Jim Bunning: “Mr. Speaker, the Democratic alternative is not a good deal for Social Security. On the face of it, one might think that…”

“Mr. Speaker, the Democratic alternative is not a good deal for Social Security. On the face of it, one might think that putting aside $1.6 trillion in excess FICA taxes seems better than the $1.4 trillion the GOP would reserve at 90 percent of the total budget surplus. But the amendment adds risks to Social Security that are totally unnecessary. The Democratic substitute sends all excess FICA reserves and receipts to the Federal Reserve Bank in New York City where the central bankers are to invest them in marketable securities. The Fed's job is to control inflation and provide market liquidity, not invest Social Security funds. This is not the role of the Federal Reserve and only creates a conflict of interest. When the Federal Reserve buys securities to keep financial markets steady, what will it do with the FICA receipts? Will the Fed's first priority first be to stabilize markets or getting the best deal for Social Security? After all, investing FICA funds in marketable securities introduces a new risk, market risk from the changing prices of bonds, from which Social Security, under current Treasury investment practices, is spared.”