Opening Statement of the Honorable E. Clay Shaw, Jr., M.C., Florida,
Chairman, Subcommittee on Social Security

Hearing on the 2000 Social Security Trustees Report

April 6, 2000

Today's hearing features the public trustees who helped compile the new 2000 Social Security Trustees' Report. Their 5-year service has now come to an end, and we thank them for that outstanding work. Their insights will certainly help us better understand the current and projected condition of the Social Security program.

Most attention this year focused on the Trustees' estimate that the Social Security trust fund will extend to 2037 - three years beyond last year's estimate of 2034.

That's a positive development, but we need to consider some context. Social Security's soundness always has been measured over 75 years, or long enough to span most people's working and retired years. Obviously, paying full benefits for only 37 years falls well short of that standard.

Current retirees need not worry about their benefits. But many workers under age 50 and most under 40 can expect to see 2037. What will their Social Security benefits be? How should they plan their retirement saving?

Our inability to answer those simple questions is one reason why the Trustees "again urge that the long-range deficits of both the OASI and DI Trust Funds be addressed in a timely way."

But that's still only half of the picture.

As the Trustees note, in only about 15 years Social Security benefits will cost more than taxes bring in. After that we can raise taxes, cut benefits, or borrow more each year to make up the difference.

And that difference is very real. In 2015 benefits will exceed taxes by $7 billion, widening to a $318 billion gap in 2037. In 2037, that would be like shutting down the Department of Defense and sending the money to Social Security. Between those years we need to find a total of $4 trillion to pay full Social Security benefits.

It's good we're using today's Social Security surpluses to pay down our current debt, which will strengthen our economy for the long run. But no amount of debt repayment or economic growth can substitute for real improvements to make Social Security sound for 75 years and beyond.

For those who see this year's report as cause for delay and inaction, here's one simple fact to remember:

We now need to find more than $1 trillion more than last year to pay full Social Security benefits over the next 75 years.

In spite of all the rosy headlines, Social Security's long-run deficits increased from $20 trillion to $21 trillion, almost without notice. So the clock is ticking, and the price tag of saving Social Security for all generations keeps going up with each year we delay.