April 22,1999

Roth Statement on Social Security Lockbox

WASHINGTON -- Senate Finance Committee Chairman William V. Roth, Jr. (R-DE) today voted against a procedural motion to bring up a bill on the Senate floor that would have created a new debt ceiling in order to put Social Security surpluses in a "lock box". Roth submitted the following statement for the record:

"Mr. President, I rise to oppose the measure now before the Senate. This bill would create new budget procedures to prevent the spending of any surpluses attributed to Social Security, other than for reducing the public debt or for Social Security reform. Although this bill is well intended, in my view the bill is unlikely to accomplish its objectives and, worse, may have negative, unintended consequences.

"Before describing specific objections, let me first commend Senator Domenici for his leadership on the budget resolution and his commitment to Social Security. The FY 2000 budget resolution that passed Congress last week sets aside every penny of every dollar of the $1.8 trillion in Social Security surpluses expected over the next 10 years. This measure demonstrates unequivocally our commitment to protecting Social Security and to restoring confidence and accountability in Social Security's financing.

"On the other hand, the President's budget would spend $158 billion of the Social Security surpluses over the next 5 years, and even more thereafter. The differences between the President's budget plan and Congress's could not be more clear.

"Mr. President, the bill now before the Senate intends to provide additional protections against spending so-called "off budget" surpluses, by, among other things, creating a new public debt limit.

"In my view, the bill has serious substantive problems. The simple fact is that if Congress does not authorize spending, money cannot be spent. Debt is issued solely to pay for spending Congress authorizes. Indeed, Congress delegated its exclusive constitutional authority to borrow money on the credit of the United States in 1917 to the Treasury Department. Prior to 1917, Congress individually authorized each debt issue, specifying interest rates and maturity

"Over the years, debt ceilings have made little difference in preventing spending or deficits. But, as those of us who have been involved with debt ceiling legislation know too well, the need to raise the debt ceiling can and has often created a sense of crisis. Indeed, this bill could hamper the Federal government from paying its bills in a timely manner; injure the Federal government's credit standing; and limit the Treasury's flexibility to manage the debt in the most efficient manner.

"Having said that, the legislation before us does attempt to address some of these problems. For example, the bill contains exceptions for emergency spending, recession, and war. However, these exceptions seem to undo the very purposes of the bill, without providing the flexibility needed to properly manage the debt. Moreover, the language of the bill ensuring the timely payment of Social Security benefits should be strengthened.

"The best solution is to prevent spending, not to undo spending with a new type of debt limit. Indeed, the whole point of the 1974 Congressional Budget Act, and subsequent budget process legislation, has been to provide an organized, disciplined framework for consideration of the nation's budget and of public spending. If the current budget procedures are not adequate to prevent spending authorizations, new remedies should be devised without creating a new type of debt limit.

"I received a letter from Treasury Secretary Rubin which addresses the pending amendment. In this letter Secretary Rubin raises concern that the amendment, if enacted, could actually jeopardize the payment of Social Security benefits. This concerns me as well.

"Mr. President, I ask unanimous consent to enter the letter from the Treasury Secretary in the Record following my remarks."