May 26,2016

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Hatch Charts Path Forward for Consideration of Trustee Nominations

Utah Senator Says, "Despite some insinuations to the contrary, my plan all along has been to hold votes in the Finance Committee on the President’s nominees for the public trustee positions as soon as possible.  I look forward to filing the existing vacancies.”
WASHINGTON – In a speech on the Senate floor today, Senate Finance Committee Chairman Orrin Hatch (R-Utah) called on colleagues to put politics aside when considering pending nominations of the Social Security and Medicare Boards of Trustees.
“All of this political bluster over the public trustee nominations – every single word of it – is a political sideshow,” Hatch said.  The public trustees serve a limited, but important, role in monitoring and reporting on the system.  That is all.”  
Hatch reiterated the important role of the Social Security nominee and the need to keep the trustee boards free of partisan politics.
“While this may be par for the course during an election year, there is more than politics at stake here,” Hatch said. “If we turn these nominations into just another political battleground, the trustee reports will eventually be viewed as political documents, having no unique seriousness or credibility.  In the end, that will mean less transparency, objectivity, and integrity for Social Security and Medicare.”
The complete speech as prepared for delivery is below:
       Mr. President, I rise today to speak about pending nominees for the Social Security and Medicare Boards of Trustees.
       As most of us know, under the law, these two boards consist of the Secretaries of Treasury, Labor, HHS, the Commissioner of Social Security, and two public trustees, one from each party.  One purpose of the boards is to provide yearly reports on the operation of the trust funds and their current and projected status.   
         Since 1983, when the two public trustee positions were established in the statute, the trustee reports for both trust funds have largely been devoid of partisanship or political influence.  
        That, to me, has been a good thing.
         It means the process generating the reports is free of political influence.  It also means that the public can have confidence that the statements and assessments made in the reports – including those dealing with current and future financial conditions of the trust funds – are objective and not made to serve a particular agenda.
         The inclusion of public trustees on the boards is an important part of the structure that provides this type of certainty.  Yet, by the time President Obama is out of office, the two boards will have issued more reports with vacant public trustee positions than have been issued under any President since the two positions were created.
          In a recent hearing, the Senate Finance Committee, which I chair, heard testimony from President Obama’s nominees for the currently vacant public trustee positions, Dr. Charles Blahous and Dr. Robert Reischauer, both of whom have been re-nominated after serving one full term on the boards.
         Some Members of the Finance Committee, as well as a few others in this chamber, have questioned whether having public trustees serve more than one term is beneficial.  Their argument seems to be that the process of producing the trustees’ reports should have “fresh eyes” every four years.
         However, to me, this argument is not all that persuasive.
         As the trustees go through the process of producing reports, there are many inputs and many participants, including a number of “fresh eyes.”
         For example, there are numerous technical panels, composed of actuaries, economists, demographers and others, who review the assumptions and methods used in the trustees’ reports.  Since 1999, 50 different people have served on these technical panels, weighing in on the reports and providing both fresh perspectives on the trustees’ reports as well as a much-needed check on what could otherwise be outsized roles played by various others, including the Chief Actuary of Social Security Administration, in guiding the contents of the reports.
        In my view, there is value to having continuity in the public trustee oversight of the trust funds, particularly since the process that gives rise to trustee reports takes time to learn.  For the most part, public trustees are unlikely to have fully learned the ropes until well into their four-year terms and their terms likely expire very shortly after they have a complete understanding of the process.   
         Ultimately, while there are probably some tradeoffs associated with term limits for public trustees, there is no real evidence to demonstrate that a single term is inherently superior or that the benefit of having public trustees with “fresh eyes” outweighs the costs of inexperience.
         Whatever the case, members are entitled to their individual preferences regarding term limits for public trustees, and, if the issue is as important as some of my colleagues on the other side claim, a bill to impose those kinds of term limits would seem logical.   However, such a bill has not recently been offered.
          And, if the recent Finance Committee hearing on the current nominees is any indication, my friends have a different agenda altogether.  If term limits were the real issue with these nominations, the committee could have had a reasoned debate and each member could have weighed in on the matter.  And, members would obviously be free to base their vote on the substance and outcome of that reasoned debate.
            Sadly, a reasoned debate is not what occurred in our committee.  What we got instead was a coordinated attack – pretty much from the Ranking Member all the way down the Democratic side of the dais – focused squarely on the Republican nominee, Dr. Blahous.
            Throughout the course of the hearing, the Democrats never claimed that Dr. Blahous lacked the appropriate credentials to be a suitable trustee.  They never provided any evidence that he had acted inappropriately or exercised some kind of nefarious influence in the process of compiling reports.
           Instead, my colleagues attacked the nominee for expressing policy views that they happened to disagree with.  He has never worked to change any Social Security or Medicare policies in his capacity as a public trustee, because, given the very specific mission of the Boards of Trustees, he doesn’t have any real opportunity to influence or enact any policy changes in any official capacity.   
          The Democrats’ current position seems to be that, if a nominee has EVER said anything they happen to disagree with – even if the statements represent reasoned policy views and are supported by objective analysis – they are unfit to serve as public trustees.
         And, during the course of our hearing, not only did the Democrats publicly subject the nominee to this preposterous standard, they did so with comments and arguments that were misleading, inconsistent, or blatantly false.  In the end, their onslaught amounted to little more than partisan character attacks.
          The Republican nominee was referred to as “hyper partisan,” even though you’d be hard-pressed to find ANY credible and reasonable Social Security and Medicare analyst from either party who would agree with that label.  
           He was accused of being the “architect of privatization” of Social Security, because he happened to work in the Bush Administration.
            He has been attacked for his involvement in President Bush’s Commission to Strengthen Social Security, as though that was something nefarious, even though Senator Daniel Patrick Moynihan, a figure long revered by Democrats everywhere, was also a co-chair of that commission.
          There have been other attacks made, in the hearing and elsewhere, and all of them add up to one single and obvious conclusion, which is that anyone who expresses a view about the future of Social Security that is not a recommendation for more taxes and higher benefits will be subject to partisan attacks and deemed unfit to serve in any capacity relating to Social Security.      
         This is, of course, the demand of left-wing interest groups who have virtually declared ownership of all things Social Security.
         For this crowd, even arguments in favor of slowing the growth of benefits for upper earners seem to be off limits, even when they are made by the Democrat nominee for public trustee.  In other words, even proposals that would make Social Security more progressive – something a reasonable person would assume Democrats wouldn’t fight – is seemingly unacceptable because slower benefit growth, even for the very rich, is considered a “cut” to the left-wing activists who try to take ownership of this debate.
        I’m talking, of course, about organizations like Social Security Works, the Strengthen Social Security coalition, various unions, and “democratic socialist” groups that have made intransigence and unreasonableness on Social Security a hallmark of their efforts.
        For these people, the only allowable discussion on Social Security is one limited to talk of higher benefits and higher taxes.  Anyone who disagrees will not only be refuted or opposed, they will be publicly maligned and their characters will be called into question.
        Indeed, for many of these groups – and, sadly, for some of my colleagues on the other side of aisle – these efforts are not about winning the public policy debate, they are about silencing and trying to censor anyone who dares to express a contrary opinion.
       In even-numbered years, Republicans have more or less gotten used to hearing that we want to see Social Security “slashed” and “privatized,” or “turned over to Wall Street.”  Left-wing activists – and, yes, even a number of our colleagues – base a huge portion of their fundraising efforts on scaring Social Security and Medicare beneficiaries with those kind of over-the-top attacks.
       But, for once, when it comes to Social Security, I wish we could look at the facts.
For example, everyone knows that we made some changes to Social Security last year in order to prevent imminent and legally-required cuts to disability benefits.  We did so based on the projections of the Social Security Trustees.
       Did we “slash” benefits?
       Did we privatize anything?
       Did we turn anything over the Wall Street?
       Of course not.  What we did was make reasonable and needed changes to the program.
But that didn’t stop many on the other side from sounding the privatization alarm and raising money by scaring beneficiaries, even if they were as aware as we were that the cuts to disability benefits were, absent changes, an absolute certainty.   
        We got precious little help from the Democrats in our efforts to AVOID benefit cuts, because, as is too often the case around here, complaining about a problem and blaming the other side for it makes for better politics than finding a solution.  
         And, that same strategy and those same attacks have now permeated the effort to confirm two of President Obama’s nominees.
        Like I said, the Republican nominee for public trustee has been accused of being many things.  More than anything, some of my colleagues have tried to link him to some supposedly ongoing effort to privatize all of Social Security and hand everything over to Wall Street.
         Never mind the fact that he’s already served in the very same position for four years and Social Security is no closer to being in the hands of Wall Street than it was before.
         Never mind the fact that he was already confirmed to the very same position once before without any opposition on the Senate floor.
         Never mind anything that has happened in the past.  Here and now, according to my colleagues, he is controversial.
         Here and now, letting him serve as public trustee would be like having a fox guarding the henhouse or some such nonsense.  By the way, that phrase – “fox guarding the henhouse” – is an actual quote from one of our colleagues describing Dr. Blahous.  Apparently, he became a “fox” sometime in the last six years, because, in 2010, no one in the Senate objected to his confirmation.
          But, here in 2016, there are apparently some Democrats who feel that they need to use this nomination and their partisan rants against it to raise money for their campaigns and, perhaps in a case or two, boost their prospects for higher office.  
        Of course, none of this is entirely surprising, because, years ago, probably in some Democrat war room, my friends on the other side discovered that terms like “privatization” and “Wall Street” and “cuts” poll well with their political base.  
        As an aside, this favorable polling data also probably explains why we heard their party’s presidential frontrunner, back in February of this year, make the following claim:  “After Bush got reelected in 2004, the first thing he said was, let’s go privatize Social Security…And you know what, their whole plan was to give the Social Security trust fund to Wall Street.”
          There are at least three or four poll-tested buzz words in that quote.  If nothing else, Secretary Clinton deserves at least some praise for focus-group efficiency with that statement.
         Of course, in dissecting that claim, the Washington Post assigned it three Pinocchios, concluding that it is false.  In fact, the Washington Post reminded us that the Clinton Administration was the first to consider investing Social Security trust fund resources into something other than low-yielding government bonds.
         So, in a sense, the real “architect of privatization” was President Bill Clinton, not President George W. Bush, and certainly not the current Republican nominee for public trustee.  
          Furthermore, if simply considering alternative investment strategies for trust fund dollars means “privatization,” then the growing list of guilty privatizers has recently included a Democrat in the House, the AARP, a Nobel Prize winning economist, and many others.  And not all of them are Republicans, Mr. President.
         Let me return to the debate over public trustee nominations, because, quite frankly, the Democrats make so many misleading claims with regard to Social Security that I couldn’t begin to address them all in a single floor speech.  
          A recent article in Politico outlined the plan devised by top Senate Democrats to engage in “an election-year battle” over Social Security in general and the public trustees in particular.  In relation to Dr. Blahous, the article says that:  “Democrats point to several instances in the trustees’ reports released after Blahous joined the board that they say suggest the Social Security trust fund is less solvent than it really is.”
         That almost sounds like a legitimate policy argument, Mr. President, provided you don’t think about it for longer than 30 seconds.  There are, quite simply, countless reasons why that argument is entirely baseless.
         First of all, no one in the Obama administration has corroborated a single one of these claims in any way, shape, or form.
        On top of that, this claim seems to suggest that one public trustee – a Republican – has had such a persuasive and misleading influence that he has been able, for more than four years, to hoodwink five Democrat trustees, including Dr. Reischauer, the other current nominee, along with Treasury Secretary Lew, Labor Secretary Perez, HHS Secretary Burwell, and Acting Social Security Commissioner Colvin, all of whom also signed onto those trustees reports.
         Does anyone believe that for a second?
        I’m going to give my friends some advice: If a political attack relies on an assumption that the sitting Secretaries of Treasury, Labor, HHS, and the Acting Commissioner of Social Security, along with their staffs, are so impotent in the face of the cunning sophistry of a single public trustee from the opposing party, it’s best to leave that particular conspiracy theory on the shelf, because it doesn’t even pass the laugh test.  That is, of course, unless you assume at the outset that members of President Obama’s cabinet, along with their staffs, are incompetent, or just plain dumb.    
        Aside from being based on foolish assumptions, the claim that recent trustee reports have been biased is verifiably false, given that the nonpartisan Congressional Budget Office has reached similar conclusions about the solvency of Social Security.  In fact, CBO’s projections are even bleaker.
         Perhaps my Democratic colleagues believe that Dr. Blahous’s dastardly influence has extended to CBO as well, though, to be fair, I haven’t heard any of them claim that such is the case.
         Mr. President, all of this political bluster over the public trustee nominations – every single word of it – is a political sideshow.  The public trustees do not have the power or ability to slash or privatize Social Security or turn a single penny of any public funds over to Wall Street.  They serve a limited, but important, role in monitoring and reporting on the system.
        That is all.
       Any reasonable observer will tell you that both of President Obama’s nominees for public trustee have solid reputations as being fair, objective, balanced, and, most important, highly competent.  
         I don’t personally agree with all of the policy positions that the Democratic nominee, Dr. Reischauer, has put forward over the years, but he has always conveyed his ideas in a temperate and respectful manner without partisanship or ad hominem attacks.  Quite frankly, I also may not even agree with all the positions that the Republican nominee, Dr. Blahous, has put forward, but he similarly conducted himself in a respectful and non-partisan manner.   
         The fact of the matter is, Mr. President, whether certain Democrat Senators like it or not, the law requires that one of the public trustees be from the Republican Party.  If someone wants to put forward legislation to change that, or to impose term limits on trustees, or even start a public debate on those issues, they are free to do so.  Similarly, if a Senator disagrees with a prospective trustee’s positions on policy or with something they’ve written outside of their public trustee functions, that Senator is also free to vote against that nominee on that basis.    
           However, Mr. President, it is, in my opinion, shameful for members of Congress to engage in unreasonable and false character attacks in order to reinforce a presidential candidate’s talking points or to raise money from left-wing activists.  It is wrong, under any circumstances, to impugn someone’s character and professionalism by false association.
           While this may be par for the course during an election year, there is more than politics at stake here.  If Democrats truly have an interest in the integrity of Social Security and Medicare, and their trust funds, then politicizing public trustee nominations is an extraordinarily odd strategy.  If we turn these nominations into just another political battleground, the trustee reports will eventually be viewed as political documents, having no unique seriousness or credibility.  And, in the end, that will mean less transparency, objectivity, and integrity for Social Security and Medicare.
          This would be unfortunate, Mr. President.   
           To conclude, I would just say that, despite some insinuations to the contrary, my plan all along has been to hold votes in the Finance Committee on the President’s nominees for the public trustee positions as soon as possible.  I look forward to filing the existing vacancies.
           The trustee reports for Social Security and Medicare have historically been void of politics, to the credit of the current and past administrations as well as the public trustees from both sides of the aisle.  My sincere hope is that we can keep it that way.
           With that, I yield the floor.