S Con Res 21. (Fiscal 2008 budget resolution). DeMint of South Carolina amendment on establishing a Social Security reserve fund/On agreeing to the amendment
senate Roll Call 89 Mar 22, 2007
This vote occurred on an amendment by Jim DeMint, R-S.C., that would set aside surplus money in the Social Security trust fund and place it in a "reserve" account with severe restrictions on how it may be spent. The amendment was offered to the budget resolution that serves as the blueprint for Congress' budget priorities in fiscal 2008. The budget resolution sets overall spending targets for the Appropriations committees and outlines other budget rules.
Typically Social Security runs a surplus -- according to DeMint, this year it will amount to about $80 billion -- but often that surplus money ends up being redirected to help offset spending on unrelated programs that would otherwise place the budget into a deficit, he said.
DeMint said this reserve fund, which could only be spent on Social Security, would force politicians to be more responsible with their spending each year, and would also help Social Security remain solvent for longer.
"It will put a lot of pressure on both parties, Republicans and Democrats, to figure out how to cut wasteful spending and how to save the Social Security money we promised to future generations. If we put it in a reserve account, we will also start the process to create a funded Social Security system, a Social Security system that has real money so we can keep our promises to future generations."
The solvency of Social Security is an enormous issue that both parties must come to terms with -- Social Security's trustees estimated in 2005 that by 2017 the fund will be spending more than it's receiving in tax revenues, and will need to issue bonds to help make up the difference. The trustees also estimated that over the next 75 years, Social Security will face a revenue shortfall of up to $4 trillion.
Budget Committee Chariman Kent Conrad, D-N.D., said he agreed conceptually that Congress engages in "funny money accounting around here, taking Social Security money and using it to pay other bills," but questioned DeMint about how, then, the surplus would be spent.
"My amendment doesn't specify. Congress would have to determine that. As the Senator knows, as part of the budget process, this does not affect it happening. We would still have to perform the act of taking the money off the table," DeMint said.
Conrad then asked whether DeMint's amendment would prevent the walled-off money from going to fund "private accounts." DeMint said it would not. In 2005, President Bush tried to win congressional approval for a plan that would have allowed most people to redirect portions of their Social Security payroll taxes into private investment accounts. Reducing entitlement spending -- that is, money that Congress is obligated by law to spend for a specific purpose -- is a popular idea with fiscal conservatives, but even under a Republican-controlled Congress the plan was unsuccessful. Democrats are particularly wary of such suggestions, generally believing government-run Social Security, as opposed to a pseudo-privatized system, is the best way to ensure the welfare of all American retirees.
Democrats were successful in defeating the Republican-backed amendment, by a largely party line vote of 45-52. Four Republicans voted yes, siding with Democrats -- Susan Collins and Olympia Snowe of Maine, George Voinovich of Ohio, and Gordon Smith of Oregon. One Democrat voted no -- Claire McCaskill of Missouri. Thus, the budget resolution went forward without language that would have prevented Social Security surpluses from being spent on anything other than Social Security.
MAKING GOVERNMENT WORK FOR EVERYONE, NOT JUST THE RICH OR POWERFUL — Insuring Government Has Adequate Financing to Function
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