America is getting older. As the baby boom generation enters retirement, pressures on the solvency of Social Security and Medicare will increase. I firmly believe in the preservation of both programs, and have supported legislation in Congress to put both Social Security and Medicare on a sounder fiscal foundation.

Social Security

Overview

• Social Security is our most important and most successful retirement-security program, and its long-term financial stability is important to everyone, not just senior citizens. To address long-term solvency, I support creation of a bipartisan solvency commission along the lines of the Reagan-Dole-O'Neill agreement in the 1980s. Let's put all options on the table, and engage the American people in a bipartisan approach and an up-down vote in Congress.
• No solution for long-term solvency will succeed unless and until the federal deficit is brought under control.
• I supported the bipartisan Pension Protection Act (PPA) of 2006 (H.R. 4), which confronted the financial insecurity caused by defaulting pension plans in some of the country's major industries. However, more changes are needed to help Americans plan for their retirement, including allowing participants in 401(k)-style retirement accounts have more control over their retirement funds, and increasing the allowed contribution to Individual Retirement Accounts (IRA's).

Millions of Americans rely on Social Security as an essential part of their retirement income. A majority of Americans over 65 years old rely on Social Security as their primary source of income. Forty-two percent of seniors rely on Social Security to keep them from poverty.

I believe Social Security has worked well for our country, but that will not continue unless every American has a stake in the program. That is why I have always opposed attempts to privatize Social Security. Younger Americans may not feel that Social Security works for them, but if you look at the success of this program since it was created in the 1930s, it is clear that it is beneficial for all Americans, even those who are not close to retirement because it keeps older family members out of poverty, it helps those with severe disabilities, and it provides a modest floor of income that younger workers ought to be able to count on as they age.

Despite the program's strengths, Social Security is facing a long-term solvency problem. Because of demographical changes, the number of Social Security beneficiaries will exceed the number of working citizens contributing to the program. The smaller ratio of contributors to beneficiaries will eventually create a shortfall, and most experts agree that unless the problem is addressed Social Security will not be able to fully pay all scheduled benefits after 2041, even if it is able to cash in all the Treasury bonds it is now accumulating by lending money to the rest of the government.

I was one of those in Congress in 1999-2000 who advocated a budget "lock box" for Social Security. Had we taken Social Security and preserved long-term funding when we enjoyed a budget surplus, we would not be facing the problem we can now see on the horizon. The Bush Administration rejected this very sensible idea, and, instead, the president and Congress engaged in fiscal policies that wrecked the budget surplus. Worse yet, the Administration uses the Social Security Trust Fund to mask the actual size of the federal deficit. That should stop. I am a cosponsor of legislation (H.R. 3654) to establish a bipartisan "Securing America's Future Economy (SAFE) Commission" that would develop legislation to:

1. correct the imbalance between long-term federal spending commitments and projected revenues;
2. promote greater national savings;
3. address the fact that so much of our national debt is owed to foreign governments; and
4. revise the budget process to put more emphasis on long-term planning.

Some have advocated solving the long-term Social Security short-fall through the diversion of some Social Security funds into private retirement accounts. I believe this is a terrible approach that will only lead to the erosion and privatization of the program. Diverting Trust Fund dollars out of Social Security will weaken the program and, worse yet, subject an otherwise stable social insurance system to one that is even more susceptible to market fluctuations and Wall Street speculators.

In addition, the diversion of Social Security funds into private accounts is not a solution to the impending budget shortfall. The hypothetically positive effects from the diversion of assets into private accounts will come too late to help compensate for the increase in beneficiaries from an aging population. Assuming optimistic growth at around 10% a year, the oldest Baby-Boomers will not have enough time to accumulate large personal accounts relative to their projected Social Security benefits in their lifetime. It will take 43 years to feel the full effect of a private diversion program -- way more time than we have to come up with a solution to the budget shortfall.

Instead of draining money out of the Social Security Trust Fund to finance "Individual Retirement Accounts" (IRAs), I believe we should be encouraging individuals to independently pursue private retirement options on top of Social Security. The more assets a family can accumulate and invest when they are working, the better off they will be in retirement. The federal government should encourage individual private investment by increasing the amount individuals can put into IRAs, enabling people to use their individual or employer-provided retirement accounts, making it easier for people to maintain their retirement accounts when they change jobs, and making it easier for employers to maintain retirement plans for their employees.

Pension Protection

Traditional pension plans are becoming less available to American workers, and that is leading to deeper concerns about retirement security. Most of us switch jobs many times before settling, if ever, into a final pension plan. So portability of pension benefits is important, and we also need to ensure that promises made by employers to their workers are kept, even when companies change ownership or close altogether. That is why, I am proud to say that in 2006, I supported the most comprehensive pension reform legislation in more than 25 years.

For those people relying on traditional pension plans, The bipartisan Pension Protection Act (PPA) of 2006 (H.R. 4) confronts the financial insecurity caused by defaulting pension plans in some of the country's major industries. Along with making it easier for employers to sponsor quality retirement benefits programs, it includes several provisions to protect the solvency of existing pension plans, including:

• Providing more protection for multi-employer pension plans. The PPA establishes a new set of rules for improving the funding of multiemployer plans that the law defines as being in "endangered" or "critical" status.
• Requiring that employers fund their pension plans. The PPA establishes new funding requirements for single employer defined benefit plans that require plan funding to be equal to 100% of the plan liabilities, and require any unfunded liability to be amortized over seven years.
• Prohibiting employers from promising extra pension benefits if their plan cannot afford it. In most cases the PPA prohibits plans that are funded at less than 60% of full funding from paying any shut-down benefits, benefit accruals, and from making lump sum distributions. The law also prohibits the plan sponsors from making any amendments that increase benefits if the plan is funded at less than 80% of the full funding level unless the employer makes additional contributions to fully fund the new benefits.
• Requiring employers to disclose more information about the status of their pension plans. The PPA requires plan sponsors to notify participants when the employer's actions are restricted because the plan is funded at less than 60%. It requires all single-employer defined benefit plans to distribute an annual funding notice to participants and requires plan sponsors to provide participants in defined contribution plans with quarterly benefits statements if the investments are participant directed and annual statements if the investments are not participant directed.

The new law is important, but it is not the last word on pension protection. More changes are needed including those that ensure that participants in 401(k)-style retirement accounts have more control, including the ability to take the plans with them from job-to-job, and to make additional contributions to their retirement funds. I also support legislation to increase the allowed contribution to Individual Retirement Accounts (IRA's) and other steps to make it easier for people to save while they are working in order to be able to supplement any income they may get from pensions.

As our economy changes and health care costs increase, and as the pressures of global competition make the future less certain for retirement planning, I believe we should look for ways to encourage more savings, including tax credits for older Americans, reform the estate tax and make it easier for families to plan their retirement security.

Health Care

Improved health care for seniors should be a national priority. Unfortunately, Congress and the Bush administration have missed opportunities to make a bad situation better. The Republican-controlled Congress passed Medicare reform legislation in 2003, but the system is confusing and seniors continue to struggle to pay for life-saving medications. I will continue to work with other members of Congress to make improvements to the 2003 Medicare Reform Bill so that it better serves the health needs of our seniors. These improvements include:

• Preserving health care for seniors in rural areas. I am an original co-sponsor of legislation to continue Medicare Cost Contract health plans, which are of particular concern to seniors who live in rural Colorado. Medicare Cost Contracts are managed care plans that are reimbursed on a cost basis for providing care. The premiums cover deductibles and other services not covered by traditional Medicare, and seniors can use any Medicare provider. Under current law, these plans will expire unless Congress acts to extend them.

• Closing the "donut hole" in the Medicare prescription drug program . Under current law, seniors who spend more than $2,400 in drug costs are responsible for paying 100% of their drug bills until they reach $5,100 in costs. This is known as the "donut hole" and it has placed an incredible burden on seniors who have chronic illnesses. We can close the gap in coverage by eliminating the $12 billion stabilization fund - which is a slush fund for insurance companies -and curbing excessive payments to insurance companies that participate in Medicare Advantage. Currently, insurance companies are paid 12 percent more than traditional Medicare plans and the Congressional Budget Office estimates that these overpayments will equal at least $54 billion over the next five years. These overpayments and the stabilization fund can be redirected into providing actual drug coverage for seniors.

• Rollling back physician payment cuts. The Bush administration has proposed cutting Medicare physician payments by 10 percent in 2008. This will have a devastating effect on seniors' ability to find or keep a doctor. Ultimately, the formula that determines Medicare physician payments needs to be changed so that it accurately reflects the cost of providing health services, however, in the meantime, I support preventing these cuts from going into effect and will work with my colleagues to make sure seniors have access to doctors.