Mr. Chairman, I want to thank you and Ranking Member Matsui for allowing me to testify today.

Social Security is the bedrock of American retirement security. Since President Franklin Roosevelt signed it into law in 1935, Social Security has been our nation's most successful government initiative lifting millions of seniors and working families out of poverty. But, there was a time before Social Security, Mr. Chairman, a time when seniors suffered in abject poverty. Too many couldn't afford basic human needs like food and shelter. Too many died homeless in the streets.

The creation of Social Security is one of the landmark achievements of the 20th Century. Together, we declared that seniors should not be forced to live in third-world poverty here in America. Together, we made a compact with our seniors like my mother and my mother in-law that would last from generation to generation. That compact said that if you work hard all of your life; you and your family will be cared for in your old age.

Mr. Chairman, Congress does not have the right to break that compact.

Now, Social Security is facing a serious challenge. The solvency of the system will deteriorate over the next few decades and we must act to up hold our end of the compact. There are those, including the President, who feel that privatizing Social Security is the answer to this problem. I disagree.

Last year, the President appointed his Commission on Social Security. Unfortunately, that Commission was a stacked deck. Every member on the Commission supported privatization. The Commission was forced only to consider privatization plans and did not include a single member who represented the groups that would be most effected by changes in the system - beneficiaries, minorities, women, and seniors. In the end, the Commission offered three flawed plans to privatize Social Security, and failed to provide a plan to restore solvency to the system.

Mr. Chairman, I cannot support any privatization plan that would jeopardize the retirement security of our seniors and working families. The recent Enron scandal clearly demonstrates that we cannot allow the retirement security of working Americans to become the victim of unrestrained corporate greed. Social Security was designed to be a safety net compact between generations, not a privatized vehicle of massive wealth for some and massive poverty for others.

There are many problems with privatizing Social Security. First, taking money out of the Trust Fund to create private accounts would fundamentally weaken the system. One plan offered by the President's Commission would remove $1.5 trillion from the Trust Fund over 10 years. Republican Leader Armey's privatization bill, H.R. 3135, would drain the Trust Fund of so much money that Social Security would begin paying out more benefits than it brings in by 2003 - next year.

Privatization also means benefit cuts. Another of the Commission's plans would reduce the benefits promised to future retirees by 46%. Every privatization plan has a "clawback" provision. That means that in a privatized system beneficiaries will not receive both the full value of their private account and along with their full Social Security benefits.

In addition, a system based upon individual accounts would also disproportionately hurt women because they would suffer from low account deposits and likely lose their spousal benefits. Minorities would be literally short-changed because private accounts would erode the progessivity of the system. Finally, the transition costs associated with privatization puts the system's solvency and the retirement security of those who depend on it at risk.

The Republican Majority now proposes to issue sham certificates to Social Security recipients. This reminds me of last year's tax cut, when the Republican Leadership decided to use taxpayer dollars to send letters to every American informing them that they were going to get a tax cut. A constituent of mine from Rocky Mount received one of those letters. It promised her and her family $600. When her check arrived, all she got was $3 and change. She had to sell the family car to pay her family's bills. She was counting on that money.

Mr. Chairman, people count on their Social Security benefits too. And these guarantee certificates would not be worth the paper they would be printed on. We can find something better to do with the $10 million it will cost to send out these worthless certificates. Folks in my District have learned the hard way to be skeptical when this Administration promises them "the check's in the mail."

I am willing to work with anyone in good faith to strengthen the bedrock that is Social Security. But, we must put aside partisan gimmicks and ideological differences like phony guarantee certificates and privatization plans that would only make Social Security's budgetary problems worse. I urge this subcommittee and all of my colleagues in the House to get serious about Social Security reform. Time is running out.

Thank you Mr. Chairman for allowing me to join you today.

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