Statement of the Hon. John E. Baldacci, a Representative in Congress from the State of Maine

I am pleased that the committee has convened these hearings to discuss the important topics of benefit guarantee certificates, benefit improvements for women, and changes to the Social Security Statement and Trustees Report.  It is good to see serious attention paid to the future of the Social Security program, which is the foundation of America’s retirement security and a crucial source of support for disabled Americans.

Let me say that I deeply support the idea of strengthening Social Security for women.  I also agree that Americans should know the facts about the Social Security system, so that as a society we can have an informed debate about the best way to provide for retirees and the disabled.   I appreciate this committee’s leadership in bringing these topics onto the agenda. 

However, there are many troubling aspects to the specific proposals discussed so far in these hearings.  Some of the benefit adjustments meant to aid women are reasonable and involve relatively low costs on the system.  Others however, impose high costs that further imperil Social Security solvency for a relatively narrow benefit.  At a time when we are trying to preserve Social Security for future generations, any proposals with such significant revenue implications must be considered in the context of an overall plan to reform the program, or they will only make our challenges even greater. 

I also believe that the proposal to issue benefit guarantee certificates is misguided.  The nonpartisan Congressional Research Service has found that these so-called “guarantees” would not confer any additional rights beyond those already contained in current law.  Certificates would only serve to give Americans a false impression.  The real question is: if the President and this Congress are truly serious about safeguarding Social Security, and have no intention of taking away benefits, why would we need to spend $10 million of taxpayer money to announce something that will not happen anyway? 

Unfortunately, the truth is that the specter of gutting the system and cutting benefits is all too real.  I have been seriously troubled by the testimony that has occurred during these hearings in support of the President’s Commission on Social Security’s three privatization schemes.  Several witnesses have used this forum to promote private accounts as the long-term solution to Social Security solvency.  The fact is that the leading plan proposed by the President’s commission would drain $1.5 trillion from the Trust Funds in just the next 10 years.  This is no formula for future solvency. 

Even worse, the commission’s plans propose cutting benefits for future retirees between 30 and 46 percent, reducing disability and survivor benefits, raising the retirement age, and drawing on general revenues. All of this for an approach that would, by definition, create as many losers as winners in the private investment market.  This is a terrible deal both for retirees and the disabled. In fact, this approach would hurt the very group that we are supposed to be trying to help in these hearings: women.  Privatization would remove the guaranteed, lifetime, progressive benefits that are the lifeblood of retirement for women.  Anyone who is serious about protecting women’s interests in retirement would oppose the commission’s plans. 

In closing, I believe that the committee is talking about the right subjects.  We need to have a serious discussion about the future of Social Security, and that discussion must begin with a solemn agreement not to cut benefits for retirees.  We should also be talking about how to enhance this program for women, and how to make it more fair and effective for everybody.  I hope that we can continue to have this discussion throughout the remainder of this session, and that we can find ways to strengthen Social Security for all Americans.