the
committee. There is a rule that does
not allow an amendment now.
Haveing said that, I believe that
whatever odium I find in that provi-
sion is outweighed by a number of
other provisions which I think are nec-
essary.
My personal opinion Is, and I will
continue to hold this opinion and work
for reform in the future, my personal
opinion is that there are welfare ele-
ments to the social security program.
Approved For Release 2008/10/29: CIA-RDP85-00003R000200130004-8 I
 Approved For Release 2008/10/29: CIA-RDP85-00003R000200130004-8
H 972 CONGRESSIONAL RECORD - HOUSE March 9, 1983
Out of this melee, the President es- $20,000. This is the second highest tax I -commend the bipartisan commis-
tablished the National Commission on burden imposed by the compromise. sion for their proposal, though I do
Social Security Reform, whose pur- Although it is intended to recapture not agree with every element of the
pose it was to consider options in a some portion of the benefit that is un- proposal and I do not think it deals
nonpolitical environment and then earned, the real effect will be to penal- with the long-term problem.
make recommendations to the Con- ize those who have saved for their re- I do not think we are going to adopt
gress on hbw hest to shore up the sys- tirement. At a time when we should be a proposal that I agree with every ele-
tem's short-term and long-term finan- developing incentives to save and en- ment of, nor do I believe this Congress
cial future. Even their efforts were courage people to work to supplement is going to adopt one package that is
deadlocked for most of last year by their fetirement income, this proposal going to deal with the social security
the very dynamics that forced the throws a huge obstacle in the path of problem once and for all.
Commission's creation in the first those who attempt to do so. Second, I commend the members of
place. At literally the last minute, There is no question but that im- the Ways and Means Committee. I
they managed to stitch together a provements, if allowed, could be made commend our Speaker and the major-
series of recommendations which even to the committee's bill.. I would be ity leader of the Senate and our Presi-
the Commission conceded would not among the first to try to correct some dent for working out a package that
solve the long-term problems, and of the problems outlined above. But keeps social security on its feet and
which many analysts doubt will even improvements will not be allowed, and gives us time to come up with a real
solve the short-term problems. Now, at this point there is no choice but to solution to the problem.
with less than 6 weeks to go before the support final passage of the package. Mr. Chairman, there are those who
deadline, we are forced to consider the Although there are many reasons to say that we do not do anything here
package in a crisis atmosphere, with- vote against the bill, the one powerful, except raise taxes. I am willing to
out even a chance to try and correct overriding argument for voting in grant that the great burden of dealing
some of the more blatant problems on favor of the package is that we cannot with this problem has been placed
the floor of the House. let the system go bankrupt. We must again on the shoulders of those who
The choice is either to accept the act to insure that there is sufficient seem always to bear the burden for
committee's product, or to send 'the revenue coming in to at least guaran- our failure, the working men and
system into bankruptcy, a choice pur- tee benefit payments for the next few women of this country; but we do
posely scheduled this way by the years. The only alternative is chaos, adopt changes that are important and
Speaker and the Democratic Party and that is obviously unacceptable. changes that are equitable. We take
leadership. We should learn from the lessons of the first step here in broadening the
Despite the fact that, in general, the the past and begin immediate consid- base of the social security tax.
committee's bill relies too heavily on eration of a true reform package, one We have heard a lot of people stand
tax and revenue increases to deal with that will provide some measure of pay- u and talk about
the problem, there are two aspects of p asking ecur ty tax.
the proposal that deeply trouble me. roll tax relief while permanently guar- ployees to pay the social security tax.
The first is the huge tax increase anteeing future benefit payments Mr. Chairman, I think the time has
being levied on the self-employed, and based on earned income. come to ask every American to pay
the farm population in particular. The Mr. CONABLE. Mr. Chairman, I social security taxes. In 1937 when we
other is the taxation of benefits for in- yield 5 minutes to the distinguished were looking at what might be an ac-
dividual beneficiaries with incomes gentleman from Texas (Mr. Gxnnm). tuarially sound system as a supple-
above $20,000-$32,000 for a recipient Mr. GRAMM. Mr. Chairman, I rise mental income program, it made sense
couple. in support of this compromise pack- to exempt Federal employees from
The committee's bill would raise the age- social security taxes; but when today
tax on the self-employed to the full I would like to address those of my the system has clearly lost any actuar-
employer/employee rate-14 percent- colleagues here today who have come ial balance, when it represents a tax
which is in effect a 33-percent tax in- to the well and said that we ought to and not a retirement program, it
crease in a single year. That is a direct work on this package further and that makes no sense to exempt Federal em-
tax on labor at a time when we should we should try to work out another ployees from bearing the burden of
be enacting incentives to increase package. this tax and shouldering that burden
labor. It will fall most heavily on small Mr. Chairman, I think we have had with other Americans.
businesses, which have historically 2 years of an effort to work out a I am proud of the fact that the Con-
been the prime generator of jobs. In package to deal with the social secu- gress has not bailed itself out of this
particular, I am extremely concerned rity problem. I remember well 2 years package. I am proud of the fact that
about the impact that this will have ago when our President sent to the the first Federal employees to pay
on the farmers on my district, and the Congress a proposal to deal with the social security taxes will be Members
indirect impact on an already belea- social security crisis that we all agreed of Congress, so that when Members
guered farm economy. existed. I remember that package hit come to the well and pound their
Even though the social security tax here about 2 weeks after we voted on breasts and talk about social security
increases are offset to a certain degree the budget and I also remember that and dealing with the problem, they
by refundable income tax credits, at many of my colleagues jumped to the can now say, "Let's deal with it by
some point this can only have a nega- microphone and put the boot to the taking more money out of our pockets,
tive impact on the Federal deficit. As first wave of political footballs on the rather than just out of the pockets of
such, the tax will have a negative social security issue, an issue that those working people out there who
impact on employment, thus reducing came to be the dominant issue in the pay our bills."
the amount of real income flowing 1982 elections and an issue which de- I think the time has come to stop
into the trust funds. In addition, it feated many of the people in this body the bailout whereby people were aban-
moves us closer to the establishment who were willing to stand up and take doning social security and leaving
of a guaranteed annual income policy a position that we had a social security those Americans who continue to be
by putting the Government in support problem and that that problem needed covered with a heavier and heavier
of a refundable tax credit. You can be to be dealt with. burden on their shoulders. It was im-
sure that if there is any effort now or Mr. Chairman, I do?not think we are perative that we force our public em-
in the future to reduce or ameliorate going to improve our situation by de- ployees to come under the social secu-
the impact of this tax, I will lend my bating this issue any further. After 2 -rity system and to pay the tax along
support to it. years of making social security the No. with others.
The second provision that troubles 1 political football in the country, the It was also imperative that we take
me is the tax on benefits for individual time has now come to do something steps to prevent State and local gov-
recipients with incomes in excess of about the problem. ernment employees from bailing out
Approved For Release 2008/10/29: CIA-RDP85-00003R000200130004-8 I
 Approved For Release 2008/10/29: CIA-RDP85-00003R000200130004-8
H 974
The Aging Committee, on which I
have the privilege to serve, has looked
long and hard at social security, and I
am convinced after careful study that
this legislation must be defeated, for
many reasons.
This bill delays the cost-of-living in-
crease for all social security recipi-
ents-millions of whom are now under
the poverty level-by 6 months. It is
clearly a benefit cut. I have heard
from thousands of my constituents op-
posing this provision, and I believe the
Government ought to live up to its
commitments and not approve this
provision.
We are increasing taxes for all
American workers contributing to the
system under this bill by tremendous
amounts, on top of a tax bill that was
passed last year to increase Federal
taxes by $99 billion in just 3 years. We
are penalizing self-employed workers
and small businesses by drastically in-
creasing their contributions to social
security.
But that is only one side of the coin.
While we are asking all these people
to pay more into the system, the com-
mittee is asking us to reduce benefits.
Another proposal would have us in-
crease taxes even further.
We are also asking civil servants to
come under social security, yet we
have not even addressed the question
of what kind of pension system will re-
place the one they now have. Conse-
quently, we are asking them to pay an
additional 7 percent in tax to the Fed-
eral Government without even indicat-
ing what the future system will be.
What is worse, Mr. Chairman, is
that the American public will be
shocked this summer when they find
out the situation in medicare. Right
now, actuarial estimates show the
medicare- system will be over $400 bil-
lion in debt in 1995. Either the medi-
care tax must be raised, the system
must be changed, or some general rev-
enues must be used. Whatever hap-
pens, it is obvious that remedial legis-
lation will have to be considered and
approved by Congress.
There Is a Commission now studying
the medicare problem and they are
due to issue their report in the middle
of the summer. Clearly, it is possible
for'us in Congress to approve remedial
legislation for social security, and con-
sider the medicare report in conjunc-
tion with the results of the National
Commission on Social Security
Reform which has just completed its
work. But to stand here today and tell
the American people that if we pass
this bill, the system will be safe, is
simply not true.
This legislation is filled with provi-
sions that I cannot support: A 6-month
delay in the COLA allowance. A tre-
mendous tax increase on self-em-
ployed individi}als and all working
Americans. A benefit cut for middle-
age Americans, and a long-range tax
increase for all Americans. Taxation of
social security benefits in clear viola-
CONGRESSIONAL RECORD - HOUSE March 9, 1983
tion of the commitment of Congress
that benefits will not be taxed.
Mr. Chairman, I firmly believe there
are better solutions in the long-range
and more responsible policy alterna-
tives in the short-range. This bill
should not be approved. Instead, we
ought to address ourselves to the real
problems of the system. If the retire-
ment age is to be changed, let us be
honest with new workers. Let us tell
them that we will have a "new con-
tract" with them so that they will
know what to expect when they retire.
As it stands, this legislation does not
address the system's needs and it is
being considered under a rule that
does not allow Members to offer
amendments to improve.
I intend to vote against this legisla-
tion, and I urge my colleagues to join
me in defeating it.
^ 1250
Mr. CONABLE. Mr. Chairman, I
yield 7 minutes to the gentleman from
Missouri (Mr. GMH iwT).
Mr. GEPHARDT. Mr. Chairman, I
thank the minority side for yielding
this time to me.
Mr. LEVITAS. Mr. Chairman, will
the gentleman yield to me?
Mr. GEPHARDT. I yield to the gen-
tleman from Georgia.
(Mr. LEVITAS Asked and was given
permission to revise and extend his re-
marks.)
Mr. LEVITAS. Mr. Chairman, I rise
in support of H.R. 1900, the bipartisan
social security compromise. I oppose
the closed-rule procedure under which
we are considering this bill, and I
regret that we did not have a recorded
vote on that rule so that it could have
been defeated to allow us to vote on
many of the separate issues and alter-
natives that could be considered.
We are told that what we are consid-
ering here today is a social security
"reform" package, but it seems to me
it is more appropriate to say we are
considering a social security "rescue"
plan. I say "rescue" because the bill
we will vote on today is little more
than a temporary bailout proposal
that is only a first step to solving the
deep-seated, long-term, structural
problems that will continue to plague
our social security system long after
this legislation becomes law.
It is a real tragedy that the Presi-
dent and Congress are passing up this
opportunity to enact a true reform
package which would make the social
security system once again a fair, af-
fordable, and viable program. At best,
with this plan, we are rescuing the
system from short-term problems, but
we are doing.so in a way which is not
as equitable as it could be and in a way
which just postpones the problems.
Under this plan, we may be back in 2
to 3 years facing the same questions
and the same concerns about short-
falls and the same inequities in the
social security system.
It would have made more sense to
face the true problems head on, today,
instead of putting off until tomorrow
decisions on truly reforming the
system. Why just postpone cost-of-
living adjustments as this bill does,
when what we really need is a change
in the structure of the COLA formulas
and their relationship to the funding
mechanism. Why keep raising payroll
taxes, which are already overly bur-
densome, when what we really need is
to make structural changes in the
system to improve the management of
the funds, and establish some perma-
nent balance between the outflows
and intakes of the system.
Unfortunately, we have no choice
today but to consider and. vote upon
the "rescue" package before us. I was
disappointed that the rule for consid-
eration of this bill allows only two
amendments. I believe it would have
been more appropriate to consider this
bill under an open rule which would
have allowed consideration of amend-
ments to make this rescue plan a
reform plan. An open rule would have
allowed Members to record their-views
on addressing the long-term problems
of the social security system.
Now we are in the middle of this
debate, with only one alternative
before us. While it is not the best al-
ternative, it is the only choice we have
been given. There is no question that
something must be done to address
the immediate crisis of the social secu-
rity system. This bill will provide some
relief for the system and it will avoid
an immediate crisis. If a short-term fix
is all we can vote on, then we must
vote on it and I will vote to pass it. But
it is a shame that we have not been
given the opportunity to consider pro-
posals which could actually solve the
problems of the system, instead of just
postponing them. Once again, howev-
er, the political courage to bring true
reform proposals before the Congress
is lacking.
I have a sense of dejA vu as we
debate this bill today, for I recall simi-
lar debates in the past on similar plans
to solve the problems of the social se-
curity system. The words of Santaya-
na come to mind: "Those who disre-
gard the past are bound to repeat it."
And I anticipate that his words will
prove true once again, as once again
we only consider temporary fixes to
the short-term problems which will
lead us back to this same debate a few
more years down the road.
This problem with social security is
not a new one. In fact, as early as
1975, when I first came to Congress, I
was pointing out the need for congres-
sional attention to the social security
system, and the need for that atten-
tion to be immediate before we
reached the crisis situation we are in
now. In 1975, I stated on the House
floor:
"It should be a matter of the highest pri-
ority for Congress to begin to do something
about this problem now and not wait until
the crisis is upon us and emergency meas-
ures and ill-considered reactions are re-
quired.
Approved For Release 2008/10/29: CIA-RDP85-00003R000200130004-8
 Approved For Release 2008/10/29: CIA-RDP85-00003R000200130004-8
H976 CONGRESSIONAL RECORD - HOUSE March 9, 1983
Ing a balance between outflows and in- The opportunity to pass a true this is the best package at hand to do
takes. reform package has been passed up in the job. I honestly believe there is no
This legislation contains one propos- our haste to put together a rescue other package that can be put togeth-
al that particularly pleases me. I have plan. But I do believe strongly that we er this year, and I think this is our last
always been a strong advocate of must do something while there still is and best chance to solve the problems
making the system apply to everyone, time to save social security. The entire of the system.
and I have introduced legislation in package that we are voting on here It is a good package. It event dis-
this Congress and in previous Con- today is not completely satisfactory to y
greases that would bring about univer- me, but I am prepared to vote for it must psfor pain reform. is the price we
con-
sal coverage. I believe it is outrageous because we have no alternative at this tams pay us no Draconian . It benefit cuts benefit c fair. that
that the system does not now cover time. We must take some action. will s push the elderly pthat
Members of Congress, who snake deci- Therefore, I intend to support over the poverty
pport this line, nor does it protect retirees by hit-
sions on the system, or even the Com- social security "rescue package." ting workers with excessive tax in-
missioner of Social Security, who ad- I suppose that a dirty old plank is creases.
ministers the system. I am pleased better than no plank at all to the vic- It is my belief that this same spirit
that this legislation will include these tims of a shipwreck. And we must grab of compromise should extend to the
individuals, as well as new Federal that plank now, and keep the Ameri- long-term solution. I do not think we
workers and employees of nonprofit can public from drowning. should rely entirely on a single solu-
organizations. Mr. GEPHARDT. Mr. Chairman, I tion or ask any single group to shoul-
Universal coverage is appropriate be- think we all must remember that this der the entire cost. That is why I sup-
cause it is fair-not because it would is the second time since 1936 that the
bail out social security-which it Congress has considered and debated a port the approach in the eonenittee
would not. In fact, over the long run, major reform in the financing of social bill iothat ns and includes taxes s mix solve t the hefit -
it would be a financial washout with security. Some of us were here in 1977 term are ong-
the new payers becoming benefit re- when the same kind of debate went on here term to give problem. a We alittle e bit to asking eoevveyohe
cipients. The point is that there and when we felt we had fixed the roblem a the
should not be some elitist group of problems of social security until way p. We are asking everyone to do
people not participating in social secu- into the next century. Many of us something to address the long-term
rity while the rest of America does. were convinced that was the case. Ob- not and tasking he short-term problems. y are
I am pleased that this extension of viously, as we are here today, that was are asking everybody anyone to give everything;
coverage is being done in such a way not the case, and we face again the we are asking eto do their
that the civil service retirement business of reordering and restructur- diced a bit toward taxes, The short-term solution long-
system will be preserved for its present ing the financing of the social security term u res, and the a w rd
participants. I know that many ]Feder- system. eral solution is prejudiced toward
al employees are worried that bringing In my view, this restructuring is fan- benefit reductions.
new Government employees under perfect, but it is an important step in The point I am trying to make is
social security could jeopardize the the right direction. Its creation re- that I think it is fair, I think it is rea-
self-sufficiency of the existing civil flects credit on all who have addressed sonable; I think it is a good compro-
service retirement system. Actually, the problem, ranging from the Presi- mise, and I think it merits the support
the Federal retirement system is not dent's Commission to all of my col- of Members on both sides of the aisle.
currently self-sufficient. In fact, ac- leagues on the Committee on Ways bet me finish my remarks with just
cording to the Congressional Research and Means. I want to take this oppor- a few comments about the medicare
Service, employee contributions ae- tunity to commend the chairman of reform. I think it is also important to
count for only 13 percent of the funds the subcommittee, the gentleman note that while we are here doing the
currently being paid into the system. from Texas (Mr. PicKLE), for the second major reform in social security
Another 25 percent comes from inter- work, the perseverance, and the since 1936, we are also doing the most
est, and the balance comes from con- energy that he has contributed in major reform since 1965 in the medi-
gressional appropriations. Therefore, achieving the consideration of this care system. I stood on this floor in
the future solvency of the present civil most important bill, because without 1979 and argued against the Carter
service retirement system is dependent his leadership, I doubt that we could hospital cost containment bill. I said it
on the commitment of Congress to have gotten this far. would not work. I said it treated symp-
keep it funded. I believe that is an ab- In my view, social security is a valua- toms and not causes, and I said there
solute commitment which must be ble program that absolutely must be were better solutions. I have to admit
honored. preserved. It is part of the fabric of to the Members today that I was
Congress also has such a commit- our society. It is a successful program wrong because by not enacting some-
ment to make every effort to solve our that is, on a daily basis, doing great thing at that time, I think we missed
social security problems. We cannot things for Americans. However, it is an opportunity. I wish that we would
back away from these decisions. As I not the program and it is not the have developed a better alternative
said in the 94th Congress, we must get fabric of the program that is wrong. I than the Carter bill. I think that is
on with the job that has to, and must, think, rather, we are the victims of what we have before us today.
be done if we are to keep the social se- honest mistakes that Congress has Let us be clear about it. It is a regu-
curity system solvent, and keep our made in the past, including in 1977, lation. It is a lot of regulation, but in
unbreakable commitment to the and unprecedented economic events, my view it is better to have these regu-
American people. The best solutions and the two together have created the lations than the Carter cost contain-
may have been overlooked in our problem we face. ment effort, because this proposal is
hurry to rescue the program in this bi- I remember well, as I said, standing consistent with giving providers of
partisan compromise. Certain propos- here in 1977 and believing that we hospital and health care incentives to
als should have been considered, and were doing the best we could, that we be as efficient as they can be, which is
voted on by the entire Congress. But were doingthe right thing, and that it very different than the Carter cost
political courage was lacking to bring would solve the problem. It did not. containment formula.
these difficult choices to the floor. We made honest mistakes, we made I do not know if it is going to work.
I hope that this will not happen wrong assumptions, and the economy It suffers from having the same com-
again. As I said before, I believe we did not work the way we hoped it plications the Carter bill did, but if
may be back in just a few years to con- would. any regulation in the health care field
sider again measures to save the social So I speak today with humility, not can work, I think this is it. It deserves
security, system. I hope we will be saying that this is the best solution or a try.
braver than we were in 1977, and than even the final solution. Rather, I say Mr. Chairman, I think the medicare
we are being today. that social security must be saved and reforms, like the social security pack-
Approved For Release 2008/10/29: CIA-RDP85-00003R000200130004-8 i
 Approved For Release 2008/10/29: CIA-RDP85-00003R000200130004-8
H 978 CONGRESSIONAL RECORD - HOUSE March 9, 1983
For what good it would do it should
be implemented in 1985 instead of
1988. However, in the long term it does
nothing to restrain spending from the
fund. The actuaries do not show it
benefits the fund one single dollar.
No. 6. the windfall 'benefits to
noncovered employees, sometimes
called double dipping, is not fully
cured because H.R. 1900 embraces
only 50 percent of the remedy suggest-
ed by the National Commission.
No. 7, this bill does not repeal the
earnings limitation, a massive disin-
centive to working beyond retirement
years.
No. 8, there is in reality no "fail-
safe" really in the bill except to come
back to Congress, and that is exactly
what the Commission's recommenda-
tions hoped to avoid.
No. 9, with the changing economic
conditions of more and more women
working-over 50 percent in the work
force today-we have not made struc-
tural reforms necessary. Only short
shrift has been given to that problem.
In short, this package is not a
reform package and will not stand the
test of time. In committee I offered a
package that would continue social se-
curity on a basis that meets all of the
above objectives.
There is a positive answer to these
problems for those who have the cour-
age to embrace it. I am sad to say H.R.
1900 does not.
In 1784 Samuel Adams, speaking on
a major national issue said, and I
quote,
The necessity of the times demands our
utmost circumspection, deliberation, and
fortitude, for we must seriously consider
that millions yet unborn may be miserable
sharers in this event today.
I believe the impact of social secu-
rity Is our Nation's No. 1 economic
problem in the long term. We can do
better. I believe we must.
Mr. CONABLE. Mr. Chairman, I
yield 1 minute to the gentleman from
Arizona (Mr. RUDD).
(Mr. RUDD asked and was given per-
mission to revise and extend his re-
marks.)
Mr. RUDD. Mr. Chairman, 6 years
ago, the 95th Congress passed a social
security rescue package that was ad-
vertised as a long-term panacea for a
program headed toward bankruptcy.
That bill, which included major pay-
roll tax increases for the decade of the
1980's, was shortsighted and blatantly
ignored many of the very serious fun-
damental reasons the social security
program was becoming bankrupt,
It should come as no surprise to any
of us why the 1977 plan failed, and it
should be just as apparent why the
bill before the House today will not do
the job. It relies heavily on this never.
ending pattern of higher taxes. it clev-
enues, and the bill makes no attempt Needless to say, the tax side has taken
to correct some of the underlying the brunt of this choice. The com-
problems that have led this system to bind employee/employer payroll tax
the brink. has risen from 2 percent in 1937 to
While I do oppose the bill, H.R. 13.4 percent today, and under this bill
1900, as reported from the committee, that rate will climb to almost 16 per-
I urge my colleagues to support the amendment to be offered by Mr. Picxis, one of this body's foremost ex- perts on this subject. Raising the re- tirement age on a gradual basis, as his amendment would do, is about the most reasonable action we can take today. His proposal would up the re- tirement age to 67, phasing thischange in over a 22-year period, begin. ning in the year 2000. Demographic changes over the last decades alone have made a retire- age change essential if we expect social security to survive for future generations. In 1940, life expectancy was about 61 years for a man and 65 for a woman. By the year 2000, men reaching age 65 may be able to live an- 16.4 years while women may live another 22 years. Greater longevity is certainly goodnews for us, but it is bad new for, a re-
tirement tirement program using outdated facts. A gradual retirement age in- crease of only about a month per year, in place early retirement benefits at the current age of 62, will give future retirees plenty of time to plan for retirement and not affect those who are near retirement. startling statistic that has evolved since the inception of social se- curity is the wage-earner to benefici-
ary ratio. In 1945, we had almost 42 workers for every beneficiary of social security. Today, because of lower than birth rates and greater lon-
gevity. the ratio is about 3.3 workers per beneficiary, and dropping. The pay-as-you-go financing scheme in security leaves our younger gen-
eration with a tremendous burden, unless we alter the structure of future benefits in this program. proposals contained in the core bill, H.R. 1900, do not secure the pro- gram for today's workers, and severalof the bill's provisions further dampen the original purpose of social security since its enactment in 1935. The pro- gram's benefits have continually ex-
panded since then, What started as a supplemental re- tirement program to help workers plan for the future, now includes: dis- insurance, a health insurance program, early retirement benefits, ex-
tension of benefits to survivors and de-
pendents of the original beneficiaries, and the indexation of benefits and the base to inflation. To top this off, in 1972, when Congress first author- annualized COLA's, a 20-percent benefit increase was included by a change in actuarial assumptions. These demographic and legislative changes to social security left but a few alternatives for Congress to keep the system in balance: Either raise and the revenue options or
cent in 1990. Maximum taxes from
1970 to 1982 alone have gone up 580
percent for the employee while taxes
for the average wage earner rose 259
percent.
This bill seeks to accelerate, or in
effect raise, payroll taxes again. For
self employed persons, this bill raises
taxes by
33 percent to equal the com-
bined employe
l-employee rate, and
allows the self-employed
workers to
deduct half
of their retirement taxes
for income tax purposes.
.
How far can we cut into a worker's
's
paycheck
before it no longer becomes
an incentive to work? The loss
to the
private economy
is enormous in terms
of increased burdens
to the employers,
burdens which eventually
lead to less
investment, , less private saving, less
economic growth, and ultimately,
less
j
The legislation
also proposes to
begin taxing
a retiree's benefits by 50
percent
if an individual earns more
than $25,000 ,000 in annual income. Pro-
ceeds for this additional tax will be
moved from general
revenues to the
social security
system. This change
strikes at the heart
of the "earned
right" effect concept of social security, and
ffect penalizes those who have had
the foresight
.
I am disappointed
that the commit-
did not put a permanent control on
toe
cost-of-living the single biggest cause for
the tremendous growth
in benefits
since
1972 when these inflation adjust-
ers were instituted. the 1970's, coupled with lower
wage
earnings grown, left the system's
income well behind benefit growth.
Since 1965, , wages have increased 169.9
percent
while social security benefits
rose 209 9 percent because of indexa
tion
.
Delaying
this year's COLA may save
$40 billion, but it does not prevent
future disparities
increases from again putting the
system out of balance.
Social security now accounts for 28
percent
of our Nation's total Federal
budget. . It affects nearly every single
American with 116 million citizens
paying
Into million receiving retirement benefits.
With so much at stake in this pro-
grain, . we need to make decisions
which not only reflect sound economic
Judgment, udgment, but which allow our present
and future retirees the chance for a
secure program to
count on. We must
not rely on this bill's mixed bag of
short-term remedies it we expect to re-
alistically meet this dual commitment
to our young people and present retir-
ees. ees. This legislation does not reform a
program that is plagued by past legis-
lative mistakes and political compro-
mises.
What this bill does do is postpone
the inevitable reckoning day for our
Nation's social security and budget
deficit problems by hiking taxes and
Approved For Release 2008/10/29: CIA-RDP85-00003R000200130004-8 i
 Approved For Release 2008/10/29: CIA-RDP85-00003R000200130004-8
H 980 CONGRESSIONAL RECORD - HOUSE March 9, 198$
ents, or by compelling even more citi- Americans have now become financial- adequately meet the expected demand
zens to take part in social security. ly dependent upon the Government in benefits and services.
The financial problems of social se- for retirement- Income and economic As long as money remained in the
curity have come not only from mis- security. Many people believe that trust funds-beyond that needed for
management within the social security they have a legally enforceable con- retirement benefits-promises for new
system and Congress insatiable desire tract with the Government entitling and increased welfare benefits kept
to hand out free benefits, but also' them to future benefits. The truth is, growing. Benefit increases have been
from Government manipulation of our Congress had no obligation to guaran- regarded as necessary corrective meas-
national economy and monetary tee this form of economic dependence ures to keep the social security system
system with irredeemable paper it has created. The Supreme Court has from accumulating a heavy surplus.
money. ruled that there is not legal, enforce- Now we have reached the point where
The facts about social security have able contract between the U.S. Gov- even current taxes cannot meet cur-
been kept from the American people ernment and the citizens concerning rent benefits. Congress overextended
long enough. The millions of workers social security benefits. Social security obligations have finally caught up
who have been forced to pay social se- benefits can be changed or terminated with its somewhat limited ability to
curity's bills are not only demanding at any time by Congress, and the Gov- pay for them.
answers, but deserve to know the hard ernment's right to L ,nfiscate individu- Many of the economic problems of
economic facts about this compulsory al social security benefits has been social security lie in the deep-seated
system. We in Congress have a compel- upheld in the courts (Fleming v. contradictions between the welfare as-
ling obligation to fulfill this demand. Nestor, 80 S. Ct. 1367 (1960)). pects and the retirement insurance as-
Unfortunately, there are too many The greatest hypocrisy that Con- pects of the system. The welfare as-
people in and out of Congress who do gress is committing against the Amen- pects of social security-that is, aid for
not take this obligation seriously. ' can people is that social security con- dependent children, supplemental se-
As is the case with most Govern- tributions paid by the employee and curity income, disability, and drug ad-
ment programs, financial problems the employer are accumulated with in- diction and alcoholic provisions-have
that develop are blamed on everything terest in a special account with the - been expanded at the expense of the
except the Government itself. The employees name on it. The Govern- retirement insurance aspects. Social
causes of social security's difficulties, ment stopped doing this in 1939. In- security has been and continues to be
however, rest precisely on the Govern- stead, the taxes barely have time to understood by a majority of Ameri-
ment's shoulders. The problems feed reach the books of account at the cans as an insurance program set up
on themselves causing ever greater Social Security Administration before for their retirement. Because this con-
economic hardships for our elderly. they are sent as earned benefits to 36 tradiction is being ignored by politi-
The economic deficiencies of the pres- million people every month. Because clans and the press, the reform pro-
ent makeup of social security are well of this substitution from an insurance clans
documented in the fact that it has annuity program, tl?ie length of time it lems, within will will only social exacerbate the prob-
taken not prove
taken the Government less than 50 takes a retired individual to recover them.
years to change the system from a re- FICA taxes is very short. Studies done
tirement insurance program into a by the Congressional Research Service The a solutions
Commission being pnroposed Social by the
by the
current taxes pay current benefits of the Library of Congress shows that rity Reform are nothing more than
system, emptying the reserves in the a minimum wage earner will recover
largest of the three trust funds, and his social security taxes paid in 13 quick fixes that will not pull social se-
threatening to empty the other two. months. The average wage earner will curity out of its deep financial trou-
Yet, it is maintained that social secu- collect in benefits what he has paid, in bles. The main thrust of the proposals
rity does not need trust funds because, 17 months. The maximum wage earner is quite clear-to continue coercing
unlike a private insurance company, will receive contributions in 22 and deceiving the American people
the Government can force future months. On the surface this type of into paying still higher taxes and en-
workers to contribute whatever is arrangement is a good deal for our el- couraging a belief that the system is
needed to meet all benef obligations. derly. Receiving more in benefits than fundamentally sound.
But this country is still democracy, paid in taxes appears as though the Some of the proposed solutions in-
and this power to tax to meet social se- Government is doing a good job of in- clude:
curity obligations hinges on the ability vesting. This seemingly wonderful ar- First, raising payroll taxes;
and the willingness of the American rangement is typical of the startup Second, reducing benefits and slow-
people to do so. phase which social security has been ing cost-of-living adjustments;
Any private insurance company operating under for the past 50 years. Third, taxing social security bene-
found financing its program with cur- The startup phase allows recipients to fits;
rent premiums paid by the people receive greater benefits from the Gov- Fourth, raising the retirement age;
would find its board of directors in jail ernment than could' have been earned Fifth, compelling all employees to
and the company filing for bankrupt- if the money had been invested in the participate in social security, including
cy marketplace. But now, the system is local, State, and Federal Government
The prevailing attitude in Washing- entering the.mature or pay-as-you-go employees; and
ton toward solving social security's phase. The trust funds are near Sixth, subsidize the social security
problems continues to center around empty, and the cry for increased taxes trust funds with general revenue.
increasing the Government's role in and reduced benefits are echoing in As if the American taxpayers are not
controlling what clearly should be a the Halls of Congress to save the already overburdened with taxes, the
private affair. Solutions calling for less system. The truth of the matter is, Social Security Reform Commission
Government control are quickly social security benefits and services re- wants to increase the contributions
shrugged off as being a threat to pres- ceived for the rest of one's retirement made to social security. The American
ent or future retirees. Anyone espous- years are not paid-for benefits, but people are so well acquainted with
ing the idea of making social security rather free windfall Government as- social security tax increases that for
voluntary-not to mention phasing the sistance. While free windfall Govern- approximately 50 percent of all Ameri-
program out altogether-is labeled an ment benefits are an economic gain can workers, their social security tax is
enemy of social security and our elder- for the 36 million Americans receiving greater than their Federal income tax.
ly. The real enemies of our present such aid, they represent an economic The original combined employee/em-
and future elderly, however, are those loss for the 116 million Americans who ployer social security tax rate was 2
who continue to call this pay-as-you-go are forced to provide these benefits percent assessed against the first
scheme security. through compulsory payroll taxes. $3,000 of income. This rate remained
Social security has been exploited by This economic loss will become even in effect until 1950 when the rate was
Congress to the extent that millions of greater as payroll taxes are raised to increased to 3 percent. Today, the
Approved For Release 2008/10/29: CIA-RDP85-00003R000200130004-8
 Approved For Release 2008/10/29: CIA-RDP85-00003R000200130004-8
H 982 CONGRESSIONAL RECORD - HOUSE
being a coercive social welfare scheme.
Below is an outline for solving the
social security dilemma.
The most fundamental merit of this
proposal is that it returns to the
American people the freedom of
choice to plan for their retirement.
Nothing short of this will restore to
the people the freedom they so desper-
ately need and deserve to plan for the
future of their own lives.
First, freedom of choice must' be
granted to every American citizen to
voluntarily opt out of the social secu-
rity system.
Second, no new workers are to be,
compelled by the Government to Join
the social security system.
Third. FICA payroll taxes will cease
to be withheld from people voluntarily
opting out of social security. The em-
ployer FICA tax will also be eliminat-
ed on those employees opting out of
social security.
Fourth. all persons voluntarily
opting out of social security will relin-
quish all claims to future benefits that
would be provided under social secu-
rity. regardless of the amount contrib-
uted Into the system to date.
Fifth, persons voluntarily opting out
of social security will have their social
security records destroyed by the
Social Security Adminstration.
Sixth. Government regulations per-
tatoing to individual retirement ac-
counts (IRA's) must be amended so
that a person can put Into these ac-
counts at least the same amount previ-
ously withheld as FICA taxes.-both
employee and employer share.
An amounts contributed into IRA's
and all Interest earned on iRA's must
be tax free in the form of a deduction
against Federal income tax liability,
and IRA's must be allowed to Invest in
collectibles.
Seventh, an decisions pertaining to
the type of IRA and the amount con-
tributed to an IRA shall be the re-
sponsibility of the individual.
Eighth, the earnings limitation now
imposed on persons between the ages
of 62 and 70 shall be eliminated This
will end the present practice of the
Government discouraging older Ameri-
cans to continue contributing their
skills and knowledge in the market-
place.
Ninth, persons currently receiving
benefits are to be notified that the
system is bankrupt and his present
benefit level will become a ceiling.
All future payments will be financed
on an annual bads. The amount
needed for funding will be derived
from:
First, savings through the elimina-
tion of foreign expenditures-both
military and economic;
Second. selling government proper-
ty;
Third, proceeds from the minting
and selling of American gold eagle
coins to the public; and
Fourth, payroll contributions from
people remaining voluntarily in the
social security system.
The system can use general revenue
only to the extent that its use is offset
by Implementing the first three Items
above. An Increase In the FICA payroll
contributions on those remaining in
the social security system will be nec-
essary to fully fund their retirement-
and all promised related benefits--and
to make up any shortfall realized after
exhausting the aforementioned recom-
mendations for funding benefits for
present beneficiaries.
Mr. CONABLE. Mr. Chairman, I
yield 4 minutes to the distinguished
gentleman from Georgia (Mr. Jza-
srns).
(Mr. JENKINS asked and was given
permission to revise and extend his re-
marks.)
Mr. RICHARDSON. Mr. Chairman,
will the gentleman yield?
Mr. JENKINS. I yield to the gentle-
man from New Mexico.
(Mr. RICHARDSON asked. and was
given permission to revise and extend
his remarks.)
Mr. RICHARDSON. Mr. Chairman.
I realize this social security reform
package is built upon a delicate bal-
ance of compromise and concession. I
also realize the importance of keeping
the social security system solvent.
But, Mr. Chairman. I must express
my grave reservation about one of the
provisions of this bill. I am speaking,
of course, about the provision requir-
ing all new Federal employees to be in-
cluded in the social security system be-
ginning January 1. 1084. I believe this
provision is unjust and unwise.
If newly hired Federal employees
are brought within the social security
system, I am deeply concerned that
the absence of any new contributions
being paid into the civil service retire-
ment system could bankrupt that
system In less than 40 years. If that
happens, Mr. Chairman, who will end
up funding the revenues needed to pay
Federal retirement benefits? The
answer is obvious: The taxpayers will
The civil service retirement system is
the crown jewel of Federal employ-
ment. The system is viable and sol-
vent. During the past 2 years of Feder-
al budget cuts. Job firings and RIF's,
proposed pay freezes, and increased
health insurance costs, the one thing
Federal employees have been able to
cling to is their assured retirement
program. To endanger that program
now is to strike an unwarranted blow
against our Federal workers.
Mr. Chairman, I am fully aware that
this proposal will pass the House in its
present form. But I want to take this
opportunity on behalf of the Ameri-
can taxpayers and Federal employees
nationwide to warn the House of the
grave problems this bill may create. I
hope and pray that we will not be
faced with the task of forcing taxpay-
ers to shore up a weakened civil serv-
ice retirement program in the coming
decades. But I must say, Mr. Chair-
man, that I doubt this issue will solve
itself and disappear into the night.
March 9, 1983
Mr. JENKINS. Mr. Chairman,
through the past several decades the
Congress and the various Presidents of
both political parties have been in the
enviable position on being able to vote
for Increasing benefits and expanded
coverage under social security.
Unfortunately, the same Congress
and the same Presidents have been re-
luctant and, indeed, they have been
adamant in refusing to increase the
taxes to pay for these-increased bene.
fits that they so freely voted.
As Is the case in any benefit pro.
gram, there Is ultimately a day of
reckoning. At some time benefits must
be paid for by someone.
It takes no political courage to vote
to increase benefits or to expand cov-
erage under social security. It does
take some degree of responsibility to
make the hard vote in preserving a
good retirement system that 36 million
people now depend upon.
If any Member of this House decides
to oppose this measure I respect that
right. But with that opposition, if you
are to be fair with the American
people in opposing this bill, you do
have some degree of responsibility to
offer the alternative that you support.
If you have an alternative plan. I
would think you have the responsibili-
ty to go before the Rules Committee
and ask for a rule that would permit
your plan to be voted upon on this
House floor.
It is easy to be against a measure
where there are.some political liabil-
ities, but there is a degree of responsi-
bility that each of us in this body have
to make the hard vote where that is
necessary.
Sure, you can say this increases
taxes. Well, what Is your alternative to
some increase or speed up in taxes?
Yes. you may say that this decreases
benefits ultimately. Well, what is your
alternative to that?
Yes. this Includes new Federal em-
ployees and you could oppose the bill
because you say that is unfair. Well,
what is your plan? Do you want to in.
crease the payroll tax today? Do you
want to increase the retirement age
today for those nearing retirement?
The simple facts are unless you are a
purist or unless you are finding some
political reason to oppose the measure,
then I think this package that is
before us today, with whatever defects
it may have, is probably the only
measure that we will have the oppor-
tunity to vote on to preserve social se-
curity.
So I say, Mr. Chairman, there are
many parts of it that I oppose, that I
do not like. There are many parts of it
that I opposed in committee.
There are some things that I wanted
in the bill that I did not get. I am con-
cerned about small business, the self-
employed. I am concerned about a
host of people.
But I say to this body that this is
the only package that you will get to
vote upon and if you vote against it
Approved For Release 2008/10/29: CIA-RDP85-00003R000200130004-8
 H 984
Approved For Release 2008/10/29: CIA-RDP85-00003R000200130004-8
CONGRESSIONAL RECORD - HOUSE March 9, 198.E
In 1976 at the end of the session the
Ways and Means Committee brought
to the floor under a closed rule a bill
which was said to be the ultimate solu-
tion to the problems of financing
social security. Like this bill today,
that bill in 1976 was pushed through-
ramrodded through-this House be-
cause of the impending crisis.
Failure to pass this bill, we were
told, would result In the-immediate
crumbling of the social security
system. We were urged by the White
House and the House leadership to
pass that bill despite our reservations
with it because any inequities that
might be found within It could be cor-
rected after the bill was putin place.
It was not until early in the follow-
ing year that Members of the House
realized the extent of their folly. We
had passed a bill that greatly in-
creased payroll taxes across this land
for social security, but we had also not
solved the problem. And so we are
back here today being told once more
that we must act blindly now with full
faith In the pledge of the White House
and the Ways and Means Committee
that passage of this bill will solve our
problems.
We are told to put aside our reserva-
tions about the harm we do to others
In our haste to solve this problem and
we are told that passage of this bill
which we may not change will solve
the financing problems of the social
security system once and for all.
I was wrong In 1976 when I support-
ed my White Houe and the House
leadership and voted for that social se-
curity bill. I thought I was acting to
help social security, but all I was doing
was following the blind leading the
blind. I have that sense that the same
thing is happening today and it is
something I cannot abide. I urge the
House membership not to accept what
we are offered either.
I said earlier today that I bow to no
person In this body over the last two
decades of service in my support of the
senior citizens of this country. I be-
lieve that passage of this bill today is a
disservice to them as well as to the
millions of Americans whose personal
retirement systems will be bankrupted
by this bill. Passage of this bill today
will' ultimately result in the bankrupt-
cy of the social security system as we
know it and it is my prediction that
the Congress within no more than 5 to
10 years will be called upon again to
take still another remedial action to
save the social security system. I
would hope that by refusing to swal-
low this bill whole today, we might
create the atmosphere for taking the
time to find a proper solution to our
financing problems for social security.
I think it is an important enough issue
to devote more than 4 hours of general
debate to a bill that affects all Ameri-
cans well Into the next century.
I we no reason why the Members of
this body cannot have the right to
offer amendanents they believe are
pertinent to this measure. I refuse to
accept again the concept that only the
Ways and Means Committee has the
experience and intelligence to write
this bill. Indeed. following our experi-
ences of the past with remedies for the
social security system, we stand a far
better chance of helping our senior
citizens and the other recipients of
social security by rejecting this bill out
of hand.
Mr. CONABLE. Mr. Chairman. I
yield such time as he may consume to
the gentleman from Rhode Island
(Mr. ST Cox).
(Mr. ST GERMAIN asked and was
given permission to revise and extend
his remarks.)
Mr. ST GERMAIN. I believe that
the social security compromise report-
ed by the Ways and Means Committee
is a generally fair and effective pack-
age, that will solve most of the prob-
lems plaguing the social security
system. However, a few elements of
this package should be reconsidered
on the floor, since they cast a pall of
unfairness over the whole compro-
mise.
The font? the harshest, problem
with this package is the 6-month delay
in cost-of-living adjustments that
would push back the necessary infla-
tion adjustments for our senior citi-
zens to January 1984. We have heard
much about the plunging inflation
rate during the last year but even a 4-
percent increase in prices means a 4-
percent decrease in purchasing power
for the elderly.
Perhaps a 4-percent pay cut would
not be important to anyone in this
Chamber, but it could be a matter of
life and death to senior citizens who
already eke out a bare existence,
caught between skyrocketing medical
bills, steadily mounting fuel bills, and
rising food prices. One third of our
over-45 population are women who are
living alone. These women must make
do with an average annual income of
;6,000, and I think we all know that
the bare necessities of life eat up most
of that $6,000. A 4-percent pay cut due
to Inflation means $240 less to spend,
and a harsher life for our senior citi-
zens.
Elderly women living alone are not
the only ones who will suffer from this
cut. Nearly one-fourth of all people
over 65 count on social security as
their sole source of Income, and a full
65 percent may social security is their
predominant source of income. These
people will all be badly hurt by a
penny-pinching attempt to squeeze a
few more cents from the least-well-off
citizens in our country.
We are told that these COLA delays
are done to spare those currently
working from further increases in
their. social security taxes, yet when
we look at the most recent public
opinion polls, the COLA delay is op-
posed by a far greater percentage of
people aged 18 to 29 than of people
aged 65 and over. Forty-seven percent
of the senior citizens oppose this
COLA delay. The elderly, as always,
stand ready to make necessary sacrifi-
cies to promote our economic health
and the safety of the social security
system. But we should not ask for sac-
rifices by the less well off, when the
privileged and healthy can be asked to
bear their fair share.
So, I will oppose the COLA delay in
the compromise, and support the
amendment to be offered by Congress-
men Psrrsa that would insitute an em-
ployer/employee tax rate increase of
0.53 percent in the year 2010. A tax in-
crease of one-half of 1 percent, nearly
80 years from now for people still at
their prime earning power, is much
more fair than an Income cut of 4 per-
cent this year for people who depend
upon the little income they get from
social security to survive.
I will also oppose the so-called bend
points shift that would have the effect
of reducing the initial benefit levels
for every worker aged 42 and under,
and will cut the benefits of those
workers 37 years old or younger by at
least 5 percent. While tax rates are in-
creasing for current workers, we would
be taking benefits from them through
the back door, if this shift became law.
A third area of great concern is the
Inclusion of new Federal empldyees in
social security. It is imperative that we
recognize our commitment to current
Federal employees and the soundness
of their retirement system. Members
of this body have been deluged with
calls, letters, and visits from justifi-
ably worried Federal employees. They
want and deserve tangible assurances
that their retirement system will be
preserved. Immediate action must be
taken to address the Issue of the
future of the civil service retirement
system In the event that new Federal
employees are brought into social se-
curity. We must give them more than
promises. We must demonstrate that,
when they are ready to retire, the
funds will be available to provide the
benefits they have been told they
would receive.
I hope to support this social security
package in final passage, but without
reconsideration of the COLA delay
provisions, the bend-point changes,
and the plight of Federal employees,
the pall of unfairness still hangs heav-
ily over the compromise.
Mr. CONABLE.. Mr. Chairman, I
yield 2 minutes to the gentleman from
Virginia (Mr. BLnaY).
(Mr. BLILEY asked and was given
permission to revise and extend his re-
marks. )
Mr. BLILEY. I thank the gentleman
from New York for yielding.
Mr. Chairman, while I have several
concerns with the legislation now
before the House, my 2 years as a
Member of Congress have shown me
that rarely, If ever, can the necessary
compromises which must be made in
this body satisfy every Member. At the
risk of repeating what several other
Members have said before me, this Is
not the package I personally would
Approved For Release 2008/10/29: CIA-RDP85-00003R000200130004-8
 Approved For Release 2008/10/29: CIA-RDP85-00003R000200130004-8
H 986 CONGRESSIONAL RECORD - HOUSE
First of all I would like to, along
with others who spoke before me,
commend Mr. PicKLE, the chairman of
the Subcommittee on Social Security
for the very fine job he and others
have done to bring this bill to the
floor of the House. In January of this
year, if we would have thought this
bill would reach the floor in the
second week in March, people would
have thought we were crazy.
It is through his leadership that we
have this bill on the floor at this time.
I would like to enter into a colloquy
with the chairman of the committee.
The D.C. employees indicated to me
there is some ambiguity as to whether
or not they are under social security
under the terms of the committee
report. Would the chairman advise me
whether the D.C. employees will be
covered by social security?
Mr. ROSTENKOWSKI. No D.C. em-
ployees are affected by the coverage
provisions of this bill. They are not
considered Federal employees for this
purpose. So the employees of the Dis-
trict are not at all affected.
Mr. MATSUI. I thank the chairman.
Speaking of Federal employees, Mr.
Chairman, I would just like to add one
thing: If the bill had been divided up
so that amendments were to be of-
fered, I would guarantee you that
there would not be a bill passing the
floor of the House of Representatives
this afternoon because you can elimi-
nate Federal employees, we can elimi-
nate the 6 months' delay in the cost of
living, we could eliminate the increase
in the various taxes that will be im-
posed, and we could end up without a
bill. Now, let me address the Federal
employee issue, if I may.
I have a number of Federal employ-
ees in my district, some 20,000, and I
might say that over the last 4 years I
have been one of the staunch support-
ers of Federal employee issues, prob-
ably close to 100 percent in my voting
record, of those issues of concern to
them. I would like to set forth some
facts, if I may, that we gathered from
the deliberations of the committee
when we had our hearings.
First of all, with respect to the civil
service retirement system, those 40
different systems within the trust
fund, our actuaries have said there is
$560 billion of unfunded liabilities in
that system. So that system is not, at
this time, a sound system, but in fact
it will need an infusion of Federal dol-
lars in addition to what is being put in
now in the years to come.
In addition to that, with respect to
the supplemental system that will be
set up, I know that many of the Feder-
al employees in my district were un-
aware of the fact that Mr. RosTEx-
Kowsxz, Chairman FoRD and the
Speaker, have sent a letter to all
Democratic Members stating that they
will maintain and protect the integrity
of the current Federal employees re-
tirement system.
^ 1330
And when that letter is delivered to
my constituents most of their fears
are alleviated and their concerns that
their system is in fact in jeopardy is
somewhat reduced.
And let me conclude by setting forth
some facts that the committee used in
putting new Federal employees under
social security.
First of all, 50 percent of the Federal
employees that go into the work force
do not-I say do not-receive any civil
service retirement benefits. And those
are usually the lower income employ-
ees. They are the ones who eventually
go into private industry, and they are
the ones who lose the period of time
that they have been in Federal service
and do not accumulate any social secu-
rity credits.
In addition, there is the portability
factor with respect to social security.
If a person is in the Federal retire-
ment system today and he wants to
leave, then he does not accumulate
benefits under the civil service system.
And third, and perhaps most impor-
tantly, those Federal employees who
will be under social security will re-
ceive disability benefits and death
benefits.
I think the Federal employees, in-
stead of fighting this issue, which is
really a noiiissue for those Federal em-
ployees frankly who are currently in
the work force since they will not be
covered by social security, they should
be fighting the wage freeze that the
administration is proposing. They
should-be fighting the restructuring of
their retirement system.
So I think the Federal employees
really should begin to divert their at-
tention to the budget issues which will
be coming up in the next few months.
And in conclusion, Mr. Chairman, I
would only like to say that frankly the
groups that have been most helpful in
this effort have been the senior citizen
groups. I suppose that is partly be-
cause the gentleman from Florida, Mr.
CLAUDE PEPPER, has been their leader
in this effort.
When I went back home and talked
to some of them and I advised them of
the 6-month delay in their cost-of-
living benefits, most of them were cou-
rageous enough to say if all of us sacri-
fice, then they are willing to sacrifice
too.
So I urge that all Members vote for
this bill.
Mr. ROSTENKOWSKI. Mr. Chair-
man, I yield such time as she may con-
sume to the gentlewoman from Mary-
land (Ms. MIKULSxI).
(Ms. MIKULSKI asked and was
given permission to revise and extend
her remarks.)
Ms. MIKULSKI. Mr. Chairman, we
are facing a difficult and important
decision today. Our Nation's retire-
ment system is in trouble and Con-
gress has a responsibility to find an
equitable and responsible solution to
the financial problems facing the
system.
March 9, 1989
I have the utmost respect and regard
for the bipartisan commission that
worked so diligently to make recom-
mendations. I also respect the Ways
and Means Committee for their efforts
to adapt these recommendations into
legislation for consideration by the
full House.
I am deeply concerned about partic-
ular aspects of this package and I am
reflecting the concerns I have heard
from my constituents.
First, the delay in the cost-of-living
adjustment will place an unfair and
heavy burden on our Nation's elderly,
especially those at the lower end of
the benefit spectrum.
Second, I think there is a myth
about Federal employees getting some
kind of free ride. I think many people
in this country are unaware of the sig-
nificant contribution Federal employ-
ees have made to this country. They
have been under assault for too long.
It is unforgivable that Federal employ-
ees continue to be the scapegoat for
our Nation's budget problems. They
have made significant contributions to
their retirement system and are now
being asked to sit by passively and
accept a major change in that system
with no guarantee that it will be there
when they need it.
I think - this is outrageous. It is
unfair to current employees, and
places an unbearable financial burden
on new employees. We risk losing the
best employees we have, and being
unable to recruit talented newcomers.
Third, I think more serious atten-
tion should have been paid to the use
of general revenues in specific and lim-
ited circumstances. For instance, there
could be trigger mechanism such as a
certain unemployment level, which
would cause general revenues to kick
in, and then kick back out when the
unemployment level went back down.
Finally, we must continue to be con-
scious of the burden that any more in-
crease in payroll taxes will place on
the self-employed and on business,
small business in particular.
I am going to vote for this legislation
despite my misgivings for one reason: I
cannot and will not play chicken with
the checks that many of our senior
citizens -depend on for their food and
shelter.
Mr. ROSTENKOWSKI. Mr. Chair-
man, I yield 4 minutes to the gentle-
man from Ohio (Mr. PEASE).
(Mr. PEASE asked and was given
permission to revise and extend his re-
marks.) -
Mr. PEASE. Mr. Chairman, I would
like to begin my comments with com-
mendations for the chairman of our
committee, the gentleman from Illi-
nois (Mr. RosvExxowsxi) and for the
chairman of the subcommittee, the
gentleman from Texas (Mr. PzcrLE).
It is clear to me what without their
expertise and their dedication and
their political skill this bill would not
be on the floor today in as good a
shape as it is in.
Approved For Release 2008/10/29: CIA-RDP85-00003R000200130004-8
 Approved For Release 2008/10/29: CIA-RDP85-00003R000200130004-8
H 992 CONGRESSIONAL RECORD - HOUSE March 9, 1988
Purposes, which are, first, to allow of the elderly are among the poorest, perform at the optimistic levels pro-
Congress to consider the entire budget in New Haven and elsewhere in the jected in the 1977 social security
overall, to examine the effect of total district. With rising utility costs, rising amendments. The long-term financial
spending, revenues, and deficit on the rents, and an increasing cost of living, problem is a result of demographics-
economy, and, second, to facilitate this is not a sacrifice that they are when the baby-boom generation re-
making tradeoffs among programs able to make. tires, there will be only two workers
competing for public resources. I might have made a different deci- paying into the system to support
Taking social security and medicare sion if this package provided real solu- each person drawing benefits. Neither
off budget would severly weaken the tions to the long-term problems facing of these problems is changed one whit
process. social security. I am convinced that by bringing more people into the
Budget totals would be understated unfortunately, it does not, and that we social security system.
by more than $300 billion, so it would will soon be back here facing this There is no plan before us today on
be meaningless to talk of the size of problem again. We have to take fur- what sort of a pension system will be
the budget in relation to the economy. ther steps to control the steady in- devised for the new Federal employees
The budget deficit would be over- crease of the social security tax who are to be brought under social se-
stated. This makes it difficult to relate burden on working people. We have to curity. Federal employees are being
deficits to the economy. Further, it solve the problems of skyrocketing asked to take it on faith alone that
seems paradoxical for us to arrange a medicare costs which will soon over- Congress will protect the financial se-
system that will force us to vote for whelm the system. This bill does not curity of the pensions they have paid
overstated deficits. sufficiently address these problems to for. This social security package is lim-
This precedent could lead to pres- justify the immediate sacrifice, the im- ited in scope to insure that we do not
sure to take other trust funds off mediate benefit cut, that is being break faith with the 36 million Ameri-
budget, for example, the rest of medi- asked of the elderly. That is why, re- cans who have paid into the social se-
care, the civil service retirement trust luctantly, I must vote against it. We curity system and are now receiving its
fund, the highway and airport devel- must find better solutions for both the benefits. Those who have been paying
oment trust funds, the general reve- short-term and the long-term prob- into the civil service retirement system
nue sharing trust fund, the land and lems. deserve the same consideration. Every
water conservation fund, and so on. Mr. CONABLE. Mr. Chairman, I Member who votes for this social secu-
The combination of overstated defi- yield 1 minute to the gentleman from rity bill should make a commitment to
cits and understated spending totals Missouri (Mr. COLEMAN). keeping the civil service retirement
will lead to increasing pressure on the (Mr. COLEMAN of Missouri asked system financially sound as well.
remaining on-budget programs, basi- and was given permission to revise and
tally the discretionary. programs-de- extend his remarks.) Just 5 years ago, the congressional
fense, education, employment, law en- Mr. COLEMAN of Missouri. Mr. leadership told us that the Social Be-
forcement, and so on. Chairman, the social security legisla- curity Financing Amendments of 1977
Now people have argued that social tion before us today presents the most would place the system on a sound fi-
security should be off budget because important and difficult choices this nancial footing well into the 21st cen-
it is self-financed. This is not true-it Congress will be called on to face. The tury. We have all seen how inaccurate
receives and will continue to receive a problems of the social security system that assessment has proved, so I think
number of general fund subsidies. Fur- are grave-even as we talk, social secu- we should avoid making any similar
ther, it is argued that taking it off rity is paying out $17,000 a minute Promises about the legislation we are
budget will remove social security more than it is taking in. There is no considering today. Nevertheless, this
from politics, easy way to solve the problems. But bill presents, on the balance, the soun-
But, in fact, the insulation would not solve them we must, if we are going to dest and most responsible solution put
work. Because the general fund subsi- keep faith with the 36 million Ameri- forward for addressing the very real fi-
dies to the trust funds will still exist, cans who are counting on their month- nancial crisis of the social security
proposals to raise or lower social secu- ly benefit checks and the 115 million system. No one group is asked to make
rity or medicare benefits would still be workers who are paying into the all the sacrifices that are needed to
reflected as on-budget changes to the system, make this system whole again. Passing
cost of the subsidies. Thus, there could The legislation before us is not a this legislation is the best way to
still be pressure to change social secu- perfect plan. I doubt if there is a assure all Americans that they can
rity or medicare because of budgetary Member on this floor who does not depend on the social security system,
considerations. object to at least one of its provisions, both now and in the decades to come.
In summary, the proposal is bad for I myself am particularly concerned Now is the time to set aside partisan
the process. It forces us to vote for over several of the provisions, among political considerations and legislate in
overstated deficits. It puts unfair pres- them the inclusion of new Federal the compelling national interest. I
sure on other programs. It is a bad workers in the social security system urge my colleagues to support this leg-
precedent. It fails in its purpose of in- and the unprecedented change of islation.
sulating the program. Therefore, the making some social security benefits Mr. ROSTENKOWSKI. Mr. Chair-
Provision taking social security off taxable income for people who have man, I yield 4 minutes to the gentle-
budget should be dropped in confer- made the effort to save and prepare man from Maryland (Mr. Home).
ence. for their retirement. Or for that Mr. HOYER. Mr. Chairman, this
Mr. CONABLE. Mr. Chairman, I matter, no one enjoys raising the rate legislation placed before us today may
yield 1 minute to the gentleman from of social security taxation. But if each be an important response to the diffi-
Connecticut (Mr. MoiuusoN). of us held out for what we considered cult challenge of producing a solvent
(Mr. MORRISON of Connecticut the ideal solution, this House would and strong social security system. It
asked and was given permission to still be debating our 435 separate pro- may be an example of how well Gov-
revise and extend his remarks.) posals while the social security system ernment can respond to the cross-cur-
Mr. MORRISON of Connecticut. went bankrupt in July. So we must rents between various interest groups
Mr. Chairman, I rise to speak in oppo- balance our individual concerns over this critical issue. It may well be
sition to this bill, sadly but necessar- against the interest of the entire the most equitable solution to this
ily. The communications from the el- Nation in having a stable and strong ticklish problem of balancing options
derly people of my district have made social security system, in the speediest fashion. But for me,
it clear to me that they cannot bear Let me take just a moment to ad- Mr. Chairman, it is not a solution I
the loss of 6 months' cost-of-living in- dress the concerns that public employ- can easily accept. Indeed, many of my
crease. Mr. Chairman, the largest city ees have raised about the plan. Social colleagues on both sides of the aisle
in my district, New Haven, is the sev- security's immediate finpncing crisis share my uneasiness over adopting
enth poorest city in the Nation. Many stems from the economy's failure to this proposal.
Approved For Release 2008/10/29: CIA-RDP85-00003R000200130004-8
 Approved For Release 2008/10/29: CIA-RDP85-00003R000200130004-8
H994 CONGRESSIONAL RECORD - HOUSE
This equitably spreads a relatively
small burden among all those now
drawing benefits, rather than concen-
trating a large burden on a small
number of current beneficiaries.
The very low-income elderly will be
completely shielded from the impact
of this provision. Although the COLA
for supplemental security income
(SSI)-Federal cash assistance for the
aged, blind, and disabled poor-must
also be delayed for adminstrative rea-
sons from July to January, SSI
beneficiaries will recieve a one-time
across-the-board increase in monthly
benefits of $20-$30 for couples. This
is almost double the maximum SSI
COLA of $11 that would have been
paid otherwise.
Higher income beneficiaries will also
be called on to contribute to restoring
social security to financial health. Our
bill would require beneficiaries to in-
clude in taxable income the lesser of
one-half of benefits or one-half of the
excess of the taxpayers' combined
income-adjusted gross income plus
one-half of benefits-over a certain
base amount. The base amount would
be $25,000 a year for an individual,
$32,000 for a married couple filing
jointly, and zero for married persons
filing separate returns.
I was quite concerned about taxing a
small portion of social security bene-
fits because this has never been done
before. Changes in this provision made
by the Ways and Means Committee
reduce the percentage of beneficiaries
affected by this provision to well
under 8 percent. What is more, al-
though employees pay income taxes
on their income subject to the payroll
tax, employers do not because they
can claim a business expense deduc-
tion for their payroll tax payments.
Therefore, it is argued that requiring
social security beneficiaries to pay
taxes on the previously untaxed por-
tion of their benefits-the part pro-
vided from employer contributions-is
appropriate at the time of receipt.
Current workers are also called on to
help. Already scheduled increases in
the payroll tax for 1985 and 1990
would be rolled forward, under the
bill, to 1984 and 1988, respectively.
Many people have pointed out that in-
creasing payroll taxes in 1984 may
stifle recovery and hamper our efforts
to reduce unemployment. That is why
this bill would give employees a pay-
roll tax credit, for 1984 only, equal to
the payroll tax increaese in 1984.
Self-employed persons would also
make a sacrifice under this measure.
When the self-employed were first
covered by social security in the
1950's, their payroll tax rate was set at
about 1% times the employee rate, or
about 75 percent of the combined em-
ployee-employer rate.
Since that time, however, it has been
widely recognized that although the
employer nominally pays half of the
total payroll tax for each worker, the
worker himself bears the burden of
this tax by receiving a lower net wage
from his employer. Consequently it
has been argued, and this bill pro-
poses, that the self-employed, as both
employee and employer, should also
pay the same tax rate as the combined
employee-employer rate.
In recognition that this is a substan-
tial tax increase on the self-employed
at a time when the economic recovery
may be only beginning, this bill also
proposes a payroll tax credit equal to
2.1 percent of payroll in 1984, 1.8 per-
cent in 1985 through 1987, and 1.9 per-
cent thereafter.
Although the President's National
Commission on Social Security
Reform originally proposed a tax de-
duction equal to one-half of the self-
employed's payroll tax payments, this
bill restructured that proposal to pro-
vide a credit of similar magnitude that
will ease the burden of the additional
tax for lower income self-employed.
persons.
The bill would also make a number
of other important changes in social
security. Federal workers hired after
1983, Members of Congress, the Feder-
al judiciary, and nonprofit organiza-
tion employees would join the 115 mil-
lion people in the private sector in
paying social security payroll, taxes.
State and local governments now par-
ticipating in social security would be
prohibited from withdrawing from
coverage. Windfall social security
benefits for people who draw pensions
from nonsocial security covered em-
ployment would be eliminated, and
the U.S. Treasury would reimburse
social security for uncashed social se-
curity benefit checks and gratuitous
military wage credits.
In the depths of the Great Depres-
sion, amid widespread poverty among
our Nation's elderly, the U.S. Congress
enacted the Social Security Act of
1935. At that time, over half of our el-
derly population subsisted on incomes
below the poverty level.
Over social security's 48-year histo-
ry, the system has drastically reduced
poverty among the elderly by 75 per-
cent and become America's most popu-
lar and most successful social pro-
gram.
Mr. Chairman, we cannot abdicate
our responsibility to workers and
beneficiaries. We must deal' decisively
with this issue and restore faith to all
Americans of Congress commitment to
social security.
In short, I urge my colleagues to
support this bill as an equitable solu-
tion to the crisis we now face in social
security.
Mr. ROSTENKOWSKI. Mr. Chair-
man, I yield 1 minute to the gentle-
man from California (Mr. Wexnsax).
(Mr. WAXMAN asked and was given
permission to revise and extend his re-
marks.)
Mr. WAXMAN. Mr. Chairman, I
would like to take a few minutes to
discuss the medicare prospective reim-
bursement provisions of this bill.
Rising hospital costs have been the
major factor in increased health
March 9, 1989
spending for many years. We tried 3
years ago to pass legislation to limit
health inflation and spending with
overall limits on all hospital costs
through a hospital cost containment
measure, but that effort was defeated
on the floor.
Today, we have before us a major re-
vision in how medicare pays for hospi-
tal care. All of us are very concerned
that major reforms like this not be too
abrupt-we do not want a system that
imposes deep and irreversible changes
before we can evaluate their impact,
or that brings immediate windfalls or
substantial deficits to individual hospi-
tals.
That concern is evident in many
places, including my own State of Cali-
fornia. But I believe that the changes
made in the committee bill help to ad-
dress this problem. The short-term
impact is moderated by accounting for
urban and rural differences, and for
regional differences. Most important-
ly, the system is phased in over 1
years. The first year retains 75 percent
of payment on the basis of institution-
specific cost limits, with only 25 per-
cent on the basis of the new prospec-
tive system. That phasing period will
give us an ideal opportunity to exam-
ine the impact of the proposal as it is
phased in, and allow us time to make
any adjustments that are required.
We should all acknowledge that the
proposal is not as comprehensive as
the type of all-payor program that I
would prefer. But it would serve none
of our interests to hold this up for a
system which may not be possible at
this point, the bill offers important
protections for States that do want to
develop all-payor programs through
provisions based on Mr. WyDzx's bill. I
hope that we will see States respond-
ing to this opportunity. In addition, it
provides for the collection and study
of data on the impact of such all-payor
programs in order to provide us with
the information needed to address this
issue in the future.
The bill is an important step in
moving us from our existing and infla-
tionary cost-based payment system to
a prospective mechanism under which
hospitals have some incentives to mod-
erate their costs.
There are a number of other fea-
tures that were important to many of
us and are now included in the Ways
and Means committee bill.
The system will initially be based on
geographic regions to help take into
account the existing differences
among regions in hospital spending;
The system adjusts for the higher
costs in urban areas;
The system takes into account some
of the special needs of the urban
public hospitals;
The system includes special adjust-
ments for teaching hospitals-it passes
through the direct medical education
costs, and includes a special adjuster
to account for their indirect costs;
Approved For Release 2008/10/29: CIA-RDP85-00003R000200130004-8
 Approved For Release 2008/10/29: CIA-RDP85-00003R000200130004-8
March 9, 1983 CONGRESSIONAL RECORD - HOUSE
H 995
The system phases out the special hospital costs down and their oper- ty has now expired, and unless new
return on equity that is part of the ation as efficiently as possible. legislation is enacted, the OASI fund
cost-based system and places all hospi- I am very pleased with the provi- will be unable to pay July benefit
tats on an equal footing in trying to lions of title V of this bill, which checks on time.
earn a return based on their ability to would extend the authority for Feder- The House Ways and Means Com-
operate at costs within these prospec- al supplemental unemployment com- mittee has reported-that if interfund
tive limits; pensation benefits through September borrowing were merely continued
The system passes through capital 31, 1983. without additional reforms, the three
costs but includes a study and some in- This program has been extremely combined social security - funds would
terim constraints to minimize any ef- beneficial in Puerto Rico in maintain- be unable to pay benefits on time be-
forts at rapid and costly capital expan- ing a steady, though small, income for ginning in the spring of 1984. Under
sion; families where the wage earner is ex- the circumstances we have no other
The system includes all services- periencing long-term unemployment. choice but to consider comprehensive
except physicians-provided by hospi- In an economy of 25.3 percent unem- legislation to rectify the problem.
tals to help assure that the cost and ployment, we can only expect the H.R. 1900 represents over 1 year of
charges are not simply shifted to numbers of people needing this addi- bipartisan work by the National Com-
medicare part B; tional aid to increase. mission on Social Security Reform es-
The system includes important stud- I am deeply concerned with the pro- tablished to recommend a fair, bal-
ies of how to limit potential volume in- visions that will put various categories anced plan to restore the system and
creases, and how to address the issue of federal employees under the social Americans' confidence in it. The Coln.
of revising physician payments for in- security system. mission's recommendations included:
patient services to parallel this new I urge my-colleagues to act promptly acceleration of already scheduled pay-
hospital payment system; and and establish a new, supplementary roll tax increases, 6-month delay of
..Finally, I would stress that the com- system to give new social security cov- the cost-of-living adjustment, tax in-
mittee bill prohibits hospitals from ered Federal employees retirement centives for those who retire after age
extra billing the medicare patient-so benefits comparable to those that will 65, inclusion of newly hired Federal
the costs cannot be passed on to them. be received by Federal employees that employees and employees of nonprofit
All of these provisions help make will remain under the civil service re- organisations, changes in the self-em-
this an acceptable first step in our tirement system. Both groups of em- ployment tax and revision of certain
reform on hospital payments. I thank ployees as well as both retirement sys- social security rules. The plan won bi-
the Ways and Means Committee-and tems should be fully protected. partisan support and balanced $40 bil-
especially Mr. SHANNON, and Mr. Gzi - I also urge you to oppose any lion in benefit changes against $40 bil-
HAaa'r, and the chairman and ranking amendment aimed at increasing the Ron in revenue increases.
minority members of the full commit- present social security retirement age After minor modification, the House
tee and health subcommittee, for their or curtail future benefits. Any long Ways and Means Committee reported
efforts in these areas. term shortfall in the system should be this plan to the House. Is the plan per-
Mr. ROSTENKOWSK. Mr. Chair- taken care of by raising employer-em- fect? Certainly not. Many of these pro-
man, I yield such time as he may con- ployee contributions if and when nec-
seem
some to the gentleman from Puerto essary. visions, considered unjust . would Yet, con
-
Rico (Mr. CORRADA). I give my support to H.R. 1900 and both both insufficient and alone, package they represent
(Mr. CORRADA asked and was urge all my colleagues to vote for it. sidered as a
the most viable option open represent
us at
given permission to revise and extend By doing so we will be protecting a this point-
his'remarks.) system that is essential to carry out No one really supports increased
Mr. CORRADA. Mr. Chairman, the our commitment of social Justice to all actions we take today are important to American citizens in the Nation and in taxes. This bill would accelerate the
preserve the financial health of the Puerto Rico. scheduled OASDI tax increases, but it
social security system. A system that Mr. CONABLE. Mr. Chairman, I would also offer a 1984 tax credit to
has served well, for close to 50 years, yield such time as he may consume to compensate for this increase of 0.3
millions of American citizens in the the gentleman from Wisconsin (Mr. percent of wages. In addition, the
Nation and Puerto Rico. A pystem GuwDi asoN). social security tax rates for self-em-
which shows that we as a nation care (Mr. GUNDERSON asked and was ployed persons would be increased by
for our elderly, our disabled and for given permission to revise and extend 33 percent to the full employer-em-
their families. his remarks.) ployee rate. Yet, this provision is cou-
Our social security system is present- Mr. GUNDERSON. Mr. Chairman, I pled with yearly tax credits through
ly in critical economic condition which rise in support of the bill before us. 1988. A portion of beneficiary social
could endanger the well-being of mil- Mr. Chairman, as we consider legis- security payments would be subject to
lions of beneficiaries nationwide. lation to remedy the serious funding taxation for individuals with $25,000
The social security rescue package shortfall of the social security system. income and couples with $32,000. It is
we consider today reflects a bipartisan the words of Abraham Lincoln should important to note that the committee
agreement between Democrats and offer some guidance. He once instruct- in its deliberations increased the
Republicans aimed to save -the system ed the American public, "You cannot income threshold originally recom-
from disruption. escape the responsibility of tomorrow mended by the Commission and al-
As a package it has elements which I by evading it today." tered the computation procedure to
fully support and elements that deeply How easy it would be to reject the make it more equitable.
concern me. Social Security Amendments of 1983 Social security retirees would face a
I fully support the establishment of (H.R. 1900) today for one political 6-month delay in their COLA from
a medicare prospective payment -reason or another. Yet, Congress has a July 1983 to January 1984. Included In
system for hospitals which I deem responsibility to this system, and the this provision Is an increase in supple-
wise and beneficial to the hospitals, 150 million Americans affected by it, mental security income of $20 for indi-
the Government and the medicare which cannot be ignored in good con- viduals and $30 for couples per month
beneficiaries. It will improve hospital's science. to insure that this delay places no
financial planning and serve as an in- The financing problems facing social undue burden on low-income and dis-
centive to hospital's cost efficiency. security are real and immediate. The abled individuals. The COLA change
The Government, on the other hand, old age and survivors insurance fund overall is expected to reduce the aver-
will gain some control over its rising has already run out of money. Pay- age beneficiary's payment by about
disbursements due to increasing hospi- ments continued during 1982 through 2.45 percent. In a time requiring deci-
tals costs. The medicare beneficiaries interfund borrowing approved by Con- sive action, I believe many of my con
will also benefit as a result of keeping - gress in 1981. That borrowing authors- stituents are prepared to make such a
Approved For Release 2008/10/29: CIA-RDP85-00003R000200130004-8
 Approved For Release 2008/10/29: CIA-RDP85-00003R000200130004-8
H 996 CONGRESSIONAL RECORD - HOUSE March 9, 1983
sacrifice to insure solvency for social Mr. CONABLE. Mr. Chairman, we tude for his untiring efforts. He has
security. have reached a climactic point in a been a bridgebuilder.
Many Federal employees in my dis- long struggle to save our social secu- The final product of all these labors
trict have criticized the inclusion of rity system. There have been many is, of course, imperfect. It is not pre-
new hires under social security as a po- times-many times-when I have won- cisely what the chairman of the com-
litically expedient measure to bail out dered whether we would get this far. mittee, the chairman of the subcom-
the ailing system. But this proposal is But my worst fears have failed to ma- mittee, or any one of our colleagues
not new by any means. In fact, since terialize, and we have before us today would prefer.
1938 social security advisory councils a bill that will not only avoid a finan- Let me emphasize that the bill cer-
have advocated inclusion of new Fed- cial crisis this year but will permit the tainly does not represent my personal
eral employees under social security. payment of significant benefits in the concept of the ideal way to reform
The 1981 National Commission on future. social security. My views on this are
Social Security outlined a detailed Even better, this solution does not well known to those Members who
plan to cover new Federal emnlovee put an undue burden on any one
including creation of a special Federal group or interest currently or poten- nave listened to me expound on them
Employee Benefit Board to oversee tially related to the system. over the past 15 years; but my views in
the transition by 1984. This bill is not an ironclad guarantee this respect are never going to be en-
I certainly sympathize with their le- that nothing will ever go wrong with acted into law.
gitimate concerns expressed about the the system. No legislation can offer I have presented my best thoughts
future of the civil service retirement such assurance. We do not know the on the subject often, and the response
(CSR) fund. However, in testimony future. But I,am convinced, absolutely, from this body has been, to put the
before the House Ways and Means that H.R. 1900 represents the best best face on it, something less than en-
Committee, Sylvester Schieber, re- answer to social security's financial thusiastic. To cite 2 outstanding inci-
search director for the Employee problems that this body is capable of dents, in 1982, 34 Members voted with
Benefit Research Institute, stressed producing at this time and after the me against an unfunded benefit in-
that the exclusion of new employees legislative and political history of the crease, and in 1977 I was joined by 56
from the CSR system would. not bank- issue. Members in supporting a comprehen-
rupt the fund. The Federal Govern- It has arrived here after a sometimes live Republican substitute for the
ment already pays about 65 percent of Perilous journey through the National Carter tax proposal. I was not really
the yearly income to the fwhile Commission on Social Security lonely on these occasions, but I cer-
employee contributions the fund, un compose only Reform so ably chaired by Alan tainly did not feel crowded, nor did my
15 percent of this yearly revenue. Greenspan and the Committee on wonderful principles greatly affect
Congress has maintained its oblige- Ways and Means. The Commission this troubled system in its declining
Lion to this retirement fund and my provided a necessary preliminary to course over the years of the struggle.
colleagues and must not and will not the success of our legislative effort. When this latest crisis began devel-
renege on that commitment or allow The committee did not exactly rubber- oiling, it would have been easy enough
the fund to go bankrupt. In floor stamp the Commission's consensus for one with my track record to devel-
debate on this bill today, House Post recommendations, but it followed op another major social security
Office and Civil Service Committee them so closely that anyone who en- reform bill. It would have been highly
Chairman ?S FORD has assured dorsed the Commission's consensus satisfying substantively, but it never
us that this bill protects the integrity can endorse the committee product would have gotten anywhere political-
of the civil service retirement system with confidence. ly. I do not apologize to my principled
of t het mandates service change in Federal The committee bill is not only con- friends for my part in the negotiations
si ntrI mandate L no
system IF adds- sistent with the Commission consen- which got us here with this legislation.
tion, this bill merely calls for inclusion sus, it is timely. If certain key features Over the past 2 years, social security
of new Federal employees under social of the legislation are to be implement- has become increasingly a subject that
security without requiring a separate ed, enactment must take place early no longer can be discussed in terms of
supplemental retirement pr ogram ate this spring. Therefore, there has been reason and logic. For some time it has
visioned pple
by . He t the irement o a has a strong sense of urgency to the mis- been purely a political topic, and the
sion.
pledged to work with his committee to The chairman of the Committee on politics have become the politics of
develop a scheme that will preserve Ways and Means promised in Decem- fear.
the financial condition of the CSR ber that he would start the hearing In this environment it has been obvi-
system. I make a similar pledge. The process on this issue February 1 and ous that only a truly bipartisan pro-
will of Congress is clear. The Federal have a bill on the floor of the House posal, agreed to by both the President
retirement Program will be protected- during the week of March 7. This and the Speaker, could become en-
Several groups have criticized this might appear an easy task, but for acted into law this year. H.R. 1900 is
package of reforms since the Commis- every hour of committee deliberation such a proposal.
sion completed its report. Some want on delicate matters, several hours
no tax increases and substantial bene- must be spent behind the scenes in ef- 0 1410
fit reductions. Others believe the pro- forts to satisfy disparate desires of in- Each part of this bill engenders
visions reduce COLA's too much and dividual Members. In the case of this strong opposition from one interest
advocate general revenue transfers to bill, the chairman of the committee group or another, but as a package it
bolster the system. This plan strikes demonstrated clearly his expertise in has found widespread acceptance. In
an effective balance between these ap- this kind of leadership. He promised this case, the whole is truly greater
proaches. and he delivered. And so a great deal than the sum of its parts.
To fail to approve this legislation of credit for this effort to save the Yes, the bill does reduce benefits for
would be to renege on our promises to social security system should go to the some beneficiaries with above-average
current retirees and those who contin- gentleman from Illinois (Mr. Rosrxx- incomes. Yes, the bill does require
ue to pay into the system. We must gowsss). greater contributions from self-em-
accept our responsibility for the Much credit should also go to the ployed persons. Yes, the bill will accel-
future by supporting this comprehen- distinguished chairman of the Sub- erate high tax rates paid by employees
give package today. committee on Social Security, the gen- and employers. And, yes, the bill does
Mr. CONABLE. Mr. Chairman, I tleman from Texas (Mr. Picsza). He require a sacrifice by those already
yield myself 13 minutes. has persevered in his drive to make drawing benefits, who will have to
(Mr. CONABLE asked and was given the social security system safe, and wait 6 months, until January of next
Permission to revise and extend this both the contributors and the year, to receive their 1983 cost-of-
remarks.) beneficiaries owe him a debt of grata- living benefit adjustment.
Approved For Release 2008/10/29: CIA-RDP85-00003R000200130004-8
 Approved For Release 2008/10/29: CIA-RDP85-00003R000200130004-8
H 998 CONGRESSIONAL RECORD - HOUSE March 9, 1989
ment compensation and medicare. medicare from payroll tax funding and corporations and those who earn more
Above all, it is a bill to save our social fund it with general revenues. More- than $50,000 per year.
security system from the threat of over the committee bill does not even Divert funds for the MX missile to
bankruptcy. address the serious funding deficien- retirement benefits. Switch our appro-
It emerged from the Committee on cies facing medicare. The actuarial es- priations from nuclear weapons escala-
Ways and Means on a recorded vote of timates provided by the Social Secu- tion to the health, hospitalization, and
32 to 3. Not in many years has major rity Administration show that the educational needs of the American
legislation been blessed with such a health insurance trust fund will con- people-and there will be no need to
harmonious, bipartisan sendoff. This tinue to decline and be depleted in force Federal civil servants' retirement
reflects, I think, the strong view of about 1990. Thus, even if the commit- plans down into social security, but
most Members that the social security tee bill becomes law, we will still have rather the opportunity to lift social se-
crisis must be averted, and soon, and to come back in several years to ad- curity up to the level of those retire-
that this vehicle is the best one to do dress the serious deficiencies in the ment plans.
the job. medicare program, dealing yet another The hodgepodge of political compro-
I hope this is the prevailing view, body blow to public confidence in the mise before us did not require any
Mr. Chairman, and that we can move long-term stability of social security. courage of convictions, but putting the
today to save social security and then Our colleague LEON PAxrrrA has in- people first would.
proceed with our other work. We and troduced legislation that would deal The problem with this bill is not a
the American people need this reas- effectively with both, problems. I matter of adding or subtracting a
suring vote. strongly urge the Ways and Means dollar here or there, or switching cate-
Mr. ROSTENKOWSKI. Mr. Chair- Committee to take that proposal up, gories from here to there. We need to
man, I yield 1 minute to the gentle- in this session, so we can avoid the send the whole mess back to commit-
man from Ohio (Mr. SEIBERLIN(;). negative impact of the increase in the tee where the entire priorities of the
(Mr. SEIBERLING asked and was payroll tax and also settle the ques-
given permission to revise and extend tion of funding medicare before it be- to be turned to be nr our Federal recipe need
his remarks.) right-side-up.
Mr. SEIBERLINC3. Mr. Chairman, in comes a critical problem. We must restart by totally rejecting
1977 ml E L in Congress voted for Nor does the bill the House is consid- the upside-down priorities of that
a 77 ml scof us financing v t e dor ering today contain the supplemental Robin Hood-in-reverse in the White socia
bill ked because we were givens choice Federal pension that will be needed House, rather than merely seeking to
between supporting that given
and let- for new Federal employees and for reconcile the differences within them
tang social security ortin th bankrupt. We Members of Congress who will be cov- between Democrats and Republicans.
again face the choice of We ered by social security beginning next Consider the people above power.
and ing the system go bankrupttaxes
Under major concern to the many Federal its inception in 1935, the social secu-
the circumstances, I intend to cast my and postal workers whom I have rite system has strived to adhere to
vote for the bill before us. talked with in recent weeks. one of the most basic of American
While the bill could be faulted on I am gratified by the assurances we values: the right of a person to live out
many grounds, its worst feature is that have received from Speaker O'NEna. -his last years with dignity and some
it increases social security's reliance and Chairman Foxe of the Post Office economic security.
on the regressive payroll tax. The pay- and Civil Service Committee that a In the past few weeks I have trav-
roll tax is just about the worst tax plan will be developed promptly and eled throughout my rural district in
there is. It increases unemployment by submitted to Congress. New Federal Michigan and talked to senior citizens,
making it more expensive for employ- workers being placed under social Be- business people, labor unions, and
ers to hire new workers. It also in- curity deserve to know that they will farmers about this social security fi-
creases inflation,, since most employers have supplemental retirement costs nancing package that is before us
simply pass the tax increase through and benefits comparable to those of today. The message they gave me was
to consumers in the form of higher current Federal workers. It is abso- clear. Even though this package will
prices. lutely essential that Congress deal have a great impact on their own indi-
Furthermore, it violates the princi- with this question in this session. I vidual interests, they told me, "Some-
ple that, where possible, taxes should intend to do everthing I can to see thing must be done to keep social secu-
be based on ability to pay; lower-` that it does. rity solvent; we must all have to
income workers pay a higher percent- expect to make some sacrifices to
age of their income in social security 0 1420 make sure that this is done."
taxes than the well-to-do. It is truly a Mr. ROSTENKOWSKI. Mr. Chair- For those of my constituents who
regressive tax. man. I yield 1 minute to the gentle- are willing to make sacrifices in order
Yesterday, I placed in the REcoan on man from Illinois (Mr. SAVAGE). to insure the dignity and economic se-
page H935 a Washington Post article Mr. SAVAGE. Mr. Chairman, I curity of our older Americans, I sin-
by Thomas B. Edsall examining how oppose this bill because-just as we cerely thank you. Knowing that my
our overall tax system has become less seek to balance the Federal budget on constituents are willing to set aside
and less progressive in the past few the backs of the needy to give to the selfish interests and have asked that I
years. He notes that social security greedy-we are seeking to balance our do what I feel is best for social secu-
payroll taxes are three times higher as social security system on the backs of rity and the country, has helped me to
a percentage of Federal revenues than its poor beneficiaries and future support this very necessary bi-partisan
they were a quarter century ago. beneficiaries. reform package.
During that same timespan, the per- If we want to find the money to heal To be honest, there are many parts
centage contribution of personal social security, take it from bombs, not of this package I would have difficulty
income taxes, which are based on abili- from bread. Pass a real jobs bill and supporting under other circumstances.
ty to pay, has remained constant while put people back to work, and then the Increased payroll taxes for workers
the corporate income tax today con- unemployed can pay into social secu- and the self-employed and delays in
tributes barely one-quarter of what it rity. the cost-of-living adjustments are pro-
used to. Take away our millions of dollars visions I could not support under ordi-
This sad situation is made sadder by from the tyrannical El Salvadoran die- nary circumstances. However, the cir-
the fact that it is unnecessary. There tatorship with which it is murdering cumstances we now find ourselves in
are other alternatives-reasonable al- its citizens. Disengage the United demands that we make these difficult
ternatives-to higher payroll taxes. States from its support of the racist/ decisions. The bi-partisan agreement
One in particular which I have sup- fascist South African dictatorship. Do now before us requires that we all
ported for many years is to remove not cut taxes any further for the big make sacrifices. A delicate balance be-
Approved For Release 2008/10/29: CIA-RDP85-00003R000200130004-8
 Approved For Release 2008/10/29: CIA-RDP85-00003R000200130004-8
H 1000
funds, but their virtues have been ex-
tolled far beyond the realistic abilities
of those tax increases. I recall that, in
1977, then-President Carter stated
that the massive payroll tax increases
contained in the 1977 amendments
were "the guarantee that, from 1980
to 2030, social security funds would be
sound." The fact that we are here in
this Chamber today debating the need
for still more revenues seems to cancel
Mr. Carter's "guarantee."
Another objectionable feature of the
bill is the proposal to modify the cost-
of-living adjustment (COLA). The
June 1983 COLA would be delayed
until December, and all subsequent
COLA's would be payable on a calen-
dar year basis. It is grossly unfair to
change the rules for those already de-
pendent upon social security, parf1cu-
larly the low-income elderly who rely
upon social security and the COLIC as
their sole source of income. If COLA is
to be the instrument of salvation for
social security, then we in Congress
should review, the methodology for
computing the Consumer Price Index,
and should evaluate its applicability to
the true cost of living for older Ameri-
cans. Such an evaluation may lead to
more realistic and cost effective means
of calculating cost-of-living adjust-
ments.
There are certain provisions of the
bill which have my support. Improving
benefits fpr surviving divorced or dis-
abled spouses who remarry is one such
positive provision; increased benefits
for disabled widows and widowers is
another. Benefits would be increased
for widows whose husbands had died
several years before the widow was eli-
gible for benefits. Divorced individuals
would be allowed to receive spouse's
benefits at age 62 whether or not the
former spouse had retired. I am also
pleased that title III of the bill in-
cludes miscellaneous and technical
provisions to eliminate gender-based
distinctions under social security. The
gentleman from Texas (Mr. PICKLE), is
to be commended for his endeavors to
remove from the system inequities
against women.
Another feature of the bill which I
endorse is the provision to place each
of the three trust funds within the
unified budget as separate functions
and, in 1988, to remove those trust
funds from the budget altogether. I
strongly endorse the off budget ap-
proach.
However, those positive components
of the bill do not weigh heavily
enough to offset its inequitable provi-
sions. In essence, the legislation before
us is another exampl of the treat-
ment of symptoms, rather than the
curing of causes. The social security
system has many faults and negative
aspects which must be corrected, not
masked. The very structure of the
system is in need of reform and revi-
sion and, until such time as those
structural weaknesses have been prop-
erly corrected, ?I fear that social secu-
rity will be continually plagued with
CONGRESSIONAL RECORD - HOUSE March 9, 1983
ills. I am opposed to the bill, and I am My colleague from Connecticut, Mr.
sincerely regretful that it is simply not MoRRIsoN, and I had hoped to propose
enough. an amendment to the legislation that
Thank you..
? Mrs. SCHNEIDER. Mr. Chairman, I
rise today in support of the bill, H.R.
1900. There is no question that there
are portions of the bill that I am very
unhappy to see become law. Yet, as so
often is the case with major, landmark
legislation, we are faced with a pack-
age composed of many small parts. In
order to reach enough of a consensus
to save the system, it becomes neces-
sary for all of us to accept some provi-
sions we do not favor in order to ac-
complish the need for both immediate
and long-term relief for the social se-
curity system.
Mr. Chairman, I must honestly say
that I am most impressed with the
quality of debate in this Chamber
today. However, we must not lapse
into complaceny with passage of this'
bill. I, for one, must insist that we con-
tinue to monitor the welfare of the
Federal worker, the disabled recipient,
and the medicare beneficiary. I am dis- _ deficits, the President continues to
turbed by the statements of some of
our colleagues to the effect, "Sure,
this is a difficult vote, but do it now
and this is the last time we will ad-
dress social security during our life-
times."
Let us remember that we have com-
mittees whose responsibility it is to
closely follow the welfare of those re-
ceiving social security, disability, and
medicare benefits. We must not ne-
glect this very important responsibili-
ty, and we must reassure the American
people that we would not enact this
package and forget about them.
Mr. Chairman, yesterday I asked the
Rules Committee to permit greater
debate on some issues affecting the
system, particularly with respect to
coverage of Federal workers and
delays in COLA adjustments. I certain-
ly am disappointed that the Rules
Committee failed to permit votes on
these subjects, and I implore the com-
mittees to give due attention in the
coming months and years to the effect
of these measures with a view toward
correction, if necessary.
Mr. Chairman, again, with these res-
ervations and cautions to my col-
leagues, I will vote for this package.
But let us not forget that one of our
major responsibilities is oversight-
and that we have a duty to insure that
the result of this legislation is that
which was intended when it was draft-
ed.?
? Mr. GEJDENSON. Mr. Chairman, I
rise today in opposition to H.R. 1900,
the Social Security Act Amendments
of 1983.
I oppose the bill because I believe
that the Congress has, over the past 2
years, missed numerous opportunities
to bring progressiveness to the Na-
tion's tax structure, and that, by pass-
ing this package as it now stands, we
are missing yet another opportunity to
enact a progressive tax policy.
would have, in our estimation, made it
far more equitable. Our amendment
would have removed the cap from the
taxable wage base for both employers
and employees, a move that would
have raised approximately $80 billion
for social security between 1984 and
1990. In addition, we would have re-
moved the language for the 6-month
COLA delay and the inclusion of Fed-
eral new hires from the bill. Our pro-
posal would have raised approximately
$27 billion more for social security
than does the inclusion of those two
provisions.
Not only would our alternative have
saved more money, but it would have
done so in a far more equitable fash-
ion. The Congress, over the past 2
years, has allowed a number of regres-
sive tax proposals to be enacted, and
has basically lost the opportunity to
go back and make the tax cut progres-
sive. In the face of huge Government
propose regressive tax measures such
as the gasoline tax. We have rolled
over and played dead too long while
the President's policies benefiting the
rich and denying the poor have
become the law of the land.
Our proposal would have given Con-
gress the opportunity to bring progres-
sive tax treatment to the social secu-
rity system-a move that is long over-
due..
? Mr. FAUNTROY. Mr. Chairman, I
rise in opposition to title I of section
101(a) of H.R. 1900 which provides for
the inclusion of new Federal employ-
ees hired on or after January 1, 1984,
into the social security system.
I am also deeply disappointed that
the rule under which we are debating
the Social Security Act of- 1983 does
not permit a vote on the inclusion of
new Federal workers into the social se-
curity system.
The civil service retirement system is
being put at risk in order to bail out
the social security system. Is not the
-inclusion of Federal workers into the
social security system a case of rob-
bing Peter to pay Paul?
The civil service retirement pay as
you go system will not be able to func-
tion if new Federal workers are not
added to the system. This provision to
include Federal workers could mean
that when current Federal workers
retire there will not be a new genera-
tion of Federal workers to contribute
to the program.
Federal employees have correctly
argued that the only way to insure
benefits for Federal workers is for the
Government to put additional billions
into the civil servicesystem.
Mr. Chairman, what we are engaged
in is a shell game. This proposal will
provide no significant contribution to
the solvency of the social security
system.
Approved For Release 2008/10/29: CIA-RDP85-00003R000200130004-8
 Approved For Release 2008/10/29: CIA-RDP85-00003R000200130004-8
March 9, 1983 CONGRESSIONAL RECORD - HOUSE
The estimates of the additional rev-
enues that the inclusion of new Feder-
al workers are greatly exaggerated.
The Congressional Budget Office has
estimated that revenues deriving from
the inclusion of new Federal workers
could be as low as $4.9 billion in the
short term. Over the longer period,
many believe, that the social security
system, will lose money when Federal
workers begin to receive social security
benefits.
. Government costs emanating from
this provision will increase as the Gov-
ernment begins matching Federal em-
ployee's social security taxes and
paying for the new retirement system
to supplement social security benefits.
Additionally, the Government would
experience a loss in revenue as taxable
civil service retirement benefits are re-
placed by nontaxable social security
benefits.
Again, Mr. Chairman, I wish to ex-
press my disappointment that the rule
under which we are operating will not
permit a vote on this very unwise pro-
vision.*
Mr. WALGREN. Mr. Chairman, I
want to add my support for the Social
Security Act Amendments of 1985.
This legislation, a careful compromise
which earned the support of many di-
verse groups, promises to place social
security on a sound financial basis well
Into the next century and provide us
all with a basic income in our retire-
ment years. .
In talking to many of the people I
represent, It is clear - to me that the
greatest reservation the public has is
the belief that social security will run
out of money again in the near future.
After all, they say, we were told In
1977 that the tax increases the Con-
gress then approved would keep the
system sound into the 20th century.
And, look what happened. The system
is bankrupt in less than 5 years.
However; unlike the 1977 amend-
ments which proved to be inadequate
because of the unexpected double
burden of severe inflation and unem-
ployment of the past decade, this bill
contains Important automatic stabiliz-
er which will do much to insure fi-
nancial stability. Beginning in 1988, If
the trust funds decline below a.reason-
able level, the coat-of-living benent
would automatically be reduced to the
lower of the consumer price index in-
crease or the increase in average
wages. This will prevent depletion of
the trust funds in times of rapid infla-
tion and sluggish economic growth,
when prices outstrip wages. When the
funds recover, a "catch-up" benefit
payment would be made.
Passage of this bill demonstrates the
commitment of the Congress to the
fundamental structure and principles
of the social security program. It is im-
portant to keep In mind that the prob-
lems confronting 'social security
merely reflect the changes In our soci-
ety. Most important of these is that
we are an aging society with longer
life expectancies and lower birth rates.
In 1950. there were 10.5 workers sup-
porting each social security benefici-
ary; today there are only 3.2. We ex-
pectancy for males has rises from 65
to 1950 to 70 In 1982. It is only to be
expected that we must set aside more
of our resources to meet the increased
needs an aging population requires
from our society. To think that we can
avoid increasing our contributions and
believe that basic social security bene-
fits can be maintained, is simply wish-
ful thinking.
Finally, I believe it is most impor-
tant that this bill requires universal
participation and coverage in social se-
curity. Every American without excep-
tion, including the President and each
Member of Congress, will now be re-
quired to pay social security taxes.
No one will be able to point to
anyone else and say they are not bear-
ing their -fair share. Each of us will
know that that, whatever burden we
are bearing, It is only our fair share
when we think about what everyone
else is paying.
Mr. Speaker, the importance of con-
tinuing a healthy social security
system was especially well put by a
constituent of mine. In a recent letter
to me, she wrote:
Dear Mr. Walsren: I am a senior citizen.
My total income is $476 of social security
and $5.00 benefit from the veterans admin-
istration which I get along on. paying $209
rent in addition to my gas. electric, phone
and medical items. I also keep my life insur-
ance as well as Blue Cross up each month. I
dropped my Blue Shield because I knew I
couldn't do It, but I manage okay. I am 76
years of age and have been a widow for 7%
years and I feel very lucky to be able to take
H 1001
Insure its solvency, both for people
now receiving benefits and for people
now paying into the system. As we
know, that solvency is threatened-
social security is expected to need $150
to $200 billion between now and the
end of the decade to stay healthy.
Social security checks are now literally
being sent out on borrowed time, time
which will expire in July. If we fail to
act today in approving this plan, we
run a very real risk of letting that
time expire and letting a lifeline for
millions of older Americans expire too.
What the President's Bipartisan
Commission on Social Security accom-
plished in achieving consensus on a
package of reforms is nothing short of
remarkable. This group. appointed by
leaders of both parties, moved beyond
the simplistic rhetoric in which many
had engaged. Through more than a
year of hard work and negotiation,
they put together a realistic and bal-
anced package. They deserve deep
thanks from all of us.
One of the hallmarks of a true com-
promise is that there is something in it
that everyone does not like. That is
certainly true of this package. Each
member of the CommisSiaac, acting in-
dividually, would have written a differ-
ent plan. The Commission is asking
for some sacrifice from nearly every
American. But the reason their work Is
so impressive is that they do not ask
an unfair sacrifice from any one
group. Their comprgpaige strikes a
fragile balance between a number of
competing and legltim$te Interests. If
we turn It down today, there is certain.
with $10.000 or more should complain about
having tax taken for social security when
they know the condition of our great coun-
try. Let everyone help as much as they can
and be happy doing so. -
I don't live in a shabby neighborhood and
am not ashamed to bring anyone into my
apartment. If they would only bring food
prices down a little it would help a great
many people. I am thankful for everything I
have. My late husband worried how a frail
person like me would even exist after he was
gone. But I did it and am contented. Sure, I
must sacrifice some times but It never hurts
me to do so.
God bless you and your fellow represents-
tives. I can think of nothing more Important
than that the Congress keep the social secu-
rity system sound.
? Mr. WIRTH. Mr. Chairman, social
security affects virtually every Ameri-
can in a direct and important way. It
has been remarkably successful at
achieving its central purpose of keep-
ing senior citizens from living in dire
poverty. It has provided a basic floor
of income for retired Americans and
has given working people the security
of knowing they will not be destitute
when they grow old. It is our country's
largest social program, the result of a
social compact we made in the dark
days of the Depression.
Because social security is of such
profound importance to all Americans,
our overriding goal today must be to
happy with parts of , the package
would be more satisfied In the future.
Indeed, there Is no guarantee that an-
other compromise could be reached.
When the Commission's plan was
issued in January, I decided that
before making my decision on whether
to support it, I would consult broadly
with my constituents. Through news-
letters to each home in my district. I
explained the major parts of the plan,
and outlined arguments for and
against each part. Hundreds of
Coloradans took time to communicate
with me about social security, and
their thoughts were very helpful.
Some of their feelings were touching-
seniors living barely above the poverty
line who wrote that a 6-month delay
in their COLA's was a necessary part
of keeping social security healthy, cur-
rent workers stating that a gradual
speedup In their payroll taxes was a
reasonable part of the needed solu-
tion, and many others.
Other constituents shared their con-
cerns about parts of the package: Fed-
eral workers concerned about the
future of their retirement system,
small business people worried about
the effect of the tax -hikes on their
businesses, working taxpayers who are
feeling the brunt of ever-rising taxes,
and others.
Approved For Release 2008/10/29: CIA-RDP85-00003R000200130004-8
 Approved For Release 2008/10/29: CIA-RDP85-00003R000200130004-8
H 1004 CONGRESSIONAL RECORD
I am concerned with the impact of
the delay in the cost-of-living increase
for current beneficiaries, particularly
those receiving minimal benefits and
hope that every effort will be made to
assure that the increase in SSI pay-
ments will help to compensate for the
COLA delay imposed on particularly
low income social security recipients.
The impact of the increase in tax-
ation for the self-employed, especially
small business people, is also a source
of concern to me, and I sincerely hope
that the tax credit provided the self-
employed against their taxes will be
adequate to help offset the increased
burden, but I still have doubts-espe-
cially, after the 2-year duration of the
tax credit.
Of particular concern to me has
been the impact 'of the provisions ex-
tending social security coverage to new
Federal employees effective January 1,
1984. Like many, I have questioned the
impact of such a provision on the via-
bility of the civil service retirement
system for those who will rely on that
system for their future retirement
benefits. Questions have been raised
as to whether the system will ulti-
mately go bankrupt because of the
lack of contributions by new Federal
employees.
In my view, this has been a serious
enough issue that I had considered
voting against the bill solely because
of that threat. In an attempt to gain a
better perspective on just what this
provision will mean to the future of
the civil service retirement system, I
spoke at length with the chairman of
the Post Office and Civil Service Com-
mittee, the gentleman from Michigan
(Mr. Foxe) who was of immense assist-
ance in helping to put this entire
matter into better focus, and who has
greatly assisted me in clarifying some
misconceptions that have been pro-
moted as arguments against such
extension of coverage.
As I now understand this legislation,
while new Federal employees will be
required to contribute to social secu-
rity effective January 1, 1984, they
will also be required, as is currently
the case, to contribute to the civil serv-
ice retirement system. Therefore, con-
trary to the claims by many, the con-
tributions of new Federal employees
to the CSRS will not be lost.
However, this does not alleviate an-
other serious concern, namely, wheth-
er these new Federal employees will
therefore be forced to bear an unduly
heavy financial burden because of the
necessity of dual contributions to both
systems, amounting to a total of about
14 percent of their salaries, at the
outset, a very large assessment,
indeed.
Because of this factor, I am assured
by Mr. Foxe and the House leadership
that every effort will be made to im-
plement a mini-program whereby new
Federal employees will have, instead, a
supplemental program under the civil
service retirement system, permitting
contributions at a lesser than full rate
HOUSE March 9, 1983
of 7 percent. While the contribution
burden will still be more than if they
were required to participate in only
one program, they will also have the
advantage of comparably higher re-
tirement benefits through the two
pension programs when they finally
do retire.
I am further assured that every pos-
sible guarantee will be made that the
Federal Government will contribute
whatever will be necessary to assure
expected benefits for current Federal
employees when they do retire. As we
all know through studying this issue,
the General Treasury already contrib-
utes upward of 80 percent of the total
needed to meet benefit obligations.
Hopefully, under this new system,
that contribution need not be signifi-
cantly higher than it is today.
Because of these assurances regard-
ing the future preservation of the civil
service retirement system for those
who-must rely on that system for their
retirement income, I have decided
that, on balance, this is a supportable
bill.
However, I also believe that some
questions which I have raised, includ-
ing assurances that adequate funding
for the CSRS will be guaranteed for
future years to come, must be ad-
dressed. I further believe that the
Congress must closely monitor the
impact of the dual contributions re-
quired of new Federal employees to
assess the financial impact of such re-
quirements, particularly on those at
the lower rung of the OS ladder.
Mr. Chairman, on a final note I want
to make the observation that Federal
employees have been perhaps the
most unjustifiably maligned group of
workers in this country. For the most
part these civil servants are hard
working and dedicated employees who
earn every dollar they make. They
have continually been singled out for
undue sacrifices ever time we face eco-
nomic problems in this country. And,
again, this administration has pro-
posed asking more sacrifices from
them by urging increased contribu-
tions to their retirement systems,
freezing their wages when they have
already been held to COLA increases
far less than the cost-of-living in-
creases for several years resulting in a
lag of 14.47 percent behind the private
sector as of October 1982.
If such actions continue, we will
clearly come dangerously close to
bringing reality to the myth that Fed-
eral employees are poorly qualified
workers by making Federal employ-
ment so unattractive that we will be
unable to find qualified persons to fill
Government positions. Already studies
show that Federal workers are paid an
average of 20 percent less than compa-
rable workers in the private sector and
if the recommendations of this admin-
istration are adopted, they will fall
even further behind.
I hope that bringing Federal em-
ployees under social security will quiet
some of the criticism that they are
somehow a privileged class. I hope,
even more, that we will finally cease
treating Federal workers like second-
class citizens.
Mr. Chairman, I sincerely hope that
with this legislation, and with what I
assume will be comparable action by
the Senate, we will adequately address
the short-term needs of the social se-
curity system. I trust that this pack-
age will relieve the concern held by
many that there will be no money in
the trust funds when they retire.
Whether the long-term needs of the
system will also be met by whatever
legislation is ultimately sent to the
White House for the President's signa-
ture, remains to be seen.?
? Mr. GONZALEZ. Mr. Chairman, I
cannot support this bill.
On principle, it is wrong, in that it
makes fundamental and probably irre-
versible changes in the nature of social
security. For the first time, it places a
tax on certain recipients, in effect cre-
ating a means test for beneficiaries.
This ultimately means that the pro-
gram will not be seen as an insurance
program wherein all premium payers
are treated equally, but as a welfare
program in which some are treated
differently from others, based on a
test of need. Naturally, we are told
that only a small percentage of recipi-
ents will be subjected to this new tax,
but the principle will have been set,
and that principle is clearly to trans-
form the basis of social security from
an insurance program into a means-
tested welfare program. We will see
that in the future, when the program
is in trouble, the means test will be ex-
panded, the number of people with
drastically reduced benefits will in-
crease, and public support for the pro-
gram will fall off. It is a small provi-
sion, this tax, but its meaning and por-
tent are vast, and it is fundamental to
the whole future of social security as
we know and understand it today.
On principle, I cannot support a bill
that is drawn up in a matter of days,
when we know that the recommenda-
tions behind it were arrived at only
after months of struggle, and then
only after the Commission was force-
fed. The issues embodied in this bill
are immense. They deserve more care-
ful consideration and time than we are
permitted to give today. The questions
before us are greater than the two
amendments we are permitted to vote
on. If the Commission on Social Secu-
rity was free to work its will, and if the
Committee on Ways and Means was
able to work its will, why must we
reduce ourselves to consideration of
only two amendments? Why should we
deny ourselves the opportunity to
work our will on such matters as cov-
erage of Federal employees, and on
such issues as the new medicare reim-
bursement system-just to name two
of the larger questions in this bill.
On principle. I cannot accept the ar-
gument that this bill is the ultimate
cure for all that ails social security.
Approved For Release 2008/10/29: CIA-RDP85-00003R000200130004-8
 Approved For Release 2008/10/29: CIA-RDP85-00003R000200130004-8
H 1006 CONGRESSIONAL RECORD - HOUSE
Furthermore, during the last 2 years
Federal employees' health ipsurance
premiums have sharply increased at
the same time their health benefits
have been significantly reduced. Under
the Federal health benefit program
(FEHBP) Federal workers and the
Government share the costs of the
system. In fiscal year 1981. when the
Office of Management and Budget re-
alized that there would be substantial
shortfalls in the J HBP, President
Reagan decided against requesting a
supplemental appropriation. Instead,
the. administration cut benefits and
shifted the costs from the Govern-
ment to civil servants by increasing
their contribution. Last year, the ad-
ministration once again increased
worker contributions. Today, the aver-
age Federal employee is now paying 55
percent more for health coverage than
in 1981.
The administration proposes to dras-
tically alter the formula used in deter-
mining the Government's contribution
to FEHBP. In lieu of a percentage for-
mula, the Government would adopt a
voucher plan. This means that the
government would contribute a fixed
dollar amount toward the purchase of
a health plan. This proposal will force
the Federal employees to bear a much
greater share of the health care costs.
This proposal will not hold down
health care costa as the administration
contends. Escalating medical expenses
will become the financial responsibili-
ty of Federal employees.
Finally, major cuts have been made
in the civil service retirement system
(CSRS) since 1980. Cost-of-living ad-
justments (COLA) no longer come
every 6 , months, but on an annual
basis. In 1962, these adjustments were
delayed 1 month for each of the next
3 years beginning in 1683. This means
that instead ? of COLA adjustments
being on a 6-month cycle as they were
at the start of the administration they
are now on a 13-month cycle.
However, compared to the Presi-
dent's 1964 budget request these past
cuts are minor. If passed, the fiscal
year 1964 COLA will be canceled. In
addition, the budget contains provi-
sions to lower retirement benefits, in-
crease employee contributions, and
raise the an at which Federal employ-
ees can retire with full benefits. This
proposal would, have a devastating
effect on the civil service retirement
system. The administration is sense-
lessly attacking a retirement system,
which unlike most private pension
plans employees contribute to, where
the average retiree receives $12,550 a
year and 22 percent of retirees receive
less than $500 a month. Furthermore,
these generous benefits are subject to
Federal income tax.
Mr. Chairman, retired Federal em-
ployees and those nearing retirement
have worked their entire lives at jobs
less, financially rewarding than those
in the private sector. It is outrageous
that we would now jeopardize their re-
tirement security. Furthermore, unless
this Congress passes a fair supplemen-
tal pension plan, and rejects the Presi-
dent's budget proposals pertaining to
Federal employees, it will become im-
possible to attract qualified public
servants. Providing equitable Federal
employee , benefits is a matter of
simple justice and a necessary invest-
ment in America's future.*
? Mr. THOMAS of California. Mr.
Chairman, as we consider how best to
repair our Nation's social, security
system so that it will survive and con-
tinue to pay benefits to our retirees
into the 21st century, I sincerely hope
that Congress avoids taking the easy
route-that is, more tax increases-
and instead attempts a more perma-
nent solution.
We have already agreed that in
order to rescue the social security
system, we must enact a set of short-
term proposals with which every
American may not agree, but which
will put the system on a sounder basis.
I may not agree with each proposal,
indeed. no Member of Congress may
agree on each proposal, but I believe
the short-term package is by and large
a responsible, balanced package which
treats every group in our society
fairly, and 4t must be enacted.
I believe Congress should take the
same responsible attitude in dealing
with the long-term problems which
social security faces. In my opinion,
the most equitable and responsible of
the alternatives before us to assure
social security's long-term solvency is
to gradually raise the retirement age
by 2 years, beginning in the year 2000.
According to actuarial estimates,
this slight change, accomplished very
gradually over a 25-year span in the
next century, will assure that the
system survives-without a future tax
increase, without a future cut in bene-
fits, without harming those now re-
ceiving benefits, without harming the
disabled or women workers.
It is irresponsible and unfair for
Congress to enact yet another payroll
tax increase to cover 21st-century defi-
cits. Payroll tax increases siniply at-
tempt to mask the real problem we
face with social security: In short,
people are living longer, and relatively
fewer workers are being asked to sup-
port the system.
Is it equitable for Congress to re-
quire younger workers to pay more
taxes and settle for a benefit cut of 5
percent when It is their turn to retire?
That is one of the proposals we con-
front today.
Is it equitable or responsible to
expect future employers and workers
to contribute more and more of their
payroll to cover yearly deficits that,
under current law, are expected to
reach $10 trillion by the year 2052?
That is another proposal before us
today.
I say that the Pickle amendment is
the most responsible choice of the al-
ternatives before us to complete the
reform package which we send to the
Senate. Raising the retirement age by
March 9, 1988
an average of 1 month per year is an
honest way to deal with an inescap-
able fact: The U.B. population is aging.
The current social security problem
is before us precisely because people
have changed. It would be foolish for
us not to admit that the system needs
to be changed to meet changes in the
population.*
? Mr. BIAGGI. Mr. Chairman, I rise
to express my opposition to the
amendment sponsored by the distin-
guished chairman of the Social Secu-
rity Subcommittee, Mr. Picxra, to
raise the retirement age to 67 as a
main means of guaranteeing the
future solvency of social security.
I oppose this amendment for several
reasons, not the least of which is that
fact that we should not be adopting
this radical approach at this time. We
have before us a comprehensive
enough bill in H.R. 1900, with its $165
billion in new revenues for social secu-
rity ostensibly to keep the system
afloat through 1990 and beyond. To
add yet another difficult feature to
H.R. 1900 seems to go far beyond what
we must do today.
Yesterday. the House Select Com-
mittee on Aging, on which I am proud
to be an original member, conducted a
hearing which focused in great meas-
ure on the issue of raising the retire-
ment age. At that time I raised the
point that increasing the retirement
age and justifying it by the fact that
people are living longer overlooks a
central issue. Just because people live
longer does not mean that they are
able to work longer. At this point a
startling 74 percent of those exercising
early retirement under social security
must do so for reasons such as poor
health. Will this percentage decrease
that dramatically in the next two dec-
ades? I doubt ft. Therefore, why do we
assume it by raising the retirement
age.
A second concern I have I can state'
very simply. If we raise the retirement
age we may be seeing one of the first
examples of our Nation legislating dis-
crimination. It is a documented fact
that the minority aged live fewer
years than do their white counter-
parts. Therefore, raising the retire-
ment age does not afford all aged per-
sons equal protection under the law.
Finally, Mr. Chairman, I oppose the
Pickle amendment because it once
again places Congress in the position
of cutting social security benefits.
There should be other approaches ex-
plored before we take a step such as
proposed in the Pickle amendment.?
? Mr. ROTH. Mr. Chairman, I rise in
opposition to yet another attempt to
restrain the Members of the House
from expressing the views of their con-
stitutents on this historic legislation.
We will take actions today that will
impact on future generations of
Americans. Provisions of this bill will
shape the workplace and the lifestyle
of workers and retirees well into the
next century.
Approved For Release 2008/10/29: CIA-RDP85-00003R000200130004-8
 Approved For Release 2008/10/29: CIA-RDP85-00003R000200130004-8
H 1010 CONGRESSIONAL RECORD - HOUSE
ceived by the retired worker from 42
percent to 40 percent of previous
monthly gross pay at the time of re-
tirement as scheduled to be phased in
from the years 2000 to 2008.
It is incumbent upon Congress to in-
novate new and relatively painless
sources of income to help fund the Old
Age Survivors and Disability Insur-
ance program. I have recently reintro-
duced H.R. 85, the "National Social
Security Lottery Act," which would es-
tablish a national lottery similar to
the Irish Sweepstakes. If the Irish can
fund their hospitals through a lottery,
we should be able to held fund social
security in the same manner. It is esti-
mated that a national lottery could
gross upwards of $25 billion over the
next 7 years, the period of time the
Commission addressed in their short
term proposals. This would significant-
ly lessen the number of unpopular
compromises that would otherwise be
necessary to keep the system solvent.
A national lottery, however, is no
panacea. Other avenues must also be
explored in an effort to identify new
sources of income. I urge the Congress
not to act hastily. The outcome of this
vote will shape the financial futures of
millions of Americans.*
? Mr. BIAGGI. Mr. Chairman, the
hour of decision has finally arrived.
We stand on the threshold of a histor-
ic decision affecting the lives of some
36 million of our citizens. The hours
and days and months of wrangling
over what approach to take to aid the
social security system are, for all prac-
tical purposes, over, for we have
before us today, H.R. 1900, the Social
Security Reform Act of 1983.
With the passage of this bill today,
Congress will have administered to
itself a stiff dose of castor oil-bitter
medicine necessary to effect a cure to
the ailing social security system. This
bill has been properly designated as a
bipartisan compromise package. How-
ever, as anyone in Congress knows,
compromises by their very nature are
imperfect, and H.R. 1900 Is no excep-
tion.
As I stated earlier during the debate
on the rule governing consideration of
this bill. H.R. 1900 would be a far
better document were more Members
of Congress able to shape it. The rule
we are operating under provides for
separate votes only on two amend-
ments, both of which deal with the
longer term financing issues related to
social security. As far as &he issues af-
fecting social security in the shorter
term-as far as what comprises the
$165 billion package before us-we
have no opportunity to do anything
but ratify or reject the entire package.
Both routes are fraught with peril.
However, I would emphasize the fact
that the latter route is far more dan-
gerous, for our failure to adopt a pack-
age along the lines of H.R. 1900 could
result in the collapse of social security,
to which none of us would want to be
a party.
The facts are that social security is a
system that is in the worst financial
trouble in its more than 40-year histo-
ry. The reasons are many-but very
few do we have any real control over.
One, of course, is demographic-social
security as the "pay as you go" system
is financed through taxes paid by both
employers and employees into three
trust funds. In the early days of social
security, the ratio of contributors to
beneficiaries was a healthy 5:1. This
ratio has now slipped to just over 3:1,
and based on current demographic
projections could drop to a dangerous
2:1 by the year 2000. Further, none of
us could anticipate the tremendous
fluctuations in economic conditions
which have been a part of this Nation
over the past 10 years. In 1972, I sup-
ported the legislation which provided
social security beneficiaries with a
once-a-year cost-of-living increase. One
could not expect the rampant infla-
tion which raged through our Nation
in subsequent years-yet it occurred,
and under the law, social security
benefits were to be raised according to
the Consumer Price Index. There is
little doubt that this, too, adversely af-
fected the financial picture of the
social security system, yet we were on
sound footing in trying to provide our
senior citizens with some protection
against inflation.
Finally, as we move closer to the
economy of today, now the impact of
the recession is being felt on the social
security system as well. One particular
consequence is our high unemploy-
ment rate; today, we have more than
11 million people out of work. Many of
these people could be contributors to
social security, yet, instead, they are
idle. The impact of high unemploy-
ment combined with demographic
changes has done a great deal to put
social security in the dangerous finan-
cial condition we face today.
As an illustration of how serious
social security's problems have become
for the past several months, the
system has been forced to exercise its
interfund borrowing authority pro-
vided to it by Congress. Under the pro-
posal, this will insure the timely pay-
ment of benefits through July. This
legislation will take care of the bene-
fits after that date.
What we have before us is a balance
of benefit reductions: Tax increases,
limited use of general revenues, and
expansion of coverage under the
system. It is a delicate balance, at-best,
but obviously the whole is more ac-
ceptable than the sum of its parts.
I wish to address some of the fea-
tures contained in this legislation. Let
me begin with the proposal which will
provide the greatest amount of new
revenue for social security but which
will cause the greatest hardship for
people presently enrolled in social se-
curity. I refer to the proposal to delay
for 6 months the 1983 cost-of-living in-
crease for the 36 million Americans on
social security. Under this legislation,
the 1983 increase would actually be in
March 9, 1983
the January 1984 benefit check and all
subsequent COLA's would be paid in
January. The Committee on Ways and
Means is to be commended for adding
a very important provision guarantee-
ing that at least a 3-percent COLA will
be paid in 1983-84 even if the CPI
should not be at the 3-percent level.
However, there are powerful human
problems associated with this provi-
sion. For an estimated 26 percent of
the 36 million people on "social secu-
rity, this represents 90 percent or
more of their income. H.R. 1900 is
asking these people to go 18 months
without an increase in their social se-
curity check. This does not take into
account that almost all of these people
have suffered from increases in some
essential staple of their lives whether
it be rent, heat, food, or medical care.
We know that inflation has decreased
substantially, but it has by no means
disappeared altogether. What about
the low-income seniors who have the
misfortune to heat their homes this
winter with natural gas-and were
unable to get assistance from the Fed-
eral Government? What about the
senior citizens who budget for the
COLA in July-and suddenly realize
the increase will not come until Janu-
ary? What essential will they have to
go without during the balance of this
year?
It is not easy for those of us who
have worked so hard and voted for
bills to preserve the integrity of the
social security system to swallow a
provision which constitutes a perma-
nent reduction in social security bene-
fits. These past 2 years have been dif-
ficult in that we have had to accept
legislation which calls for the first re-
ductions in benefits in the history of
social security. In 1981, it was the
minimum benefit payment which was
cut off under the terms of the Budget
Reconciliation Act. Through efforts of
myself and others, the decision was
partially reversed when Congress
voted to restore the benefit for those
currently enrolled, but barred the
benefit for new beneficiaries. In that
instance-much like the so-called "diet
COLA"-it is the low-income senior
who gets hit the hardest. For some,
corresponding increases in SSI bene-
fits provided as part of this bill may
help to offset the hardship of the de-
layed COLA. However, it is by no
means a substitute for it, and for
many low-income seniors who fail to
qualify for 881, the problem becomes
that much more acute.
One final point relative to the COLA
delay-it seems hard for me to under-
stand why it is necessary to implement
this at a time when inflation is down
drastically, therefore the size of the
COLA would be far reduced from pre-
vious years and the amount this would
cost the system would be far less than
in previous years. Delaying the COLA
until January will pose many prob-
lems-that is for certain-but having
future COLA's paid in January instead
Approved For Release 2008/10/29: CIA-RDP85-00003R000200130004-8
 Approved For Release 2008/10/29: CIA-RDP85-00003R000200130004-8
March 9, 1983 CONGRESSIONAL RECORD - HOUSE H 1011
of July and having the future formula it is wrong, the way. we are legislating labor-a new tax is imposed on you by
after 1988 begin either the increase in this major change in law today. There the Government.
the CPI for the last quarter of each should have been a separate vote on I believe the provisions in this legis-
year
or the increase i
avera
e
es -
a
,
n
g
w
g
. whichever is lower does throw into se-
rious question our commitment to
maintain the policy we began some
1044 years ago to provide seniors with
adequate protection against inflation.
I would state, as I have to my constitu-
ents in New York, if we were given an
opportunity for a separate vote on this
issue, I would have voted against a
delay in COLA's.
Similarly, I am strongly opposed to
the provision mandating social secu-
rity coverage beginning in 1984 for all
new Federal and postal workers and a
host of other governmental employ-
ees. My opposition is based on a simple
cost-benefit ratio principle. The most
which this "universal coverage" provi-
sion could provide to social security
would be some $12 billion. I would
note that this is considerably lower
than the $20 billion estimated by the
Social Security Commission. The re-
spected president of the National As-
sociation of Letter Carriers, Vincent
Sombretto, contends it will only pro-
vide $6 billion for social security.
Whether it be 6 or 12, this is not
enough of a benefit to balance out the
excessive costs which this provision
will produce. First and foremost, based
on current projections, putting new
Federal and postal workers under
social security will simply bankrupt
the civil service retirement system in
'about 20 years-something which
could cost the Oovernment $185 bil-
lion, which I might point out is more
than this entire bill will produce in
new revenues, let alone the provision
bringing in new Federal and postal
employees.
I am confident that the distin-
guished chairman of the House Post
Office and Civil Service Committee,
Bas. FORD, will initiate proceedings in
his committee, which is responsible for
this retirement program, to insure
that a supplemental system is put into
place. In my capacity as a senior
member of the House Select Commit-
tee on Aging. I intend to do all that I
can to assist Chairman FoR! and other
concerned Members of Congress in de-
veloping long-term protection for
these Federal workers. They are enti-
tled to equal benefits under social se-
curity that they would have received
under their own retirement plan and I
am confident that Congress will re-
spond in timely fashion to insure that
this happens.
Finally, let me add, as a former
postal worker and current Federal em-
ployee-from the managerial sense-It
is ludicrous to legislate in a way that
produces divisiveness among Federal
and postal employees. It is irresponsi-
ble to legislate in a way that produces
different retirement systems for
people doing the same type of work. It
is wrong for Congress to pass legisla-
tion which will lower morale among
Federal and postal employees. Finally,
to the lives of millions of. Federal and ~ _ _ tan w.y oa.ed'?ay"~ OVA
postal employees. They have not been g by Con-
grem ass 1977 is far preferable to In.
ff
d
d d
or
e
a
emocracy. Another provision that I have some
serious reservations over is the provi-
sion to impose a first-time tax on
social security benefits. Again, to the
credit of the Ways and Means Com-
mittee, certain adjustments were made
from the original proposal of the
Social Security Commission, but in re-
ality, we are violating a principle here.
Social security recipients paid taxes on
each and every paycheck they received
in their working years-taxes which
were earmarked for the social security
trust funds. These were to be used by
the worker to help finance a secure re-
tirement. It was not paid with the ex-
pectation that they would be forced
with another tax when they were
begun to be applied to their retire-
ment. Yet that is what we are propos-
ing with this bill today.
H.R. 1900 proposes that benefits
would be taxed only for those redpi-
ents whose taxable income (excluding
social security) plus one-half of their
social security benefits exceeds a base
amount. This base would be $25,000
for an individual and $52,000 for a
married couple. Further, the amount
of social security benefiti that would
be taxed would be the lessen of one-
half of the excess of the ' taxpayer's
combined income over the base
amount or one-half of the taxpayer's
social security benefits.
As I mentioned earlier, the- Ways
and Means Committee did make some
important improvements in this provi-
sion-perhaps the most important of
which is eliminating the so-called
"notch" problem which would have
caused people with incomes just over
the threshold to pay a, disproportion-
ately high tax compared to the person
well above the threshold. By allowing
the tax to be applied to the amount by
which a taxpayer's income exceeds the
base amount alleviates this problem
and institutes more equity into this
process. Let me also add that I am
pleased that this legislation mandates
that all revenues raised from this tax
be applied directly to the social secu-
rity trust funds.
While it is estimated that only 7 per-
cent of current beneficiaries will be af-
fected by this provision, it does repre-
sent a radical departure from the his-
tory of social security. In addition to it
being a first-time tax on social security
benefits, it promises to affect more
and more people each year because
the thresholds are not indexed. There
is a great deal of inequity associated
with this particular proposal. Let us
assume you are an elderly person who
has elected to invest or save wisely for
a comfortable retirement after years
of hard work. Just as you reach this
point in life-or in some cases while
you are enjoying the fruit, of your
creasing them further between now
and the year 1990. While it will be dif-
ficult for some to assume these. in-
creases under the timetable provided
in this bill, there is sufficient time pro-
. vided for people to Plan for them.
Over the history of the system, It has
been the payroll tax which has pro-
vided the foundation of funding for
social security. In the past decade, it
has presented far more of a burden
then in previous years, and H.R. 1900
strikes an effective balance in this
area and I am in support of the lan-
guage regarding the acceleration of
the payroll tax increases,
I have some concerns about the
impact of the provision in this bill
which will raise the payroll tax rates
paid by self-employed persons. Under
present law, the self-employed pay re-
tirement and disability taxes at a rate
equal to about 75 percent of the com-
bined employer-employee tax rate,
while only about 60 t of this
rate for the medicare ;hospital insur-
ance taxes . Under H,R. 1100, the self-
employment tax for all three trust
funds would be raised .100 percent
of the combined pr-employee
rate. However, is anotiiar example of
how the committee improved upon the
.
Commission's reoomm sidation, they
helped soften the Impact by allowing
the self-employed a credit against
their new self-employment tax rate
amounting to 2.1 percentage points in
1984 and 1.8 percentaie, points over
the period from 1986-87. and 1.9 per-
centage points for 1988 $nd beyond.
Clearly, like so many other provi-
sions in this bill, a great sacrifice is
being asked of a Particular segment of
people-in this case, the self-em-
ployed. Here we are in some ways.reo-
tifying a situation and !bringing some
degree of equity to the way payroll
taxes are assessed. However, again like
in so many other provisions in this leg-
islation, we are asking too much too
soon. There should be some degree of
phase-in of provisions like this which
so affect the economic fortunes of
working people in already difficult
economic times. The self-employed
person-especially the small business-
man-is 'being adversely affected al-
ready by a number of economic fao-
tors. H.R. 1900 asks for one more.
Let me now address several provi-
sions in the bill for which I can claim
some degree of responsibility. The
first has to do with the provision reim-
bursing the social security trust fund
for the full value, including interest,
of uncaahed checks. It Was disclosed in
hearings before my Aging 'Subcommit-
tee in 1981, that while Cfal security
checks are drawn f dm trust
funds, if they should not be negotiated
for whatever reason, the full value in-
Approved For Release 2008/10/29: CIA-RDP85-00003R000200130004-8
 Approved For Release 2008/10/29: CIA-RDP85-00003R000200130004-8
H 1012
CONGRESSIONAL RECORD -- HOUSE March 9, 1983
cluding interest accrued on the check
is credited to the General Treasury,
not the trust funds from where they
were originally drawn. This has caused
social security to lose an estimated
$500 million over the life of the
system and it could lose another $30
million over the next 3 years unless
the law was changed. Under this bill,
the trust funds will be compensated
for the full amount they are owed by
the General Treasury for uncashed
checks. Further, the bill contains pro-
visions which would presume a check
to be dncashed after a more reason-
able time than is presently the case.
This is an important administrative
reform which I had advocated, as evi-
denced by my authorship In the 97th
Congress of H.R. 4003.
A second provision of this legislation
which I helped to shape has to do with
stemming the flow of people who are
leaving social security. Last year, I
sponsored H.R. 6356, and H.R. 475 in
the Congress, to impose a 5-year mora-
torium on persons withdrawing from
social security while also mandating
that new nonprofit employees be cov-
ered under social security. My bill also
would permit those entities that did
withdraw from social security to
return, which Is not an option under
current law.
What H.R. 1100 provides Is the fol-
lowing It bars State and local govern-
ments 14+om terminating social security
coverage for their employees if the
termination had not taken effect by
the time the measure is enacted. It
also allows State and local govern-
ments that have previously withdrawn
from sodas security to voluntarily
rejoin. Further, the bin before us ex-
tends social security coverage to em-
ployees of all nonorgandsatlon's chari-
table at -private schools and uni-
versities, and hospitals--and requires
all of these organizations and their
employees to begin paying social secu-
rity taxes, effective January 1, 1984.
This applies to all employees, not just
newly hired. The bill does provide that
people aged 55 and over would qualify
for social security coverage with fewer
quarters.
I commend the Social Security Com-
mission and the Ways and Means
Committee for addressing this very se-
rious problem. At the beginning of
this year. the entire city of Is Ange-
les-more than 100 counties-left
social security. The Social Security
Administration has applications pend-
ing which, if not stopped, would result
in more than 400,000 additional em-
ployees leaving social security. If the
system is already reeling from the ef-
fects of a shrinking ratio of workers to
beneficiaries, to permit upwards of
400,000 contributors to leave the
system simply and unnecessarily exac-
erbates this situation.
Briefly, some final points about the
social security provisions of this bill I
regret that there is not stronger lan-
guage governing the use of general
revenues for social security. There are
a number of us over the years who
have believed that limited general rev-
enue financing was needed in social se-
curity. One approach was the one-
third, one-third, one-third approach,
advocated by our distinguished former
colleague, Jim Burke of Massachu-
setts. Another would be to have the
disability insurance and hospital insur-
ance funds funded under general rev-
enues. None of this has come to pass
either in the Commission's report or
the bill before us. Instead, we have
somewhat general language saying
that if-and only if-we have a serious
decrease in available reserves, would
funds from the general revenues be
used but these must be paid within 2
years. The bill does provide for an ex-
tension of interfund borrowing au-
thority through 1987 which is of obvi-
ous Importance once we realize how
the OASDI fund has paid its benefit
checks these past several months.
Finally. I commend the Commission
and the committee for including lan-
guage which will Improve the invest-
ment policies of the trustees. The
main improvement Is that, under the
bill. trust funds could be Invested in
short-term as ww11as long-term Treas-
ury securities. This should help the
all-Important rate of return on the In-
vestments which has been seriously
lagging and. according to a report
issued by the Community Service Soci-
ety of New York.- has cost the trust
funds some $14 billion.
There are other important provi-
sions in this bill which I would like to
mention briefly. H.R. 1900 while de-
laying the cost-of-living increase until
January, as in social security. does
provide a one-time permanent Increase
of $20 per month for all Individuals
and $30 for all couples receiving 88I
benefits, effective in July. The bill also
prohibits States with their own 88I
programs from lowering their benefits
in order to offset the increase in Fed-
eral benefits, thus Insuring that every
needy 8SI person in every State re-
ceives this Increase. 881 people are
truly the poorest of the poor in our
Nation and this increase is desperately
needed for them to eke out a basic ex-
istence. It Is long overdue and I fully
support it.
The bill extends for 6 months the
emergency Federal supplemental oorn-
pensation program. The need for this
is as obvious as anything we could do
up here. As unemployment increases
both in terms of absolute numbers and
duration. we must take steps to keep
those unemployed from being thrown
any further or deeper into poverty. As
it stands now. many of our Nation's
unemployed have or are about to ex-
haust their unemployment benefits-
their lifeblood, if you will. Many have
already lost their health benefits,
causing tremendous apprehensions
that a serious illness could lead to fi-
nancial ruin. We have an obligation to
provide extensions of unemployment
benefits for as long as it takes for full
economic recovery to be translated
into more people working.
Finally, let me convey my tentative
support for the provision in this legis-
lation introducing a new prospective
reimbursement or payment system for
medicare hospital insurance. It seeks
to attack the excessive cost problems
of medicare at the root cause-exces-
sive hospital and physician rates.
The 1982 tax bill required the De-
partment of Health and Human Serv-
ices to come forth with a program to
address the escalating drain on the
medicare trust funds. This prospective
payment plan is it. Prospective reim-
bursement, when properly implement-
ed, is a viable alternative to cost con-
tainment as it pegs actual costs to
average costs of a given region. This
legislation rightly sets two variable
rates for reimbursement of hospitals,
one for urban and the other for rural.
However. given the fact that health
care costs have been disproportinately
borne by the elderly over the past 2
years, we have to insure that any such
system is sensitive to those on fixed
income who could be forced to pay a
greater share of their Income under
such a payment plan. In other words,
we do not want to pass along those
costs not reimbursed by the Federal
Government to beneficiaries.
The legislation before us is of funda-
mental importance to the future of 36
million of our fellow Americans and
millions more to follow. We have no
real choice we must pass this bill or
face the national trauma of having
social security miss its first payday In
more than 40 years. Some of the best
minds in the Nation were employed to
bring about the reform package before
us. Some of the best possible solutions
are in this bill as are some of the
worst. I do not vote for this bill with
any enthusiasm but I do so with a
sense of responsibility. It is a compro-
mise-we all know it-but It Is also all
that we have at the present time.
Therefore, I urge a favorable vote so
that the minds of our senior citizens
can be eased and the apprehensions
that social security is to collapse can
be put to rest.?
? Mr. RITTER. Mr. Chairman. the
social security system is an indispens-
able source of income for millions of
older Americans. The solvency of this
system is of paramount concern to me,
but I could not support H.R. 1900, the
Social Security Act Amendments of
1983. There are many provisions in
this bill that I feel we, as a legislative
body, should examine more closely
such as the coverage of Federal em-
ployees, the increase in social security
payroll taxes, and the long-term fund-
ing sollutions. In 1977, the American
people were told that the tax increases
and benefit reductions would guaran-
tee the health of the social security
system into the next century. Six
years later, the Congress came back
for a massive bailout program. How
Approved For Release 2008/10/29: CIA-RDP85-00003R000200130004-8
 H 1016
Approved For Release 2008/10/29: CIA-RDP85-00003R000200130004-8
CONGRESSIONAL RECORD HOUSE March 9, 1983
dations for increasing revenues and re-
ducing expenditures, this body has
had little or no opportunity to consid-
er alternative funding measures. Even
worse, there has been little opportuni-
ty for Members to vote on the impor-
tant issues this legislation raises,
either in committee or on the floor.
We are presented with a take-it-or-
leave-it situation. If this bill does not
pass, the social security system will be
in serious financial peril. It may be the
only realistic chance we have to save
the system. However, by passing it, we
are heaping large new burdens upon
self-employed, farmers and business-
men, Federal employees, and other
without any opportunity to consider
their grievances and explore alterna-
tive funding sources to meet those
grievances.
I am extremely disturbed that I am
unable to vote separately on the af-
fects of this bill on the self-employed.
Unfortunately, this bill will mean a
larger increase in taxes for the self-
employed than for others. For the
self-employed, the bill increases the
tax from 9.35 percent to 14 percent.
The tax credit of approximately 2 per-
cent only reduces the real cost to 11.9
percent, which still is a huge increase
over current law, and far higher than
the employee rate.
For a self-employed person earning
$20,000, this amounts to an annual tax
increase of $510. If the income level is
$35,000, the increase will be almost
$900. This is far too heavy a burden to
impose on our farmers and small busi-
nessmen, which are so essential to our
economic well-being. It is especially
unfair since employees will be paying
more than 4 percentage points less
than the self-employed rate. Certainly,
there are more equitable solutions
which we are not being' given the
chance to consider today.
The proposal to place new Federal
employees under the social security
system is unwise and shortsighted. Al-
though this measure may help to re-
solve the short-term financing prob-
lems, I have serious reservations as to
how this measure will affect the
system in the long run. Further, I am
extremely concerned about the inevi-
table detrimental effects this proposal
will have on the civil service retire-
ment program.
As Members of Congress we have a
responsibility to provide Federal work-
ers past and present with the retire-
ment benefits they have earned and
that they deserve. Placing new Federal
hires under the social security system
will make it difficult for us to live up
to that responsibility. The major prob-
lem with this proposal is that it will
erode the future revenue base of the
civil service retirement program. With
the elimination of new funds coming
into the civil service system. Congress
will, at some time in the future, be re-
quired to finance the system in order
to meet the obligations to future Fed-
eral retirees.
This proposal would also require
that a second, supplemental system be
created to assure an adequate retire-
ment for these new Federal workers.
History has already shown us that the
costs of operating two employee retire-
ment systems is between two and four
times greater than simply having one
system. Furthermore, the U.S. Treas-
ury will experience a substantial loss
of revenues. Under the current system,
social security benefits are tax free,
whereas 10.6 percent of Federal annu-
ity payments are returned to the
Treasury in taxes paid by retirees.
It is unfortunate that we are not
being given the opportunity today to
vote on these provisions of the bill. If
we had been given the chance, I most
certainly would have voted against
placing Federal employees under the
social security system, and against the
onerous burdens imposed on the self-
employed farmers and small business-
men.?
? Mr. LEHMAN of California. Mr.
Chairman, I rise today to speak in
favor of the passage of H.R. 1900, the
Social Security Act Amendments of
1983.
It is no secret that the social secu-
rity system is currently facing a severe
financial crisis. In fact, upon close ex-
amination of the social security
system, it becomes painfully obvious
that the social security trust fund is
on the verge of bankruptcy.
It is important to note that H.R.
1900 calls for sacrifices by all of those
persons involved with social security;
current social security recipients,
future retirees, Federal employees,
self-employed Americans, and all tax-
payers. Like many of my colleagues, I
realize that this package of reforms is
far from perfect. However, I am con-
vinced that the choice offered to us
here today is a clear cut one. We can
either vote for H.R. 1900, which pro-
vides for the continued financial secu-
rity of the social security system, or
we can vote against the measure and
leave social security to go bankrupt by
the end of this year. With such a deci-
sion before us, the only responsible
course of action is to pass this meas-
ure. Only through the passage and
successful implementation of H.R.
1900 can we provide for the retirement
incomes of the millions of American
workers who depend on social security
for their livelihood.
With respect to the two amendments
which are being offered today by my
colleagues Messrs. PzcKI.z and PEPPER,
I must vote against both. I believe that
the National Commission on Social Se-
curity Reform has adequately ad-
dressed the vast majority of problems
facing social security. I do not believe
that it is in the best interests of social
security that we make last minute
changes in the Commission's recom-
mendations.
Like. many of my colleagues in the
House of Representatives, I have re-
ceived a great deal of mail from my
constituents on this important issue.
The great majority of this mail has
been from Federal and postal employ-
ees. I regret that I did not have the
opportunity to vote upon the rule re-
garding the inclusion of Federal and
postal employees in the social security
system. This is certainly one of the
provisions that I would have changed
had I had the opportunity.
Many of the Federal and postal em-
ployees whom I represent have ex-
pressed their fear that H.R. 1900 will
initiate the demise of the civil service
retirement system. I would like to take
this opportunity to stress my commit-
ment to preserving the integrity of the
civil service retirement system. The
Congress will be addressing this issue
later during the year, and I would add
my voice to those of my fellow Mem-
bers who have pledged their support
of the Federal workers in their fight
to preserve their retirement system.*
? Mr. RAHAL . Mr. Chairman, I rise
in support of H.R. 1900, the Social Se-
curity Act Amendments of 1983. While
each of us has his or her disagree-
ments on particular aspects of the bill,
when taken as a whole, the legislation
takes important steps toward solving
the short- and long-term problems
facing social security.
Estimates by the Social Security Ad-
ministration indicate this bill will
create revenue increases and outlay
decreases totaling $165.3 billion be-
tween 1983 and 1989 for the retire-
ment and disability trust funds. The
bulk of savings will be achieved from
delaying the COLA for 6 months-
$39.4 billion-accelerating the payroll
tax-'$39.4 billion-taxing benefits for
those retirees earning over $25,000 as
an individual or $32,000 for a couple,
and increasing the self-employment
tax-$18.5 billion.
This legislation addresses the prob-
lems created by a change in our eco-
nomic climate. When trust fund re-
serves drop below 20 percent at the be-
ginning of any year after 1987, COLA's
would be based on the average in-
crease in the Consumer Price Index
(CPI) or wages, whichever is lower.
When reserves reach 32 percent in the
trust fund, a catchup payment would
be provided to all who suffered a loss
in benefits during slower economic
times. During periods when reserves
are between 20 and 32 percent,
COLA's will be based on the CPI as
they are presently. In anticipating a
slow economic upturn between 1983-87
the bill authorizes interfund borrow-
ing between the three funds which
comprise the social security system-
retirement, disability, and medicare. It
should be noted that provision must
be made for the repayment at the ear-
liest possible date, no' later than the
end of 1989.
At long last we have addressed the
problems with uncashed social secu-
rity checks. If a period of 6 months
has elapsed from the time a check is
issued, the Treasury Department now
will be authorized to credit the
Approved For Release 2008/10/29: CIA-RDP85-00003R000200130004-8
 Approved For Release 2008/10/29: CIA-RDP85-00003R000200130004-8
H 1018 CONGRESSIONAL RECORD - HOUSE March 9, 1989
Mr. Chairman, by no means do I ad- they can bear the increased tax that went on between the political
vocate returning to a system as lean burden. parties as to which could vote the
and as incompassionate as that of And second, we must guarantee higher benefits to social security recip-
1935; I believe in opportunity for or- middle-aged Federal employees who ients, this side or that, 4 percent, 5
phans, dignity for widows, equity for are vested in the existing civil service percent or more. That is the way it
the disabled, independence for the retirement and have paid into it for went and it got to be rather disgusting.
aged, and I want them to have it. 10, 15, and 20 years that their retire- So a number of us got together and
And I further believe in getting the ment will be there when they need it. considered why not turn to the
system back to its basic soundness in They are worried the result of our scheme industry and labor are turning
providing fair and Just old age benefits putting new Federal employees under to more and more in negotiating their
that meet the needs of the times, and social security would be to lock their wage-management contributions, and
in meeting as much of the other op- retirement into diminishing revenues that was tying wages and salaries to
tions as the fund can accommodate; while the liability remains the same. the cost-of-living index.
and we turn to general revenue for congress will stand behind their pen- If it was good principle for them,
what is necessary to meet the needs sions. But we must assure them. why not for social security?
above that. Mr. Speaker, there are several com- An well and good except for one
For money we can look among the ponents of this bill that I do not like. I factor that we left out of our calcula-
millions and billions spent on foreign am sure every Member of this House tions back in 1972 when we finally per-
aid, among the millions and billions feels the same. But I have been im- suaded the Congress to adopt the prin-
spent in developing the economies of pressed by the bipartisan effort by ciple of tying social security benefits
foreign nations so they can dump Members as well as the support of my to the CPI and that was double-digit
goods here that cause unemployment constituents, and I will vote for it be- inflation.
among workers who pay the social se- cause we all will soon count on social Automatic increases of 14 percent,
curity tax. security.. 11 percent, 10 percent, back to back,
You see, if the additions get too ex- Mr. ROSTENKOWSKI. Mr. Chair- were just too much for the system to
pensive, and the taxes too high, the man, I have no further requests for bear.
people will break the contract and the time, and I yield back the balance of So that brings us, frankly, to where
system is lost. If we bleed dry the Fed- my time. we are today.
eral pension system for a quick fix in Mr. CONABLE. Mr. Chairman, I Mr. Chairman, it has taken this
1983, the only thing we guarantee is yield my remaining time to the gentle- House 2 years to make the Journey
that the 107th or 108th Congress will man from Illinois (Mr. Mzcimi.). from crisis to compromise in social se-
have to conscript more money to fix The CHAIRMAN... The gentleman curity financing reform. The Journey
both-temporarily. from Illinois (Mr. MIcuaL) is recog- from there to here was senseless and
The years have turned a sound basic nized for 18 minutes. rather destructive and debilitating.
model into a lemon and it is never (Mr. MICHEL asked and was given rather
has an issue demanded so
going to deliver good mileage until permission to revise and extend his re-
Congress takes it apart-not in haste marks.) much statesmanship but produced so
doggone much demagoguery.
or fear, but with deliberation-and Mr. MICHEL. Mr. Chairman, back in doggone have the the right repairs. This bill does 1941 when I was employed in my first Seldom a the e energies
re-
bodies and been
been
not do that. 40-hour-a-week Job between high misused y
in the
For these reasons, I must vote school and college I was paid the so reaching dhing and a consensus. But
against this measure.e handsome sum of $13 a week gross or course misdirected ? Mr. SYNAR. Mr. Chairman, the $12.87 net take-home pay because the that is behind us and before us is a
vote we face today on social security is social security tax in those days was compromise.
one of the most difficult votes I have only 1 percent. Before us is a product born out of
cast. On one hand, we face the pros- My father had deductions from his necessity and ripened by the kind of
pect of burdening our small businesses pay in that same year that totaled $30 bipartisan deliberation that does this
by moving up scheduled tax increases, for the entire year, since the law at body some real credit. I must pause
taxing benefits for the first time, and that time called for a 1-percent-payroll here to reiterate what was said by my
creating fear among current middle- deduction for an employee up to the colleague from Illinois (Mr. RosxxN-
aged Federal employees over the fate maximum of $3,000 income. KOWSKI) the chairman of the Ways
of their retirement. But on the other In filing my income tax return for and Means Committee. Throughout
hand, we face the option of leaving 1982 I will pay a self-employed social the last 2 years several Members of
social security without an answer to its security tax 100 times larger than my this body have certainly behaved and
growing financial problem. While father paid as a maximum under the acted like statesmen. I am particularly
voting against the bill would placate law 40 Years ago. proud of my two appointees to the
the legitimate concerns of the various There is absolutely no way we can be Social Security Commission, BARBER
groups affected by the bill-small busi- honest to ourselves or our children by CONABLE of New York, ranking
nesses, senior citizens, and Federal em- forcing the same kind of progressive member on the Ways and Means Com-
ployees-it would be irresponsible. tax burden on our children during the mittee, and Bn.t ARcmm of Texas, for
There is no alternative. For that next 40 years. their invaluable contributions to the
reason, Mr. Speaker, I will vote for the I guess I am also reminded of the work of the Commission.
bill. number' of times my dad asked me I should also like to single out the
Once we have completed work on before he died Just a few years ago chairman of the Ways and Means
this bill and it is law, we must immedi- why he was getting those increases in Committee, the gentleman from Illi-
ately address two equally important his social security checks when his nois (Mr. RosTENxowsxz), and the
issues. First, the tax increase that we company pension check stayed the other gentleman from Texas (Mr.
are moving up from 1985 to 1984 could same. ? Plcxza), chairman of the subcommit-
have a serious impact on small busi- I had to respond by telling him that tee who in their own deliberate way
messes, depending on the condition of I was one of those responsible for kept the light of compromise and con-.
our economy and the status of recov- amending the law to tie social security ciliation burning while others did all
ery. We must closely monitor this and benefits to the cost-of-living index. they could do to snuff it out.
be prepared to act if needed. We owe it Then he would say, "But, Bob, I don't I support this compromise. I support
to our small businesses: As I have know how long you can continue to do it despite reservations about the addi-
walked up and down main streets in that when we didn't earn it." Then I tional tax burdens it will impose.
northeastern Oklahoma the small would recount to my dad that when I I support it despite my own personal
business owners have told me that was a Junior Congressman some of us belief that we could have done more in
they want to help-but are not sure just got fed yip with the bidding game reforming the structure of the system,
Approved For Release 2008/10/29: CIA-RDP85-00003R000200130004-8
 Approved For Release 2008/10/29: CIA-RDP85-00003R000200130004-8
March 9, 1988 CONGRESSIONAL RECORD - HOUSE
and it is in that vein that I will vote
for the Pickle amendment later on
today.
I support the compromise because
compromise is the only hope we have
for the survival of social security.
We have no other choice. We have
no other alternative that could pass
this House., And I think that is what
we have to be talking about.
There are many of us, not a major-
ity, a number of us who would like to
do this, a number of us who would like
to do that, some more who would like
to do this and some more who would
like to do that, and none of those indi-
vidual groups willing to meet with the
other enough to give you 218 votes to
pass this House of Representatives.
That is what makes this whole art of
compromise, a working together with
both sides of the aisle, factions on
both sides to put together something
that will fly in the House.
There are people right now outside
the Capitol standing in protest against
the compromise because they contend
there are other alternatives. But their
interests are rather personal, Just as
many of ours would be on an individu-
al basis. Their intent Is sincere, but
their conclusions are wrong. We have
run out of time. We have run out of
solutions.
Time has run out for those Ameri-
cans who are looking to social security
to sustain them in their retirement
years. Their future depends on what
we do here today.
Equally as critical to me is the
future of those younger Americans
who are Just beginning to make their
way in the private sector, building a
base of resources for themselves and
their families.
I feel a strong sense of obligation to
those young people. I look at my four
children now all married and hopeful-
ly beginning to get into that grand-
child area. We call upon them to
supply the resources so that our older
citizens can retire with greater dignity
and greater security.
We went to them in the last decade
and imposed a heavier tax burden on
them to secure social security beyond
the next century, remember. Just a
few years ago. We secured nothing.
We saved nothing. We deceived them
and, frankly, we deceived ourselves.
I do not want that to happen again.
This compromise must work as well
for America's young people as it does
for America's senior citizens. Again,
this is why I intend to support the
'Pickle amendment over the Pepper
amendment.
If there is one compelling argument
in favor of the Pickle amendment it is
this: When social security was origi-
nally enacted life expectancy for men
was 60.8 years, for women it was 65.2.
or an average of 62.9, remembering
that 65 then was the year for retiring.
01430
By 1980 life expectancy for men had
increased to 69.8, for women it went
up to 77.2, or an average of 73.6 years
on an average. Now that Is better than
a 10-year increase in life expectancy
during the past 40 years and it is high
time we take those figures into ac-
count before piling on yet another
round of tax increasers on our children
and our grandchildren.
I want to preserve for my kids and
my grandchildren a social security
system worthy of the name.
I do not ever again want to be asked
to go back to those young Americans
and demand from them still higher
taxes to save social security.
This compromise to me Is a commit-
ment to them as much as it is a com-
mitment to the current and future
social security recipients.
So I hope that in the course of our
further deliberations this afternoon,
during consideration of the debate on
the two amendments, that there' will
be a resounding vote for the Pickle
amendment and against the Pepper
amendment because that is one sure
way of doing the right thing here
today.
The CHAIRMAN. Pursuant to the
rule, the bill Is considered as having
been read for amendment under the 5-
minute rule. No amendments are in
order except the following amend-
ments, which shall not be subject to
amendment and shall be considered
only In the following order. First,
amendments recommended by the
Committee on Ways and Means;
second, the amendment printed In the
CoNORassxoNAL RECORD of March S.
1983, by Representative Picala of
Texas, and said amendment shall be
debatable for not to exceed 2 hours,
H 1019
Sec. 103. Duration of agreements for cover-
age of State and local employ-
ees.
PART B-CoxruTATrox or Barr AtiounTS
Sea
Sea
Sec.
Sec.
Sec.
See.
Sec.
111. Shift of cost-of-living adjustments
to calendar year basis.
112. Cost-of-living Increases to be based
on either wages or prices
(whichever Is lower) when bal-
ance In OASDI trust funds
falls below specified level.
113. Elimination of windfall benefits
for individuals receiving pen-
sions from noncovered employ-
ment.
114. Increase in old-age insurance
benefit amounts on account of
delayed retirement.
PART C-Rava,,IIR PROVISIONS
121. Taxation of social . security and
railroad retirement benefits.
124. Credit for the elderly and the per-
manently and totally disabled.
123. Acceleration of Increases In FICA
taxes; 1984 employee tax
credit.
124. Taxes on self-employment income;
credit against such taxes.
125. Allocations to disability Insurance
trust fund.
equally divided and controlled by the PART E-MsCHANISMI ro AssvRR CoxTSxoso
proponent of the amendment and the Bxx=T PAYnmITS nt UxarSCTSDLY Ai),.
chairman of the Committee on Ways VERSE COMMONS
and Means, or .his designee; and third. Sec. 141. Normalised crediting of social se-
the amendment printed in the CoN- curity taxes to trust funds.
ORESSIONAL RECORD of March 7, 1983, Sec. 142. Interfund borrowing extension.
by Representative PErraa of Florida, Sec. 143. Recommendations by Board of
said amendment shall be in order even Trustees to remedy Inadequate
if the amendment designated No. 2 ~ the Social Security
has been adopted, and said amend-
ment shall be debatable for not to PART F-OTHSR FINANCING A menraxrs
exceed 2 hours, equally divided and Sec. 151. Financing of trtbutory mil-
controlled by the proponent of the Sec. 152. AccoItary wage credits.
unting for certain unnegotiat-
amendment and the chairman of the
Committee on Ways and Means, or his ad checks for benefit@ under
designee. the social security program.
TITLE II-ADDITIONAL PROVISIONS
-The text of tho hnl-- Wn I goo- in An fo ows' RELATING TO LONOrTZRM FINANC-
" H.R. 1900 ENO OF THE SOCIAL SECURITY
H.R.
Be it enacted by the Senate and House of Sec. 201. Adjustments in OASDI benefit
Representatives of the United States of formula.'
America in Congress assembled, Sec. 202. Adjustments in OASDI tax rates.
SHORT TrTLE TITLE III U$ AND
Sacrlox 1. This. Act, with the following
table of contents, may be cited as the
"Social Security Act Amendments of 1983".
TABLE OF CONTENTS
Sea 1. Short title.
TITLE I-PROVISIONS AFFECTING THE
FINANCING OF THE SOCIAL SECU-
RITY SYSTEM
PAST A-Covssaos
Sec. 101. Coverage of newly hired Federal
employees.
Sea 102.' Coverage of employees of nonprbf-
it organizations.
TECHNICAL PROVISIONS
PART A-Cax MAs oaxzxi
Sea 301. Float periods.
Sec. 302. Interest on late State deposits.
Sec. 303. Trust fund investment procedures.
Sec. 304. Budgetary treatment of trust fund
operations.
PART B-ELsmATION Or 0mm-BAsss
DISTINCTIorfs
Sec. 311. Divorced husbands.
Sec. 312. Remarriage of surviving spouse
before we of eligibility.
Drvoacm, LED DISAaLm BroUSSa
131. Benefit. for surviving divorced
spouses and disabled widows
and widowers who remarry.
132. Entitlement to divorced spouse's
benefits before entitlement of
Insured Individual to benefits;
exemption of divorced spouse's
benefits from deduction on so-
count of work.
133. Indexing of deferred surviving
spouse's benefits to recent
wage levels.
134. Limitation on benefit reduction
Approved For Release 2008/10/29: CIA-RDP85-00003R000200130004-8
 Approved For Release 2008/10/29: CIA-RDP85-00003R000200130004-8
H 1020 CONGRESSIONAL RECORD - HOUSE
Sec. 313. Illegitimate children.
Sea 314. Transitional insured status.
Sec. 315. Equalization of benefits under sec-
tion 228.
Sec. 316. Father's Insurance benefits.
Sec. 317. Effect of marriage on childhood
disability benefits and on other
dependents' or survivors' bene-
fits.
Sec. 318. Credit for certain military service.
Sec. 318. Conforming amendments.
Sec. 320. Effective date of part B.
PART C-COVERMNS
Sec. 32L Coverage of employees of foreign
affiliates of American employ-
em
Sec. 322. Extension of coverage by interna-
tional social security agree-
ment.
Sec. 323. Treatment of certain service per-
formed outside the United
States.
Sea 324. Treatment of pay after age 62 as
wages.
Sec. 325. Treatment of contributions under
simplified employee pensions.
Sec. 326. Effect of changes in names of
State and local employee
groups in Utah.
Sec. 327. Effective dates of international
social security agreements.
Sea 328. Technical correction with respect
to withholding of sick pay of
participants In multiemployer
plans.
Sec. 329. Amount received under certain de-
ferred compensation and salary
reduction arrangements treat-
ed as wages for FICA taxes.
Sea M. Codification of Rowan decision
with respect to meals and lodg-
ing.
PART D--OrnaR Asuamuzwra
Sec. 331. Technical and conforming amend-
ments to maximum family
benefit provisions.
Sec. 332. Reduction from 72 to 70 of age
beyond which no delayed re-
tirement credits can be earned.
Sec. 333. Relaxation of Insured status re-
quirements for certain workers
previously entitled to a period
of disability.
Sec. 334. Protection of benefits of illegit-
imate children of disabled
beneficiaries.
Sec. 335. One-month retroactivity of
widow's and widower's insur-
ance benefits.
Sec. 336. Nonassignabfity of benefits.
Sec. 33?. Use of death certificates to pre-
vent erroneous benefit pay-
ments to deceased Individuals.
Sea 338. Public pension offset.
Sea 339. Study concerning the establish-
ment of the Social Security Ad-
ministration as an Independent
agency.
Sec. 340. Conforming changes In medicare
premium provisions to reflect
changes in the cost-of-living
benefit adjustments.
TITLE IV-SUPPLEMENTAL SECURITY
INCOME BENEFITS
Sec. 401. Increase in Federal SSI benefit
standard.
Sec. 402. Adjustments in Federal SSI pass-
through provisions.
Sea 403. SSI Eligibility for temporary resi-
dents of emergency shelters for
the homeless.
Sec. 404. Disregarding of emergency and
other in-kind assistance pro-
vided by nonprofit organiza-
tions.
TITLE V-UNEMPLOYMENT
COMFEMSATION PROVISIONS
Suara7.x A-FIDSzAL SUFH.EIZITAL
COMPENSATION
Sec. 501. Extension of Program.
Sec. 502. Number of weeks for which com-
pensation payable.
Sec. 503. Coordination with trade readjust-
ment program.
Sec. 504. Effective date.
Su BTrrLE B-Mxsczu.ANEoua PaovisxoNs
See. 511. Voluntary health insurance pro-
grams permitted.
Sec. 512. Treatment of certain organiza-
tions retroactively determined
to be described In section
501(cX3) of the Internal Reve-
nue Code of 1954.
TITLE VI-PROSPECTIVE PAYMENTS
FOR MEDICARE INPATUNT HOSPI-
TAL SERVICES
Sea 601. Medicare payments for Inpatient
hospital services on the basis of
prospective rates.
Sec. 602. Conforming amendments.
Sec. 603. Reports, experiments and demon-
stration projects, and intent of
Congress respecting new capi-
tal expenditures.
Sec. 604. Effective dates.
TITLE I-PROVISIONS AFFECTING THE FI-
NANCING OF THE SOCIAL SECURITY
SYSTEM
PART A-Covmaaas
cOVERAGS OF NEWLY HUM TMEEAL
ZVOWTIMS
Sac. 101. (aX1) Section 210(a) of the
Social Security Act is amended by striking
out paragraphs (5) and (8) and inserting in
lieu thereof the following:
"(5) Service performed in the employ of
the United States or any Instrumentality of
the United States, if such service-
"(A) would be excluded from the term
'employment' for purposes of this title if
the provisions of paragraphs (5) and (6) of
this subsection as in effect in January 1983
had remained in effect, and
"(B) Is performed by an individual who (1)
has been continuously in the employ of the
United States or an Instrumentality thereof
since December 31, 1963 (and for this pur-
pose an Individual who returns to the per-
formance of such service after being sepa-
rated therefrom following a previous period
of such service stall nevertheless be consid-
ered upon such return as having been con-
tinuously in the employ of the United
States or an Instrumentality thereof, re-
gardless of whether the period of such 'sepa-
ration began before or after December 31,
1983, if the period of such separation does
not exceed 365 consecutive days), or (11) Is
receiving an annuity from the Civil Service
Retirement and Disability Fund, or benefits
(for service as an employee) under another
retirement system established by a law of
the United States for employees of the Fed-
eral Government or members of the uni-
formed services;
except that this paragraph shall not apply
with respect to-
"(i) service performed as the President or
Vice President of the United States,
"(ii) service performed-
"(I) in a position placed in the Executive
Schedule under sections 5312 through 5317
of title 5, United States Code,
"(II) as a noncareer appointee In the
Senior Executive Service or a noncareer
member of the Senior Foreign Service, or
"(III) in a position to which the individual
Is appointed by the President (or his desig-
nee) or the Vice President under section
105(aXl), 106(aXl), or 107 (aXi) or (b)(1) of
March 9, 1988
title 3, United States Code, If the maximum
rate of basic pay for such position Is at or
above the rate for level V of the Executive
Schedule,
"(iii) service performed as the Chief Jus-
tice of the United States, an Associate Jus-
tice of the Supreme Court, a Judge of a
United States District Court (including the
district court of a territory), a Judge of the
United States Claims Court, a Judge of the
United States Court of International Trade,
a Judge of the United States Tax Court, a
United States magistrate, or a referee In
bankruptcy or United States bankruptcy
judge,
"(iv) service performed as a Member, Dele-
gate, or Resident Commissioner of or to the
Congress, or
"(v) any other service in the legislative
branch of the Federal Government if such
service is performed by an individual who,
on December 31, 1983, is not subject to sub-
chapter III of chapter 93 of title 5, United
States Code;
"(6) Service performed In the employ of
the United States or any Instrumentality of
the United States if such service is per-
formed-
"(A) In a penal institution of the United
States by an inmate thereof;
"(B) by any individual as an employee in-
cluded under section 5351(2) of title 5,
United States Code (relating to certain In-
terns, student nurses, and other student em-
ployees of hospitals of the Federal Govern-
ment), other than as a medical or dental
intern or a medical or dental resident In
training, or
"(C) by any Individual as an employee
serving on a temporary basis in can of fire,
storm, earthquake, flood, or other similar
emergency;".
(2) Section 210(p) of such Act is amended
by striking out "provisions of-" and all that
follows and inserting in lieu thereof "provi-
sions of subsection (aX5).".
(bXl) Section 3121(b) of the Internal Rev-
enue Code of 1954 is amended by striking
out paragraphs (5) and (6) and Inserting In
lieu thereof the following:
"(5) service performed In the employ of
the United States or any instrumentality of
the United States, if such service-
"(A) would be excluded from the term
'employment' for purposes of this title if
the provisions of paragraphs (5) and (6) of
this subsection as in effect in January 1983
had remained in effect, and
"(B) is performed by an Individual who (1)
has been continuously in the employ of the
United States or an instrumentality thereof
since December 31, 1993 (and for this pur-
pose an individual who returns to the per-
formance of such service after being sepa-
rated therefrom following a previous period
of such service shall nevertheless be consid-
ered upon such return as having been con-
tinuously In the employ of the United
States or an Instrumentality thereof, re-
gardless of whether the period of such sepa-
ration began before or after December 31,
1983, if the period of such separation does
not exceed 365 consecutive days), or (ii) is
receving an annuity from the Civil Service
Retirement and Disability Fund, or benefits
(for service as an employee) under another
retirement system established by law of the
United States for employees of the Federal
Government or members of the uniformed
services;
except that this paragraph shall not apply
with respect to-
"(I) service performed as the President or
Vice President of the United States,
(ii) service performed-
Approved For Release 2008/10/29: CIA-RDP85-00003R000200130004-8
 H 1022
Approved For Release 2008/10/29: CIA-RDP85-00003R000200130004-8
CONGRESSIONAL RECORD - HOUSE March 9, 1989
shall be deemed to have been determined by
the Secretary of Health and Human Serv-
ices to be a "cost-of-living computation
quarter" under paragraph (2)(A) of such
section) for all of the purposes of such Act
as amended by this section and by other
provisions of this Act, without regard to the
extent by which the Consumer Price Index
has increased since the last prior cost-of-
living computation quarter which was estab-
lished under such paragraph (1XB).
COST-OF-LIVING INCREASES TO BE BASED ON
EITHER WAGES OR PRICES (WHICHEVER 18
LOWER) WHEN BALANCE IN OASDI TRUST
FUNDS FALLS BELOW SPECIFIED LEVEL
Szc. 112. (a) Section 215(1)(1) of the Social
Security Act is amended-
(1) by striking out "in which" in subpara-
graph (B) and all that follows down
through the first semicolon in such subpar-
agraph and inserting in lieu thereof "with
respect to which the applicable increase per-
centage is 3 percent or more;";
(2) by striking out "and" at the end of
subparagraph (B);
(3) by redesignating subparagraph (C) as
subparagraph (H); and
(4) by inserting after subparagraph (B)
the following new subparagraphs:
"(C) the term 'applicable increase percent-
age' means-
"(1) with respect to a base quarter or cost-
of-living computation quarter in any calen-
dar year before 1988, or in any calendar
year after 1987 for which the OASDI fund
ratio is 20.0 percent or more, the CPI in-
crease percentage; and
"(ii) with respect to a base quarter or cost-
of-living computation quarter in any calen-
dar year after 1987 for which the OASDI
fund ratio is less than 20.0 percent, the CPI
increase percentage or the wage increase
percentage, whichever (with respect to that
Quarter) Is the lower,
"(D) the term 'CPI increase percentage',
with respect to a base quarter or cost-of-
living computation Quarter in any calendar
year, means the percentage (rounded to the
nearest one-tenth of 1 percent) by which
the Consumer Price Index for that Quarter
exceeds such index for the most recent prior
calendar Quarter which was a base quarter
under subpararaph (AXii) or, If later, the
most recent cost-of-living computation quar-
ter under subparagraph (B);
"(E) the term 'wage increase percentage',
with respect to a base quarter or cost-of-
living computation Quarter in any calendar
year, means the percentage (rounded to the
nearest one-tenth of 1 percent) by which
the SSA average wage index for the year
immediately preceding such calendar year
exceeds such index for the year immediate-
ly preceding the most recent prior calendar
year which included a base quarter under
subparagraph (A)(li) or, if later, which in-
cluded a cost-of-living computation quarter,
"(F) the term 'OASDI fund ratio', with re-
spect to any calendar year, means the ratio
of-
"(I) the combined balance in the Federal
Old-Age and Survivors Insurance Trust
Fund and the Federal Disability Insurance
Trust Fund, reduced by the outstanding
amount of any loan (including interest
thereon) theretofore made to either such
Fund from the Federal Hospital Insurance
Trust Fund under section 201(1), as of the
beginning of such year, to
"(ii) the total amount which (as estimated
by the Secretary) will be paid from the Fed-
eral Old-Age and Survivors Insurance Trust
Fund and the Federal Disability Insurance
Trust Fund during such calendar year for
all purposes authorized by section 201
(other than payments of interest on, or re-
payments of, loans from the Federal Hospi-
tal Insurance Trust Fund under section
201(1)), but excluding any transfer pay-
ments between such trust funds and reduc-
ing the amount of any transfers to the Rail-
road Retirement Account by the amount of
any transfers into either such trust fund
from that Account;
(G) the term 'SSA average wage index',
with respect to any calendar year, means
the average, of the total wages reported to
the Secretary of the Treasury or his dele-
gate for the preceding calendar year as de-
termined for purposes of subsection
(b)(SXAXii); and".
(b) Section 215(1X2XA)(11) of such Act is
amended by striking out "by the same per-
centage" and all that follows down through
the semicolon, in the sentence immediately
following subdivision (III), and inserting in
lieu thereof "by the applicable increase per-
centage;".
(c) Section 215(1) of such Act is further
amended by adding at the end thereof the
following new paragraph:
"(5)(A) If-
"(I) with respect to any calendar year the
'applicable increase percentage' was deter-
mined under clause (ii) of paragraph (1XC)
rather than under clause (1) of such para-
graph, and the increase becoming effective
under paragraph (2) In such year was ac-
cordingly determined on the basis of the
wage increase percentage rather than the
CPI increase percentage (or there was no
such increase becoming effective under
paragraph (2) in that year because the wage
increase percentage was less than 3 per-
cent), and
"(ii) for any subsequent calendar year in
which an increase under paragraph (2) be-
comes effective the OASDI fund ratio is
greater than 32.0 percent,
then each of the amounts described in sub-
divisions (I), (II), and (III) of paragraph
(2)(AXii), as Increased under paragraph (2)
effective with the month of December in
such subsequent calendar year, shall be fur-
ther increased (effective with such month)
by an additional percentage, which shall be
determined under subparagraph (B) and
shall apply as provided in subparagraph (C).
"(B) The applicable additional percentage
by which the amounts described in subdivi-
sions (I), (ID, and (III) of paragraph
(2)(A)(ii) are to be further increased under
subparagraph (A) in the subsequent calen-
dar year involved shall be the difference be-
tween-
"(1) the compounded percentage benefit
increases that would have been paid if all
increases under paragraph (2) had been
made on the basis of the CPI increase per-
centage. and
'Yin) the compounded percentage benefit
increases that were actually paid under
paragraph (2) and this paragraph,
with such increases being measured-
"(iii) in the case of amounts described in
subdivision (I) of paragraph (2)(A)(11), over
the period beginning with the calendar year
in which the individual first became entitled
to monthly benefits described in such subdi-
vision and ending with such subsequent cal-
endar year, and
"(iv) in the case of amounts described in
subdivisions (II) and (III) of paragraph
(2)(A)(li), over the period beginning with
the calendar year in which the individual
whose primary insurance amount is In-
creased under such subdivision (II) Initially
became eligible for an old-age or disability
insurance benefit, or died before becoming
so eligible, and ending with such subsequent
calendar year,
except that if the Secretary determines in
any case that the application (in accordance
with subparagraph (C)) of the additional
percentage as computed under the preced-
ing provisions of this subparagraph would
cause the OASDI fund ratio to fall below
32.0 percent In the calendar year Immediate-
ly following such subsequent year, he shall
reduce such applicable additional percent-
age to the extent necessary to ensure that
the OASDI fund ratio will remain at or
above 32.0 percent through the end of such
following year.
"(C) Any applicable additional percentage
increase in an amount described in subdivi-
sion (I), (II), or (III) of paragraph (2XA)Ui),
made under this paragraph in any calendar
year, shall thereafter be treated for all the
purposes of this Act as a part of the in-
crease made in such amount under para-
graph (2) for that year.".
(dX1) Section 215(1X2XC) of such Act is
amended by adding at the end thereof the
following new clause:
"(iii) The Secretary shall determine and
promulgate the OASDI fund ratio and the
SSA wage index for each calendar year
before November 1 of that year, based upon
the most recent data then available, and
shall include a statement of such fund ratio
and wage index (and of the effect such ratio
and the level of such index may have upon
benefit Increases under this subsection) in
any notification made under clause (ii) and
any determination published under subpara-
graph (D).".
(2) Section 215(1X4) of such Act (as
amended by section 111(bXl) of this Act) is
further amended by striking out "section
111(b)(2)" and inserting in lieu thereof "sec-
tions 111(b)(2) and 112".
(e) The amendments made by the preced-
ing provisions of this section shall apply
with respect to monthly benefits under title
II of the Social Security Act for months
after December 1987.
(f) Notwithstanding anything to the con-
trary in section 215(iXl)(F) of the Social Se-
curity Act (as added by subsection (a)(4) of
this section), the combined balance in the
Trust Funds which is to be used in deter-
mining the "OASDI fund ratio" with re-
spect to the calendar year 1988 under such
section shall be the estimated combined bal-
ance in such Funds as of the close of that
year (rather than as of its beginning).
ELIMINATION OF WINDFALL BENEFITS FOR INDI-
VIDUALS RECEIVING PENSIONS FROM NONCO-
VERED EMPLOYMENT
Sac. 113. (a) Section 215(a) of the Social
Security Act is amended by adding at the
end thereof the following new paragraph:
"(7XA) In the case of an individual whose
primary insurance amount would be com-
puted under paragraph (1) of this subsec-
tion, who-
',(I) . attains age 62 after 1985 (except
where he or she became entitled to a disabil-
ity insurance benefit before 1988 and re-
mained so entitled in any of the 12 months
immediately preceding his or her attain-
ment of age 62), or
"(ii) would attain age 62 after 1985 and be-
comes entitled to a disability insurance
benefit after 1985,
and who is entitled to a monthly periodic
payment (including a payment determined
under subparagraph (C)) based in whole or
in part upon his or her earnings for service
which did not constitute 'employment' as
defined in section 210 for purposes of this
title (hereafter in this paragraph and in
subsection (d)(5) referred to as 'noncovered
service'), the primary insurance amount of
that individual during his or her concurrent
entitlement to such monthly periodic pay-
ment and to old-age or disability insurance
benefits shall be computed or recomputed
under subparagraph (B) with respect to the
initial month in which the individual be-
Approved For Release 2008/10/29: CIA-RDP85-00003R000200130004-8
 Approved For Release 2008/10/29: CIA-RDP85-00003R000200130004-8
H1 024 CONGRESSIONAL RECORD - HOUSE
"(d) SocIAL SECURITY BENSrrr.-
"(1) IN GxtrattAL.-For purposes-of this sec-
tion, the term 'social security benefit' means
any amount received by the taxpayer by
reason of entitlement to-
"(A) a monthly benefit under title II of
the Social Security Act, or
"(B) a tier 1 railroad retirement benefit.
"(2) ADJUSTMENT FOR REPAYMENTS DURING
"(A) IN GENERAL.-For purposes of this sec-
tion, the amount of social security benefits
received during any taxable year shall be re-
duced by any repayment made by the tax-
payer during the taxable year of a social se-
curity benefit previously received by the
taxpayer (whether or not such benefit was
received during the taxable year).
"(B) DENIAL OF DEDUCTION.-If (but for
this subparagraph) any portion of the re-
payments referred to in subparagraph (A)
would have been allowable as a deduction
for the taxable year under section 165, such
portion shall be allowable as a deduction
only to the extent it exceeds the social secu-
rity benefits received by the taxpayer
during the taxable year (and not repaid
during such taxable year).
"(3) WORKMEN'S COMPENSATION BENEFITS
SUBSTITUTED FOR SOCIAL SECURITY BENEFITS:
For purposes of this section, if, by reason of
section 224 of the Social Security Act (or by
reason of section 3(a)(1) of the Railroad Re-
tirement Act of 1974), any social security
benefit Is reduced by reason of the receipt
of a benefit under a workmen's compensa-
tion act, the term 'social security benefit' in-
cludes that portion of such benefit received
under the workmen's compensation act
which equals such reduction.
"(4) Tint 1 RAILROAD RETIREMENT BENE-
Frr.-For purposes of paragraph (1), the
term 'tier 1 railroad retirement benefit'
means a monthly benefit under section 3(a),
4(a), 4(f) of the Railroad Retirement Act of
1974.
NO LIMITATIoN ON AMOUNT INCLUDED
WHERE TAXPAYER RECEIVES Lump-SUM PAY-
"(1) LIMITATION.-If-
"(A) any portion of a lump-sum payment
of social security benefits received during
the taxable year is attributable to prior tax-
able years, and
"(B) the taxpayer makes an election
under this subsection for the taxable year,
then the amount Included in gross income
under this section for the taxable year by
reason of the receipt of such portion shall
not exceed the sum of the increases in gross
income under this chapter for prior taxable
years which would result solely from taking
Into account such portion in the taxable
years to which it is attributable.
"(2) SPECIAL RULES.-
"(A) YEAR TO WHICH BENEFIT ATTRIBUTA-
BLE.-For purposes of this subsection, a
social security benefit is attributable to a
taxable year if the generally applicable pay-
ment date for such benefit occurred during
such taxable year.
"(B) ELEcTION.-An election under this
subsection shall be made at such time and
in such manner as the Secretary shall by
regulations prescribe. Such election, once
made, may be revoked only with the consent
of the Secretary.
"(f) TREATMENT AS PENSION OR Amxurry
FOR CERTAIN PURPOSES.-For purposes of-
"(1) section 43(c)(2) (defining earned
income),
"(2) section 219(fXl) (defining compensa-
tion),
"(3) section 221(bX2) (defining earned
income), and
"(4) section 911(bXl) (defining foreign
earned income),
any social security benefit shall be treated
as an amount received as a pension or annu-
ity."
(b) INroRzATION REPoRTIN(L-Subpart B
of part III of subchapter A of chapter 61 of
such Code (relating to information concern-
ing transactions with other persons) i8
amended by adding at the end thereof the
following new section:
"SEC. 4060F. RETURNS RELATING TO SOCIAL SECU-
RITY BENEFITS.
"(a) RsQUQRSMENT or REPORTING.-The ap-
propriate Federal official shall make a
return, according to the forms and regula-
tions prescribed by the Secretary, setting
forth-
"(1) the-
"(A) aggregate amount of social security
benefits paid with respect to any Individual
during any Calendar year,
"(B) aggregate amount of social security
benefits repaid by such individual during
such calendar year, and
"(C) aggregate reductions under section
224 of the Social Security Act (or under sec-
tion 3(aXl) of the Railroad Retirement Act
of 1974) in benefits which would otherwise
have been paid to such individual during the
calendar year on account of amounts re-
ceived under a workmen's compensation act,
and
"(2) the name and address of such individ-
ual.
"(b) STATEMENTS To BE FURNISHED To IN-
DIVIDUALS WITH RESPECT To WHOM INFORMA-
TION Is FURNISHED.-Every person making a
return under subsection (a) shall furnish to
each individual whose name is set forth in
such return a written statement showing-
"(1) the name of the agency making the
payments, and
"(2) the aggregate amount of payments, of
repayments, and of reductions, with respect
to the individual as shown on such return.
The written statement required under the
preceding sentence shall be furnished to the
individual on or before January 31 of the
year following the calendar year for which
the return under subsection (a) was made.
"(c) DEFINITIONS.-For purposes of this
section-
"(1) APPROPRIATE FEDERAL OFFICIAL.-The
term 'appropriate Federal official' means-
"(A) the Secretary of Health and Human
Services in the case of social security bene-
fits described in section 86(dX1XA), and
"(B) the Railroad Retirement Board in
the case of social security benefits described
in section 86(dXl)(B).
"(2) SOCIAL SECURITY BENEFIT.-The term
'social security benefit' has the meaning
given to such term by section 86(d)(1)."
(c) TREATMENT or NONRESIDENT ALIENS.-
(1) AMENDMENT OF SECTION 871 (a).-+Sub-
section (a) of section 871 of such Code (re-
lating to tax on income not connected with
United States business) is amended by
adding at the end thereof the following new
paragraph:
"(3) TAXATION or SOCIAL SECURITY BENE-
FITS.-For purposes of this section and sec-
tion 1441-
"(A) one-half of any social security benefit
(as defined in section 86(d)) shall be includ-
ed in gross income, and
"(B) section 86 shall not apply."
(2) AMENDMENT or SECTION 1441.-Section
1441 of such Code (relating to withholding
of tax on nonresident aliens) is amended by
adding at the end thereof the following new
subsection:
"(g) CROSS REFinaIIcE.-
"For provision treating one-half of social secu-
rity benefits as subject to withholding under this
section, see section 871(aX3)."
(3) DISCLOSURE or INFORMATION To SOCIAL
SECURITY ADMINISTRATION OR RAILROAD RE-
TIREMENT ROARD.-
March 9, 1989
(A) IN GENERAL.-Subsection (h) of section
6103 of such Code (relating to disclosure to
certain Federal officers and employees for
purposes of tax administration, etc.) is
amended by adding at the end thereof the
following new paragraph:
"(6) WITHHOLDINo or TAX FROM SOCIAL as-
cURITY BzNzrxTs.-Upon written request, the
Secretary may disclose available return In-
formation from the master files of the in-
ternal Revenue Service with respect to the
address and status of an individual as a non-
resident alien or as a citizen or resident of
the United States to the Social Security Ad-
ministration or the Railroad Retirement
Board for purposes of carrying out its re-
sponsibilities for withholding tax under sec-
tion 1441 from social security benefits (as
defined in section 86(d))."
(B) CONFORMING AMENDMENT.-Paragraph
(4) of section 6103(p) of such Code (relating
to safeguards) is amended by inserting
"(h)(6)," after "(h)(2)," in the material pre-
ceding subparagraph (A) and in subpara-
graph (FXii), thereof.
(d) SOCIAL SECURITY BENEFITS TREATED AS
UNITED STATES SomRcED.-Subsection (a) of
section 861 of such Code (relating to income
from sources within the United States) is
amended by adding at the end thereof the
following new paragraph:
"(8) SOCIAL SECURITY BENEFITS.-Any social
security benefit (as defined in section
86(d))."
(e) TRANSFERS To TRUST FUNDS.-
(1) IN GENERAL.-There are hereby appro-
priated to each payor fund amounts equiva-
lent to the aggregate increase in tax liabil-
ities under chapter 1 of the Internal Reve-
nue Code of 1954 which is attributable to
the application of sections 86 and 871(aX3)
of such Code (as added by this section) to
payments from such payor fund.
(2) TRANSFERS.-The amounts appropri-
ated by paragraph (1) to any payor fund
shall be transferred from time to time (but
not less frequently than quarterly) from the
general fund of the Treasury on the basis of
estimates made by the Secretary of the
Treasury of the amounts referred to in such
paragraph. Any such quarterly payment
shall be made on the first day of such quar-
ter and shall take into account social secu-
rity benefits estimated to be received during
such quarter. Proper adjustments shall be
made in the amounts subsequently trans-
ferred to the extent prior estimates were in
excess of or less than the amounts required
to be transferred.
(3) DEFINITIONS.-For purposes of this
subsection-
(A) PAYOR FUND.-The term "payor fund"
means any trust fund or account from
which payments of social security benefits
are made.
(B) SOCIAL SECURITY BENEFITS.-The term
"social security benefits" has the meaning
given such term by section 86(dXl) of the
Internal Revenue Code of 1954.
(4) RBFoRTs.-The Secretary of the Treas-
ury shall submit annual reports to the Con-
gress and to the Secretary of Health and
Human Services and the Railroad Retire-
ment Board on-
(A) the transfers made under this subsec-
tion during the year, and the methodology
used in determining the amount of such
transfers and the funds or account to which
made, and
(B) the anticipated operation of this sub-
section during the next 5 years.
(f) TECHNICAL AMENDMENTS.-.
(1) Subsection (a) of section 85 of such
Code is amended by striking out "this sec-
tion," and inserting in lieu thereof "this sec-
tion, section 86,".
Approved For Release 2008/10/29: CIA-RDP85-00003R000200130004-8
 Approved For Release 2008/10/29: CIA-RDP85-00003R000200130004-8
H 1028
shall be equal to the primary insurance
amount (as determined for purposes of this
subsection after application of subpara-
graphs (B) and (C)) of such deceased indi-
vidual.
"(BXi) For purposes of this subsection, in
any case in which such deceased individual
dies before attaining age 62 and section
215(aXl) (as in effect after December 1978)
is applicable in determining such individ-
ual's primary insurance amount-
"(I) such primary insurance amount shall
be determined under the formula set forth
In section 215(aX1XB) (1) and (ii) which is
applicable to individuals who initially
become eligible for old-age insurance bene-
fits in the second year after the year speci-
fied in clause (ii),
"(II) the year specified in clause (ii) shall
be substituted for the second calendar year
specified in section 215(bX3XAXi1XI), and
"(III) such primary insurance amount
shall be increased under section 215(1) as if
it were the primary insurance amount re-
ferred to in section 215(1X2)(AX1iXII),
except that it shall be increased only for
years beginning after the first year after
the year specified in clause (ii).
"(ii) The year specified in this clause is
the earlier of-
"(I) the year in which the deceased indi-
vidual attained age 60, or would have at-
tained age 60 had she lived to that age, or
"(II) the second year preceding the year
in which the widower first meets the re-
quirements of paragraph (1)(B) or the
second year preceding the year in which the
deceased individual died, whichever is later.
"(iii) This subparagraph shall apply with
respect to any benefit under this subsection
only to the extent its application does not
result in a primary insurance amount for
purposes of this subsection which is less
than the primary insurance amount other-
wise determined for such deceased individu-
al under section 215.
"(C) If such deceased individual".
(2) Section 202(f) of such Act (as amended
by paragraph (1) of this subsection) is fur-
ther amended-
(A) in paragraph (1)(D) and in the matter
in paragraph (1) following subparagraph
(F)(ii), by inserting "(as determined after
application of subparagraphs (B) and (C) of
paragraph (3))" after "primary insurance
amount"; and
(B) in paragraph (3)(D)(ii), by inserting
"(as determined without regard to subpara-
graph (C))" after "primary insurance
amount".
(c) The amendments made by this sestion
shall apply with respect to monthly insur-
ance benefits for months after December
1984 for individuals who first meet all crite-
ria for entitlement to benefits under section
202 (e) or (f) of the Social Security Act
(other than making application for such
benefits) after December 1984.
LIMITATION ON BENEFIT REDUCTION FOR EARLY
RETIREMENT IN CASE OF DISABLED WIDOWS
AND WIDOWERS
SEC. 134. (a)(1) Section 202(q)(1) of the
Social Security Act is amended by striking
out the semicolon at the end of subpara-
graph (B)(ii) and all that follows and insert-
ing in lieu thereof a period.
(2XA) Section 202(qX6) of such Act is
amended to read as follows:
"(6) For purposes of this subsection, the
'reduction period' for an individual's old-
age, wife's, husband's, widow s, or widower's
insurance benefit is the period-
"(A) beginning-
"(I) in the case of an old-age or husband's
insurance benefit, with the first day of the
first month for which such individual is en-
titled to such benefit,
CONGRESSIONAL RECORD - HOUSE March 9, 1989
"(ii) in the case of a wife's insurance bene-
fit, with the first day of the first month for
which a certificate described in paragraph
(5XA)(i) Is effective, or
"(ill) in the case of a widow's or widower's
insurance benefit, with the first day of the
first month for which such individual is en-
titled to.such benefit or the first day of the
month in which such individual attains age
60, whichever is the later, and
"(B) ending with the last day of the
month before the month in which such indi-
vidual attains retirement age.".
(B) Section 202(QX3XG) of such Act is
amended by striking out "paragraph (6)(A)
(or, if such paragraph does not apply, the
period specified in paragraph (6XB))" and
inserting in lieu thereof "paragraph (6)".
(C) Section 202(q) of such Act is further
amended, in paragraphs (1XB)(i), (3XEXii).
and (3XFXI')(I), by striking out "paragraph
(6XA)" and inserting in lieu thereof "para-
graph (6)".
(3) Section 202(9X7) of such Act is amend-
ed by striking out the matter preceding sub-
paragraph (A) and inserting in lieu thereof
-the following:
"(7) For purposes of this subsection, the
'adjusted reduction period' for an individ-
ual's old-age, wife's, husband's, widow's, or
widower's Insurance benefit is the reduction
period prescribed in paragraph (6) for such
benefit, excluding-".
(4) Section 202(q)(10) of such Act is
amended-
(A) in that part of the second sentence
preceding cliause (A), by striking out "or an
additional adjusted reduction period";
(B) in clauses (B)(i) and (C)(i), by striking
out ", plus the number of months in the ad-
justed additional reduction period multipled
by *%40 of 1 percent";
(C) in clause (B)(ii), by striking out "plus
the number of months in the additional re-
duction period multiplied by 43440 of 1 per-
cent,"; and
(D) in clause (C)(ii), by striking out "plus
the number of months in the adjusted addi-
tional reduction period multiplied by 4%4o
of 1 percent.".
(b) Section 202(m)(2)(B) of such Act (as
applicable after the enactment of section 2
of Public I,Aw 97-123) is amended by strik-
ing out "subsection (q)(6XA)(11)" and insert-
ing in lieu thereof "subsection (q)(6)(B)".
(c) The amendments made by this section
shall apply with respect to benefits for
months after December 1983.
PART E-MECHANISMS To ASSURE CONTINUED
BENEFIT PAYMENTS IN UNEXPECTEDLY AD-
VERSE CONDITIONS
NORMALIZED CREDITING OF SOCIAL SECURITY
TAXES TO TRUST FUNDS
SEC. 141. (a)(1) The last sentence of sec-
tion 201(a) of the Social Security Act is
amended-
(A) by striking out "from time to time"
each place it appears and inserting in lieu
thereof "monthly on the first day of each
calendar month"; and
(B) by striking out "paid to or deposited
into the Treasury" and inserting in lieu
thereof "to be paid to or deposited into the
Treasury during such month".
(2) Section 201(a) of such Act is further
amended by adding at the end thereof the
following new sentence: "All amounts trans-
ferred to either Trust Fund under the pre-
ceding sentence shall be invested by the
Managing Trustee in the same manner and
to the same extent as the other assets of
such Trust Fund; and such Trust Fund shall
pay interest to the general fund on the
amount so transferred on the first day of
any month at a rate (calculated on a daily
basis, and applied against the difference be-
tween the amount so transferred on such
first day and the amount which would have
been transferred to the Trust Fund up to
that day under the procedures in effect on
January 1, 1983) equal to the rate earned by
the investments of such Fund in the same
month under subsection (d).".
(b)(1) The last sentence of section 1817(a)
of such Act is amended-
(A) by striking out "from time to time"
and inserting in lieu thereof "monthly on
the first day of each calendar month"; and
(B) by striking out "paid to or deposited
into the Treasury" and inserting in lieu
thereof "to be paid to or deposited into the
Treasury during such month".
(2) Section 1817(a) of such Act is further
amended by adding at the end thereof the
following new sentence: "All amounts trans-
ferred to the Trust Fund under the preced-
ing sentence shall be invested by the Man-
aging Trustee in the same manner and to
the same extent as the other assets of the
Trust Fund; and the Trust Fund shall pay
interest to the general fund on the amount
so transferred on the first day of any month
at a rate (calculated on a daily basis, and ap-
plied against the difference between the
amount so transferred on such first day and
the amount which would have been trans-
ferred to the Trust Fund up to that day
under the procedures in effect on January
1, 1983) equal to the rate earned by the in-
vestments of the Trust Fund in the same
month under subsection (c).".
(c) The amendments made by this section
shall become effective on the first day of
the month follbwing the month in which
this Act is enacted.
INTERFUND BORROWING EXTENSION
SEC. 142. (a) Sections 201(1)(1) and
1817(j)(1) of the Social Security Act are
each amended by striking out "January
1983" and inserting in lieu thereof "January
1, 1988".
(b) Sections 201(1)(3) and 1817(j)(3) of
such Act are each amended by inserting
before the period at the end thereof the fol-
lowing: "; but the full amount of all such
loans (whether made before or after Janu-
ary 1, 1983) shall be repaid.at the earliest
feasible date and in any event no later than
December 31, 1989.".
RECOMMENDATIONS BY BOARD OF TRUSTEES TO
REMEDY INADEQUATE BALANCES IN THE SOCIAL
SECURITY TRUST FUNDS
SEC. 143. Title VII of the Social Security
Act is amended by adding at the end thereof
the following new section:
"RECOMMENDATIONS BY BOARD OF TRUSTEES To
REMEDY INADEQUATE BALANCES IN THE SOCIAL
SECURITY TRUST FUNDS
"SEc. 709. If the Board of Trustees of the
Federal Old-Age and Survivors Insurance
Trust Fund, the Federal Disability Insur-
ance Trust Fund, the Federal Hospital In-
surance Trust Fund, or the Federal Supple-
mentary Medical Insurance' Trust Fund de-
termines at any time that the balance of
such Trust Fund may become inadequate to
assure the timely payment of benefits from
such Trust Fund, the Board shall promptly
submit to each House of the Congress a
report setting forth Its recommendations for
statutory adjustments affecting the receipts
and disbursements to and from such Trust
Fund necessary to remedy such inadequacy,
with due regard to the economic conditions
which created such inadequacy and the
amount of time necessary to alleviate such
inadequacy in a prudent manner.".
PART F-OT ER FINANCING AMENDMENTS
FINANCING OF NONCONTRIBUTORY MILITARY
WAGE CREDITS
SEC. 151. (a) Section 217(g) of the Social
Security Act is amended to read as follows:
Approved For Release 2008/10/29: CIA-RDP85-00003R000200130004-8
 H 1030
Approved For Release 2008/10/29: CIA-RDP85-00003R000200130004-8
CONGRESSIONAL RECORD - HOUSE March 9, 1983
mmaay oemme
09W di for *W
bYity
insMdmurance benefits,
or die (bdem
for purposes for purposes for purposes for purposes
of clause of clause of clause of the first
(I) of (0) of (ii) of sentence of
ragraph
paragr)( pu(1)agr(A pa(1)(A) ragraph p'(7 )(6)
(1A
le- IS- Is- n-
governing the payment of monthly insur-
ance benefits under title II of the Social Se-
curity Act, and of the general feasibility and
desirability of making adjustments in such
procedures with respect to float periods; and
(2) a separate investigation-of the feasibil-
ity and desirability of providing, as a specif-
ic form of adjustment in such procedures
with respect to float periods, for the trans.
fer each day to the general fund of the
Treasury from the Federal Old-Age and
Survivors Insurance Trust Fund and the
Federal Disability Insurance Trust Fund, as
appropriate, of amounts equal to the
amounts of the checks referred to in subsec-
tion (a) which are paid by the Federal Re-
serve Banks on such day.
(c) In conducting the study required by
subsection (a), the Secretaries shall consult,
as appropriate, the Director of the Office of
Management and Budget, and the Director
shall provide the Secretaries with such in-
formation and assistance as they may re-
quire. The Secretaries shall also solicit the
views of other appropriate officials and or-
ganizations.
WD Not later than six months after the
date of the enactment of this Act, the Secre-
taries shall submit to the President and the
Congress a report of the findings of the In-
vestigation required by subsection (b)(1),
and the Secretary of the Treasury shall by
regulation Mae such adjustments in the
procedures governing the payment of
monthly insurance benefits under title II of
the Social Security Act with respect to float
periods (other than adjustments in the form
described in subsection (b)(2)) as may have
been found in such investigation to be nec-
essary or appropriate.
(2) Not later than twelve months after the
date of the enactment of this Act, the Secre-
taries shall submit to the President and the
Congress a report of the findings of the sep-
arate investigation required by subsection
(b)(2), together with their recommendations
with respect thereto; and, to the extent nec-
essary or appropriate to carry out such rec-
ommendations, the Secretary of the Treas-
ury shall by regulation make adjustments in
the procedures with respect to float periods
in the form described in such subsection.
SEC. 302. (a) Section 218(j) of the Social
Security Act Is amended-
(1) by inserting "(1)" after "(j)",
(2) by striking out "the rate of 6 per
centum per annum" and inserting in lieu
thereof "the applicable rate determined in
accordance with paragraph (2)", and
(3) by adding at the end thereof the fol-
lowing new paragraph: -
"(2) For purposes of paragraph (1), the
rate of interest applicable to late payments
outstanding during the six-month period be-
ginning on January 1, 1984, shall be 9.0 per-
cent per annum. The rate of interest appli-
cable to late payments outstanding during
the six-month period beginning on July 1,
1984, and subsequent six-month periods be-
ginning on January 1 or July 1 thereafter,
shall be determined by the Secretary of the
Treasury not later than 15 days after the
end of the base period described in the fol-
lowing sentence and shall be an annual rate
equal to the average (rounded to the near-
est full percent, or the next higher percent
if it is a multiple of 0.5 percent but not of
1.0 percent) of the annual rates of interest
applicable to the special obligations issued
to the Trust Funds (in accordance with sec-
tion 201(d)) in each month of such base
period. The 'base period' for the rate effec-
tive on January 1 of a year Is the six-month
period ending on.the immediately preceding
September 30, and the base period for the
rate effective on July 1 of a year is the six-
month period ending on the immediately
preceding March 31.".
(b) The amendments made by this section
shall apply with respect to payments made
after December 31, 1983, under an agree-
ment pursuant to section 218 of the Social
Security Act.
TRUST FUND INVESTMENT PROCEDURES
SEC. 303. (a)(1) Section 201(d) of the
Social Security Act is amended by striking
out the second and third sentences and in-
serting in lieu thereof the following: "Such
investments may be made only in Interest-
bearing public-debt obligations of the
United States which are issued exclusively
for purchase by the Trust Funds under title
31 of the United States Code.".
(2) The fifth sentence of such section
201(d) is amended to read as follows: "Such
obligations shall be redeemable at par plus
accrued interest at any time, and shall bear
Interest In any month (including the month
of issue) at a rate equivalent to either (1)
the average market yield (determined by
the Managing Trustee on the basis of
market quotations as of the end of each
business day of the preceding month) on all
marketable interest-bearing obligations of
the United States then forming a part of
the public debt (other than 'flower bonds')
which are not due or callable until after the
expiration of 4 years from the end of such
preceding month, or (2) the average market
yield (so determined) on all such obligations
which are due or callable 4 years or less
from the end of such preceding month,
whichever average market yield (with re-
spect to the month involved) Is larger;
except that where such equivalent interest
rate is not a multiple of one-eighth of 1 per-
cent, the rate of interest on the obligations
involved shall be the multiple of one-eighth
of 1 percent nearest such equivalent rate.".
(3) Section 201(d) of such Act is further
amended by striking out the last sentence,
and by inserting in lieu thereof the follow-
ing: "For purposes of the preceding sen-
tence, the term 'flower bond' means a
United States Treasury bond which was
issued before March 4, 1971, and which may,
at the option of the duly constituted repre-
sentative of the estate of a deceased individ-
ual, be redeemed In advance of maturity and
at par (face) value plus' accred Interest to
the date of payment if (I) it was owned by
such deceased individual at the time of his
death, (ii) it is part of the estate of such de-
ceased individual, and (iii) such representa-
tive authorizes the Secretary of the Treas-
ury to apply the entire proceeds of the re-
demption of such bond to the payment of
Federal estate taxes.".
(b)(1) Section 1817(c) of such Act is
amended by striking out the second and
third sentences and inserting In lieu thereof
the following: "Such investments may be
made only in interest-bearing public-debt
obligations of the United States which are
issued exclusively for purchase by the Trust
Funds under title 31 of the United States
Code.".
(2) The fifth sentence of such section
1817(c) is amended to read as follows: "Such
obligations shall be redeemable at par plus
accrued interest at any time, and shall bear
interest in any month (including the month
of issue) at a rate equivalent to either (1)
the average market yield (determined by
the Managing Trustee on the basis of
market quotations as of the end of each
business day of the preceding month) on all
marketable interest-bearing obligations of
the United States then forming a part of
the public debt (other than 'flower bonds')
which are not due or callable until after the
expiration of 4 years from the end of such
preceding month, or (2) the average market
yield (so determined) on all such obligations
an (y7ar rough
199999 ....................
90.0
32.0
15.0
610
2000 .........................
89.4
31.8
14.9
60.6
2001 .........................
88.8
31.6
14.8
60.2
2002 .........................
88.2
31.4
14.1
59.8
2003 .........................
87.6
31.1
14.6
59.4
2004- .......................
87.0
30.9
14.5
59.0
2005 .........................
86.4
30.7
144
58.6
2006 .........................
85.8
30.5
14.3
58.2
2007 or thereafter....
85.2
30.3
14.2
57.7."
. ADJUSTMENTS IN OASDI TAX RATES
SEC. 202. (a) Section 3101(a) of the Inter-
nal Revenue Code of 1954 (relating to rate
of tax on employees for old-age, survivors,
and disability insurance), as amended by
section 123(a)(1) of this Act, is further
amended by striking out the last line of the
table and inserting in lieu thereof the fol-
lowing:
"1990 through 2014 ............. 6.2 percent
2015 or thereafter ................ 6.44 percent."
(b) Section 3111(a) of such Code (relating
to rate of tax on employers for old-age, sur-
vivors, and disability insurance), as amended
by section 123(a)(2) of this Act, is further
amended by striking out the last line of the
table and inserting in lieu thereof the fol-
lowing.
"1990 through 2014 ............. 6.2 percent
2015 or thereafter ................ 6.44 percent."
(c) Section 1401(a) of such Code (relating
to rate of tax on self-employment income
for old-age, survivors, and disability insur-
ance), as amended by section 124(a) of this
Act), is further amended by striking out the
last line of the table and Inserting in lieu
thereof the following,
"December 31, 1989 ..................... January 1, 2015 212.40
December 31, 2014 ....................... ............................................ 12.88."
(d) The amendments made by this section
shall apply to remuneration paid, and tax-
able years beginning, after December 31,
2014.
TITLE III-MISCELLANEOUS AND
TECHNICAL PROVISIONS
PART A--CASH MANAGEMENT
FLOAT PERIODS
SEC. 301. (a) The Secretary of Health and
Human Services and the Secretary of the
Treasury shall jointly undertake, as soon as
possible after the date of the enactment of
this Act, a thorough study with respect to
the period of time (hereafter in this section
referred to as the "float period") between
the issuance of checks from the general
fund of the Treasury in payment of month-
ly insurance benefits under title II of the
Social Security Act and the transfer to the
general fund from the Federal Old-Age and
Survivors Insurance Trust Fund or the Fed-
eral Disability Insurance Trust Fund, as ap-
plicable, of the amounts necessary to com-
pensate the general fund for the issuance of
such checks. Each such Secretary shall con-
sult the other regularly during the course of
the study and shall, as appropriate, provide
the other with such information and assist-
ance as he may require.
(b) The study shall include-
(1) an investigation of the feasibility and
desirability of maintaining the float periods
which are allowed as of the date of the en-
actment of this section in the procedures
Approved For Release 2008/10/29: CIA-RDP85-00003R000200130004-8
 Approved For Release 2008/10/29: CIA-RDP85-00003R000200130004-8
H 1036
CONGRESSIONAL RECORD - HOUSE March 9, 1983
shall exclude from the term 'wages' any em-
ployer contribution-
"(1) under a qualified cash or deferred ar-
rangement (as defined in section 401(k)) to
the extent not included In gross income by
reason of section 402(aX8),
"(2) under a cafeteria plan (as defined in
section 125(d)) to the extent the employee
had the right to choose cash, property, or
other benefits which would be wages for
purposes of this chapter, or
"(8) for an annuity contract described in
section 403(b)."
(b) Section 209 of the Social Security Act
is amended by adding at the end thereof
(after the new paragraph added by section
101(cXl) of the this Act) the following new
paragraph:
"Nothing in any of the foregoing provi-
sions of this section (other than subsection
(a)) shall exclude from the term 'wages' and
employer contribution-
"(1) under a qualified cash or deferred ar-
rangement (as defined in section 401(k)) of
the internal Revenue Code of 1954 to the
extent not included in gross income by
reason of section 402(a)(8) of such Code,
"(2) under a cafeteria plan (as defined in
section 125(d) of suSh Code) to the extent
the employee had the right to choose cash,
property, or other benefits which would be
wages for purposes of this title, or
"(3) for an annuity contract described in
section 403(b) of such Code."
(c) The amendments made by this section
shall apply to remuneration paid after De-
cember 31, 1983.
CODIFICATION OF ROWAN DECISION WITH
RESPECT TO MEALS AND LODGING
SEC. 330. (aX1) Subsection (a) of section
3121 of the internal Revenue Code of 1954
(defining wages) is amended by striking out
,,or,, at the end of paragraph (17), by strik-
ing out the period at the end of paragraph
(18) and inserting in lieu thereof "; or", and
by inserting after paragraph (18) the follow-
ing new paragraph:
"(19) the value of any meals or lodging
furnished by or on behalf of the employer if
at the time of such furnishing it is reason-
able to believe that the employee will be
able to exclude such items from income
under section 119."
(2) Section 209 of the Social Security Act
is amended by striking out "or" at the end
of subsection (p), by striking out the period
at the end of subsection (q) and inserting in
lieu thereof 11; or", and by inserting after
subsection (q) the following new subsection:
"(r) The value of any meals or lodging fur-
nished by or on behalf of the employer if at
the time of such furnishing it is reasonable
to believe that the employee will be able to
exclude such items from income under sec-
tion 119 of the Internal Revenue Code of
1954."
(bX Subsection (a) of section 3121 of
such Code is amended by inserting after
paragraph (19) (as added by subsection (a)
of this section) the following new sentence:
"Nothing in the regulations prescribed for
purposes of chapter 24 (relating to income
tax withholding) which provides an exclu-
sion from 'wages' as used in such chapter
shall be construed to require a similar exclu-
sion from 'wages' in the regulations pre-
scribed for purposes of this chapter."
(2) Section 209 of the Social Security Act
is amended by inserting immediately after
subsection (r) (as added by subsection (a) of
This section) the following new sentence:
"Nothing in the regulations prescribed for
purposes of chapter 24 of the Internal Reve-
nue Code of 1954 (relating to income tax
withholding) which provides an exclusion
from 'wages' as used in such chapter shall
be construed to require a similar exclusion
from 'wages' in the regulations prescribed
for purposes of this title."
(c) The amendments made by subsections
(a) and (b) shall apply to remuneration paid
after December 31, 1983.
PART D-OTHER AMENDMENTS
TECHNICAL AND CONFORMING AMENDMENTS TO
MAXIMUM FAMILY BENEFIT PROVISIONS
Sac. 331. (aXi) Section 203(a)(3)(A) of the
Social security Act is amended by striking
out clause (ii) and inserting in lieu thereof
the following:
"(11) an amount (I) initially equal to the
product of 1.75 and the primary insurance
amount that would be computed under sec-
tion 215(aXl), for January of the year de-
termined for purposes of this clause under
the following two sentences, with respect to
average indexed monthly earnings equal to
one-twelfth of the contribution and benefit
base determined for that year under section
230. and (II) thereafter increased in accord-
ance with the provisions of section
215(iX2XAXii).
The year established for purposes of clause
(ii) shall be 1983 or, if it occurs later with
respect to any individual, the year in which
occurred the month that the application of
the reduction provisions contained in this
subparagraph began with respect to benefits
payable on the basis of the wages and self-
employment income of the insured individu-
al If for any month subsequent to the first
month for which clause (ii) applies (with re-
spect to benefits payable on the basis of the
wages and self-employment income of the
insured individual) the reduction under this
subparagraph ceases to apply, then the year
determined under the preceding sentence
shall be redetermined (for purposes of any
subsequent application of this subpara-
graph with respect to benefits payable on
the basis of such wages and self-employ-
ment income) as though this subparagraph
had not been previously applicable.".
(2) Section 203(aX7) of such Act is amend-
ed by striking out everything that follows
"shall be reduced to an amount equal to"
and inserting in lieu thereof "the amount
determined in accordance with the provi-
sions of paragraph (3XA)(ii) of this subsec-
tion, except that for this purpose the refer-
ences to subparagraph (A) in the last two
sentences of paragraph (3)(A) shall be
deemed to be references to paragraph (7).".
(b) Clause (i) in the last sentence of sec-
tion 203(b)(1) of such Act (as amended by
section 132(b) of this Act) is further amend-
ed by striking out "penultimate sentence"
and inserting in lieu thereof "first sentence
of paragraph (4)".
(c) The amendments made by subsection
(a) shall be effective with respect to pay-
ments made for months after December
1983.
REDUCTION FROM 72 TO 70 OF AGE BEYOND
WHICH. No DELAYED RETIREMENT CREDITS CAN
BE EARNED
SEC. 332. (a) Section 202(w) of the Social
Security Act is amended-
(1) in paragraph (2XA), by striking out
"age 72" and inserting in lieu thereof "age
70"; and
(2) in paragraph (3), by striking out "age
72 after 1972" and inserting in lieu thereof
"age 70".
(b) The amendments made by subsection
(a) shall apply with respect to individuals
who attain age 70 after December 1983. For
individuals who attain age 70 before Janu-
ary 1984, section 202(w) as in effect immedi-
ately before the enactment of the amend-
ments made by this section shall apply.
except that no increment months as deter-
mined under such section attributable to
months after December 1983 shall accrue.
RELAXATION OF INSURED STATUS REQUIRE-
MENTS FOR CERTAIN WORKERS PREVIOUSLY
ENTITLED TO A PERIOD OF DISABILITY
SEC. 333. (a) Section 216(iX3) of the Social
Security Act is amended-
(1) by striking out the semicolon at the
end of clause (ii) of subparagraph (B) and
inserting in lieu thereof ", or"; and
(2) by inserting after clause (ii) of such
subparagraph the following new clause:
"(iii) in the case of an individual (not oth-
erwise insured under clause (i)) who, by
reason of clause W. had a prior period of
disability that began during a period before
the quarter in which he or she attained age
31, not less than one-half of the quarters be-
ginning after such individual attained age
21 and ending with such quarter are Quar-
ters of coverage, or (if the number of quar-
ters in such period is less than 12) not less
than 6 of the quarters in the 12-quarter
period ending with such quarter are quar-
ters of coverage; ".
(b) Section 223(c)(1XB) of such Act is
amended-
(1) by striking out the semicolon at the
end of clause (ii) and inserting in lieu there-
of ", or"; and
(2) by inserting after clause (ii) the follow-
ing new clause:
"(iii) in the case of an individual (not oth-
erwise insured under clause (i)) who, by
reason of section 216(iX3)(B)(ii), had a prior
period of disability that began during a
period before the quarter in which he or she
attained age 31, not less than one-half of
the quarters beginning after such -individual
attained age 21 and ending with the quarter
in which such month occurs are quarters of
coverage, or (if the number of quarters in
such period is less than 12) not less than 6
of the quarters in the 12-quarter period
ending with such quarter are quarters of
coverage;".
(c) The amendments made by this section
shall be effective with respect to applica-
tions for disability insurance benefits under
section 223 of the Social Security Act, and
for disability determinations under section
216(1) of such Act, filed after the date of the
enactment of this Act, except that no
monthly benefits under title II of the Social
Security Act shall be payable or increased
by reason of the amendments made by this
section for months before the month follow-
ing the month of enactment of this Act.
PROTECTION OF BENEFITS OF ILLEGITIMATE
CHILDREN OF DISABLED BENEFICIARIES
SEC. 334. (a) The last sentence of section
216(h)(3) of the Social Security Act is
amended by striking out "subparagraph
(A)(1)" and inserting in lieu thereof "subpar-
agraphs (AM) and (B)(1)".
(b) The amendment made by subsection
(a) shall be effective on the date of the en-
actment of this Act.
ONE-MONTH RETROACTIVITY OF WIDOW'S AND
WIDOWER'S INSURANCE BENEFITS
SEC. 335. (a) Section 202(!)(4XB) of the
Social Security Act is amended-
(1) by redesignating clauses (ill) and (iv) as
clauses (iv) and (v), respectively; and
(2) by adding after clause (11) the follow-
ing new clause:
"(111) Subparagraph (A) does not apply to
a benefit under subsection (e) or (f) for the
month immediately preceding the month of
application, if the insured individual died in
that preceding month.".
(b) The amendments made by subsection
(a) shall apply with respect to survivors
whose applications for monthly benefits are
filed after the second month following the
month in which this Act is enacted.
Approved For Release 2008/10/29: CIA-RDP85-00003R000200130004-8
 H 1038
Approved For Release 2008/10/29: CIA-RDP85-00003R000200130004-8
CONGRESSIONAL RECORD - HOUSE March 9, 1983
(2) by striking out "the 12-month period "(d)(1) For any particular month after nished to or on behalf of the family which
commencing July 1 of the next year" In the March 1983, a State which is not treated as (as determined under regulations of the Sec-
first sentence and inserting In lieu thereof meeting the requirements imposed by para- retary by such State agency as the chief ex-
"the following calendar year"; and graph (4) of subsection (a) by reason of sub- ecutive officer of the State may designate)
(3) by striking out "for such next year" In section (b) shall be treated as meeting such is based on need for such support and main-
the second sentence and inserting in lieu requirements if and only if- tenance, including assistance received to
thereof "for that following calendar year". "(A) the combined level of its supplemen- assist in meeting the costs of home energy
(b)(1) Section 1839(c) of such Act is tary payments (to recipients of the type In- (including both heating and cooling), and
amended- volved) and the amounts payable (to or on which".
(A) by striking out "December of 1972 and behalf of such recipients) under section (c) The amendments made by this section
of each year thereafter" in paragraphs (1), 1611(b) of this Act and section 211(a)(1)(A) shall be effective with respect to months
(3), and (4) and inserting in lieu thereof of public Law 93-66, for that particular which begin after the month In which this
"September of each year"; month, Act is enacted and end before October 1,
(B) by striking out "for the 12-month is not less than- 1984.
period commencing July 1 in the succeeding "(B) the combined level of its supplemen-
year" in paragraphs (1), (3), and (4) and in. ry payments (to recipients of the type in- COMP OMPE S UNEMPLOYMENT
serting in lieu thereof "for months in the taENSATION PROVISIONS
following calendar year"; volved) and the amounts payable (to or on PART A-FEDERAL SUPPLEMENTAL
(C) by striking out "such 12-month behalf of such recipients) under section COMPENSATION
period" each place it appears in paragraphs 1611(b) of this Act and section 211(a)(1)(A)
(1) and (4) and inserting In lieu thereof of Public law 93-66, for March 1983, in. SEC. 501. EXTENSION OF PROGRAM.
"such calendar year"; creased by the amount of all cost-of-living Paragraph (2) of section 602(f) of the Fed-
(D) by striking out "that 12-month adjustments under section 1617 (and any eral Supplemental Compensation Act of
period" in paragraph (3)(A) and inserting in other benefit increases under this title) 1982 is amended by striking out "March 31,
lieu thereof "that calendar year"; which have occurred after March 1983 and 1983" and Inserting in lieu thereof "Septem-
(E) by striking out "May 1 of the year" in before that particular month. ber 30, 1983".
paragraph (3)(B) and inserting in lieu there- "(2) In determining the amount of any in- SEC. 502. NUMBER OF WEEKS FOR WHICH COMPEN-
of "November 1 of the year before the crease in the combined level involved under SATION PAYABLE.
year"; and paragraph (1)(B) of this subsection, any (a) GENERAL RULE.--Subsection (e) of sec-
(F) by striking out "following May" in portion of such amount which would other- tion 602 of the Federal Supplemental Com-
paragraph (3)(B) and inserting in lieu there- wise be attributable to the increase under pensation Act of 1982 is amended by redes-
of "following November". section 1617(c) shall be deemed instead to ignating paragraph (3) as paragraph (4) and
(2) Section 1839(g) of such Act is amend- be equal to the amount of the cost-of-living by striking out paragraph (2) and inserting
ed- adjustment which would have occurred in in lieu thereof the following new para-
(A) by striking out "June 1983" in pare- July 1983 (without regard to the 8-percent graphs:
graph (1) and inserting in lieu thereof "De. limitation contained in section 215(i)(1)(B)) "(2)(A) In the case of any account from
cember 1983", and if section 111 of the Social Security Act which Federal supplemental compensation
(B) by striking out "July 1985" and insert- Amendments of 1983 had not been en- was first payable to an individual for a week
ing in lieu thereof "January 1986" each acted.". beginning after March 31, 1983, the amount
place it appears. SSI ELIGIBILITY FOR TEMPORARY RESIDENTS OF established In Such account shall be equal to
(d) The amendments made by this section EMERGENCY SHELTERS FOR THE HOMELESS the lesser of-
shall apply to premiums for months begin- SEC. 403. (a) Section 1611(e)(1) of the "(1) 65 per centum of the total amount of
ning with January 1984, and for months Social Security Act is amended- regular compensation (including depend-
after June 1983 and before January 1984- (1) by striking out "subparagraph (B) and ents' allowances) payable to the individual
(1) the monthly premiums under part A (C)" in subparagraph (A) and inserting in with respect to the benefit year (as deter-
and under part B of title XVIII of the lieu thereof "subparagraphs (B), (C), and mined under the State law) on the basis of
Social Security Act for individuals enrolled (D)"; and which he most recently received regular
under each respective part shall be the (2) by adding at the end thereof the fol- compensation, or
monthly premium under that part for the lowing new subparagraph: "(ii) the applicable limit determined under
month of June 1983, and "(D) A person may be an eligible individu- the following table times his average weekly
(2) the amount of the Government contri- al or eligible spouse for purposes of this title benefit amount for his benefit year.
butions under section 1844(a)(1) of such Act with respect to any month throughout
shall be computed on the basis of the actu- which he is a resident of a public emergency "In the case of weeks The applicable limit is:
arially adequate rate which would have during a:
been in effect under part B of title XVIII of lations shelter for which the shall be homeless ( prescribed by defined in
See- 6-percent period ..................................... 14
the Sec-
such Act for such months without regard to 5-percent period ..................................... 13
the amendments made by this section, but eligible retary); except individual that or r person shall be an 4.5-percent period .................................. 11
using the amount of the premium in effect reason of this eligible spouse esubparagraph more than
an 3.5-percent period .................................. 10
for the month of June 1983. three months In any 12-month period.". Low-unemployment period .................. 8
TITLE IV-SUPPLEMENTAL SECURITY (b) The amendments made by subsection "(B) In the case of any account from
INCOME BENEFITS (a) shall be effective with respect to months which Federal supplemental compensation
INCREASE IN FEDERAL SSI BENEFIT STANDARD after the month in which this Act is en- was payable to an individual for a week be-
SEC. 401. (a) Section 1617 of the Social Se- acted. ginning before April 1, 1983, the amount es-
curity Act is amended by adding at the end DISREGARDING OF EMERGENCY AND OTHER IN- tablished in such account shall be equal to
thereof the following new subsection: KIND ASSISTANCE PROVIDED BY NONPROFIT the lesser of the subparagraph (A) entitle-
"(c) Effective July 1, 1983- ORGANIZATIONS ment or the sum of-
"(1) each of the dollar amounts in effect SEC. 404. (a) Section 1612(b)(13) of the "(I) the subparagraph (A) entitlement re-
under subsections (aXl)(A) and (b)(1) of Social Security Act is amended by striking duced (but not below zero) by the aggregate
section 1611, as previously increased under out "any assistance received" and all that amount of Federal supplemental compensa-
this section, shall be increased by $20 (and follows down through "(B)" and inserting In tion paid to such individual for weeks begin-
the dollar amount in effect under subsec- lieu thereof the following: "any support or ning before April 1, 1983, plus
tion (aX1XA) of Public Law 93-66, as previ- maintenance assistance furnished to or on "(ii) such individual's additional entitle-
ously so Increased, shall be increased by behalf of such individual (and spouse if any) ment.
$10); and - which (as determined under regulations of "(C) For purposes of subparagraph (B)
"(2) each of the dollar amounts in effect the Secretary by such State agency as the and this subparagraph-
under subsections (a)(2)(A) and (b)(2) of chief executive officer of the State may des- "(I) The term 'subparagraph (A) entitle-
section 1611, as previously increased under ignate) is based on need for such support or ment' means the amount which would have
this section, shall be increased by $30.". maintenance, including assistance received been established in-'the account If subpara-
(b) Section 1617(b) of such Act is amended to assist in meeting the costs of home graph (A) had applied to such account.
by striking out "this section" and inserting energy (including both heating and cooling), "(ii) The term 'additional entitlement'
in lieu thereof "subsection (a) of this sec- and which". - means the lesser of-
tion". (b) Section 402(a)(36) of such Act is "(I) three-fourths of the subparagraph
ADJUSTMENTS IN FEDERAL SSI PASS-THROUGH amended by striking out "shall not include (A) entitlement, or
PROVISIONS as Income" and all that follows down "(II) the applicable limit determined
Sac. 402. Section 1618 of the Social Secu- through "(B)" and inserting in lieu thereof under the following table times the individ-
rity Act Is amended by adding at the end the following: "shall not include as income ual's average weekly benefit amount for his
thereof the following new subsection: any support or maintenance assistance fur- benefit year.
Approved For Release 2008/10/29: CIA-RDP85-00003R000200130004-8
 Approved For Release 2008/10/29: CIA-RDP85-00003R000200130004-8
H 1040
CONGRESSIONAL RECORD - HOUSE March 9, 1989
(5) by inserting "and subsection (d) and
except as provided in subsection (e)" in
paragraph (3)(B) after "subparagraph (A)";
(6) by Inserting-"or fiscal year" after "cost
reporting period" each place it appears in
paragraph (3)(B);
(7) by inserting "before the beginning of
the period or year" In paragraph (3)(B)
after "estimated by the Secretary"; and
(8) by striking out "exceeds" in paragraph
(3XB) and inserting in lieu thereof "will
exceed".
(cXI) Subsection (c)(1) of such section is
amended-
(A) by striking out "and" at the end of
subparagraph (B),
(B) by striking out the period at the end
of subparagraph (C) and inserting in lieu
thereof ' ; and", and
(C) by adding at the end the following:
"(D) the Secretary determines that the
system will not preclude an eligible organi-
zation (as defined in section 1876(b)) from
negotiating directly with hospitals with re-
spect to the organization's rate of payment
for inpatient hospital services.
The Secretary cannot deny the application
of a State under this subsection on the
ground that the State's hospital reimburse-
ment control system is based on a payment
methodology other than on the basis of a di-
agnosis-related group or on the ground that
the amount of payments made under this
title under such system must be less than
the amount of payments which would oth-
erwise have been made under this title not
using such system. If the Secretary provides
that the assurances described in subpara-
graph (C) are based on maintaining pay-
ment amounts at no more than a specified
percentage increase above the payment
amounts in a base period, the State has the
option of applying such teat (for inpatient
hospital services under part A) on an aggre-
gate payment basis or on the basis of the
amount of payment per inpatient discharge
or admission. If the Secretary provides that
the assurances described in subparagraph
(C) are based on maintaining aggregate pay-
ment amounts below a national average per-
centage increase in total payments under
part A for inpatient hospital services, the
Secretary cannot deny the application of a
? State under this subsection on the ground
that the State's rate of increase in such pay-
ments for such services must be less than
such national average rate of increase.";
(2) Subsection (c)(3) of such section is
amended-
(A) by striking out "requirement of para-
graph l1XA)" and inserting in lieu thereof
"requirements of subparagraphs (A) and (D)
of Paragraph (1) and, if applicable, the re-
quirements of paragrapIr (5),", and
(B) by inserting "(or, if applicable, in
paragraph (5))" in subparagraph (B) after
"paragraph (1)".
(3) Subsection (c) of such section is fur-
ther amended by adding at the end the fol-
lowing new paragraphs:
"(4) The Secretary shall approve the re-
quest of a State under paragraph (1) with
respect to a hospital reimbursement control
system if-
"(A) the requirements of subparagraphs
(A), (B), (C), and (D) of paragraph (1) have
been met with respect to the system, and
"(B) with respect to that system a waiver
of certain requirements of title XVIII of the
Social Security Act has been approved on or
before (and which Is in effect as of) the date
of the enactment of the Social Security Act
Amendments of 1983, pursuant to section
402(a) of the Social Security Amendments
of 1967 or section 222(a) of the Social Secu-
rity Amendments of 1972.
"(5) The Secretary shall approve the re-
quest of a State under paragraph (1) with
respect to a hospital reimbursement control
system if-
"(A) the requirements of subparagraphs
(A), (B), (C), and (D) of paragraph (1) have
been met with respect to the system;
"(B) the Secretary determines that the
system-
"(I) is operated directly by the State or by
an entity designated pursuant to State law,
"(ii) provides for payment of hospitals
covered under the system under a method-
ology (which sets forth exceptions and ad-
justments, as well as any method for
changes in the methodology) by which rates
or amounts to be paid for hospital services
during a specified period are established
under the system prior to the defined rate
period, and
"(iii) hospitals covered under the system
will make such reports (in lieu of cost and
other reports, identified by the Secretary,
otherwise required under this title) as the
Secretary may require in order to properly
monitor assurances provided under this sub-
section;
"(C) the State has provided the Secretary
with satisfactory assurances that operation
of the system will not result in any change
in hospital admission practices which result
hn-
"(i) a significant reduction in the propor-
tion of patients (receiving hospital services
covered under the system) who have no
third-party coverage and who are unable to
pay for hospital services,
"(ii) a significant reduction in this propor-
tion of Individuals admitted to hospitals for
inpatient hospital services for which pay-
ment is (or is likely to be) less than the an-
ticipated charges for or costa of such serv-
ices,
"(iii) the refusal to admit patients who
would be expected to require unusually
costly or prolonged treatment for reasons
other than those related to the appropriate-
ness of the care available at the hospital, or
"(iv) the refusal to provide emergency
services to any person who is in need of
emergency services it the hospital provides
such services;
"(D) any change by the State in the
system which has the effect of materially
reducing payments to hospitals can only
take effect upon 60 days notice to the Secre-
tary and to the hospitals the payment to
which is likely to be materially affected by
the change; and .
"(E) the State has provided the Secretary
with satisfactory assurances that in the de-
velopment of the system the State has con-
sulted with local governmental officials con-
cerning the impact of the system on public
hospitals.
The Secretary shall ,respond to requests of
States under this paragraph within 60 days
of the date the request is submitted to the
Secretary.".
(d) Subsection (d) of such section, as
added by section 110 of the Tax Equity and
Fiscal Responsibility Act of 1982, is amend-
ed-
(1) by striking out "section 1814(b)" in
paragraph (2)(A) and inserting in lieu there-
of "subsection (b)", and
(2) by redesignating the subsection as sub-
section (j) and transferring and inserting
such subsection at the end of section 1814 of
the Social Security Act under the following
heading:
"Elimination of Lesser-of-Cost-or-Charges
Provision".
(e) Such section 1886 is further amended
by adding at the end the following new sub-
sections:
"(d)(1)(A) Notwithstanding section
1814(b) but subject to the provisions of sec-
tion 1813, the amount of the payment with
respect to the operating costs of inpatient
hospital services (as defined in subsection
(a)(4)) of a subsection (d) hospital (as de-
fined in subparagraph (B)) for inpatient
hospital discharges in a cost reporting
period or in a fiscal year-
"(1) beginning on or after October 1, 1983,
and before October 1, 1986, is equal to the
sum of-
"(I) the target percentage (as defined in
subparagraph (C)) of the lesser of the hos-
pital's target amount for the cost reporting
period (as defined in subsection (b)(3XA)),
or the limitation established under subsec-
tion (a) (determined without regard to para-
graph (2) thereof) for the period, and
"(II) the DRG percentage (as defined in
subparagraph (C)) of the adjusted DRG
prospective payment rate determined under
paragraph (2) or (3) for such discharges; or
"01) beginning on or after October 1, 1986,
is equal to the adjusted DRG prospective
payment rate determined under paragraph
(3) for such discharges.
"(B) As used in this section, the term 'sub-
section (d) hospital' means a hospital locat-
ed in one of the fifty States or the District
of Columbia other than-
"(I) a psychiatric hospital (as defined in
section 1861(f)),
"(ii) a rehabilitation hospital (as defined
by the Secretary),
"(iii) a hospital whose inpatients are pre-
dominantly individuals under 18 years of
age, or
"(iv) a hospital which has an average inpa-
tient length of stay (as determined by the
Secretary) of greater than 25 days;
and, upon request of a hospital and in ac-
cordance with regulations of the Secretary,
does not include a psychiatric or rehabilita-
tion unit of the hospital which is a distinct
part of the hospital (as defined by the Sec-
retary).
"(C) For purposes of this subsection, for
cost reporting periods beginning, or dis-
charges occurring-
,,(I) on or after October 1, 1963, and before
October 1, 1984, the 'target percentage' is 75
percent and the 'DRG percentage' is 25 per-
cent;
"(ii) on or after October 1, 1984, and
before October 1, 1985, the 'target percent-
age' is 50 percent and the 'DRG percentage'
is 50 percent; and
"(iii) on or after October 1, 1985, and
before October 1, 1986, the 'target percent-
age' is 25 percent and the 'DRG percentage'
is 75 percent.
"(2) The Secretary shall determine an ad-
justed DRG prospective payment rate, for
each inpatient hospital discharge in fiscal
year 1984 involving inpatient- hospital serv-
ices of a subsection (d) hospital (located in
an urban or rural area within a census divi-
sion) for which payment may be made
under part A of this title, as folk ws:
"(A) DETERMINING ALLOWABLE INDIVIDUAL
HOSPITAL COSTS FOR BASE PERIOD.-The Secre-
tary shall determine the allowable operat-
ing costs of inpatient hospital services for
the hospital for the most recent cost report-
ing period for which data are available.
"(B) UPDATING FOR FISCAL YEAR 1981.-The
Secretary shall update each amount deter-
mined under subparagraph (A) for fiscal
year 1984 by-
(I) updating for fiscal year 1983 by the
estimated average rate of change of hospital
costs industry-wide between the cost report-
ing period used under such subparagraph
and fiscal year 1983, and
"(ii) projecting for fiscal year 1984 by the
applicable percentage increase (as defined
in subsection (b)(3XB)) for fiscal year 1984.
"(C) STANDARDIZING AMOUNTS.-The Secre-
tary shall standardize the amount updated
Approved For Release 2008/10/29: CIA-RDP85-00003R000200130004-8
 Approved For Release 2008/10/29: CIA-RDP85-00003R000200130004-8
H 1044 CONGRESSIONAL RECORD HOUSE March 9, 1988
bill for such services independent of the "(E) with respect to an individual who at- tions of the changes made by this section in
hospital payment. tams early retirement age after December retirement age in the case of those Individ-
(b) The Secretary shall make an appropri- 31, 2021, 67 years of age. uals (affected by such changes) who, be-
ate reduction in the payment amount under "(2) The term 'early retirement age' cause they are engaged in physically de-
section 1886(d) of the Social Security Act means age 62 In the case of an old-age, manding employment or because they are
(as amended by this title) for any discharge, wife's, or husband's insurance benefit, and unable to extend their working careers for
if the admission has occurred before a hos- age 60 In the case of a widow's or widower's health reasons, may not benefit from im-
pital's first cost reporting period that begins insurance benefit. provements in longevity. The Secretary
after. September 1983, to take into account "(3) The age increase factor for any indi- shall submit to the Congress no later than
amounts payable under title XVIII of that vidual who attains early retirement age In a January 1, 1986, a full report on the study
Act (as in effect before the date of the en- calendar year within the period to which and analysis. Such report shall include any
actment of this Act) for items and services subparagraph (B) or (D) of paragraph (1) recommendations for legislative changes, in-
furnished before that period. applies shall be determined as follows: eluding recommendations with respect to
(OXi) The Secretary shall cause to be pub- "(A) With respect to an individual who at- the provision of protection against the risks
lashed in the Federal Register a notice of tains early retirement age in the 5-year associated with early retirement due to
the interim final DRO prospective payment period consisting of the calendar years 2000 health considerations, which the Secretary
rates established under subsection (d) of through 2004, the age increase factor shall finds necessary or desirable as a result of
section 1886 of the Social Security Act (as be equal to two-twelfths of the number of the findings contained in this study.
amended by this title) no later than Sep- months in the period beginning with Janu- Mr. PICKLE (during the reading).
tember 1, 1983. and allow for a period of ary 2000 and ending with December of the,. Chairman. I ask unanimous Con-
public comment thereon. The DRO prospec- year in which the individual attains early Mr. the amendment unanimous
as
tive payment rates shall become effective on retirement age. sent October 1, 1983, without the necessity for "(B) With respect to an individual who at- read and printed in the REcoRD.
consideration of comments received, but the tains early retirement age in the 5-year The CHAIRMAN. Is there objection
Secretary shall, by notice published in the period consisting of the calendar years 2017 to the request of the gentleman from
Federal Register, affirm or modify the through 2021, the age increase factor shall Texas?
amounts by December 31, 1983, after consid- be equal to two-twelfths of the number of There was no objection.
ering those comments. months in the period beginning with Janu-
Chair-
(2) Mr. ROSTENKOWSKI. Mr. Chair-
A modification under paragraph (1) ary 2017 and ending with December of the
that reduces a DRO prospective payment year in which the individual attains early man. pursuant to the rule, I designate
rate shall apply only to discharges occurring retirement age.". the gentleman from Massachusetts
after 30 days after the date the notice of (bXl) Section b02(gX9) of such Act is (Mr. SIrANNoN) a member of the com-
the modification is published in the Federal amended to read as follows: mittee. to control the time in opposi-
Register. "(9) The reduction factors for early retire- tion to the Pickle amendment.
(3) Rules to implement subsection (d) of ment specified in paragraph (1) shall be pe- The CHAIRMAN. Pursuant to
section 1886 of the Social Security Act (as riodically revised by the Secretary so that-
so amended) shall, and exceptions, adjust- "(A) in the case of old-age insurance bene- House Resolution 126, the gentleman
ments, or additional payment amounts fits, wife's insurance benefits, and husband's from Texas (Mr. Plcxi.E) will be recog-
under paragraph (5) of such. subsection insurance benefits, the reduction factors ap. nized for 1 hour, and the gentleman
may, be established In accordance with the plicable to an individual initially becoming from Massachusetts (Mr. SI ANNON)
procedure described in this subsection. entitled to such benefits at an age not more will be recognized for 1 hour.
The CHAIRMAN. Are there any than 3 years less than the retirement age The Chair recognizes the gentleman
committee amen applicable to such Individual will be the from Texas (Mr. PICKLE).
mar. WSffi.,Th=L_80 same as those specified in paragraph (1), Mr. PICKLE. Mr. Chairman, I yield
::~ c!emmi .taa mendment , Chair- and the reduction factors for each month such time as he may consume to the
below the age which is 3 years lower than
AMEEDMEr1T 0"nMED BY ]nC=X the applicable retirement age shall each be gentleman from Iowa (Mr. BEDELL).
CKLE. Mr. Chairman, I offer five-twelfths of 1 percent; and (Mr. BEDELL asked and was given
M(B) In the case of widow's insurance permission to revise and extend his re-
an r. amendment. " benefits and widower's insurance benefits, marks.)
The Clerk read as follows: the reduction factors applicable to an indi- Mr. BEDELL. Mr. Chairman, I rise
Amendment offered by Mr. PICKLr Strike vidual initially becoming entitled to such in support ort of H.R. 1900, the Social See-
out sections 201 and 202 (beginning on page benefits at early retirement age shall be the Amendments of 1983. Al-
Insert line 9, and ending on page 86. line 8) and same as those specified in paragraph (1). Curity Act insert in lieu thereof the following new no- and the reduction factors applicable to indi- though I do not support each and
tion (with a conforming amendment to the viduals initially becoming entitled to such every individual provision in this bill, I
table of contents): benefits at a greater age shall each be estab- do feel that as a whole the agreement
INCREAas nx arrIRE AGE lashed by linear Interpolation between the reached represents a shared sacrifice
Sac. 201. (a) Section 218 of the Social Se- applicable reduction factor for such early between those who are presently re-
curity Act Is amended by adding at the end retirement age and a factor of unity at the tired and those in the work force-
thereof the following new subsection: applicable retirement age." both of which have so much at stake
"RETIRSL13N'r AGE (2) Section 202(q)(1) of such Act is amend- the strength of the social security
ed by striking out "If" and inserting in lieu
"(1X1) The term 'retirement age' means- thereof "Subject to paragraph (9), if,,. system.
"(A) with respect to an individual who at- (c) Title II of the Social Security Act Is Judging from the hundreds of let-
tains early retirement age (as defined in further amended- ters, phone calls, and appeals raised
paragraph (2)) before January 1, 2000, 65 (1) by striking out "age 65" or "age of 65". repeatedly across my congressional
years of age: as the case may be, each place it appears in district, it is quite apparent that no
"(B) with respect to an individual who at- the following sections and inserting in lieu other issue has alarmed so many
talus early retirement age after December thereof in each instance "retirement age (as Americans and caused alarmed so aany
31, 1999, and before January 1. 2005, 65 defined in section 216(1))":
years of age plus the number of months in (A) subsections (a), (b), (c), (d), (e), (f), (q). ety as the future of social security. Di-
the age increase factor (as determined (r), and (w) of section 202, rectly or indirectly, social security
under paragraph (3)) for the calendar year (B) subsections (c) and (f) of section 203, touches the lives of almost every
in which such individual attains early retire- (C) subsections (f) of section 215, American. There is no question that it
ment age; (D) subsections (h) and (I) of section 216. is the central feature of the way
"(C) with respect to an individual who at- and Americans plan their financial futures.
tams early retirement age after December (E) sections 223(a);
31. 2004, and before January 1. 2017, 66 (2) by striking out "age sixty-five" In sec- That security must be restored and
years of age Lion 203(c) and inserting in lieu thereof "re- preserved.
"(D) with respect to an Individual who at- tirement age (as defined in section 216(1))"; I want to commend the National
tains early retirement age after December and Commission on Social Security for its
31, 2016, and before January 1. 2022, 66 (3) by striking out "age of sixty-five" in deliberations on this important matter
years of age plus the number of months in section 223(a) and inserting in lieu thereof and for putting forth a consensus
the age increase factor (as determined "retirement age (as defined in section package of recommendations designed
under paragraph (3)) for the calendar year - 216(1))".
the implies- - s lems land the system's short-range
which such individual attains early retire- ensive stuuddy Secretary
of its longer term prob-
and analysis conduct
ment age; and h
Approved For Release 2008/10/29: CIA-RDP85-00003R000200130004-8
 Approved For Release 2008/10/29: CIA-RDP85-00003R000200130004-8
H 1046 CONGRESSIONAL RECORD - HOUSE
recognize this fact and increase the re-
tirement age correspondingly. Only
those persons 46 years of age or less
will be affected by the increase to age
66, and those 19 or less by the increase
to age 67. This is not an unreasonable
burden to ask ? current generations
which can expect to live longer than
any other generation in our Nation's
history.
I might also point out that the origi-
nal retirement age of 65 was estab-
lished in 1936. It has never in the pro-
gram's history been changed to reflect
increased longevity. I wish also to re-
state that this long-term funding pro-
posal will not affect anybody currently
over the age of 46.
I am also supporting the Pickle
amendment because it would supplant
the long-term financing committee
compromise to cut benefits slightly in
the year 2000 and further increase em-
ployer/employee taxes in the year
2010. I believe that acceleration of
taxes in the short-term is enough of a
tax increase and that a further in-
crease in taxes for long-term financ-
ing, albeit less than 0.6 percent, is ex-
cessive and a double burden on those
already expected to pay accelerated
social security taxes in the next sever-
al years.
In conclusion, Mr. Chairman, I
heartily endorse the social security
compromise plan with the Pickle
amendment phasing in increased re-
tirement ages. I believe this is a fair
and responsible effort which will shore
up social security for the indefinite
future an restore our citizen's confi-
dence in what has been a most success-
ful, if often maligned, retirement pro-
gram.
Mr. PICKLE. Mr. Chairman, I yield
such time as he may consume to the
gentleman from Georgia (Mr. Row-
LAND).
(Mr. ROWLAND asked and was
given permission to revise and extend
his remarks.)
Mr. ROWLAND. Mr. Chairman, I
commend the members of the Com-
mittee on Ways and Means for their
diligence in seeing that an acceptable
social security financing package was
brought before the House in a timely
fashion.
We are all aware of the severe time
constraints involved with implement-
ing H.R. 1900, and I know that every
person in this Chamber will sleep a
little easier tonight, knowing that the
retirement checks to social security re-
cipients will not be delayed.
Before us today, we have a compro-
mise package. The gentleman from
Florida (Mr. YouNo) commented earli-
er that it must be a fair bill because
each person with whom he met had a
complaint about it.
Under closer observation, it is appar-
ent that we have before us not a bill
which satisfies a majority of the popu-
lace, but a bill that has generated an
equal level of opposition from almost
all factions. In fact, I would be hard
pressed to find any two people with
different occupations that would
reject the same provision of this bill.
The composition of this legislation has
successfully fractionalized all interest-
ed parties. There has been no coalition
of opposition, because there is no con-
sensus of disagreement. A flawless
strategy, I must admit.
The Federal employees have op-
posed extended social security cover-
age for new hires. And with good
reason. They have been given no guar-
antees that, the retirement system,
which is their future, will be solvent.
Those self-employed workers who
make up a large component of our
labor force will be taxed as if each one
is really two complete taxpayers.
And the elderly of this land are con-
vinced that their incomes will not keep
up with inflation if a delay in the
COLA is enacted.
Then of course, there are the oppos-
ing factions on how to solve the re-
maining long-term financing prob-
lem-whether to increase employee
taxes or reduce benefits to retirees.
But we had plenty of time to come
to terms with all of these provisions.
The passage of H.R. 1900 is inevitable.
However. I am concerned that we
might be taking advantage of this new
found momentum by arbitrarily at-
taching other legislation to it, assured
of its passage.
There is no doubt that we must stop
the escalating cost of health care, but
this bill may not be the proper mecha-
nism for making sweeping changes to
the medicare payment plan.
While the medical industry did not
present any major obstacle to the in-
clusion of the prospective payment
plan, we must remember the alterna-
tive plan for payment contained in the
Tax Equity and Fiscal Responsibility
Act of 1982 would have a more adverse
affect on health care providers. This is
merely the more attractive choice.
I implore you not to mistake my in-
tentions. I sincerely hope this plan
will equitably reduce health care cost.
The concept of prospective payments
is reasonable, but the potential of this
plan is only as good as the provisions
which were hurriedly assembled
during the last few months of the 97th
Congress.
History can at times provide us with
clues to the future. Nearly a decade
ago, a nationwide network of health
agencies was created for the purpose
of lowering hospital costs. Some of us
who were professionally involved with
the health care systems felt the legis-
lation was too hastily conceived and
ill-advised. In November of 1975, I tes-
tified against a measure before the
House Ways and Means Committee,
and subsequently those remarks ap-
peared in the CONGRESSIONAL REcoan.
When I read back over those re-
marks, I realize we were absolutely
right about one point. Regardless of
whether we were right or wrong on
the merits of the issue, it would have
been far more prudent to study the
proposed program thoroughly before
March 9, 1983
risking hundreds of millions of dollars
on something that might not work the
way it was designed.
Today we are phasing out those
agencies. After spending up to $157.7
million a year on this program, fund-
ing was decreased to about $56 million
for the past 2 fiscal years.
The goal was a worthy one, but the
health agencies did not work out the
way they were planned.
Now, we are again confronted by a
proposed program to deal with health
care costs that has been rather hastily
developed. And at this stage, there is
no conclusive evidence to verify the
cost effectiveness of this plan.
I realize my arguments in this
matter will not change the outcome of
this legislation. In spite of all my res-
ervations, this bill is the only option
available. While this $185.3 billion
package may temporarily ease the
social security financing crisis, I have
serious doubts about the long-term fi-
nancial integrity of the system.
However, I will support this package
because I have a responsibility to the
36 million retirees who are facing a
bankrupt social security retirement
program. To not expeditiously pass
legislation to stabilize the social secu-
rity system would be irresponsible and
inexcusable to the millions who
depend on their checks to survive.
But to pass this bill without ac-
knowledging that it does not have the
overwhelming support of my constitu-
ency would be deceptive.
Mr. PICKLE. Mr. Chairman, I yield
myself 15 minutes.
(Mr. PICKLE asked and was given
permission to revise and extend his re-
marks.)
Mr. PICKLE. Mr. Chairman, we
have reached the point now in the
consideration of our social security
reform bill where the House will be
asked to work its will to determine
what route we take to correct the
long-term deficit of 0.68 percent of
payroll. Two amendments have been
made in order, and I present the
amendment that, in effect, would raise
the normal retirement age in the
future, starting at the year 2000 and
completing in the year 2027.
First, I think it would be best if I
would state to the Members what my
amendment does.
The amendment I have offered
raises the normal retirement age in
two steps.
First it raises the normal retirement
age to 66 by increasing the age for full
benefits by 2 months per year for 6
years, so that the proposal would be
fully effective beginning with those at-
taining the age 66 in the year 2009.
In other words, the change in age
would not be fully completed for some
26 years.
The phase-in would begin at age 62.
We retain that 82 level of early retire-
ment. It saves 0.42 percent of taxable
payroll. Keep in mind that we must
save or raise 0.68.
Approved For Release 2008/10/29: CIA-RDP85-00003R000200130004-8
 Approved For Release 2008/10/29: CIA-RDP85-00003R000200130004-8
March 9, 1988
CONGRESSIONAL. -RECORD -HOUSE H 1047
The second stage does this: It raises
the normal retirement- age from 66 to
67 by increasing the age for full bene-
fits by 2 months a year for 6 years so
that the proposal would be fully effec-
tive beginning with those attaining
the age 67 in the year 2027.
The phase-in would begin with those
at age 62 which commenced in 2017.
This second step, saves 0.26 percent of
payroll.
Another part of the amendment is
that the age 62 benefits would be
maintained at an ultimate rate of 70
percent of full benefits fully effective
after the age for full retirement is
changed to 67. There will be no
changes made in medicare or SSI. And
last, the amendment requires the Sec-
retary, by January 1, 1986, to conduct
and submit with recommendations to
Congress a comprehensive study and
analysis of the implications of the
change in retirement age for those in-
dividuals affected by this change who,
because they are engaged in physically
demanding employment, or because
they are unable to extend their work-
ing careers for health reasons, may
not benefit from improvements in lon-
gevity.
Now, let me repeat, would raise the
retirement age way in the future by
raising it 2 months per year starting in
the year 2000. The first stage would be
completed by the year 2009. In other
words, with 17 years in this century
and 9 years later, it would not be fully
effective for some 26 years in the
future.
01400
Thus anybody 45 years or above
would not be affected by this amend-
ment.
The second part of the amendment
raises the age from 66 to 67, and that
does not start until 2017 and it is not
made fully effective until the year
2027. Now with the 17 years in this
century and the 27 years that would
mean 44 years. Thus, my second stage
would affect a very small . percent of
the present workforce.
Now why should the Congress take
this step and why should the Congress
take this step in 1983? Let me mention
some of the points that I think should
be made today.
First, the social security program
faces a long-term deficit after the turn
of the century that is largely demo-
graphic in nature. Now Members
ought to remember that, it is substan-
tial. The deficit is over 28 percent of
program costs in the outyears and it
begins sooner than most of us think,
as income to the trust funds will begin
to fall below the outgo somewhere in
the years 2010 to 2015.
Not, Mr. Chairman, this shortage is
a demographic shortfall. Overall pro-
gram costs will remain fairly steady as
a percent of GNP. This long-time defi-
cit arises in spite-now in spite=of the
projection of real wage growth of 1.5
percent, of low unemployment of 5.5
percent, of low inflation of 4 percent,
and an increase in the birth rate over
current levels.
The trustees of the social security
program are very clear about the
reason for this deficit, and I hope the
Members listen to this point: This is
the reason they cite for the deficit:
The number of beneficiaries will be in-
creasing faster than the number of
workers; ? it is demographic and we
should remember that. -
Now, while we cannot forecast with
total accuracy, we would have to have
very, very substantial changes in these
projections to eliminate the deficit in
the outyears. Moreover, our young
people know that this problem exists.
They know that there are problems in
the program which exist, and they will
not have confidence in . the system
unless they see a solution enacted
which addresses this four-square.
Second, the demographic impact on
the social security trust funds comes
not just from baby booms or from a
drop in fertility rates. Longevity has
increased dramatically in this century,
with most of the increases in the last
half occurring among the adult popu-
lation and not through lower infant
mortality or other factors. More
people are living longer, and these in-
creases have occurred already across
the board among men and women and
among all races.
The gentleman from Illinois (Mr.
Mrcxar.) made the point very well that
life expectancy has increased over 10
years in recent times, and we must
take that into account as we consider
the demographics of our program.
Three, the combination of demo.
graphic circumstances facing us means
that an increase in the retirement age
is inevitable. This Congress has al-
ready gone on record many times
fighting age discrimination in employ.
ment. Once the baby boom is fully
adult there will be a slowdown in the
growth of the labor force, and it will
become even more important to en-
courage individuals to work longer in
order to maintain overall national
growth.
Given the Inevitability, and I say it
is the inevitability, the only fair route,
the only reasonable, responsible route,
is to make the change-now so that in-
dividuals have full notice of what to
expect.
Now four. Mr. Chairman, any meas-
ure which seeks to address the long-
term needs of social security are going
to make some changes that have unfa-
vorable side effects. Raising taxes hits
hardest on the low income and conse.
quently on minorities and women, who
are often lower paid. Raising taxes
causes inflation. It hurts the little
worker more than anything that we
could do. Reducing the growth of
benefits. by any measure or any formu-
la also cuts benefits which hit these
same groups Just as hard. Only by rais-
ing the age are we making it clear that
we want individuals who can to stay in
the work force longer. And it they do
that then they will suffer no reduc-
tion. My colleagues are going to hear
arguments .later that our people who
retire early will have to suffer from a
reduction in their benefits and they
will impart to you the harshness of
that. I want to challenge those figures,
but I want to say to my colleagues at
the very beginning, those people who
stay on the work force will not suffer
reductions ? and thus that will not
apply.
The responsibility of the Congress
here today is to look down the road.
We can sit here and continue to out
benefits and raise taxes, or we recog-
nize the future and make the kind of
change that will rekindle the confi-
dence in this program by shaping it to
what the future holds down the road.
Now, Mr. Chairman, there is nothing
sacrosanct about the age 65. I think
we would probably all agree it was a
proper age when it was started back in
1935. But it does not mean that auto-
matically you can never'tamper with it
or change that age. The social security
program already offers benefits at dif-
ferent ages. Those alternatives and
those options are available now. Right
now, today, our program offers bene-
fits without any test ' of retirement
after age 70.
Second, it offers retirement benefits
at many different levels between the
ages of 62 and 70.
Third, if offers benefits to. widows
and widowers at age 60. And fourth, it
offers benefit to disabled at any time.
Those are options available now.
Now, Mr. Chairman, my amendment
does not change any of those options
and the argument that we would take
that away is just not a valid argument.
All these benefits be continued to
be offered. The difference is that we
are' slightly altering the amount so
that those who do stay in the work
force longer will receive no reduction
whatsoever. And that is a key factor.
And we are seeking the concrete infor-
mation we need to continue to provide
the kind of protection appropriate for
anyone who cannot stay in the work
force longer.
We put in the amendment. which
has the support of the administration,
that we are going to require the Secre-
tary of HHS to submit to the Congress
within 3 years an analysis and a plan
to put into effect to recognize those
people who have any kind of occupa-
tional disability so if they cannot
profit by longevity they can at least
retire.
For instance, a coal miner in West
Virginia might certainly qualify. and
we want to take that into considera-
tion. Or any manual type of labor that
shows that individual's'' body might be
unable to perform at age 62.
Mr. Chairman, we do not have the
option of not making changes, the
House must - make changes. The
former National Commission on Social
Security recommended praising the age.
The President's Commission on' Pen-
sion Policy recommended raiq[ng the
Approved For Release 2008/10/29: CIA-RDP85-00003R000200130004-8
 Approved For Release 2008/10/29: CIA-RDP85-00003R000200130004-8
H 1048 CONGRESSIONAL RECORD - HOUSE
age. A majority of the most recent Na-
tional Commission an Social Security
Reform recommended raising the age.
A clear majority of the Ways and
Means Committee, both Democrat and
Republican, have recommended rais-
ing the age. This is not a partisan
matter. It is not a Republican or
Democratic matter. I would remind
the House that I am the one who
started the proposal of raising the age
and I did that over 2 years ago. And as
a Democrat I want to make it plain
that we are not playing politics; we are
not being partisan at this point.
Now then there may be a temptation
to vote on no amendments because
some may view that as a safe route.
But let me tell my colleagues, the only
way to play it safe In to do the right
thing and that is to raise this age pro-
spectively in the future. We must re-
store confidence In this program. We
must go about it in the cleanest and
the clearest way possible. We must tell
the people plainly that we are meeting
the needs of the future. And we must
give them notice of what is going to
come about. Their confidence will
depend In great measure an how we
handle this long-term deficit
The bill we brought before you
makes many changes and it does solve
two-thirds of the long-term deficit.
Now, Mr. Chairman, we must choose
which route will we take. Your choices
are simple. You can vote for the meas-
ure that is in the bill that reduces
benefits and raises taxes. Or, you can
vote for the Pepper amendment that
raises taxes entirely. Or, you can go
the Pickle route which raises age in
the future and does not raise taxes. I
think my proposal Is the preferable
one. It is the time to do it.
01450
I conclude by saying this to you.
This Congress, whenever we get into
difficulty with social security, is going
to do whatever is necessary. Mr. Chair-
men, we know that If we are asked to
raise taxes or to cut benefits, we will
do that. We will measure up, I think,
in some respects; but we may not have
a chance In this lifetime to do the re-
sponsible thing about raising the age,
and raising that age is absolutely in-
evitable. Now Is the time. If we miss
this chance, we will end up in the
future just raising taxes. I do not
think the American people want that
or will stand for it.
I hope my party does not stand for
it. I hope the majority of this House
will recognize that we ought to in-
crease the age as we have outlined,
and I earnestly solicit your support on
this amerximent
Mr. SHANNON. Mr. Chairman. I
yield such time as he may consume to
the gentleman from New Mexico (Mr.
RICHARDSMS).
(Mr. RICHARDSON asked and was
given permission to revise and extend
his Mr. RMBAFJ)SOK. Mr. Chairman,
I Strongly oppose Congressman Pecs-
La's proposed amendment to H.R.
1900, the Social Security Act Amend-
ments of 1983, which would increase
the age at which a person could retire
with full benefits, from age 65 to 67.
The hard, cold fact is, this amendment
calls for a cut in benefits for future re-
tirees. Although supporters of the
Pickle amendment claim that it is only
logical to increase the retirement age
due to the increased life expectancy of
the average American, they Ignore
some important facts.
Longer life does not necessarily
mean better health during later years.
Due to rising costs of health care, the
health of the elderly may actually
worsen. Raising the retirement age
would devastate those individuals who
are unable to work beyond age 65 due
to a lifetime of work in hard physical
jobs. Additionally, it Is the blue collar
worker who already receives the small-
est benefit. To further reduce their
benefits would be unconscionable. A
worker who had lost his job or is
unable to work beyond age 65 due to
poor health, will be extremely unlikely
to find employment at an advanced
age.
This amendment would also have an
extremely adverse effect on women
and minorities. Although women are
living longer, their disability rates are
on the rise. Older women would find it
especially difficult to find employment
due to the double burden of sex and
age discrimination.
Minorities account for 60 percent of
the population of my district In New
Mexico. An unfortunate fact is that
minorities have a substantially shorter
life expectancy than other Americans
do. In essence, this amendment asks
minorities to pay into the social secu-
rity system their entire life, with the
likelihood that they may never receive
benefits.
Mr. Chairman, I urge you and the
Members of this body to vote against
the Pickle amendment as a violation
of the promises that have been made
to the American public. Let us make
sure that Americans will be able to
retire with security and dignity at a
reasonable age. Although Congress-
man Pspraa's amendment will require
a small tax Increase in the year 2020
should the economy remain weak, it is
a compassionate alternative to the
Pickle anent for solving the
long-term deficit of social security.
Mr. SHANNON. Mr. Chairman, I
yield myself such time as I shall use.
Mr. Chairman, I rise today in strong
opposition to the Pickle amendment.
The Idea of increasing the retire-
ment age has some superficial appeal.
But I hope today we can strip away
the mythology and look at who is af-
fected by such a change.
BAESSi1ST IMPACT OS THE MOST VOLWERAELE
REMWICIASIES
Increasing the retirement age would
be a major benefit cut for America's
most vulnerable senior citimens..
March 9, 198
The Pickle amendment would end
up cutting benefits by 12 to 14 percent
compared to current law.
The Pickle amendment Is designed
to force people to stay In the work
force longer-regardless of whether
they are able to continue working, and
regardless of whether there are any
jobs.
This amendment assumes that most
people are able to work longer than
they do now.
This is not the case.
Survey after survey shows that a
great many people, perhaps 2 out of 3,
retire-not because they want to-but
because of: First, poor health; second,
mandatory retirement; third, lack of
skills; and fourth, job loss.
According to the National Center for
Health Statistics, as many as 30 per-
cent of early retirees retire due to ill
health and have no choice In their re-
tirement decision.
Increasing the retirement age for
these people would not keep them In
the work force longer. It will simply
cut their benefits. And what will they
be able to do about ft? Nothing.
Look at the numbers.
Two-thirds of the savings from the
Pickle amendment come from cutting
benefits for early retirees-not from
workers staying on the job longer.
Instead of spreading the burden of
the long-term solution evenly over all
social security beneficiaries, the Pickle
amendment heaps it onto the backs of
those least able to carry it.
Those affected most harshly by the
Pickle amendment include low-skilled
blue collar workers, minorities, and
women.
Low-skilled and manual workers per-
form more physically demanding
work.
If manual and blue collar workers
have health problems, they are more
likely than other workers to retire
early. A lot of these people cannot
keep working up to age 67. Do you
want to vote to cut retirement benefits
for these people who are already hurt-
ing? Then vote for the Pickle amend-
ment. But if you agree that these
people already have enough problems,
vote "no."
This proposal would also hit hard on
minorities and women. Minorities
would be hurt because they are much
more likely to have their ability to
work limited by health problems in
late middle age. The job market tends
to close up on than as they get older.
And they often engage In more phys-
ically demanding work. Think about
it-white or black-would you like to
have to keep your job as a heavy la
borer until you are 67 just so you can
collect a reasonable social security
check?
And under the proposal, women
would get the same bad deal Women
have a higher incidence of chromic III-
ness than men. Do we want to penalise
them for this? It we do4 the Pickle
amendment Is a good way to do it.
Approved For Release 2008/10/29: CIA-RDP85-00003R000200130004-8
 Approved For Release 2008/10/29: CIA-RDP85-00003R000200130004-8
H 1050
It is also Important to note that be-
tween 1940 and 1980, life expectancy
at birth has increased by 12 years.
Moreover, longevity is predicted to in-
crease even further in the future.
Given this general increase in longev-
ity, an increase in the age of full re-
tirement is inevitable.
The Pickle amendment also man-
dates a study of those occupations
that, because of the nature of work,
make it difficult, if not impossible, to
work to the extended age. The study
will look at how disability can be rede-
fined to insure that those workers are
treated fairly.
It is also important to note that this
action does not affect medicare or SSI
eligibility.
Finally, after holding 16 hours of
public hearings in the Fourth District
of Arkansas this year, holding hear-
ings in 1981, publishing two special re-
ports on this issue, and my most
recent constituent questionnaire, r
find broad-based support among both
younger and older workers for raising
the retirement age.
Mr. SHANNON. Mr. Chairman, I
yield 3 minutes to the distinguished
member of the Committee on Ways
and Means, the gentlewoman from
Connecticut (Mrs. K NNEux).
(Mrs. KENNELLY asked and was
given permission to revise and extend
her remarks.)
Mrs. KENNELLY. Mr. Chairman, I
am opposed to the Pickle amendment.
I was in committee, and continue to
believe It will impact hardest on
women, low-skilled workers, and mi-
norities.
Raising the retirement age to 66,
and then 67, will reduce benefits most
directly for those who retire early. In
fact, a worker who retires at age 62 In
the year 2022 will suffer a 12-percent
reduction in benefits. Many workers.
especially women workers, have to
retire early. They are in ill health,
they are worn out from low-paid dead-
end jobs. They may have spent a life-
time on their feet, not a lifetime of sit-
ting down behind a desk.
It is these workers who I think of
when I think about increasing the re-
tirement age. I do not believe we are
being fair to them, I think this amend-
ment treats them harshly.
There is much talk about the in-
creasing role of women in the govern-
ment process. Women retire at an ear-
lier age than men-age 62 retirement
in 1978-44 percent women and 29 per-
cent men-and receive a lower benefit
award in 1979-$406 for men, $270 for
women. Reducing the benefit level by
12 percent will force more elderly into
poverty, and onto welfare. These souls
will most likely be women, because
women in most cases do not have a pri-
vate pension to fall back on, and may
have few additional resources to make
up for the cut we are imposing. Even if
a woman had the same resources as a
man, it is a fact that women live
longer than men. So it is they who are
more likely to exhaust their resources
CONGRESSIONAL RECORD - HOUSE March 9, 1983
over a lifetime. Finally, we all know
that medicare is in deep trouble. Rais-
ing the retirement age sets the prece-
dent for reducing medicare benefits by
raising the age at which one qualifies
for health benefits.
For all of these reasons, I oppose the
Pickle amendment.
Mr. PICKLE. Mr. Chairman, I yield
5 minutes to the gentleman from
South Carolina (Mr. Caacrasu.).
(Mr. CAMPBELL asked and was
given permission to revise and extend
his remarks.) '
Mr. CAMPBELL. Mr. Chairman, be-
cause I believe we must not allow the
benefits of those who are dependent
on social security to be interrupted, I
reluctantly supported the social- secu-
rity reform package when It came out
of the Committee on Ways and Means.
But I submit to my colleagues that we
are still faced with the dilemma of
trying. to save benefits for those who
are retired and we are still faced with
the dilemma of trying to assure bene-
fits for those who will one day retire.
We have not yet solved our problem.
Unless we resolve this conflict in a way
that people at home understand is
fair, we will be inviting the skepticism
and the anger of the young working
men and women of this country who
are being called upon to pay a higher
aid higher share of their paychecks to
support the benefits that have in-
creased faster than the wages that
they are making.
I want to make that point again: We
are asking them to pay more to sup-
port benefits that are going up faster
than their wages are going up.
Social security is an income transfer
program. Recognize it for what it is.
The payroll taxes a worker pays today
are used for the benefit checks of
those who are retired. We used to have
16 workers working for each retiree,
and now we have about 3. That is part
of the reason that social security taxes
have risen from $347 a year maximum
in 1970 to $2,170 this year, and a pro-
jected $4,600 before the end of this
decade-$347 to $4,600 in a short
period of time. That is an enormous
tax increase.
A worker paying into the system
over an entire lifetime who retired last
year contributed, at the most, $14,76,7.
That worker will get back everything
paid in within 18 months.
^ 1510
Compare that to a young person en-
tering the program today. That person
can expect to contribute some $335,000
at a maximum into the system and I
submit that it is questionable that
they will ever draw it back. That is
what we are faced with. We can ask
ourselves, do we really think it is fair?
Is it fair to ask this young person to
pay an even greater portion of his
earnings or her earnings when in fact
the per capita income of those over
age 65 now exceeds the per capita
income of the rest of the population?
And those retirees who were 65 in 1980
can expect to enjoy their retirement
for 16 more years.
That is good news. I think it is ex-
tremely good news that people are
living longer. A male born in 1940,
when the social security program got
underway, had an expected lifespan of
61.1 years; a female had an expected
lifespan of 65.6 years. By 1980 that
was up to 69.8 years for a male and
77.7 years for a female. Do we know
anybody who wants to reverse that
trend? I do not. I think we have to rec-
ognize it.
By the year 2000, when the Pickle
amendment would go into effect, a
baby boy can look forward to 72.9
years and a girl, 81.1 years. We do not
want to change that.
The Pickle amendment recognizes
this happy fact of life and eases the
age for full retirement benefits up by
2 months a year for those who are 62
in the year 2000 until it reaches 66 -in
the year 2009. And then, after another
10 year, it is eased up to 67.
Those who wish to retire early will
still be able to do so with only an actu-
arial reduction. To those who question
the ability of citizens over 65 to stay
on the job, I say, "Look to the Halls of
Congress. Look to the Speaker. Look
to Senator THuiutoxn. Look to Mr.
PEPPr." Let them tell me that they
cannot do It. Many of them can do it,
and many of them do do it. To those
who say they are forced out of the
work force, I say, "Look at the law."
We raised the age to 70 for compul-
sory retirement, not 65 or 62.
Mr. SHANNON. Mr. Chairman, will
the gentleman yield?
Mr. CAMPBELL. No, I will not yield.
I would suggest the gentleman use his
own time.
Mr. Chairman, I would not support a
drastic change for those who have
worked half their lives and who are
planning for their leisure years. The
Pickle amendment is not a drastic
change. That is the point. It is a
modest change, the concept of which
has been recommended by every major
study group and which, according to a
New York Times poll, had public sup-
port by a margin of 5 to 4.
Mr. Chairman, the Pickle amend-
ment is an amendment which address-
es the long-term deficit. Let us ask
ourselves, though, the crucial ques-
tion. Is it fair? That is the question we
have to look at. This amendment ad-
dresses the problem without asking
our children and our grandchildren to
sacrifice their quality of life for ours.
This amendment is fair, and It merits
our support.
Mr. SHANNON. I yield 4 minutes to
the gentleman from West Virginia
(Mr. WISE).
Mr. WISE. Mr. Chairman, I rise in
opposition to the Pickle amendment. I
do so because I come from the State of
West Virginia, which is heavily labor
intensive-and in that respect It is no
different than most other States rep-
resented here today-and a State
Approved For Release 2008/10/29: CIA-RDP85-00003R000200130004-8
 Approved For Release 2008/10/29: CIA-RDP85-00003R000200130004-8
H 1062 CONGRESSIONAL RECORD - HOUSE March 9, 1983
people, do not break faith with the that restructuring it will, in the long strikes a fair balance between present
older worker." run. cause problems for the social se- workers who pay for social security
For a small increase in taxes, for a curity system as well. I am not con- and former workers who receive the
minor adjustment in the rate sched- vinced that the gradual merger of the benefits. And it gives ample advance
ule, we can keep faith with the older two systems will provide much more warning of the new ground rules to
worker. We can allow them to retire than a quick infusion of funds into the younger workers.
with decency and dignity. We can do system moreover, we must not contin- Mr. Chairman, I urge my colleagues
so without cutting their benefits. ue to insist that Federal workers bear to support the Pickle amendment.
As respectful as I am for the gentle- the brunt of our inability to enact Mr. SHANNON: Mr. Chairman, I
man from Texas for the tough but reform yield 3 minutes to the gentleman from
very compassionate Job he has done, I But, under the rule we do not have Wisconsin (Mr. OBEY).
would say, in this instance, his amend- the option of considering better alter- Mr. OBEY. Mr. Chairman, I admire
ment goes too far. natives and so I will support this bill. the gentleman from Texas. He is doing
Before we vote to take away bene- Mr. GRADISON. Mr. Chairman, what he thinks is the right thing, and
fits, before we vote especially to re- there is great concern in this House I do not think anybody can argue with
quire factory workers or construction about the proper balance between in- that around here. I admire that in any
workers to work longer, let us remem- creasing taxes and benefit adjust- person. He thinks it is necessary to cut
ber those workers and not go back to meats as a means of putting social se- early retirement benefits and to raise
them and say. "I am sorry, but I broke curity back on the track. The short- the retirement age in order to keep
faith with the American work force." term package covering the balance of the social security system sound on a
Reject this amendment. Support the this decade is heavily tilted toward long-term basis.
Pepper amendment. It is a better higher taxes. And I believe the public I suspect, frankly, that we will prob-
amendment. It is an amendment with will accept this. I am convinced the ably need both the Pepper amendment
compassion. commitment. and concern public is willing to pay higher social and probably also, in the long term,
that keeps faith with the workers of security taxes to save the system. But some increase in the age limit in order
America. that willingness to pay higher taxes is to keep the social security system
Mr. PICKLE. Mr. Chairman, I yield, not without limit. Relying on in. sound on a long-term basis, because
3 minutes to the gentleman from Ohio creased taxes to solve the long-term my hunch is that the revenue gap in
(Mr. GRADisox), and I want to pay my problem is bad economics and bad this bill is probably understated, long
respects to him for the valuable work politics. it will hurt, not help, social terns. And I even would say that if the
he has done on the Social Security security. It will weaken, not strength- Pickle amendment were confined only
Subcommittee. en, public support for the system. to raising the age limit by a year or so,
(Mr. GRADISON asked and was Let us look at the worst case scenar-
given permission to revise and extend io: Under the pickle amendment. in i the Pepper would probably the ag ably vote a for by a But it, s twell as
well as
his remarks.) January, in the year 2027, a worker re- tamendment. gentleman t fr6m the h Texas
Mr. CLINGER. Mr. Chairman. will tiring at age 67 will receive 14 percent lem gets is s that t the
lh
reve-
the gentleman yield? . less in benefits than provided under ggets a very large in his share of those amendment by
Mr. GRADISON. I yield to the gen- present law. This will apply only-and
tleman from Pennsylvania. let me stress this-only to workers now reducing below the present law bene-
(Mr. CLINGER asked and was given age 23 or younger. fits that people would receive in early
permission to revise and extend his re- I do not know what other Members retirement.
marks.) are hearing, but what I hear convinces Now, I do not want slackers to retire
Mr. CLINGER. Mr. Chairman. today me that the younger workers would early and live off the contributions of
Congress is faced with the monumen- far prefer to accept an 86-percent other people into the system. But I
tal task of effecting a solution to the benefit than have the privilege of would say. as have many other Mem-
years of neglect visited upon the social paying higher taxes during most of bers on the floor today, that if you are
security system, I rise in reluctant sup- their working years, as the Pepper a steelworker, if you are working at a
port of this package as the only alter- amendment provide& coke oven, if you are a foundry
native we have for protecting the re- Outside of Washington-based lobby- worker. I really doubt very seriously
tirement security of the elderly. ists, I find little oppositon to the you are going to last those extra 2
Because of our inaction and partisan Pickle amendment. Is age 67 a reason- years. It is true that there is an in-
political bickering that seems to have able age for full benefits in 2027? It ac- crease in longevity, but I know of no
dominated this debate, we are faced tually could be justified today. reliable studies that indicate that
with a crisis situation that has forced For example, males who became age worker health years have extended
us to make some distasteful choices 65 in 1940 had. an average life expec- commensurately with that increase in
which could have been avoided. Ameri- fancy of about 12 years. Today it is longevity.
ca's retired workers deserve more con about 14% years, an increase of 2% So it seems to me that if we are
sideration than this hastily put to- years since the first workers retired going to study the impact of the in-
gether hodge-podge of proposals under social security. And much the creased retirement age on hard labor
before us today. same point could be made about the workers, we ought to do it before we
This bill will require some sacrifice life expectancy of women. lock into the system a higher retire-
by virtually everyone, however, opti- At bottom the issue is whether the ment age and not afterward, as the
mistically speaking. It will guarantee benefits under present law can ever be Pickle amendment would do.
the system's solvency for at least 75 modified. They can, and they have, One of the previous speakers said,
years and initiates some long overdue and the sky has not fallen in. "Look. we have Members in this House
changes in the health insurance Over the last 2 years, the death who are over 65 years, and they are
system on the provider level. That is benefit, minimum benefit and student still in great shape." That is fine. I
why I support the Pickle amendment benefit have been limited or phased hope I am in good enough shape to be
as the fairest way to achieve that out by action of this Congress. The here when I am over 65. But I will tell
guarantee. I do have one strong reser- agreed upon portion of the bill before you something: If I had worked on a
vation about this package and that is us delays the July 1 cost-of-living ad- wet machine in a papermill for 25
the coverage of new Federal employ- justment until January 1, at a loss to years, as I did for a year and half
ees by social security. In this matter beneficiaries of $40 billion over the when I was going to college, I doubt
we would be well-advised to refrain balance of this decade and far more in very seriously I would be in shape to
from tampering with their retirement later years. continue to work until 67 and, very
system. The civil service retirement The age adjustment recommended frankly, given the pressures on us in
system is a healthily functioning pen- by the gentleman from Texas (Mr. this Job, I do not think we are going
sion system in its own right and I fear PICKLE) deserves our support. It to, either, 15 years from now.
Approved For Release 2008/10/29: CIA-RDP85-00003R000200130004-8
 Approved For Release 2008/10/29: CIA-RDP85-00003R000200130004-8
H 1054 CONGRESSIONAL RECORD - HOUSE
the retirement age is equitable to
future retirees by accounting for their
increased life expectancy and the clear
trend for Americans to be productive
longer. I commend my colleague from
Texas for his genuine and- honest ef-
forts to repair social security logically
and fairly for all Americans.
Mr. SHANNON. Mr. Chairman, may
I inquire of the Chair as to how much
time I have remaining?
The CHAIRMAN. The gentleman
from Massachusetts (Mr. SHANNON)
has 34 minutes remaining, and the
gentleman from Texas (Mr. PicKLE)
has 28% minutes remaining.
Mr. SHANNON. Mr. Chairman, I
yield 6% minutes to the distinguished
member of the Ways and Means Com-
mittee, the gentleman from Georgia
(Mr. FowLER).
^ 1540
Mr. FOWLER. I thank the Chair-
man.
Let me say at the outset that I sup-
port the bill `as proposed by the Com-
mittee on Ways and Means, on which I
serve.
I want to say to the gentleman from
Texas (Mr. Picar.E) my subcommittee
chairman, that were it not for his per-
sonal persuasiveness, his ability to ne-
gotiate from principle, and his dedica-
tion to a sound and solvent social secu-
rity system, I do not believe this bill
would be on the floor. He is to be com-
mended for his leadership. I want to
tell him that as one American I am
thankful for that leadership over
many, many months now.
I had signed a letter in support of
the amendment offered by the gentle-
man from Texas (Mr. PICKLE), which I
hope will show that I have no aca-
demic problem or opposition to sup-
porting an increase in the retirement
age. But upon close scrutiny of the
amendment, I have found that it both-
ers me and I think should bother all of
us, if we adopt a national policy that
would penalize those people who are
physically incapable of working past
age 62.
Under the present law as we all
know, if a worker retires at age 62, he
or she receives 80 percent of their
benefits. If the Pickle amendment is
adopted, in the year 2006, there will be
a reduction from 80 percent to 75 per.
cent down to 70 percent in year 2027
on a sliding scale for those who choose
to exercise the option of early retire.
ment.
I do not know what the correlation
is between living longer and the ability
to work longer. I suspect with all the
studies that we have had there is no
definitive answer.
But I also suspect that as our society
moves away from an industrial base
and more and more toward the long-
heralded information-computer soci-
ety, that there will be less and less po-
litical support for those people who
have worked with their hands and
their, backs and for whom any retire-
ment age is a race 'against time to
achieve any reward short of their ce-
lestial one.
There is a third alternative to the
Pickle or Pepper amendments and
that is the committee's proposal. We
have a slight revenue surplus in this
bill. We have a mixture of benefit
points to taxation which I believe to
be fair and that is why I support our
proposal.
And I would urge, based on fairness,
solvency, and integrity of the social se-
curity system, that we reject both the
Pickle amendment and the Pepper
amendment and support the bill as
crafted by the Subcommittee on Social
Security and by the full Committee on
Ways and Means.
Mr. PICKLE. Would the gentleman
yield?
Mr. FOWLER. I would be happy to
yield to the gentleman, Mr. Chairman.
Mr. PICKLE. I appreciate the gen-
tleman's concern. As I told him in ad-
vance of the presentation of this
amendment when I talked to him per-
sonally we have put a proviso in there
in an attempt to say to the Secretary
we want him to give us a definition of
occupation disability so that those
people who cannot take advantage of
longevity can indeed have some pro-
tection if they retire at an early age,
perhaps even as early as 60.
We do not take away any options
they may have today under present
law. What we are doing is not reducing
benefits nearly so much as the chart
has been shown. We are trying to pro-
tect the very people that the gentle-
man indicated he wants protected. He
has a valid concern. That is why we
put the amendment in this bill.
Now, under the committee bill that
he has recommended or pointed out,
there is no help for him in that area.
It is a reduction of 5 percent in bene-
fits, it is a tax raising of 0.24. You are
not only raising taxes, you are cutting
benefits 5 percent and that is the same
amount that my amendment would do
if they retired, with age 66, at the
early age of 62, so actually you are
better off under my approach, which
recognizes the need to act in this area.
Mr. FOWLER. I say to my subcom-
mittee chairman in responses to his
comments, under present law, if you
retire at age 62 you get 80 percent of
benefits. Under the Pickle amendment
after the year 2006 you would eventu-
ally drop down to 70 percent of bene-
fits. I say to you that a study of what
we should do for those people who fall
from 80 percent to 70 percent, for
whatever reason and for whatever cat-
egory, is just that, a study.
Mr. PICKLE. If the gentleman
would yield further, keep in mind, Mr.
FowLER, we only reduce 5 percent at
age 66, that is all. That is little differ-
ent from what the committee bill does;
that is, the committee version does in
the reduction of their benefits.
Mr. FOWLER. Will the gentleman
give me a couple of minutes here if we
keep this going?
Mr. PICKLE. I wish I had time.
March 9, 1989
Mr. FOWLER. I want to make part
of the RECORD excerpt from the report
of the Select Committee on Aging on
early retirement, "Why Men Retire at
Age 62," whose conclusions are, among
many, "The incidence of permanent
withdrawal before age 62 was greater
among blacks than whites." We do not
address that in our bill. "A large por-
tion of very elderly withdrawees
before age 62 lack adequate income.
Labor force separation was involun-
tary for the large majority. The
health of most very elderly
withdrawees was not good and a large
proportion died within a few years of
withdrawal."
Until we can answer the question of
how we deal with the least of these
our brethren who are forced to retire
because of health at age 62, I say we
should await this mandated study
before we answer the great charge of
when we allow Americans to retire
without penalty under our Nation's
social security system.
I thank the gentleman from Massa-
chusetts and my chairman.
Mr. PICKLE. Mr. Chairman, I yield
2 minutes to the gentleman from
Georgia (Mr. JENxiNs).
(Mr. JENKINS asked and was given
permission to revise and extend his re-
marks.)
Mr. JENKINS. Mr. Chairman, I rise
in support of the Pickle amendment.
As I listen to the debate, the very
people who are so concerned about the
possibility of raising the retirement
age to 66, some 30 years down the
road, have no compunction whatsoever
in imposing upon those workers 25
years from now a rather substantial
increase in taxes.
Now, let me say this to my col-
leagues: How much of a tax increase
are we talking about? How much of a
tax bite are we willing to vote on the
young people today who will be work-
ing 25 years from now? Let us take a
self-employed person: Under the
Pepper amendment, the tax will go to
over 16 percent, one-sixth of total pay-
roll. If you are earning $36,000 a year,
you will be paying $6,000 per year
under social security, in addition to
your income tax.
Mr. PICKLE. Did I understand
those figures correctly? What figure
did you say?
Mr. JENKINS. One-sixth or 16 per-
cent.
Mr. PICKLE. How much would an
individual be paying more?
Mr. JENKINS. If you earned $36,000
you would be paying $6,000 per year.
^ 1550
If you are earning $30,000 per year,
you are willing to vote today to say
those people 25 years from now will be
paying at least $5,000 per year before
they even pay any income tax. While
people are very willing to stand up and
say I shall never vote to increase the
retirement age to 66 even though it
does not bother people in the work
Approved For Release 2008/10/29: CIA-RDP85-00003R000200130004-8
 Approved For Release 2008/10/29: CIA-RDP85-00003R000200130004-8
H 1056
working day shift steady now. Why do
you want to retire?"
He said: "I am not going to stand out
here and freeze my off in this
winter weather for another 3 years
until I am age 65." He would not want
to work another 5 years at that age
either.
And neither do the people who are
in the work force now at age 45 doing
lousy routine work on an assembly
line, day after day. It is debilitating:
Use a little commonsense. We do not
need to do this injustice to people who
are in the work force today to make
them work all those years longer. Ac-
tually what will happen is thousands
of people will the before they ever get
to enjoy their retirement at age 66 or
67. This amendment is not going to
save social security; it will be an injus-
tice to millions of workers who will be
forced, unnecessarily, to spend addi-
toinal years in the work force.
I urge a no vote.
Mr. PICKLE. Mr. Chairman, I yield
2 minutes to the gentleman from Ohio
(Mr. OzasY).
(Mr. OXLEY asked and was given
permission to revise and extend his re-
marks.)
Mr. OXLEY. Mr. Chairman, my hat
is off to the gentleman from Texas. I
think this is clearly our only opportu-
nity in this Congress and perhaps for
many, many Congresses to come to
make a long-term solution to the
social security shortfall.
This is the opportunity that many of
us have been waiting for for a long
time and I certainly hope we do not
have a replay of 1977, when so many
people followed the actions of the
Congress, when the promises were
made that we solved the problem well
into the 21st century, and yet we are
here about 6 years later debating
again the problem of social security
funding.
^ 1600
I support generally the bill that
came out of the committee, but the
long-term solution is before us and ba-
sically it is a choice of two things. Do
we want to continue on the path of
tax and tax and spend and spend in
social security, or do we want to make
a legitimate reform in the system?
Currently, Mr. Chairman, 25 percent
of the people in this country are
paying more in social security taxes
than they are paying in income taxes.
I do not think I have to remind any-
body about how regressive the social
security tax system is. The same
people who would ask for more social
security taxes in many cases are the
same people who oppose regressive
taxation; yet that is what we are faced
with today, the Pepper alternative.
Mr. Chairman, I am not so sure what
the magic age of 65 was or why it was
chosen by the Congress back then.
Perhaps it was in response to the Bis-
marck Social Security Plan in Ger-
many. We do not know; but the fact is
CONGRESSIONAL RECORD - HOUSE March 9, 1988
there was not necessarily anything
magic about that age 65.
We have to recognize times have
changed, that people are living longer,
they are more productive; so I ask that
this statesmanlike approach by the
gentleman from Texas be approved.
The CHAIRMAN. The time of the
gentleman from Ohio has-expired.
Mr. PICKLE. Mr. Chairman, I yield
30 additional seconds to the gentleman
from Ohio (Mr. OxLEY).
Mr. OXLEY. Mr. Chairman, there
was a song back in the 1960's known as
"Ball of Confusion", and the lyrics
said, "Politicians say more taxes will
solve everything ? ? ? and the band
played on."
Mr. Chairman, I think we have
learned from our past mistakes. Let us
support the Pickle amendment and
make a long-term change in the social
security structure.
Mr. SHANNON. Mr. Chairman, I
yield 2 minutes to the gentleman from
Pennsylvania (Mr. lLuuusoN).
(Mr. HARRISON asked and was
given permission to revise and extend
his remarks.)
Mr. HARRISON. Mr. Chairman, the
arguments for and against this amend-
ment have been well and concisely
stated, before the social security com-
mission, in the Ways and Means Com-
mittee and here on the floor, by know-
ledgable and dedicated Members of
this House. But, for me, the most per-
suasive argument was voiced, unknow-
ingly, by a lady I met during my cam-
paign. It was in a dress factory in
Mount Carmel, Pa.
She was an attractive lady, with sil-
very hair and a cheerful disposition.
She told me how much she was look-
ing forward to retiring the following
year when she would become 62.
Since she did not look her age and
seemed to be in good health; I asked
her why she was so eager to retire.
She replied that 44 years was enough.
She told me that she had come to
work in that very factory immediately
after graduating from high school at
the age of 18. And every year since
then, week in and week out, she had
worked in the same location, on the
same floor of the same factory; 44
years was enough, and she was pre-
pared to accept lower benefits to put
an end to the daily monotony that her
life had become.
Mr. Chairman, if 44 years is enough,
47 years certainly is. That is the total
working life of someone who begins at
18 and labors until they are entitled to
retire at 65.
I cannot say to the working men and
women of this country, under the age
of 40, that for them 47 years is not
enough and that they must work for
48, or 49, before they are entitled to
retire on the benefits they have
earned.
The working men and women of this
country, at least since this Govern-
ment began to recognize its social re-
sponsibilities 50 years ago, have la-
bored with certain expectations.
Among the expectations to which they
have become accustomed, if not enti-
tled, are reasonable working hours, a
fair wage, safe working conditions,
equal employment opportunity and
the justifiable belief that, when the
time comes, whether because of physi-
cal infirmity, economic recession, or
the simple desire to enjoy a well-
earned rest, the means will be availa-
ble for them to leave work at a reason-
able age and still enjoy a decent stand-
ard of living.
I think that this amendment violates
their trust that after long years of
work, they will finally be rewarded,
however modestly, by a system into
which they have been paying, in most
instances for their entire working
lives, at a time when their minds and
bodies tell them it is time to step
down.
The proponents of this measure say
that the impact of this provision will
not take effect for many years, that
between now and the year 2000, medi-
cal science will assure us of longer and
healthier lives, and that there is noth-
ing, therefore, magic about the age of
65. They may well be right, and I sin-
cerely hope that they are. I hope by
then that we have conquered heart
disease, the scourge of cancer, and the
needless debilitations caused by occu-
pational hazards and diseases.
If so, and I look forward to that
time, an amendment such as this
might deserve serious consideration
when a major overhaul of the social
security system again comes before
this body-in another 75 years.
But until then, I believe that we
must look to the future in a manner
that is tempered by the realities of the
present. Well-meaning promises and
overly optimistic projections of future
developments have a way of unravel-
ing, as any serious observer of this ad-
ministration's supply-side economic
theories would quickly acknowledge.
The proponents of this amendment
point out that workers will, of course,
retain the option of retiring at age 62,
with reduced benefits. They try to
downplay the fact that reduced bene-
fits received by early retirees would be
even smaller under the provisions of
the Pickle amendment than they are
under the terms of the bill reported
out of committee. It would be difficult,
if not impossible, for all but the
higher income members of the work
force to exercise this so-called option,
and those most in need of the benefits
of the system would be economically
unable to enjoy its benefits.
If it is our desire to keep men and
women in the work force longer, and
paying into the system longer, then we
ought to accomplish this by enticing
them through incentives such as in-
creased payments to later retirees,
rather than by moving the retirement
age ahead, a little bit now, perhaps
more later, and who knows how far
ahead the next time we perceive prob-
lems in the system.
Approved For Release 2008/10/29: CIA-RDP85-00003R000200130004-8
 Approved For Release 2008/10/29: CIA-RDP85-00003R000200130004-8 `
H 1058 CONGRESSIONAL RECORD - HOUSE
that people are going to have a safer
workplace and that generally people
are going to increase year after Year
with better health.
I wish this picture were true, but we
see right at this moment the Environ-
mental Protection Agency disregard-
ing its responsibilities to protect us
from exposure to very hazardous
chemicals. We see the breakdown in
the last 2 years of many regulatory
programs that have tried to give us a
safer workplace. We see an increase in
many diseases.
I have to assume that the rosy
future described by my friend and col-
league from California may not occur.
Under the Pickle amendment, we ask
people many years from now to take. a
benefit out becaqse they will be early
retirees, presumably by choice. We
ought to ask, who are these people
who choose, so to speak, to retire
early?
Well, I think we can make certain as-
sumptions about those early retirees
in the next century, based on who the
early retirees are now. The early retir-
ees are those who are not able to work
any longer because of health reasons,
often because of jobs that are very,
very difficult and demanding physical-
ly. The early retirees are people who
have no job at all because they face di-
ficulties in their elderly years in find-
ing an employer who will hire them.
They tend to be women. They tend to
be low income. They tend to be minor-
ities and these are the people who will
bear the benefit cut if the Pickle
amendment is adopted. That, I believe,
is unfair. It is unfair to them because
they are the ones who do not have
extra pension benefits and savings
upon which they can cushion their re-
tirement. They are the ones who are
going to be asked to take the benefit
cuts and they are the ones who are
going to be hardest hit by this benefit
cut.
It seems only fair to me that we
ought to ask those who are working to
pay for and carry the burden for those
who during their working years paid
into the fund. I will therefore support
the proposal that will be soon offered
by our colleague, the gentleman from
Florida (Mr. PEPPER) which will in-
crease the taxes paid by those who can
best bear paying those increased taxes,
those who are in fact working.
I ask you not to think of early retir-
ees as people with whom most of us in
these Chambers usually associate-
middle-class professionals who have a
private pension or private means.
Think of those early retirees who are
the people who have broken their
backs working in the hard labor jobs
who have seen the toll it has taken on
their health and who must quit work
at an' earlier age than 67. Do not turn
your back on them.
01610
Mr. PICKLE. Mr. Chairman, I yield
1 minute to the gentleman from Texas
(Mr. HANCE).
(Mr. HANCE asked and was given
permission to revise and extend his re-
marks.)
Mr. HANCE. Mr. Chairman, I rise in
support of the Pickle amendment and
I commend the chairman of the sub-
committee on the outstanding job that
he did.
I think the thing that we have to
look at and the group that we have to
think about, the grandchildren and
the children that would be self-em-
ployed and would get strapped with
that 16.3-percent payroll tax. I guar-
antee you, they cannot pay it. If you
are talking about over 16 percent on
payroll taxes, plus your income taxes,
you are talking about taxes that will
be very hard for young people to swal-
low and believe that there is going to
be a sound social security system. I
think that is the thing we have to look
at.
The gentleman from Massachusetts
(Mr. SHANNON) has pointed out, and I
think properly so, that there are those
who are in physically tough jobs, but
we can take those exceptions and take
care of those in some way, and Con-
gress will. But the other thing we have
to look at is the long-range effect, and
I think without this amendment we
will not be fixing the program. The
social security system would not have
the support that it has had in the past
unless we adopt the Pickle amend-
ment.
My support of this bill was the
result of assurances that an amend-
ment would be made in order that
would solve the long-term financial
problems of social security without
further increases in the. payroll tax.
The Pickle amendment gives us this
opportunity. I understand the con-
cerns of Mr. PEPPER and I commend
him on his work on behalf of our older
Americans. I can understand how this
compromise reform package contains
items he would prefer not to see in it,
like the COLA delay. There are items
in the compromise package that I
would prefer not to see in it, too, like
the tax increases for the self-em-
ployed. We both have had to accept
the compromise in order to present to
Congress a package that not only
would resolve the funding problems of
social security, but would distribute
the financing burdens in as fair a
manner as possible.
This bill was not an easy one to
draft and it will not be an easy one to
implement. It requires hard choices by
each one of us in Congress and sacri-
fices by every American-old and
young alike. I strongly object to the
tax increases in the bill yet realize
without them, proposals to reform the
system would have failed. We need to
protect the benefits of our elderly yet
in doing so should not break the backs
of the American worker.
While this bill is not perfect, it takes
necessary action to resolve the social
security crisis in a responsible manner.
March 9, 1983
Mr. PICKLE. Mr. Chairman, I yield
4 minutes to the gentleman from Cali-
fornia (Mr. TnoxAs).
(Mr. THOMAS of California asked
and was given permission to revise and
extend his remarks.)
Mr. THOMAS of California. I thank
my subcommittee chairman for yield-
ing this time to me, and want to com-
mend him for the job he has done,
along with my ranking member, Mr.
CONABLE and the chairman of the
Committee on Ways and Means, Mr.
ROSTENKOWSKI.
Mr. Chairman, I think we ought to
confess at the outset that imperfect
people were trying to accomplish the
art of the possible on a package that
was already two-thirds locked up.
When you examine that two-thirds of
the untouchable part of the package,
it was mostly tax increases and speed-
ups.
The solution to the shortfall in reve-
nue over the long term was left up to
us, and now we have moved the choice
for the long term to the floor.
In argument on the bill itself and on
this amendment, the record will show
show that we can stipulate that the
basic problem in the social security
system is structural and the reason it
is structural is because the American
people have changed. The profile of
our population has changed.
I have heard the test of fairness
used several times. I think we need a
plan that is fair to the youth, the
middle aged, and our senior citizens. I
want to tell those people who want to
march under the Pepper banner, that
that banner reads, "We do not reform;
we just raise taxes," to those people
who want to march under that banner,
this gentleman says that that banner
is available any time. Next year, 10
years from now, 25 years from now, if
you do not want to reform, you can
always raise taxes. There is no struc-
tural change in the Pepper amend-
ment. Structural change takes time
and we have lost too much time al-
ready.
Under the Pepper amendment we
are telling people that they are going
to get 40 years of increased taxes that
is not fairness.
The committee proposal for the
long-term funds a portion of it from
raising taxes, 40 percent, more taxes
on top of taxes. You could character-
ize 60 percent of the proposal 25 demo-
graphic change since it embodies bene-
fit reduction. In other words, we tell
our youth, "Pay more taxes and get
benefit cuts when you retire." You call
that fairness? And who gets their
benefit cut? It is across the board. It is
overkill. The disabled get their bene-
fits cut. But they are not the problem.
The widows and orphans of workers
who die before age 82, they get their
benefits cut. They are not the prob-
lem.
The problem is that the American
peoples demographic pattern has
changed. The Pickle amendment is a
Approved For Release 2008/10/29: CIA-RDP85-00003R000200130004-8
 Approved For Release 2008/10/29: CIA-RDP85-00003R000200130004-8
H 1060
CONGRESSIONAL RECORD - HOUSE March 9, 1988
the work force. It will be an added
burden upon America in its competi-
tive position. So I would discard, first
of all, increasing taxes.
The second thing is that we do not
know what the future holds. We can
make some predictions about the
future, but our vision about the future
is much more clouded than our vision
of the past, particularly when we
think that we are looking as far for- ,
ward as we would have to look back-
ward to get back to 1939. And how
many of us can remember when Hitler
invaded Poland?
So our vision is clouded. We need to
prevent making mistakes. What we
should do now is adopt Pickle, because
Pickle can be changed more easily out
in the future. If we make a mistake
with Pickle it will be much easier to
correct Pickle than Pepper. We may
have to adopt a little Pepper tax in-
creases out in the future because we
may need more money than we have
anticipated.
Mr. SHANNON. Mr. Chairman, will
the gentleman yield?
Mr. GIBBONS. I only have 2 min-
utes at my disposal.
Mr. SHANNON. Mr. Chairman, if
the gentleman runs out of time, I will
yield him an additional minute.
Mr. GIBBONS. Fine. I yield to the
gentleman from Massachusetts.
Mr. SHANNON. Mr. Chairman, the
gentleman has just stated that it
would be easier to change the provi-
sions of the Pickle amendment than it
would be to change the provisions of
the Pepper amendment.
Mr. GIBBONS. The retirement age,
yes.
Mr. SHANNON. I want to make the
point that we are not deciding between
Pickle and Pepper.
Mr. GIBBONS. Well, we really are.
Mr. SHANNON. We are deciding be-
tween Pickle and what the committee
has done. I do not understand how the
gentleman can make that statement.
If we pass the Pickle amendment, then
all the pension plans and all the provi-
sions for retirement outside of social
security will have to be adjusted to
ratchet it up to a 66- or 67-year-old re-
tirement age. We can always adjust
the tax rate again. We can always go
back and do that, and I am sure we are
going to go back and do that.
Mr. GIBBONS. That is exactly my
point.
Mr. SHANNON. But I think it is
going to be very difficult for us to go
back, if we make this decision today to
change the retirement age. So I dis-
agree strongly with the gentleman.
Mr. GIBBONS. Mr. Chairman, the
gentleman is making the point I want
to make, and that is that it is much
easier to change the tax rate than it is
to change the retirement age, because
the closer you get to that retirement
age, the more people feel they will be
adversely affected. That is going to be
a political problem that leaders in this
Congress in the years further out will
have to face. That is really the dilem-
ma we have had for a long time.
So we can adopt Pickle now, and if
we make a mistake, it will be very easy
to change back to the present retire-
ment age.
The CHAIRMAN. The time of the
gentleman from Florida (Mr. GIBBONS)
has expired.
Mr. SHANNON. Mr. Chairman, I
yield 1 additional minute to the gen-
tleman from Florida (Mr. GIBBONS).
Mr. GIBBONS. So, Mr. Chairman,
looking forward to the future, it will
be easier to address our problems if we
adopt Pickle now. As I said at the be-
ginning, I think we are going to have
to have a little Pepper as we go along
because I am not convinced that the
solution we have reached so far is
going to be the final solution, and I
would rather get a little closer to the
problem time and decide then whether
or not we need our Pepper tax in-
crease then or not. That is essentially
my argument. So I would say Pickle
now and maybe a little Pepper later
on.
Mr. SHANNON. Mr. Chairman, I
yield 2 minutes to the distinguished
gentlewoman from Ohio (Ms. OAKAR).
Ms. OAKAR. Mr. Chairman, I thank
the gentleman for yielding some time
to me.
I just want to make a couple of
points. First of all, to me, the entire
legislation has some real problems, but
if the Pickle amendment is adopted
and prevails, that is to me the death
knell of the legislation. I just want to
state that I have the greatest respect
for the gentleman from Texas (Mr.
Picxi.E) but I certainly do not agree
with his amendment.
First of all, it pits the young against
the old. Are we telling our 20- and 30-
years-olds that it is all right if we
retire at 62 and 65 under the social se-
curity plan, but they will have to wait
ultimately until they are 67? And
under the provisions, really what that
means is a loss of benefits to them.
In addition, there is a lot of talk
about the Social Security Act of 1936.
I wish some Members would read the
report, because in the report it shows
that they were almost completely ac-
curate about the life expectancies in
the 1970's and the 1980's. They pro-
jected that people would live a lot
longer, and on that basis they brought
forward a program. So it is not true
that they did not expect people to live
longer. They did. It is in the report,
and they were brilliant in their projec-
tions.
If we are to make projections, how-
ever, there is no proof that men are
going to live a lot longer. The median
age expectancy of men is, 68. Are we
telling the men in the year 2000 or
more that they will pay all of their
-working lives into a system and collect
for just one full year? That discrimi-
nates against men, and, most impor-
tantly, it is blatantly discriminatory
toward women.
In addition, I truly understand the
difficult task that the Committee on
Ways and Means had in presenting
this body with a comprehensive,
rational social security package that
does not place an unnecessary burden
on either social security contributors
or beneficiaries. I also believe that cer-
tain aspects of H.R. 1900 accomplish
the goals that the members of the
Ways and. Means Committee set. I
commend the members of this Com-
mittee and the National Commission
on Social Security Reform for their ef-
forts.
However, I cannot deny that I have
strong reservations regarding core
issues. First, Mr. Chairman, I am dis-
appointed with the rule that was
granted on H.R. 1900. It appears
unfair that Members were not allowed
to vote separately on the issue regard-
ing Federal employees. I am not
asking that the provision be eliminat-
ed. I am asking why Members were not
provided a choice to delay implemen-
tation by 1 year. In 1 year, the Com-
mittee on Post Office and Civil Service
with the assistance of postal and Fed-
eral unions and administrative agen-
cies would have been better prepared
to formulate a supplemental civil serv-
ice retirement system. The statistical
data and actuarial projections that are
definitely needed to reshape a retire-
ment system would have been availa-
ble.
Without the choice, new Federal
hires will be mandated to pay 7 per-
cent of their pay into the civil service
retirement system and 7 percent in the
social security system. Members of
Congress will see 15 percent of their
pay going into both systems. Perhaps
Members will not miss the 15 percent.
New hires, whose average starting
salary is below $15,000, will feel the
loss. Federal employees will also be
looking forward to reductions in pay
in benefits as prescribed by the admin-
istration in its fiscal year 1984 budget.
I empathize with these employees
and only hope that we can formulate a
reliable supplemental system in the
short amount of time we were given.
The second area of concern that I
have affects present and future female
beneficiaries. We all know that the
package that Ways and Means passed
includes certain provisions that spe-
cifically address some of the problems
that women beneficiaries face; namely,
widows, divorced spouses, and disabled
widows. These low-cost measures will
assist certain women, and generally
women's groups seem to be pleased
that the Ways and Means Committee
included those provisions. But, one
provision which allows divorced
spouses to draw spouses' benefits at
age 62 whether or not the former
spouse has retired will place an unnec-
essary burden on certain women be-
cause a divorce must have been final-
ized 2 years prior to receiving benefits,
effective in 1985. Basically, if a person
becomes divorced in 1984, he/she
Approved For Release 2008/10/29: CIA-RDP85-00003R000200130004-8
 H 1062
Approved For Release 2008/10/29: CIA-RDP85-00003R000200130004-8
CONGRESSIONAL RECORD - HOUSE March 9, 1983
Now we have a terrible tendency in
this body to cherish the way things
are now and to defend the status quo.
In fact, there is nothing speculative
about the conditions of the labor force
after the year 2000.
They are going to have the post-
World War II baby boom moving into
retirement and the relatively low birth
rate of today will be moving into the
labor force. Therefore we are going to
have a very difficult time trying to
maintain an institution as sensitive
and as important as social security
unless we have planned carefully-not
speculated-but planned on . known
facts.
These people exist. They are here
now. We know there may be many rea-
sons, including longevity, including
psychological factors, including the
necessity that we- will have to main-
tain our standard of living by using
the many talents of our senior citizens
for a longer period of time than we use
them now, to encourage some increase
in the retirement age. I say this is a
perfectly acceptable and sensible thing
to do, provided we do not mislead
people.
If it proves to be unnecessary later
on, we can always back off. It is always
possible for us to raise taxes at some
time in the future. But to build a tax
increase into the system now is to
signal an institutional defeatism that
would be most inappropriate for a rep-
resentative body like ours.
Mr. SHANNON. Mr. Chairman, I
yield myself 2% minutes.
Mr. Chairman, we come down to the
final moments of what I think will be
the most important debate that will be
taking place on this floor today. We
have to face a question and an issue
that we are going to have to live with
for a food long time.
I would say to my colleagues this
whole business of trying to deal with
the long-term problem of social secu-
rity is speculative to some degree. I
think we all agree that we wanted to
try and address it in some way or an-
other but anybody who goes home to
their consitituents and says these
numbers we are talking about today
are going to be the absolute accurate
numbers by which social security will
be governed for the next 75 years is
making a terrible mistake.
Thirty years ago we could not have
predicted what has happened to the
American economy in the past 30
years, and today we cannot look ahead
30 or 40 or 50 or 75 years and predict
with any accuracy as to what is going
to happen to our population, what is
going to happen to our economy, what
the rate of life expectancy is going to
be, and what sorts of problems people
are going to be facing in the future.
These are all unknowns.
Yet what we are saying is on the
basis of what we think might happen,
on the basis of what we think could
possibly happen, we are going to single
out one small segment of the popula-
tion, we are going to say to them
whatever happens in the future, the
burden is going to rest on your shoul-
ders, the burden is going to rest on
those who do hard labor and are
forced to retire early.
We are very privileged to be Mem-
bers of the House of Representatives.
We are privileged because we are able
to serve our constituents and our
country. But we are privileged in an-
other way as well. We do not get our
hands dirty when we work. We do not
break our backs working to serve the
people. We do not have to worry about
doing labor that forces us into retire-
ment at 62.
Several people have referred to the
fact that we have many Members who
are 63, 64, 65, or 66. Ask yourself, can
you picture them putting up steel,
mining coal, breaking their backs in
farm labor? I cannot.
Think about the people you repre-
sent. Are we going to ask them to bear
all of the burden of the future prob-
lems of social security? I hope not.
This has been a fine package that
has been put together by the Commis-
sion, by the Ways and Means Commit-
tee; fine, because the burden of solving
the problem of social security is
shared. This amendment, if adopted,
violates that concept. It says we are
not going to share the long-term
burden, we are going to place it on the
little guy. We are going to place it on
those who cannot raise their voices.
We are going to place it on people who
do the hard work in our society. And
there are going to be plenty of them in
the future.
I say if we do this today we will
never undo it, we will never go back.
We will never remember, and they will
be the ones who suffer. Let us not do
it. Reject the Pickle amendment.
? Mr. HUGHES. Mr. Chairman, I rise
in support of the Social Security Act
amendments we are considering on the
floor today.
Most of us would agree, I believe,
that this is not a perfect bill. Each of
us have some individual ideas on how
the package could be improved. It was
for that reason I voted against the
modified closed rule that prevented
further amendments. In particular, I
have serious reservations about several
of its provisions, most significantly,
the payroll-tax increases. These will
hit especially hard at the self-em-
ployed who are being increased from
9.35 to 11.9 percent.
My major concern, however,
throughout the months of debate Zon
the social security program, has been
to insure that promises made to those
working under - the social security
system are not broken-that those
who paid into the system will receive
the benefits they are entitled to, and
which they have planned for.
I believe- that this bill, on balance,
keeps this promise, although I was dis-
appointed by passage of the Pickle
amendment. The increase in retire-
ment age provided for in that amend-
2000, does affect
into the system.
those now paying
I have no objection, in light of in-
creasing life expectancies, to raising
the retirement age for those who have
not yet entered the social security
system. But to change the rules in the
middle of the game, for those who
have been paying into the system for
as long as 20 to 25 years with the ex-
pectation of retiring with full benefits
at the age of 65 is, I believe, unfair and
unfortunate. Twice I joined with many
of my colleagues to vote against this
provision. We lost that battle in the
House and we can only hope that we
can prevail in the Senate or in confer-
ence. For now, however, we must face
the fact that the crisis is upon us, and
this compromise does represent a
good-faith effort by all concerned to
put the social security system on a
sound footing for the years and dec-
ades ahead. Its defeat here would put
us right back where we were 1 year
ago, when the study of this urgent
subject was commenced by the Presi-
dent's bipartisan commission, and we
just do not have that kind of time left
to us.
As such, this bill achieves our basic
goals-restoring financial stability to
the social security system-without
jeopardizing the welfare of those who
depend upon social security for their
retirement, both now and in the years
ahead.
I believe, in short, that this is the
best bill we can write at this time, and
the Ways and Means Committee
should be commended for the compro-
mise it has brought to the floor. I urge
my colleagues to support this meas-
ure.*
? Mr. McCURDY. Mr. Chairman, I
rise in support of H.R. 1900, the Social
Security Act Amendments of 1983.
While this is not a perfect bill, it is a
fair and balanced approach to elimi-
nating present and projected deficits
in the social security trust funds. Fur-
thermore, its passage by this House is
urgently needed to restore public con-
fidence in the social security program
itself-a program that constitutes one-
fourth of the entire Federal budget,
and pays benefits to 36 million people,
1 of every 7 Americans.
Under this bill, which generally fol-
lows the recommendations of the bi-
partisan National Commission ap-
pointed last year, everyone will bear
part of the burden of putting the
social security system back on a sound
footing: current beneficiaries, current-
ly covered workers and their employ-
ers, the- self-employed, Federal em-
ployees, Members of Congress, and
other elected officials, higher income
retirees, State and local government
employees, and employees of nonprof-
it organizations. But no one group will
be called on to sacrifice unfairly.
There are some problem areas, how-
ever, that must be addressed.
The Ways and Means Committee bill
Approved For Release 2008/10/29: CIA-RDP85-00003R000200130004-8
 H 1964
Approved For Release 2008/10/29: CIA-RDP85-00003R000200130004-8 - -
CONGRESSIONAL RECORD - HOUSE March 9, 1988
al Institute on Aging, and a member of paid by these individuals before they
his group; both of them testified, retire. The tax increases in the bill
"Yes, in the last 10 years the average now combined with the benefit reduc-
age has risen 10 percent." But they tions in the committee bill actually
also added disabilities among the el- raises slightly more revenue over the
derly working people have also in- long term than my amendment and
creased 10 percent. Mr. PICKLE recog- therefore should have at least an
nizes that by having brought on here equal impact on these individuals.
now the suggestion that he will have a In comparing age 62, benefits, the
commission set up to try to accommo- handout ignores the fact that the pur-
date the difficulties that will be expe- pose of raising full benefits is to en-
rienced by those who will get less courage people not to retire at age 62.
when it comes to the time of their re- Rather, the purpose is to encourage
tirement. I think Mr. Lane Kirkland, people to delay retirement, at which
who is the head of the AFL-CIO, was time they would receive full benefits.
a member of the commission, he said Further, and I want to make this
in a stirring statement he made before point, under the Pickle amendment,
the commission. "If anybody has to provision is made to provide the Con-
bear the burden as one of my distin- gress the solution to prevent benefit
guished colleagues said here a while reductions for individuals who cannot
ago, it is a question of who should bear delay their retirement. The handout
the burden, all right let us solve that shows that my bill would be making
problem." Mr. Kirkland said, "If any- reductions when in fact the-provision
body is to bear the burden let it be in the bill, itself, makes reductions and
those strong enough to be able to increases taxes to raise more money
work, not those who are not able to than what I have proposed.
work or those who quit work and could 0 1650
not find another job or those whop an inaccurate handout and I
have one difficulty or another or have
been shoved out of their job by racial think the aicoRD ought to show it be-
or age discrimination." cause some people think the Pickle
Yes, what we are saying is, this amendment would make big reduc-
Pickle proposal is something that was tions?
rejected in substance by the commis- Now, Mr. Chairman, 2 years ago my
sion, in the very last day; there was a subcommittee made recommendations
provision in the proposed package that in an effort to cure our short-term and
we reduce long-term deficit. We were told then
The CHAIRMAN. The time of the there was not a. need to act and that
gentleman from Florida has expired. we really need not worry about the
Mr. PICKLE. Mr. Chairman, I yield long term because of the demograph-
my dear friend 1 additional minute. ics, the problem would take care of
Mr. PEPPER. I thank my distin- itself. We have found that is not so.
guished friend for his kindness. Now we have reached a point where
In that package proposal if he re- we have a chance to do something
tires at 62 your income will be reduced about it. We tried to move and we
Prom 80 percent of what you would get could not. But we have kept together
at 65 down to 74 percent. We defeated now the last 2 years, our committee
that in the commission. Now we have and the full committee. on a biparti-
another proposal here raising the age san basis.
of eligibility, another way of cutting I want to make two or three points
benefits, another way of us alleviating now as we close.
some of the burden we have imposed First, we cannot just keep on raising
upon the elderly of America, now with taxes. My colleagues know that and I
this amendment adopted we cannot know it. The committee bill raises
say any longer, "We have not cut taxes, overall now, to a rate of 15.78
benefits" no matter what pride we percent. The Pepper bill would raise
take in the accomplishments of the taxes in excess of 16.36 percent. Now
we know we cannot just keep on rais-
Mr. Mr. Chairman, I yield ing taxes. We know that longevity has
myself the remainder of my time. increased. We do not have to argue
The CHAIRMAN. The gentleman that question. Thank goodness that
from Texas, (Mr. PICKLE) has 5 min- medical science has been such that we
utes remaining, have learned to live longer and to
(Mr. PICKLE asked and was given work longer. I contend that people
permission to revise and extend his re- want to stay in the work force, people
marks.) want to keep working. They are better
Mr. PICKLE. Mr. Chairman, first I off physically, mentally and financial-
wish to attempt to straighten the ly. There is nothing in the world
RzcoaD on a matter that is in a han- wrong with raising our retirement age
dout with respect to the so-called just 1 year, 66, and then up to 67. That
Pickle amendment. The context was is not harsh, that is just in keeping
that we would reduce benefits 5 per- with the time.
cent and then 12 percent; to age 67. I said to my colleagues earlier that I
Now. Mr. Chairman, the handbill com- think that is inevitable and I think
pares lifetime benefit returns in an in- that it is.
accurate way, that is the kindest way I Now the committee bill before us
can put it-an inaccurate comparison and the one which one Member said
ignoring the larger taxes that must be he thought might be preferable, the
committee bill cuts benefits. It cuts
benefits, 60 percent of that deficit is
made up by cutting benefits. It is a 5
percent overall cut in benefits. And in
addition, it has a 0.24 percent increase
in taxes. So you are cutting benefits
and you are raising taxes at the same
time.
Now it may be that that may be the
amendment you want to fall back on.
But I say to my colleagues it is far
better for us to raise the retirement
age in the future so that people will
have ample notice when to get ready
for it. And we are going to be ready in
the meantime to give them a defini-
tion on the disability, on occupational
disability, because we think they are
entitled to that.
I would think then we ought to sum
up this argument by this. Nobody
wants to cut benefits, my dear friend
from Florida. I do not want to cut
benefits, but I think the American
people expect us, the Congress, to
make some structural changes. We
have raised taxes three or four times
in this bill that is before us. We are
taxing one-half of the benefit and we
have raised the retirement age. We
need to make structural changes.
I urge the Members to support this.
The CHAIRMAN. The question is on
the amendment offered by the gentle-
man from Texas (Mr. PicKLE).
The question was taken; and the
chairman announced that the ayes ap-
peared to have it.
RECORDED VOTE
Mr. SHANNON. Mr. Chairman, I
demand a recorded vote.
A recorded vote was ordered.
The vote was taken by electronic
device, and there were-ayes 228, noes
202, not voting 3, as follows:
[Roll No. 22)
AYES-228
Alexander
Coneble
Green
Andrews (TX)
Cooper
Gregg
Annunzio
Corcoran
Gunderson
Anthony
Coughlin
Hall, Ralph
Archer
Courter
Hall, Sam
AuCoin
Craig
Hamilton
Badham
Crane, Daniel
Hammerachmldt
Barnard
Crane, Philip
Hance
Bartlett
Daniel
Hansen (ID)
Bateman
Dannemeyer
Hansen (UT)
Bates
Daschle
Hartnett
Bedell
Daub
Hatcher
Beilenson
de In Garza
Hefner
Bennett
Devine
Heftel
Bereuter
Dickinson
Hightower
Bethune
Downey
Hiler
Bilirakis
Dreier
Hillis
Bliley
Duncan
Holt
Boehlert
Edwards (AL)
Hopkins
Bouquard
Edwards (OK)
Horton
Breaux
Emerson
Hunter
Brooks
English
Hutto
Broomfield
Erlenborn
Hyde
Brown (00)
Evans (IA)
Ireland
Broyhill
Fiedler
Jeffords
Burton (IN)
Fields
Jenkins
Byron
Fish
Jones (NC)
Campbell
Flippo
Jones (OK)
Carney
Forsythe
Kasich
Carper
Franklin
Kazen
Chandler
Frenzel
Kemp
Chappell
Fuqua
Kindness
Chappee
Gekas
Kramer
Cheney
Gibbons
Iagomarsino
Clinger
Gingrich
Latta
Coats
Glickman
Leach
Coleman (MO)
Gradison
Leath
Coleman (TX)
Gramm
Lent
Approved For Release 2008/10/29: CIA-RDP85-00003R000200130004-8
 Approved For Release 2008/10/29: CIA-RDP85-00003R000200130004-8
H 1061
CONGRMSIONAL RECORD - HOUSE March, 9, 1988
would have a decent sustenance upon
which to live, that those who died
would have a measure of protection to
transmit to their widows and their
children, and that those who became
disabled under another phase of the
system would have some support.
The Congress has been not only the
creator but the protector or social se-
curity. Now we are determining to
what extent we are going to preserve
it in the character in which it was con-
ceived. If today we cut benefits, it will
be the first time in the history of the
Congress since the inception of social
security, except in 1977, when we cor-
rected an actuarial error that had
been inadvertently included in the
previous legislation. But today, by any
method, whether by raising the age of
eligibility or by changing the formula
under which we calculate social secn-
rity benefits, if we reduce benefits
from the structure that now exists, no
matter how sound and solvent we pre-
serve the system, we will leave a taint
upon its character that has never been
put there by any previous Congress.
And, remember, the people we are cut-
ting are not even the able-bodied
workers, about whom Lane Kirkland,
president of the AFL-CIO, said before
the Commission: -
If anyone had to bear the burden, he was
better able to bear it than the unemployed,
the retired, the discharged, the ill, or the
disabled who are the beneficiaries of social
security.
There have been, unfortunately, two
causes of the trouble we have now
with social security. One was back in
1f12 when the Congress determined
that we would have a cost-of-living ad-
jrutmesrt to preserve the value of
benefits against inflation, trying to
prevent the lowering of the standard
of living of the recipients of social se-
curity. And even now a large part of
them have incomes below "the poverty
level. One-sixth of the elderly of
America today, in spite of social secu-
rity, have total incomes less than the
inoorame level of the poverty line.
In the 1972 social security amend-
ments, Congress provided that benefit
co"-living adjustments would be de-
termined by the Consumer Price
Index. Unfortunately, the historical
relationship between wages and prices
reversed itself. In almost every year
since 1972 the CPI has exceeded the
wage increase, therefor precipitating
an increase upon the demands of the
social security funds.
Rampant unemployment was the
second cause of the system's funding
problems, Today there are 12 million
people unemployed, still looking for a
job, and another 2 million who have
given up that hope, and with those
people unable to pay into social secu-
rity because they do not have any pay
check, is it any wonder that the old
age and survivors insurance fund
needs help through loans from the dia-
ability insurance fund? That is what
we have been considering here in the
last few nmonths.
In 1981 the President asked the
American Congress to cut social secu-
rity benefits by $88 billion in the 5
years succeeding 1981, and he induced
the Congress to cut social security
benefits in the succeeding 5 years by
$19 billion.
The next request of tlae President
was to reduce by about a third the
amount of benefits to be received by
anybody retiring at 62 in order to dis-
courage withdrawals from the work
force.
The next request of the President
was to reduce by 10 percent the bene-
fits of those retiring at 65 over the fol-
lowing 5 years, and the last request
was to reduce by about a third the
number of people who are the
beneficiaries of the disability insur-
ance program, reducing the number
insured for disability from 93 million
to Be million.
Well, by that time the sentiment of
the Congress was very much opposed
to those cuts, and so was the senti-
ment of the country. Then the Presi-
dent said, "I will withdraw those last
requests. and we will set up a nonpar-
tisan commission, a very objective and
fair commission, to study the problems
of social security and to make appro-
priate recommendations."
Be in December of 1981 the Social
Security Commission was set up con-
sisting of 15 members. Actually there
were five active members appointed by
the Democractic Party and supported
by the Speaker. These five were the
Honorable Lane Kirkland. head of the
AFL-CIO, Senator PAT Movini sav of
New York, I from this House, Ms.
Martha Keyes, a former distinguished
Member of this House, and the Honor-
able Robert Ball, who had been for 12
years Commissioner of Social Security.
There were five active Democrats, as
I said. There were two other Demo-
crats, but they were appointed by the
Republican Party and never worked
with us. One was Mr. Waggonner, a
former distinguished Member of this
House, and another was Mr. Trow-
bridge, now head of the National Asso-
ciation of Manufacturers.
We started our deliberations under a
very able chairman, Mr. Alan Green-
span, in December 1981. The Commis-
sion was supposed to expire at the end
of December 1982 but by that time all
that had happened was that we- five
Democrats had made some proposals
that could be the basis of negotiation
for a package to be submitted to the
President and the Congress. The
White House had not made any pro-
posals, and basically the Republicans
on the committee had not made any.
By that time the chairman appealed
to the President to extend the life of
the Commission. He extended it for 15
days. Finally, a week before January
15, the chairman induced the White
House to enter into negotiations over
the character of the recommendations
of the Commmission. We struggled over
this matter. The number of partici-
pants in the negotiations increased.
Finally, on Saturday afternoon late
of January 15, just a few hours before
the expiration of the Commission by
its extended life; we obtained an agree-
ment supported by the distinguished
Speaker, by the President, and by 12
of the 15 members of the Commission.
We came up with a package that pro-'
vided revenue of $165 billion to cover
the needs of the first phase of the
problem, namely, the period from 1983
to 1989. The Commission agreement
also solved two-thirds of the long-term
deficit, which would bring the system
into close actuarial balance. We were
unable, however, to come to an agree-
ment on closing the final one-third of
the long-term deficit.
There was a schism throughout the
deliberations of the committee, a
schism that rages on this floor today.
The question was, do we want to meet
the problems of social security by cut-
ting benefits, or do we want to pre-
serve the structure we now have and
meet those needs in some other way?
There was not a single permanent
cut in the benefits to be received by
the elderly now or yet to come in the
recommendations of the Commission.
I want to emphasize that. The Com-
mission rejected a proposal that was
first in the proposed recommenda-
tions, namely, that we reduce the
benefits to those retiring at 62 from 80
percent of what they would get if they
retired at 65 to 76 percent.
^ 1830
The proposal was rejected by the
Social Security Commission, and so
the Commission is on record as not
making any permanent cut in social
security benefits for the present or
future recipients from that great pro-
gram.
We came there that Saturday eve-
ning, January 15, and 12 of us had
agreed to sign that package. There
were many aspects of that that every
one of us detested and strenuously op-
posed.
I never thought I would ever vote to
take away a day from the cost-of-living
increases that were paid under the ex-
isting law to the elderly. But that was
in there, to cut out 6 months. I called
the White House. I did everything I
could to prevent any cut in the social
security cost-of-living increases.
And then I never believed that I
would vote to tax any of the social se-
curity benefits, and yet that package
contained a provision that we tax for
those in the higher income brackets
one-half of their social security
income, the half attributable to the
employer contribution.
These were great sacrifices. But we
had to measure and to balance what
we were required to give up with what
we were getting.
What were we getting? We were get-
ting for the first time the commitment
of the President of the United States
and the Congress of the United States
that social security benefits would be
Approved For Release 2008/10/29: CIA-RDP85-00003R000200130004-8
 Approved For Release 2008/10/29: CIA-RDP85-00003R000200130004-8
H 1068 CONGRESSIONAL RECORD -- HOUSE March 9, 1988
My dear friend, under Mr. PicxLE's this package. I have had to look into
amendment, that lady's benefits would their face as their friend, as if I was
be cut 12.5 percent from the amount their attorney and say, "Listen, I did
of benefits she would be entitled to not come out as well as I wish I could
under the present law of this land.
The truth is that about half of the
people who retire at 62 do so for rea-
sons of ill health. An additional 20 per-
cent are forced out of the labor
market because they have been dis-
criminated against an account of their
age.
I suggest that we just don't- know
whether or not the need may be just
as great out there in the future as it is
today. The other day when I was testi-
fying before the Ways and Means
Committee on this matter, I looked
around the room and I said, "I do not
see any of these people that we are
voting on to cut their benefit out
there in the year 2008, 2017.11 I do not
see any of them here today. Somehow
I do not feel just right about exerting
the privilege of relying on the law of
the present and retiring at 65, but
saying a man in the year 2000 or 2022
cannot retire when he is 65, he has to
wait until he is 67. Why do I need to
do that? Is that quite fair to him that
I pre-judge his eligibility for these re-
ceipts and the desirability of giving
them to him?
So, what I am proposing is we simply
increase the payroll tax by 0.53 per-
cent. Even if the worker had a salary
of $36,000 a year my amendment
would add only $190 in a year to the
taxes that man would have to pay.
Only 20 percent of the American
people in their work make over $20,000
a year. So my amendment would not
cause the expenditure of very much
more.
Furthermore, the Democratic five
on the Commission expressed gravest
doubt as to whether there will be any
money at all needed in the last 25
years of the 75 with which we are
dealing. Our estimate is-based on the
work of technical people of great com-
petence-that the money provided
under the Commission agreement
social security will come within 4.1
percent of meeting the projected need
of the old age and survivors and dis-
ability insurance programs over the
~..-I ne ---- The e..ninl .-A+17 flpt i.
have in your case. I tried my best but I
did not win all the things that I
sought to achieve. You are going to
have to pay a considerable price for
the enjoyment of the boon of social se-
curity in the years ahead. But, my
friend, I want to tell you one thing,
that withholding of the cost-of-living
increase is only for 6 months. You
only pay taxes on one-half of your
social security benefits even if you are
of the few who would be affected. The
part of your benefits attributable to
your half of the contribution would
still be tax free, and it is still less than
the tax you would have to pay on the
benefits you recieve from the civil
service retirement fund. But I want
you to know that in return for that we
brought you back something you can
cherish. It will give assurance to you
and your family that you have not en-
joyed. You may now be sure that your
social security protection will not be
cut.
Many an elderly person in America
has quaked in his or her tracks won-
dering from all they had heard coming
out of Washington as to the dangers
of social security, whether or not they
would ever get another,aocial security
check. And these young workers all
over America, skeptical and cynical,
have been saying, we have been rip-
ping them off, making them pour
their hard-earned dollars down a rat-
hole that will never yield them any-
thing in the future because they say,
"Well, by the time I get to 62 or 65
there will not be any social security. If
there is, it will not be anything but a
shell and there will not be any money
there for me."
I have personally noticed, as I go
around the country, in airports and
other places, since this package has
been'before this House, the number of
young people who walked up to me
and said, "We appreciate what you are
trying to do for us on social security.
Not just for my mother and father
and my aunt and uncle, but for me as
well."
a personal experience. Last summer
one of my brothers and I went back to
east Alabama, where I was born and
reared. And I visited with a lot of old
relatives and friends all over that dear
part of America.
One afternoon I was sitting in a neat
little home in Birmingham, talking to
a first cousin of mine, a lady with
whom I grew up in east Alabama. She
was telling me about her two fine sons
and she was so proud of them. One
was a minister who had just been pro-
moted to some prestigious position.
The other was a businessman who was
doing well. Suddently I said, "Eunice,
do you have social security?"
She said, "Oh, yes, I have social se-
curity."
"Well," I said, "you are all right
then, aren't you? You have got your
two fine sons to help you and you
have got your social security."
She drew herself up and said, "I
have got my social security, I don't
need my sons to help me. I don't want
to be a drag on my sons. They have
got children to support."
What parent in America wants to be
a burden upon his or her children no
matter how faithful and loving they
are? And yet here we twiddle over
giving them a few more dollars a
month, keeping them from being
crushed from poverty down to misery,
giving them the right to sustain that
dignity. That is characteristic of this
great country.
I have done all I could. I leave the
decision to my colleagues whether you
are going to preserve this great institu-
tion in its integrity.
Mr. Chairman, I have a prepared
statement which I would like to in-
clude at this point in the RECORD:
Mr. Chairman, I ask for unanimous
consent to revise and extend my re-
marks.
Mr. Chairman, today this body will
be asked to make a very difficult deci-
sion. We will be called upon to act on a
set of admittedly imperfect recommen-
dations arrived at by the National
Commission on Social Security
Reform. The compromise agreement
contains some provisions which I could
not support as individual proposals.
But there are a host of very compel-
arses wiu tell you bLW, wueu yuu tLLo
dealing with estimates of 50, 75 years We have restored their confidence ling reasons for this body to adopt the
in the future, if your income and when we enact this measure that their legislative embodiment of the Commis-
outgo are off only 5 percent, it is an Government really did care about sion agreement.
acceptable figure that you have. their social security program. Their The most immediate reason is time.
Furthermore, if my amendment is Government was committed as a point Under current law, the interfund bor-
put in effect, when the Congress gets of honor to keep it strong and solvent rowing authorized by Congress has ex-
out nearer to the time that it would and sound. pired. The last loan from the disability
begin to take effect, if they do not an- Mr. Chairman, I wish this House insurance fund will help finance the
ticipate there will be a real need for could follow the lesson and the exam- uninterrupted payment of old age and
supplemental funds, all Congress has ple of the Social Security Commission survivors' insurance benefits through
to do is to modify it or rescind it. But and reject any effort to contaminate the end of June. If we fail to act, these
once you have frozen into the law the the compromise package with any cuts benefits-the lifeblood of 31 million
principle of cuts in benefits by reduc- in social security benefits. If we will do people-will be delayed.
ing the benefit formula or by raising that, this will be a monumental day in The most compelling reason is fair-
the age of eligibility, that will remain the history of this country. It will be a ness. I believe the Commission pack-
with us into the distant future. day that will mean an awful lot be- age represents a fair and equitable
So, I am saying to you, my col- cause I just add this: Social security sharing of sacrifice. Beneficiaries are
leagues, those people out there have gives something more than money to asked to defer their cost-of-living ad-
suffered enough under this proposal, people over this country. If I may use justment, or COLA, for 6 months.
Approved For Release 2008/10/29: CIA-RDP85-00003R000200130004-8
 Approved For Release 2008/10/29: CIA-RDP85-00003R000200130004-8
H 1070
CUTS IN BENEFITS UNNECESSARY
CONGRESSIONAL RECORD - HOUSE March 9, 1989
If this is true, why are these two op-
tions to cut social security benefits
being given such serious considera-
tion? I suspect that the remaining
long-term actuarial deficit has con-
vinced many of my colleagues that the
system needs "fundamental reform." I
would like to put this issue into some
perspective.
LONG-TERM FINANCING: CURRENT LAW
Although much is said and written
about the projected status of the trust
funds 75 years from now, the truth is
that very little is known. Assumptions
made with respect to inflation, wage
growth, GNP, employment, longevity,-
immigration, interest and birth-rates
are just that-assumptions. I would
submit that there will be other factors
which affect OASDI financing, ones
we cannot even contemplate at pres-
ent. That will emerge in the future. In
short, I believe that we should ap-
proach the long-term financing of
OASDI with due humility and respect
for the limitations of our ability to
predict a future three-quarters of a
century away.
As projections are made further into
the future, accuracy and reliability
markedly diminish. Most nations with
social insurance systems. make 25- or
50-year cost projections, but almost
never beyond the latter. Only the
United States and Canada make 75-
year i tut Is important to With that
virtually all of the problems associated
with long-term OASDI financing occur
during the last 25 years of the 75-year
valuation period.
The most striking aspect of the long-
range financing picture is that under
current law the OASDI programs are
in close actuarial balance over the
next 50 years. Demographic trends
very favorable to OASDI financing
which allow the buildup of large trust
fund surpluses during the 1990's and
the first decade of the 21st century ac-
count for this little-known fact.
Even absent any long-term financing
measures by Congress, the cash-bene-
fit programs are adequately financed
for the next half-century. The reliabil-
ity of estimates beyond 50 years are
questionable at best. At worst, the i ro-
jections for 50 to 75 years in the
future have served as a rationale to
make dramatic changes in the obliga-
tions of the Nation's social insurance
system. Because the system relies on
the contributions of participants
whose benefit obligations may not be
paid for decades, I have opposed dra-
matic changes in social security's bene-
fit obligations based on assumptions
about what may or may not occur 50
to 75 years from now.
Nevertheless, I have supported ef-
forts to bring the OASDI programs
within close actuarial balance along
the lines of the National Commission
agreement. As the provisions of the
Commission agreement indicate, it is
possible to close the 75-year financing
gap without reductions in benefit pro-
tection.
When the long-range estimates are
considered in perspective, it is not dif-
ficult to see how this is true. With no
changes in current law, the average
annual cost of OASDI is 14.38 percent
of payroll over the next 75 years.
During that time, the present law
average annual contribution rate is
12.29 percent of payroll, leaving a defi-
cit of 2.09 percent of payroll.
Virtually all of the deficit accumu-
lates during the final third of the 75-
year valuation period, when the esti-
mates are the least certain. Moreover,
the shortfall amounts to 14.5 percent
of program expenditures. In fact, the
closer one examines the long-term fi-
nancing of social security, the more
that claims of impending calamity and
intergenerational warfare ring hollow.
LONG-TERM FINANCING AND COMMISSION
RECOMMENDATIONS
The recommendations of the Com-
mission, as contained in title I of the
bill, are known as short-term recom-
mendations. If the truth-in-lending
law were to apply to pending bills,
however, this title might be called
long- and short-term recommenda-
tions.
The provisions in title I reduce the
deficit over the 75-year valuation
period as a level which the social secu-
rity actuaries regard as statistically in-
significant. Enactment of these provi-
sions-without the long-term cuts con-
templated in the committee bill or the
Pickle amendment-reduces the esti-
mated deficit to within 0.68 percent of
payroll. This would bring estimated
revenues to within plus or minus 5
percent of estimated outlays, or within
close actuarial balance.
It is an irony of the highest order
that both of the pending benefit re-
ductions triggers in during the first
decade of the 21st century. The very
estimates used to justify these cuts
project that the trust funds reserves
will,be at their highest level in history:
More than 200 percent of estimated
annual outlays. Yet, this would be the
very time that substantial benefit cuts
would occur.
In short, Mr. Speaker, reducing
benefits for today's young workers is
not only unwise and unfair, it is un-
necessary. Neither of the pending
benefit cuts belongs in this refinanc-
ing legislation. There are far superior
ways to finance the system's benefit
obligations.
A FAIR ALTERNATIVE
My amendment would institute an
employer/employee tax rate increase
of 0.53 percent in the year 2010. This
would increase the FICA tax rate from
6.2 percent which, under present law
goes into effect in 1990, to 6.73 per-
cent. Moreover, my amendment would
preserve the self-employed net tax
burden contained in the committee
bill by adjusting the SECA tax credit
to 2.1 percent of self-employed income.
This amendment reduces the long-
range OASDI deficit to exactly. zero
while maintaining current law benefit
levels.
My amendment has several other ad-
vantages over the benefit-reduction
approaches:
FLEXIBILITY
Mr. Chairman, no one in this Cham-
ber knows for sure whether the addi-
tional financing contained in title II of
the bill will be necessary or not. We
are simply making the best guess we
can. I am inclined to believe that the
assumptions in SSA's long-term fore-
casts are quite conservative, especially
with respect to the birth rate and the
immigration rate. But even under
these assumptions, we have brought
the system as close to long-term bal-
ance as the actuaries expect under
their criteria. There is simply no need
to lock in the type_ of magnitude or
benefit reductions proposed by the
committee bill or the Pickle amend-
ment.
My amendment allows the greatest
degree of flexibility to meet the sys-
tem's anticipated need in the years
2022-2057. Should the additional fi-
nancing provided in title II of the bill
prove to be unnecessary, my intention
is that Congress would repeal the tax
rate increase provided in the amend-
ment. I have little fear that Congress
would allow an unnecessary tax in-
crease to remain in the law.
The other two alternatives before
the House would lock in substantial
reductions which would be difficult to
repeal. Pension plans for millions of
workers are integrated with social se-
curity and contributions to the plans
are set to the social security benefit
level. A report prepared for the Senate
Special Committee on Aging found
that a reduction in the social security
benefit formula would cost private
pension plans billions of dollars annu-
ally. There would be an additional cost
to the taxpayers amounting to billions
of dollars to the extent that these con-
tributions are written off as a business
expense.
It is anticipated that raising the age
of eligibility for full benefits would
trigger a parallel increase in private
pension plans. Tomorrow's retirees
would find themselves in double jeop-
ardy-losing private pension plan pro-
tection at the same time they are
losing social security protection. My
amendment would avoid locking into
law permanent reductions in benefits.
2. POSITION
Time and time again, Mr. Chairman,
this House has gone on record in its
opposition to reductions in social secu-
rity. Yet the committee bill resolves 60
percent of the long-term problem with
cuts in basic benefits. I can assure my
colleagues that the situation will be no
better in the Senate. In fact, it is an-
ticipated that in the other body, the
entire long-range deficit will be ad-
dressed by cutting benefits. I would
submit that giving away 50 percent of
our position-against cutting bene-
fits-before going to conference is not
Approved For Release 2008/10/29: CIA-RDP85-00003R000200130004-8
 Approved For Release 2008/10/29: CIA-RDP85-00003R000200130004-8
H 1072
CONGRESSIONAL RECORD - HOUSE March 9, 198S
I rise today, having made my choice,
to support the Pepper amendment.
And I do so for several reasons.
First, the provision in the Pickle
amendment, which raises the retire-
ment age, actually reduces benefits
and is part of a long-term solution
which I consider wrong-headed and
dangerous. To face the coal miners in
my 20th Congressional District, who
have lived a life fighting off black lung
and tell them they must wait 2 more
years, 2 more years for retirement in
generations to came, is a burden that I
would not take bane lightly.
To force recipients 18 years from
now into a level of reduced benefits is
to deny the basic goals of social secu-
rity, the dignity and independence
which our predecessors fought so hard
for 50 years ago.
I concede the inherent fallibility of
this process. Only 5 years ago, men
and women in this Chamber, stood
and announced to our Nation that
they had saved the social security
system and they were convinced that
they had tenured its financial integrity
for years to come. They were mistak-
en.
Our efforts today are an attempt to
right the balance in the most success-
ful social program this Nation has ever
conceived or created. What if we are
wrong today?
The Pepper amendment and his ap-
proach gives us more flexibility than
any alternative, primarily because it
does not force recipients to make diffi-
cult and irreversible decisions early in
their working careers. Increasing the
retirement age could force decisions by
people my age in their selection of per-
sonal retirement plans which might
not be remedied or modified without
considerable expense or hardship.
If we are wrong today and our econ-
omy makes a better recovery than we
envision, we have it within our power
to reduce or eliminate this future tax.
The choices before us are not easy.
But if our predecessors in this Cham-
ber had the courage to create social se-
curity, let us today have the courage
to insure its integrity in the future.
Senator PEPPER'S amendment contin-
ues that fine tradition, a tradition and
a vision of independence and dignity
for senior citizens. I proudly support
Senator Perm's efforts and urge my
colleagues to join me.
Mr. SIMON. Mr. Chairman, will the
gentleman yield?
Mr. DURBIN. I yield to the gentle-
man from Illinois.
Mr. SIMON. I thank the gentleman
for yielding.
Mr. Chairman, I simply want to join
the gentleman. I think one point that
the gentleman makes we have to keep
in mind. If this were social security for
white collar workers then we would
not need the Pepper amendment, but
what we are talking about are wait-
resses, we are talking about women
who work in dress factories, we are
talking about coal miners, people who
are exhausted by the time they get to
be 62 and 63 and 6!.
I commend the gentleman from Illi-
nois and I agree with him.
Mr. DURBIN. I thank the gentle-
man.
Mr. PEPPER. Mr. Chairman, with
apologies to my many friends that I
would like to give longer time to, I
regret to say that I have consumed so
much time myself and I have to re-
serve a little at the end, I am only
going to be able to yield 1 minute
each. But I do want every Member
who would like to say something to be
able to.
Mr. Chairman, I yield 1 minute to
the gentleman from Massachusetts
(Mr. Forum).
Mr. FRANK. Mr. Chairman, I be-
lieve that the problem that we face
today is part of an unfortunate trend.
It is an unfortunate trend-that we
have seen too much of in the country
and I guess we are beginning to see it
in the House-of not fully understand-
ing the nature of the work that so
many of our fellow citizens do.
It is nice to talk about the era of the
pushbutton and the computer and
high technology. The fact remains
that tens of millions of Americans now
still and will in the future be working
with their hands and their bodies in
circumstances that are not always
pleasant, in temperatures that are not
conducive to good health. People who
bend over machines and wield jack-
hammers and do all of the difficult
physical labor ought not to be told by
this Congress that they will no longer
have the option of retirement at 62.
Then we are told, "Well, don't worry,
they can go and apply for disability."
^ 1800
For people to say that, given what
has happened with disability in the
past couple years, is a cruel joke. We
have people now in control of the dis-
ability administration who think they
have discovered miracle cures. They
lay on the hands and people are cured.
We have to adopt the Pepper
amendment and respect the nature of
hard work.
Mr. CONABLE. Mr. Chairman, I
yield 2 minutes to the gentleman from
Ohio (Mr. WYLiE).
(Mr. WYLIE asked and was given
permission to revise and extend his re-
marks.)
Mr. WYLIE. I thank the gentleman
for yielding.
Mr. Chairman, I did not intend to
speak on this amendment, but I feel
constrained to do so now and I must
reluctantly oppose the amendment,
since the fine gentleman from Florida
offered it and I might otherwise per-
haps be in favor of it.
It does increase the tax in the bill.
That is abhorrent to me.
I wanted to make the observation
that we are legislating by consensus
nowadays it seems. Last week we had a
consensus jobs bill. Today we have a
consensus social security bill. Those
subjects had to be addressed immedi-
ately and it is to the credit of Presi-
dent Reagan and House Speaker
O'Nsu z and others in leadership posi-
tions in both the House and the
Senate that these problems of nation-
al importance are being addressed in
this manner.
That the Speaker is cooperating was
evidenced by the fast gavel on the pre-
vious question earlier in the day:
Mr. O'NEILL. Will the gentleman
yield?
Mr. WYLIE. Yes; I will be glad to
yield.
Mr. O'NEILL. Was the gentleman on
the floor at that particular time?
Mr. WYLIE. Yes; I was on the floor.
Mr. O'NEILL. Then he had an op-
portunity, because I looked to both
sides and the only gentleman on that
side that even made a move was the
gentleman from Pennsylvania (Mr.
WALKER).
The gentleman did not stand. The
gentleman did not rise.
- I resent the statement of the gentle-
man.
Mr. WYLIE. Well, I am sorry if the
Speaker was offended.
Mr. O'NEILL. I acted in absolute
complete fairness and had intended to
do so all the way. Had there been any-
body to stand, I would have recognized
him.
Mr. WYLIE. Sir, I did not mean to
suggest that the Speaker was not
acting in fairness at all. What I was
suggesting was that we do have a con-
sensus bill here that the gentleman
has worked with the President of the
United States--
Mr. O'NEILL. That is not what the
gentleman said. The gentleman said I
had a fast gavel and it was not a fast
gavel. It was the normal procedure of
this House and on a bill of this type I
would never do a thing like that.
I left the opportunity not only for a
vote on the previous question, but for
a vote on the rule and there was not a
man on either side of the aisle that
stood.
Mr. WYLIE. Well, I respectfully sug-
gest, sir, that I did not mean to offend
the Speaker and it was not-
Mr. O'NEILL. Well, the gentleman
has offended me, perhaps unintention-
ally, and I will accept his apology.
Mr. WYLIE. I am sorry for that.
But in any event, Mr. Chairman, I
have concluded that we must face re-
ality and pass the bill before us today.
We cannot admit to a shortfall in the
social security fund of $200 billion in
the next 7 years and do nothing about
it.
Social security recipients must not
be Intimidated by the thought of
bankruptcy in the system. I do not like
some parts of the package-
The CHAIRMAN. The time of the
gentleman from Ohio (Mr. W3tLIE) has
expired.
Mr. CONABLE. Mr. Chairman, I
yield 1 additional minute to the gen-
tleman from Ohio.
Approved For Release 2008/10/29: CIA-RDP85-00003R000200130004-8
 Approved For Release 2008/10/29: CIA-RDP85-00003R000200130004-8
March 9,1988 CONGRESSIONAL'-RECORD -HOUSE
Mr. WYLIE. I thank the gentleman
for yielding.
Mr. Chairman, I do not feel it is in
the best interests of the Federal work-
ers or of the social security system to
have Federal workers merged Into the
social security system. I think it would
be better to have a broader bAse of
separate pension program&
rather
than throw them all into one massive
system. Including Federal employees
does not under present financing ar-
rangements help solve the problem
since the Federal employees' retire-
ment program is not In itself self-sus-
taining.
This bill is a major accomplishment.
A consensus was reached as to how the
immediate crisis could be solved and
social security kept solvent for at least
the next 30 years.
The bill provides a forum to avoid a
bitter partisan battle over social secu
rity so we can go on to other problems.
It would be easy to vote no because
the Federal employees are Included or
because self-employed people are in-
cluded.
Yes; there is a lot to disagree with in
this bill, but overriding all this, it
seems to me is the fact that we do not
have any better alternative. I have
concluded a no vote would be worse
than an aye vote.
Mr. PEPPER. Mr. Chairman, I yield
1 minute to the gentleman from Min-
nesota (Mr. VINT0).
(Mr. VENTO asked and was given
permission to revise and extend his re-
Mr. VENTO. Mr. Chairman. I rise In
strong support of the Pepper amend-
ment to H.R. 1900.
We have a basic choice to respond to
the long-term deficit problem facing
the social security system. The Pepper
approach suggests that we do so by
raising the tax about one-half percent
in the year 2010. 1 for one do not
object to that Increase In cost of the
mature social security system. Remem-
ber that all of the money collected by
the social security program goes to
pay the benefits of the program, In es-
sence, it goes to the survivors, the
spouses, the retired workers of Amer-
ica. -
It is always difficult to propose tax
increases to pay for programs that is
one of the major problems with
today's Federal fiscal policy.
While social security problems can
be counted as $2 or $3 billion of short-
fall, the rest of the Federal budget
deficit shortfall is counted in the hun-
dred's of billions. This social security
system and its benefit structure are
sound, far more sound than some crit-
ics would have us believe today.
The Pepper approach to dealing
with the long-term deficit, Indeed if
there is one In the year 2010, is appro-
priate. It keeps faith with todays work-
ers.
On the other hand the Pickle
amendment which just passed and
hopefully we will now overturn,. breaks
faith with the American workers. The
Pickle aamendame t will r0olve the
long-term deficit problem' by cutting
benefits in a'mnjque*way:..
The Pidde approach will save that
revenue because many potential. re-
cipients will indeed noti live to gain the
benefits that they otherwise, would
have been paid under the existing
social security the current social con-
tract.
It literally saves the social security
system by running it and makes it gain
on the bones apd the death of the po-
tential beneficiaries. I think this is
wrong and urge my colleague to reject
the Pickle approach.
We do not have to break faith with
the American worker. we do. not have
to pull the rug out from under the
group in our society who will be asked
to pay the highest taxes both payroll
and other domestic taxes of any gen-
eration in our history.
Mr. Speaker. let we address one
unique argument that the proponents
who urge us today to raise the age to
67 for full social security benefits, that
life expectancy has and perhaps will
increase dramatically justifying this
change.
Let me point out the truth and the
fact and at once the fallacy of this
supposition.
Yes, life expectancy has Increased
dramatically however, working life ex-
pectancy now and In the future can
better be expressed in months not
years.
The fact is that workers who started
working at the Inception of the social
security program are little different
from todays workers. Therefore what
the Pickle amendment amounts to is a
significant cut in benefits, virtually a
reneging, a shrinking from the great
socialcontract that social security rep-
resents.
To many Members they may feel
that we are dealing with something
that does not matter very much, that
In essence nobody will notice this rais-
ing of the retirement age. I can tell
you that you are wrong, it will be,
screamed in the headlines across this
country, it will do more to break the
confidence than any recent action. the
confidence of Americans In this Con-
gress, at the first opportunity we will
have withdrawn from a long-standing
commitment and really shattered the
dreams of workers across America.
I simply can not understand the
logic of this Congress, this House
reaching out over 20 years to create
this type of credibility gap, creating a
loss of confidence In the Institution of
social security.
We would be well advised to adopt
the Pepper amendment and keep our
problem solving to the near and mid-
term social security issue and leave a
few questions to future Members of
this distinguished body.
It could almost be comical today if
the implications of this change were
not as profound as they are. It is ludi-
crous to assume we will do anything
H 1073
but harm if we do not move to pass
the Pepper amendment.
Mr. Chairman. we are sitting and
looking today at a very unique situa-
tion. I for one am not offended by the
Pepper approach In terms of raising
taxes by a half percent in the year
2010 In order to provide benefits for
those that are on social security.
I would remind my colleagues In this
House that all the money that is paid
Into the social security program
Indeed is paid out tol the recipients,
generally to the aged, and the others
we have classified.
The only way the proposition of the
gentleman from Texas (Mr. Pima)
actually saves money as because a lot
of people that otherwise would engage
.the benefit will not. a large extent
it Is because they are going to be dead.
That is the way that It saves money.
That is one way to do it. This is the
other way.
I think this breaks faith with the
social contract that exists, because
indeed while life expectancy has in-
creased dramatically. .king life ex-
pectancy has not. and consequence
of that is that we will be breaking
faith with those workers today in a
mature system of social security that
we are asking to pay the greatest
amount of any participants in history.
Let us vote up the Pepper amend-
ment and then pass this social security
package-a package I boat say that is
a bitter pill to accept but necessary be-
cause of the dire condition In our
economy. The price of a failed eco-
I can support this package without
the Pickle amendment with little en-
thusiasm, but with Pickle I feel the
basic fabric of this compromise pack-
age is torn.
So let us vote for the Pepper ap-
proach and pass this package today.
Mr. PEPPER. Mr. Chairman, I yield
i minute to the able gentlewoman
from Ohio (Ms. OAxxa).
(Ms. OAKAR asked and was given
permission to revise and extend her re-
marks.)
Ms. OAKAR. Mr. Chairman. I sup-
port the Pepper amendment. If the
Pickle amendment prevails, it will be
devastating for women. For women.
social security is their only retirement
benefit and now it is about $250 a
month. If women retire at age 62, it is
about $189 a month. It will not be that
much better In the year 2000.
The Pickle amendment cuts that
benefit 12% percent if they retire at 82
and 20 percent, it is estimated, if they
retire at 67.
Now, Mr. Chairman, studies show
that the mortality rate of women is
declining and their disability rate is
rising. If the Pickle amendment pre-
vails, women will be-in trouble.
I want to just tell this male-dominat-
ed body, whom I respect, women are
tired of seeing the budget cuts that
affect them. the .dls~ation In In-
surance and pensions and now what
Approved For Release 2008/10/29: CIA-RDP85-00003R000200130004-8
 Approved For Release 2008/10/29: CIA-RDP85-00003R000200130004-8
H 1074 CONGRESSIONAL RECORD -
you want to do to women is to clobber
them with the Pickle amendment. It is
unfair.
Who do you trust? Do you trust the
original Reagan proposal or do you
trust Senator Crnvna PEPPER? I trust
Sentator Ci. uns PzPrsa and I hope
you support his amendment.
Mr. PEPPER. Mr. Chairman, I yield
1 minute to the able gentleman from
Ohio (Mr. STOKEs).
Mr. STOKES. Mr. Chairman, first, I
wart to congratulate the gentleman
from Florida (Mr. Pappas) for the ex-
cellent statement he made in the well
today. He has had many fine hours in
this Chamber, but today certainly was
his finest hour.
I want to say to him that I think
that we are indeed fortunate that he
has offered this amendment and if we
support this amendment, we have an
opportunity this afternoon to correct
a very inequitable and unfair situa-
tion.
I am concerned particularly about
the effect of a reduction in benefits
when people receiving their checks are
already receiving checks that are at
about the poverty line. When we con-
sider the fact that the average check is
about $406 per month, or about $4,800
per year, and the poverty line is
$4,500, then we realize that an addi-
tional cut on these people is certainly
unfair and inequitable.
In addition to this, the speaker right
before me, the gentlewoman from
Ohio, has mentioned the unfairness as
it relates to women; but also, Mr.
Chairman, both minorities afid women
suffer more than others by benefit re-
ductions.
Even though this legislation em-
bodies a major compromise, there are
key elements of the entire bill which I
cannot, in good conscience, compro-
mise on.
Mr. Chairman, among the other pro-
visions of particular concern to me is
the recommendation to place new Fed-
eral hires under the social security
system. I see this as an unfair, un-
sound, and unjustifiable proposal.
Adding millions of people to an al-
ready overburdened social security
system just does not make sense.
Mr. Chairman, Federal workers cur-
rently pay 7 percent of their salaries
into the civil service retirement
system. Under current funding, the
civil service retirement system is fi-
nancially sound and will remain so for
at least 100 years. But retirement sys-
tems depend on receipts from current
employees to pay benefits to retired
workers. Placing newly hired workers
under social security instead of the
civil service retirement system would
quickly bankrupt civil service retire-
ment. Once bankrupt, the cost to the
taxpayers to meet civil service retire-
ment benefits already promised would
be immense-a n1inimum of $185 bil-
lion according to independent re-
search.
Mr. Chairman, advocates claim that
placing newly hired Federal workers
HOUSE March 9, 1989
under social security will help in the
short run. However, today's contribu-
tor will become tomorrow's liability.
Instead of the $9.3 billion savings
claimed by the Ways and Means Com-
mittee, other estimates show a short-
term savings of less than $5 billion be-
tween 1983 and 1989. Even these
short-term gains, however, would be
offset by increased Government costs
in the future.
Mr. Chairman, the Government
would have to increase its payments
into the civil service retirement trust
fund just to offset the revenue lost
that will occur as new workers pay
into the social security system. Unless
these payments are made, the civil
service retirement system reserve will
gradually disappear. If no new employ-
ees contribute to the civil service re-
tirement fund, the reserve will be ex-
hausted in about 20 years, and the
civil service retirement system will be
in the same position as the social secu-
rity system is now-current revenues
will not be sufficient to meet all cur-
rent obligations.
Given these facts, it is difficult to
see what the attractiveness is of plac-
ing newly hired Federal workers under
the social security system. I do not see
it, and neither do the millions of
Americans who have raised their
voices in opposition to this provision.
In addition, Mr. Chairman, I cannot
support the provision of the commit-
tee bill to defer the cost-of-living ad-
justment due in July 1983 until Janu-
ary 1984, and paying all future cost-of-
living adjustments in January instead
of the previous July.
Mr. Chairman, this provision would
only result in reduced benefit levels-
compared to the levels that would pre-
vail under current law-not only in
1983 but also in future years, because
each year social security recipients
would have to wait 6 months longer to
receive their COLA's than they would
under present law.
Mr. Chairman, there are 26 million
senior citizens in this country. Sixteen
percent of all senior citizens have in-
comes at or below the poverty level
and are struggling to make ends meet.
Any proposal to modify or reduce
their cost-of-living adjustments will
only place an even greater economic
hardship on the aged and dramatically
reduce their present standard of
living.
In spite of the obvious needs of our
Nation's senior citizens, Federal
budget reductions implemented last
year have already imposed heavy bur-
dens on the elderly. Due to the admin-
istration's policies, benefits to the
most needy senior citizens under the
food stamp, medicare and housing as-
sistance programs have been cut. In
fiscal year 1983, the President pro-
posed additional cuts in not only these
programs but also in senior citizen em-
ployment, social services, and nutri-
tion programs.
Mr. Chairman, the elderly have al-
ready suffered more than their fair
share in budget reductions. This delay
in the cost-of-living adjustment will
only cause more hardship for the low-
income elderly who can ill-afford any
reduction in their protection against
the rising cost of living.
And finally, Mr. Chairman, I must
voice 'my strong opposition to the
amendment, offered by the gentleman
from Texas, Mr. Pica i.z. The Pickle
amendment would strike the provi-
sions reducing initial benefit levels be-
ginning in the year 2000 and raising
payroll taxes beginning in the year
2015. Consequently, the amendment
would gradually raise the normal
social security retirement age from 65
to 67.
Mr. Chairman, raising the retire-
ment age under social security will
have an extremely negative impact on
those people who are unable to work
beyond age 65-or age 62, for that
matter because of poor health or be-
cause they have lost their jobs and are
unlikely to be able to find new employ-
ment at an advanced age. The Pickle
amendment assumes that jobs will be
readily available to all who want them.
and it also assumes that the disability
program will be "improved" to take
care of those who cannot continue to
work. Persons in low-paid, physically
demanding work, and minorities who
have a lower life expectancy, will be
heavy losers if the social security re-
tirement age is raised.
Further, Mr. Chairman, the Pickle
amendment clearly constitutes an-
other benefit cut for the elderly and
uses this benefit cut to make up the
estimated shortfall. Instead of the
Pickle amendment, I favor the amend-
ment offered by the distinguished gen-
tleman from Florida, Mr. PEPPER. The
Pepper amendment eliminates the re-
maining projected shortfall in the
social security trust funds without re-
sorting to benefit cuts beyond those
recommended by the Social Security
Commission.
Mr. Chairman, I urge those of my
colleagues who may be tempted to ap-
prove raising the retirement age, to
ask themselves if they are also firmly
committed to coupling this change
with new job training and placement
programs, not just for dislocated work-
ers, but also for persons in their sixty's
with limited paid work experience;
whether they are willing to support
more liberal disability programs for
persons unable to work; whether they
will stand behind vigorous enforce-
ment laws prohibiting age, sex, and
racial discrimination in employment.
Mr. Chairman, without an integral
linking of such policies, raising the age
of retirement or decreasing replace-
ment rates may contribute to the actu-
arial balance of the social security
system, but will also aggravate the
"actuarial balance" between affluence
and poverty in this Nation.
Mr. Chairman. if the Pepper amend-
ment fails I cannot in good oonsicence
support this legislation. I urge my col-
Approved For Release 2008/10/29: CIA-RDP85-00003R000200130004-8
 Approved For Release 2008/10/29: CIA-RDP85-00003R000200130004-8
H 1076 CONGRESSIONAL RECORD.- HOUSE March 9, 1989
For me to vote for H.R. 1900, I had the 0.68-percent deficit by making 60 an amendment that directs the Secre-
to satisfy both my concerns, which I percent of that deficit in reductions in tary of HHS to give us a description of
share with these Federal workers, and benefits and an increase of 0.24 per. the occupational disabilities. So all
those of the many people who have cent in taxes. It does both. these concerns that have been ex-
taken the time to visit me in my dis- There has been criticism, as I said, pressed have been taken care of, and
trict and in Washington. In today's that the Pickle amendment clobbers they are not taken care of in the bill.
debate, the gentleman from Michigan, the ladies, that it hurts the coal If Members follow the bill at this time,
chairman of the Post Office and Civil Miners, and that it prevents the young then they must understand that they
Service Committee, Mr. Foxe, has as- from being able to retire on time. would get none of that relief.
sured this body and Federal workers What we can do today we can still do Mr. SEIBERLING. Mr. Chairman,
that his committee recognizes its re- under the amendment we just passed. will the gentleman yield?
sponsibility and will fashion a plan to My amendment does not change any The CHAIRMAN. The time of the
insure that Federal workers get the of that. It does not change the right to gentleman from Texas (Mr. PicxaE)
full retirement benefits they have claim benefits at 62, nor does it affect has expired.
been promised for many years. I am medicare at 65, nor does it affect SSI. Mr. CONABLE. Mr. Chariman, I
confident that the Congress will act to We simply do not touch that. Yield 1 additional minute to the gen-
make sure our contract with Federal Now, it is true that if one did not tleman from Texas (Mr. Picxs.E).
workers will be fulfilled. stay in the work force 1 more year, in Mr. PICKLE. I yield to the gentle-
Mr. CONABLE. Mr. Chairman, I the year 2009 approximately, then man from Ohio.
yield such time as he may consume to there would be some slowing in the Mr. SEIBERLING. Mr. Chairman, I
the gentleman from Idaho (Mr. growth of benefits. I am of the opinion thank the gentleman from yielding.
CRAIG). that the American people would
permission to revise and extend his re- change in the social security program. about the fact that this bill raises
marks.) That is not being harsh. If we leave social adds to th the e Increasingly taxes end that
Mr. CRAIG. Mr. Chairman, I stand our hearts to control what we do, we this addds to asingly regressive
in opposition to the Pepper amend- would then raise benefits and raise character of our entire taxing system.
ment that taxes are not the solution taxes, and then everybody could retire I taxes, but with them not worried about bout Ing to our problem. with all the money in the world they whappens I in 2010, worried a from
[Mr. CRAIG addressed the Commit- need, what h 2, 20 years from
tee. His remarks will appear hereafter Social security is not a full retire- now.
in the Extensions of Remarks.] ment program. It is a floor. It is a sup- We have to the de payroll something
tax, oon
element, and it can be supported only about cutting , and soon
^ 1820 have a means of doing so. The medi-
as long as the American people will
Mr. CONABLE. Mr. Chairman, I support it. I say to the Members that care program is going to be in the
yield 5 minutes to the gentleman from if we keep going in the direction of same financial fix that social security
Texas (Mr. Piciu ). Senator PEPPER, then there will be a is at the end of this next decade. We
(Mr. PICKLE asked and was given generation gap, there will be genera- can move on that, transfer the cost of
permission to revise and extend his re- tion conflict, and our young people medicare to the generations, and cut
marks.) simply will not continue to support it. the payroll taxes. That is what we
Mr. PICKLE. Mr. Chairman, first When we go to any of our high ought to be doing.
and foremost, I want to pay my re- school groups, when we go to our Mr. PICKLE. Mr. Chairman, the
spects to my dear friend, Senator young businessmen's groups, and ask question on the amendment we have
PEPPER. He and I do have a difference them, "Which do you want to do, raise before us and the controversy we have
on the approach we should take in the taxes or raise the age?" By a 9-to-i is, how do we handle the long range?
long term. Mine is as sincere as I know vote, or more, they say, "Do not raise In the short range this bill raises $165
his is. I have advocated this for 2 taxes." billion, so we do not have a shortfall,
years. I think it is the proper ap- If we go to our elderly people, as I and we have taken every precaution
proach. have in my senior citizens' homes, and that the money will be there. But If
I have asked for this time simply to ask them, "Should we raise taxes po- we just raise taxes, we must under-
say to my colleagues that a great tentially?" As much as they want the stand that taxes cause inflation and
many statements have been made in benefits, they do not endorse that taxes cause unemployment.
the well now that are not factually automatically because they have chil- Mr. SEIBERLING. Mr. Chairman, I
correct, and I would hope that we dren; they have sons and grandsons, could not agree with the gentleman
would not be so worked up emotional- daughters and granddaughters coming more in that respect.
ly that we lose sight of the fact of ex- up. - The CHAIRMAN. The time of the
actly what we have done. The temptation is just to say, "Let gentleman from Texas (Mr. Pzcxz.E)
Let me respond first by saying that us raise taxes a modest amount and has expired.
if we go with Senator PEPPER's amend- pay these benefits." That is what we Mr. CONABLE. Mr. Chairman, I
ment now, we are saying in effect that would like to do. None of us ran on a yield myself 2 minutes.
from now on the only way we will cor- platform that we want to cut benefits, Mr. Chairman, I had not intended to
rect long-term deficits in the social se- but I do think that the American say anything further, but it does occur
curity program is to raise taxes. There people expect us to do the responsible to me that the point the gentleman
must be some other way than just to thing, and that is to keep the social se- from Texas (Mr. PICKLE) makes is a
keep raising taxes, because eventually curity program solvent. terribly important one.
that is going to get so onerous the Let us not think for a moment now We must have the capacity to
American people will rebel. We know that what we have done at 62 would reform critical institutions like the
that under the committee bill it is over keep everybody in so they cannot get social security system. Institutions
15 percent, and within a short time, by benefits for another 2 years. That is which cannot be reformed become
Senator PEPPER's amendment, it would not correct. They have about five op- rigid and eventually shatter. The
be 16.3 percent. There just simply tions to retire and take early retire- social contract must be a pliable thing,
must be some way to correct the social ment now. I do not change any of bent to the public will and adjusted to
security problem other than by just that. There is a slight reduction in 20 the needs of the times.
raising taxes. I would think that the years from now, there is another one For instance. at some time I hope
approach we have taken will do that. in the year 2027, but there are no the social security system can be re-
Let us keep in mind that the amend- taxes and nobody is hurt. formed to provide a better system of
ment we have just passed does not Most of all-and I want the Mem- benefits for working women. As it was
raise taxes. The bill has a reduction of bers to hear this-we put in this bill drawn in 1935, the social security
Approved For Release 2008/10/29: CIA-RDP85-00003R000200130004-8
 I
Approved For Release 2008/10/29: CIA-RDP85-00003R000200130004-8
H 1078
Lott
Parris
Snows
Lowery (CA)
Pashayan
Snyder
Lowry (WA)
Patman
Solara
Luian
Paul
Solomon
Luken
Pease
Spence
Lundine
Penny
Spratt
Lungren
Pepper
Staggers
Mack
Perkins
Stangeland
MacKay
Petri
Stenho)m
Madigan
Pickle
Stokes
Markey
Porter
Stratton
Marlenee
Price
Studds
Marriott
Pritchard
stump
Martin (IL)
Pursell
Sundquffit
Martin (NC)
Quillen
swift
Martin (NY)
Rahall
Synar
Martinez
Rangel
Talton
Matsui
Ratchford
Tauke
Mavroules
Ray
Tauzin
Masson
Regula
Taylor
McCain
Reid
Thomas (CA)
McCandless
Richardson
Thomas (OA)
McCloskey
Ridge
Torres
McCollum
Rinaldo
Torricelli
McCurdy
Ritter
Towns
McDade
Roberts
Traxler
McEwen
Robinson
Valentine
McGrath
Rodino
Vander Jagt
McHugh
Roe
Vandergriff
McKernan
Roemer
Vento
McNulty
Rogers
Volkmer
Mica
Rose
Vucanovlch
Michel
Rostenkowski
Walgren
Mikulskl
Roth
Walker
Miller (CA)
Roukema
Watkins
Miller (OH)
Rowland
Waxman
Mineta
Roybal
Weaver
Miniah
Rudd
Weber
Mitchell
Russo
Weiss
Moakley
saw
Wheat
Molinari
Savage
Whitehurat
Mollohan
sawyer
Whitley
Montgomery
Schneider
Whittaker
Moody
Schroeder
Whitten
Moore
Schulse
Williams (MT)
Moorhead
Schumer
Williams (OH)
Morrison (CT)
Seiberling
Wilson
Mrasek
Shannon
Winn
Murphy
Sharp
Wirth
-Murtha
Shaw
Wise
Myers
Shelby
Wolf
Natcher
Shumway
Wolpe
Nelson
Sikorski
Wortley
Nichols
Siljander
Wright
Nielson
Simon
Wyden
Nowak
Sisisky
Wylie
O'Brien
Skeen
Yates
Oskar
Skelton
Yatron
Oberstar
Slattery
Young (AX)
Obey
Smith (FL)
Young (FL)
Olin
Smith (IA)
Young (MO)
Owens
Smith (NE)
Zablocki
Oxley
Smith (NJ)
Zschau
Packard
Smith, Denny
Panetta
Smith, Robert
^ 1850
The CHAIRMAN. Four hundred and
three Members have answered to their
names, a quorum is present, and the
Committee will resume its business.
The Chair recognizes the gentleman
from Florida (Mr. PEPPim).
Mr. PEPPER. Mr. Chairman, I yield
the remainder of my time to our dis-
tinguished Speaker, the gentleman
from Massachusetts (Mr. O'NEILL).
(Mr. O'NEILL asked and was given
permission to revise and extend his re-
marks.)
Mr. O'NEILL. Mr. Chairman, I rise
in support of the amendment offered-
by Senator PEPPER. However, before I
address myself to that amendment, I
want to commend Chairman DAN Ros-
TENKOwsKI, JAKE PICKLE, HAROLD
FORD, and ANDY JACOBS for the excel-
lent work they have done in bringing
this landmark legislation to the floor.
It Is Just about a year ago the Presi-
dent of the United States, President
Reagan, was proposing a national com-
CONGRESSIONAL RECORD - HOUSE March 9, 1983
mission. And it was decided that a na- And then they came to us a second
tional commission would be appointed. time and they said, "Will you drop
I appointed Chairman CLAUDE PEPPER, them out?"
Robert Ball and Martha Keys to the We told them that we were going to
National Commission on Social Secu- put in future employees and they
rity Reform. Senator BYRD appointed winked as though everything was fine.
the following Democrats, Senator And suddenly they appear on the hori-
MOYNIHAN, and Lane Kirkland. zon here and to those appearing here,
When I appointed them there was I think it has been very, very unfair,
little hope that the Commission would because in no way have we hurt them
accomplish much. Well, in fact, it has whatsoever.
accomplished a great deal and reached What is this bill all about today?
a general consensus of the nature of The truth of the matter is we are all
the problem and the measures neces- in agreement on both sides of the aisle
sary to deal with the problem. as far as saving the system as of today
For all of this, I want to thank and today is the day of crisis. Because
CLAUDE PEPPER. What a beautiful and of this bill the social security is secure
brilliant Job you did. It is regrettable for the next 25 or 30 years.
that we did not have more Members But we are thinking beyond 25 and
on the floor today when you gave 30 years. That is what the argument is
those brilliant remarks. In my 30 years all about today.
AV, was one of the finest speeches I
have ever heard.
I want to thank all the members of
the Commission, particularly the ones
that I appointed myself. I had the op-
portunity of seeing Martha here today
and Bob Ball out in the hall.
It was a bipartisan consensus and a
bipartisan report. That report is the
basis of legislation which we are con-
sidering today. We owe a debt of grati-
tude to every member of the Commis-
sion for their hard work and their per-
severance in producing this report.
Social security represents a basic
contract between the Government and
the citizens of this Nation. No pro-
gram affects more Americans, no pro-
gram is as sacred as this one, and, con-
sequently, saving it and reforming it is
difficult and controversial.
The program was enacted because of
a crisis, the Great Depression. In 1935
only one-sixth of the Nation's elderly
had income from savings or invest-
ments to live on. Sixty percent of the
elderly lived in poverty back in the
thirties. And upholding the constitu-
tionality of the social security, Su-
preme Court Justice Cardozo observed,
the Nation responded to the call of
the distressed when it passed the
social security tax.
Well. I myself worked with the Com-
mission. So many times with the Com-
mission, so many times did I talk to
them I would have to say probably 50
times along the line. We discussed the
definitions, we discussed the 6-month
COLA. Could we go along with it? But
no benefit cuts along the line, it was
agreed.
We talked about taxing a portion of
social security benefits, that part the
employer had paid in for the recipient.
All right. No benefit cuts were to be
made.
We talked about the Federal em-
ployees and I have seen so many
around here. Originally is was thought
that we would put all the Federal em-
ployees in. Then the unions came, the
Federal unions. "Would you drop out
the Federal employees?"
And then we put in those who had
not been vested, had been here but 5
years and were not vested.
It came down to three issues. The
issue of the committee's amendment
that was amended by the gentleman
from Texas (Mr. PICKLE). And the
amendment as written in the bill was
really a compromise between the
Pepper amendment and the Pickle
amendment.
And so basically it came down to
this: Is there any increase in tax? I
would have to say, yes, there is an in-
crease in tax in all three bills. How is
there an increase? I see the gentleman
from Texas rises himself. Well, in
1984, goes to 5.70 and it remains at
that. In 1988 the current law stays at
5.70, the committee bill, which is not
changed by the gentleman's amend-
ment, goes to 6.06. In 1989, it remains
at 6.06. And in 1990, it goes to 6.20.
The difference betwen the gentle-
man's bill and DAN RosTI NKOwsKI's,
the Ways and Means Committee bill,
was the Ways and Means Committee
increased that 6.2 by 0.25 in 2015.
That is twenty-four one-hundredths
percent. And then there are the bend
point changes.
The Pepper bill, what the Pepper
bill does is increase the tax rate in the
year 2010 by 0.54. Point 54, that is not
54 percent, that is Just a little more
than one-half of 1 percent in the year
2010.
Well, what the Pickle did along the
line was this. As far as the committee
bill, the workers retiring at the age of
62 in the year 2007, there was a deduc-
tion of 5 percent in the benefits. The
Pickle bill, 6 percent in the benefits.
If you retired at the age of 62 in the
2022, 5 percent in the committee bill;
12 percent in the Pickle bill.
And so it goes along that way. If you
go to 66, 67, the increases are that you
take it out of the benefits. It comes
down to basically this: Should you in-
crease the tax one-half of 1 percent or
should you cut those who retire at the
age of 62 ultimately 14 percent, be-
cause you cut them from 80 to 70 per-
cent of full benefits, is a 12-percent
cut.
Now the interesting thing about it is
this. It is Just a question of philosophy
as to what you believe in. I want the
Approved For Release 2008/10/29: CIA-RDP85-00003R000200130004-8
 Approved For Release 2008/10/29: CIA-RDP85-00003R000200130004-8
R 198? CONGRESSIONAL RECORD - HOUSE
The SPEAKER. Under the rule, the
previous question is ordered.
The question is on the amendment.
The question was taken; and the
Speaker announced that the ayes ap-
peared to have it.
RE004IBE0 VOTI
Mr. WEISS. Mr. Speaker, I demand
a recorded vote.
A recorded vote was ordered.
The vote was taken by electronic
device, and there were-ayes 230, noes
200, not voting 3, as follows:
[Roll No. 251
AYES-230
Alexander Gramm Olin
Andrews (TX) Green Ortiz
Annunzio Gregg Oxley
Anthony Gunderson Packard
Archer Hall, Ralph Parris
AuCoin Hall. Sam Pashaysn
Badham Hamilton Paul
Barnard Hammerschmidt Penny
Bartlett Hance Petri
Bateman Hansen (ID) Pickle
Bates Hansen (UT) Porter
Bedell Hartnett Pritchard
Bellenson Hatcher Pursell
Bennett Hefner Quillen
Bereuter Heftel Ray
Bethune Hightower Ridge
Bilirakis Hiler Ritter
Bliley Hillis Roberts
Boehlert Holt Robinson
Boggs Hopkins Roemer
Bouquard Horton Rogers
Breaux Hunter Rostenkowski
Brooks Hutto Roth
Broomfield Hyde Roukema
Brown (CO) Ireland Rowland
Broyhill Jeffords Rudd
Burton (IN) Jenkins Sawyer
Byron Jones (NC) Schulze
Campbell Jones (OK) Sensenbrenner
Carney Kasich Shaw
Carper Kazen Shelby
Chandler Kemp Shumway
Chappell Kindness Shuster
Chapple Kramer Siljander
Cheney Lagomarsino Skeen
Clarke Latta Slattery
Clinger Leach Smith (NE)
Coats Leath Smith (NJ)
Coleman (MO) Lent Smith, Denny
Coleman (TX) Levitas Smith, Robert
Conable Lewis (CA) Snowe
Cooper Lipinski Solomon
Corcoran Livingston Spence
Coughlin Loeffler Stangeland
Courter Lott Stark
Craig Lowery (CA) Stenhoim
Crane, Daniel Lujan Stratton
Crane, Philip Lundine Studds
Daniel Lungren Stump
Dannemeyer Mack Sundquist
Daschle MacKay Synar
Daub Madigan Tauke
de Is Garza Marlenee Tauzin
DeWine Marriott Taylor
Dickinson Martin (IL) Thomas (CA)
Downey Martin (NC) Thomas (GA)
Dreier Martin (NY) Udall
Duncan Matsui Valentine
Edwards (AL) Mazzoli Vander Jagt
Edwards (OK) McCain Vandergriff
Emerson McCandless Vucanovich
English McCollum Walker
Erlenborn McCurdy Watkins
Evans (IA) McDonald Weber
Fiedler McEwen Whitehurst
Fields McGrath Whitley
Fish McKernan Whittaker
Flippo McKinney Wilson
Forsythe McNulty Winn
Franklin Michel Wolf
Frenzel Montgomery Wortley
Fuqua Moore Wright
Gekas Moorhead Wylie
Gibbons Morrison (WA) Young (AK)
Gingrich Myers Young (FL)
Glickman Nielson Zschau
Gradison O'Brien
NOES--200
Ackerman Gilman Ottinger
Addabbo Gonzales Owens
Akaka Ooodigog Panetta
Albosta Gore Patman
Anderson Gray Patterson
Andrews (NC) amirini Pease
Applegate Hall (IN) Pepper
Aspin Hall (OH) Perkins
Barnes Harkin Price
Berman Harrison Rahall
Bevill Hawkins Rangel
Biaggi Hertel Ratchford
Boner Howard Regula
Bonlor Boyer Reid
Bonker Hubbard Richardson
Borski Huckaby Rinaldo
Bosco Hughes Rodino
Boucher Jacobs Roe
Boxer Johnson Rose
Britt Jones (TN) Roybal
Brown (CA) Kaptur Russo
Bryant Kastenmeier Sabo
Burton (CA) Kennelly Savage
Carr Kildee Scheuer
Clay Kogovsek Schneider
Coelho Kolter Schroeder
Collins Kostmayer Schumer
Conte LaPalce Seiberling
Conyers Lantos Shannon
Coyne Lehman (CA) Sharp
Crockett Lehman (FL) Sikorski
D'Amours Leland Simon
Davis Levin Sisisky
Dellums Levine - Skelton
Derrick Lewis (FL) Smith (FL)
Dicks Long (LA) Smith (IA)
Dingell Long (MD) Snyder
Dixon Lowry (WA) Solarz
Donnelly Luken Spratt
Dorgan Markey St Germain
Dowdy Martinez Staggers
Durbin Mavroules Stokes
Dwyer McCloskey Swift
Dymally McDade Tallon
Dyson McHugh Torres
Early Mica Torricelli
Eckart Mikulski Towns
Edgar Miller (CA) Traxler
Edwards (CA) Miller (OH) Vento
Erdreich Mineta Volkmer
Evans (IL) Minish Walgren
Fascell Mitchell Waxman
Fazio Moakley Weaver
Feighan Molinari Weiss
Ferraro Mollohan Wheat
Florio Moody Whitten
Foglietta Morrison (CT) Williams (MT)
Foley Mrazek Williams (OH)
Ford (MI) Murphy Wirth
Ford (TN) Murtha Wise
Fowler Hatcher Wolpe
Frank Nelson Wyden
Frost Nichols Yates
Garcia Nowak Yatron
Gaydos Oakar Young (MO)
Gejdenson Oberstar Zablocki
Gephardt Obey
NOT VOTING-3
Boland Neal Washington
^ 1930
Mr. SCHEUER and Mr. RANGEL
changed their votes from "aye" to
"no.,,
So the amendment was agreed to.
The result of the vote was an-
nounced as above recorded.
The SPEAKER. The question is on
the engrossment and third reading of
the bill.
The bill was ordered to be engrossed
and read a third time, and was read
the third time.
MOTION TO RECOMMIT OFFERED BY MR. ARCHER
Mr. ARCHER. Mr. Speaker, I offer a
motion to recommit.
The SPEAKER. Is the gentleman
opposed to the bill?
Mr. ARCHER. In its present form I
am, Mr. Speaker.
March 9, 1989
The SPEAKER. The Clerk will
report the motion to recommit.
The Clerk read as follows:
Mr. ARcHgR moves to -recommit the bill,
H.R. 1900, to the Committee on Ways and
Means.
The SPEAKER. Without objection,
the previous question is ordered on
the motion to iecommit.
There was no objection.
The SPEAKER. The question is on
the motion to recommit.
The motion to recommit was reject-
ed.
The SPEAKER. The question is on
the passage of the bill.
The question was taken; and the
Speaker announced that the ayes ap-
peared to have it.
RECORDED VOTE
Mr. ROSTENKOWSKI. Mr. Speak-
er, I demand a recorded vote.
A recorded vote was ordered.
The vote was taken by electronic
device and there were-ayes 282, noes
148, not voting 3, as follows:
[Roll No. 261
AYES-282
Albosta Derrick Ireland
Alexander Dickinson Jacobs
Anderson Dicks Jeffor is
Andrews (NC) Dingell Jenkins
Andrews (TX) Dorgan Johnson
Annunzio Downey Jones (NC)
Anthony Duncan Jones (OK)
Applegate Durbin Kaptur
Aspin Dwyer Kasich
AuCoin Dyson Kastenmeler
Badham Eckart Kennelly
Barnard Edgar Kogovsek
Bartlett Edwards (AL) Kolter
Bateman Edwards (CA) LaFalce
Bates Edwards (OK) Latta
Bedell Emerson Leach
Beilenson English Lehman (CA)
Bennett Erdreich Lehman (FL)
Berman Erlenborn Levin
Bevill Evans (IA) Levitas
Biaggi Fascell Lewis (FL)
Bilirakis Fazio Lipinski
Bliley Ferraro Livingston
Boehlert Fields Long (LA)
Boggs Fish Long (MD)
Boner Flippo Lowry (WA)
Bonior Foglietta Lujan
Bonker Foley Luken
Bouquard Ford (MI) Lundine
Boxer Ford (TN) Mack
Breaux Forsythe MacKay
Britt Fowler Madigan
Brooks Frenzel Martin (NC)
Broyhill Frost Matsui
Bryant Fuqua Mazsoll
Burton (CA) Garcia McCain
Burton (IN) Gephardt McCandless
Campbell Gibbons McCloskey
Carper Glickman McCollum
Carr Gore McCurdy
Chandler Gradison McDade
Chappell Gramm McHugh
Chappie Green McKinney
Cheney Gregg McNulty
Clarke Guarini Mica
Clinger Gunderson Michel
Coats Hamilton Mikulski
Coelho Hammerschmidt Miller (OH)
Coleman (MO) Hance Mineta
Coleman (TX) Harkin Moakley
Conable Harrison Mollohan
Conte Hatcher Montgomery
Cooper Hefner Moody
Corcoran Heftel Moore
Coughlin Hightower Morrison (WA)
Courter Filler Mrazek
Coyne Hillis Murtha
D'Amours Hopkins Hatcher
Daschle Huckaby Nelson
Daub Hughes Nichols
Davis Hutto Nowak
de Is Garza Hyde O'Brien
Approved For Release 2008/10/29: CIA-RDP85-00003R000200130004-8
 Approved For Release 2008/10/29: CIA-RDP85-00003R000200130004-8
H 1082
CONGRESSIONAL RECORD -- HOUSE March 9, 1983
kind of any agricultural commodity to any
person in return for-
(I) the diversion of farm acreage from the
production of an agricultural commodity,
and
(ii) the devotion of such acreage to conser-
vation uses, and
(B) which the Secretary of Agriculture
certifies to the Secretary of the Treasury as
being described in subparagraph (A).
(2) 1983 CROP YEAR.-The term "1983 crop
year' means the crop year for any crop the
harvesting or planting period for which
occurs during 1983.
(3) QuAI.InED TAXPAYER.-The term
"qualified taxpayer" means any producer of
agricultural commodities (within the mean-
ing of the 1983 payment-in-kind programs)
who receives any agricultural bommodity in
return for meeting the requirements of
clauses (i) and (ii) of paragraph (1)(A).
(4) RECEIPT IN_CLUDES RIGHT TO RECEIVE;
Exc.-A right to receive (or other construc-
tive receipt of) a commodity shall be treated
the same as actual receipt of such commod-
ity.
(5) AMOUNTS RECEIVED BY THE TAXPAYER AS
REIMBURSEMENT FOR STORAGE.-A qualified
taxpayer reporting on the cash receipts and
disbursements method of accounting shall
not be treated as being entitled to receive
any amount as reimbursement for storage
of commodities received under a 1983 pay-
ment-in-kind program until such amount is
actually received by the taxpayer.
(6) COMMODITY CREDIT LOANS TREATED SEPA-
RATELY.-Subsection (a) of section 2 shall
apply to the receipt of any commodity
under a 1983 payment-in-kind program sep-
arately from, and without taking into ac-
count, any related transaction or series of
transactions involving the satisfaction of
loans from the Commodity Credit Corpora-
tion.
(b) REGULATIONS.-The Secretary of the
Treasury or his delegate (after consultation
with the Secretary of Agriculture) shall pre-
scribe such regulations as may be necessary
to carry out the purposes of this Act, includ-
ing (but not limited to) such regulations as
may be necessary to carry out the purposes
of this Act where the commodity is received
by a cooperative on behalf of the qualified
taxpayer.
SEC. 6. STUDY.
(a) GENERAL RULE.-The Secretary of the
Treasury or his delegate, after consultation
with the Secretary of Agriculture, shall con-
duct a study of-
(1) the 1983 payment-in-kind program,
and
(2) the tax treatment provided with re-
spect to such program by this Act.
(b) REPORT.-Not later than September 1,
1983, the Secretary of the Treasury shall
submit to the Congress a report on the
study conducted under subsection (a), to-
gether with such recommendations as he
may deem advisable.
Mr. ROSTENKOWSKI (during the
reading). Mr. Speaker, I ask unani-
mous consent that the House amend-
ment to the Senate amendment be
considered as read and printed in the
RECORD.
Mr. SPEAKER. Is there objection to
the request of the gentleman from Illi-
nois?
There was no objection.
Mr. SPEAKER. Is there objection to
the initial request of the gentleman
from Illinois?
Mr. CONABLE. Mr. Speaker, reserv-
ing the right to object and I do not
object, but I would like to ask the dis-
tinguished chairman, the gentleman
from Illinois (Mr. RosTENK0wSKI), if
he could tell us what procedure is
being followed here with respect to
the so-called PIK program, which I
understand has passed the Senate in a
somewhat different form from what it
passed the House and therefore re-
quires some further procedure.
Mr. ROSTENKOWSKI. Mr. Speak-
er, will the gentleman yield?
Mr. CONABLE. I yield to the gentle-
man from Illinois.
Mr. ROSTENKOWSKI. Mr. Speak-
er, I thank the gentleman for yielding.
Mr. Speaker, H.R. 1296 passed the
House yesterday by a vote of 401 to 1.
The bill satisfactorily resolves the tax
problems of farmers who participate
in the payment-in-kind or PIK pro-
gram while achieving a delicate bal-
ance between farm Mid tax policy. The
bill was reported to the Committee on
Ways and Means by a unanimous vote
of the Subcommittee on Select Reve-
nue Measures. The Committee on
Ways and Means also approved the
bill unanimously. Both Treasury and
Agriculture Department officials have
publicly voiced the support of the ad-
ministration for the House bill.
Despite the exceptionally strong
support for H.R. 1296, as passed by
the House, the Senate substantially
modified the House bill. The Senate
amendment eliminates the antispecu-
lation rule which was included in the
House bill and provides expanded tax
benefits both retroactively and on a
permanent basis. The Senate amend-
ment also deletes the provision of the
House bill which provides a tax ex-
emption for the National Farmers Or-
ganization or NFO.
H.R. 1296, as passed by the House,
fully addresses farmers' concerns that
participation in the 1983 PIK program
may have adverse tax consequences.
However, many farm cooperatives
have expressed opposition to the tax
exemption for the NFO. These cooper-
atives fear that such an exemption
would provide a competitive advantage
to the NFO. Therefore, I recommend
deleting this NFO exemption
Under the request I am .making, I
am asking the House to return the
original House bill to the Senate with
certain technical changes recommend-
ed by the Senate Finance Committee
by deleting the NFO exemption to
which cooperatives have objected.
^ 2000
Mr. CONABLE. Further reserving
the right to object, Mr. Speaker, to
summarize, then, it is the plan to send
the measure back to the Senate?
Mr. ROSTENKOWSKI. As passed
the House, deleting the NFO provi-
sion.
Mr. CONABLE. As passed the
House, but deleting the NFO provi-
sion.
Mr. MICHEL. Mr. Speaker, will the
gentleman yield?
Mr. CONABLE. Further reserving
the right to object, I yield to the gen-
tleman from Illinois.
Mr. MICHEL. I appreciate the gen-
tleman yielding under his reservation.
I only wanted to make the point that
when we were considering the measure
here in the House under the suspen-
sion of the rules, the gentleman from
Illinois was called to the White House
and could not obviously vote at the
time when the vote was taken.
Obviously, if I had been here, I
would have supported it wholeheart-
edly, as we had been pressing the com-
mittee to address itself to this project.
I am happy to see that it will finally
be resolved before the deadline.
Mr. CONABLE. Further reserving
the right to object, Mr. Speaker, does
the gentleman from Minnesota wish
me to yield?
Mr. FRENZEL. Yes.
Mr. CONABLE. I yield to the gentle-
man.
(Mr. FRENZEL asked and was given
permission to revise and extend his re-
marks.)
Mr. FRENZEL. Mr. Speaker, _ the
NFO amendment was not mine, but I
am the principal author of the bill
from which the amendment was
drawn. It is an important and a good
amendment, but the importance of the
PIK bill is so overwhelming that we
are better off to leave the NFO
amendment behind and we will try to
work that out at a later date.
I thank the gentleman for yielding.
Mr. DE Lk GARZA. Mr. Speaker, will
the gentleman yield?
Mr. CONABLE. Further reserving
the right to object, I yield to the gen-
tleman from Texas.
Mr. DE LA GARZA. Mr. Speaker, I
only wanted to express my apprecia-
tion to the chairman of the Ways and
Means Committee and the ranking
member and all who have worked to
assist us in this endeavor. We from the
Agriculture Committee are very appre-
ciative of the gentleman's spirit of co-
operation and understanding of our
problem.
Mr. JEFFORDS. Mr. Speaker, will
the gentleman yield?
Mr. CONABLE. Further reserving
the right to object, I yield to the gen-
tleman from Vermont.
Mr. JEFFORDS. I appreciate the
gentleman yielding.
I just want to echo the comments of
the chairman of the full Agriculture
Committee. The minority feels like-
wise. We really appreciate what the
gentleman has done.
Mr. CONABLE. Mr. Speaker, under
the circumstances, I withdraw my res-
ervation of objection.
Mr. SPEAKER. Is there objection to
the initial request of the gentleman
from Illinois (Mr. ROSTENKOWSKI)?
There was no objection.
A motion to reconsider was laid on
the table.
Approved For Release 2008/10/29: CIA-RDP85-00003R000200130004-8