Text 299, 526 rader
Skriven 2005-01-11 23:33:12 av Whitehouse Press (1:3634/12.0)
Ärende: Press Release (0501114) for Tue, 2005 Jan 11
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President Participates in Conversation on Social Security Reform
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For Immediate Release
Office of the Press Secretary
January 11, 2005

President Participates in Conversation on Social Security Reform
Andrew W. Mellon Auditorium
Washington, D.C.

President's Remarks
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˙˙˙˙˙In Focus: Social Security

10:50 A.M. EST

THE PRESIDENT: Listen, thanks for coming today. As you can see, I am joined
by some fellow citizens here on the stage who have come to talk about one
of the great causes of our generation, and that is how to strengthen and
save Social Security for generations to come.

I know this is an issue that some would rather not be talking about. It's
an issue that is kind of -- I think some think has got too much political
danger attached to it, and so, therefore, let's just kind of, maybe, move
it down to the next group of people coming to Washington, or maybe things
will get better by ignoring it. That's not what I think. And today I want
to talk about why we have an issue with Social Security, why I believe
those of us who have been elected to office have an obligation to do
something about it, and then I want -- and give some ideas, some
constructive ideas to Congress as to how to deal with the issue, and then I
want others to share with me their ideas.

And we've got some people who have come a long way -- flown all the way to
Washington, D.C., to share some thoughts with the President. And I think
you'll find their stories interesting. I certainly did, when we had a
little discussion a little bit ago.

First, let me tell you how much, I understand, Social Security has meant
for generations of Americans. I mean, Franklin Roosevelt, in thinking
boldly, envisioned a Social Security system where Social Security would
help seniors with their retirement. And the system worked for a lot of
people. And it's been a -- an incredible achievement, if you think about a
piece of legislation being relevant for nearly 70 years.

The problem is, is that times have changed since 1935. Then, most women did
not work outside the house, and the average life expectancy was about 60
years old -- which for a guy 58 years old, must have been a little
discouraging. (Laughter.) Today, Americans, fortunately, are living longer
and longer. I mean, we're living way beyond 60 years old, and most women
are working outside the house. Things have shifted.

The Social Security system is not a personal savings account. The Social
Security system is not an account where money is earned. The Social
Security system is an account where money comes out to pay for retirees and
is put in the system by people who are working. And that's changed. More
and more retirees have taken out money relative to the number of people
putting money in. In the '50s, there were 16 workers for every beneficiary.
So the system was in pretty good shape. Today, there's three workers for
every beneficiary. Relatively quickly, there's going to be two workers for
every beneficiary. And that's a problem. And that's a problem because in
the year 2018, in order to take care of baby boomers like me and --
(laughter) -- some others I see out there -- (laughter) -- the money going
out is going to exceed the money coming in.

That's not a good thing. It means that you're either going to have to raise
the taxes of people, or reduce the benefits. And the longer you wait, the
more severe the pain is going to be to fulfill the promise for a younger
generation of workers coming up. As a matter of fact, by the time today's
workers who are in their mid-20s begin to retire, the system will be
bankrupt. So if you're 20 years old, in your mid-20s, and you're beginning
to work, I want you to think about a Social Security system that will be
flat bust, bankrupt, unless the United States Congress has got the
willingness to act now. And that's what we're here to talk about, a system
that will be bankrupt.

Now, I readily concede some would say, well, it's not bankrupt yet; why
don't we wait until it's bankrupt? The problem with that notion is that the
longer you wait, the more difficult it is to fix. You realize that this
system of ours is going to be short the difference between obligations and
money coming in, by about $11 trillion, unless we act. And that's an issue.
That's trillion with a "T." That's a lot of money, even for this town.

And so I'm looking forward to working with Congress to act. We've got an
expert from the Social Security system that will talk about "the problem."
And I'm going to talk about "the problem." You know, the problem is that
some in Congress don't see it as the problem. They just kind of think that
maybe things will be okay. But the structure of Social Security is such
that you can't avoid the fact that there is a problem. And now is the time
to get something done.

Now, I've talked about this, and I want the people to clearly understand,
if you're a senior receiving your Social Security check, nothing is going
to change. Those days of politicizing Social Security, I hope, are in the
past. A lot of people who ran for office and if they even mentioned the
word, Social Security, there would be TV ads and flyers and people knocking
on doors saying, so-and-so is going to ruin Social Security for you. There
is plenty of money in the system today to take care of those who have
retired or near retirement. The issue really is for younger folks.

That's why we've got some younger folks up here. Not all of us are younger
folks, are we? (Laughter.) Most of them are younger folks. I no longer
qualify. (Laughter.) But younger people are listening to this issue. You
know, I've traveled a lot. I campaigned on this issue of Social Security,
and the need to strengthen it and reform it. I didn't shy away from it in
2000; I certainly didn't shy away from it in 2004. I laid it out there for
the people to hear. I said, vote for me, and I'm going to work with
Congress, see if we can't get something done to solve the system.

This is part of what -- this is part of fulfilling a campaign pledge. I
wouldn't be sitting here if the people said, we don't want anybody to touch
it; we think it's okay. Most younger people in America think they'll never
see a dime. That's probably an exaggeration to a certain extent, but a lot
of people who are young, who understand how Social Security works, really
do wonder whether they'll see anything. My attitude is, once we assure the
seniors who will receive Social Security today that everything is fine, I
think we've got a shot to get something done, because younger Americans
really want to see some leadership.

I said we're not going to run up the payroll taxes. I think running up
payroll taxes will slow down economic growth. This economy is beginning to
kick in, it's beginning to make sense. I think we can solve the problem
without increasing payroll taxes. (Applause.)

I also threw out another interesting idea -- it's certainly not my idea,
because others have talked about it, and that is to allow younger workers,
on a voluntary basis, to take some of their own money and set it aside in
the form of a personal savings account -- a personal savings account which
is their own; a personal savings account which would earn a better rate of
return than the money -- their money currently held within the Social
Security trust; a personal savings account which will compound over time
and grow over time; a personal savings account which can't be used to bet
on the lottery, or a dice game, or the track. In other words, there will be
guidelines. There will be certain -- you won't be allowed just to take that
money and dump it somewhere. In other words, there will be a safe way to
invest, to be able to realize the compounding rate of interest.

I've heard some say, well, this is risky to allow people to invest their
own money. It's risky to let people say, you can take your money that's
supposed to be for a retirement account and put it on the lottery, I
realize that. But it's not risky. Federal employees -- the Thrift Savings
plans invest under certain guidelines, and I don't hear them screaming it's
risky. It makes sense to try to get a better rate of return on your money,
if you expect there to be a Social Security system which is going broke.
And that's what we're talking about.

Owning your own personal savings account does two other things. One, it
allows you to pass on your savings to whoever you choose. You can't do that
in Social Security today. If you pass away earlier than expected, that
money that you put in the system is gone. And at the same time that you
manage your own account, you own your own account. I love promoting
ownership in America. I like the idea of encouraging more people to say, I
own my own home, I own my own business, I own and manage my health
accounts, and now I own a significant part of my retirement account.
Promoting ownership in America makes sense to me to make sure people
continue to have a vital stake in the future of our country.

And so I want to thank you all for coming today to give me a chance to
address the Social Security issue. I plan on talking about it a lot. This
isn't the first time I've talked about it since the campaign is over, and
it's certainly not going to be the last, because I believe it is a vital
issue. And I know that if we don't address the problem now, it will only
get worse with time. And I believe there is a fundamental duty, for those
of us who have been given the honor of serving the American people, to
solve problems before they become acute, and not to pass them on to future
Presidents and future generations.

Now, I want to talk to Andrew Biggs. He is the Associate Commissioner for
Retirement Policy at the Social Security Administration. To me, that says,
expert. (Laughter.) I don't know if that's fair to call you an expert or
not.

* * * * *

THE PRESIDENT: Yes, that's good. How old are you?

MR. BIGGS: I'm 37.

THE PRESIDENT: Man, I wish I was 37. (Laughter.) Thirty-seven, talking to
the President. That's great. (Laughter.) You ought to be concerned. I mean,
you're one of these people -- yes, good. Well, I appreciate you helping.

You see, what he just said is, there is a problem. I happen to believe
people who have been elected to office who ignore problems will face the
price at the ballot box. I think more and more people recognize we have a
problem. We've got a 37-year-old person here describing a problem. More and
more people understand we have a problem. And the more people see it, the
more it's expected we do something about it. And as Andrew said, he said,
we better start now. That's why it's important that we have this dialogue.
And that's why I'm going to continue dialoguing and talking to the
leadership in Congress about, let's solve it now, let's do our duty.

Let me talk to Scott Ballard. He is from the great state of Washington.
That's a long way away.

MR. BALLARD: That's right.

THE PRESIDENT: Brought your lads with you, I noticed.

MR. BALLARD: Yes.

THE PRESIDENT: Your sons. Yes, they had never been to Washington -- I said,
have you ever been to Washington? He said, I live in Washington.
(Laughter.)

MR. BALLARD: Yes. (Laughter.)

THE PRESIDENT: Pretty good line, you know? I meant, the District of
Columbia, Washington. So what do you do, Scott?

MR. BALLARD: Well, my brother and I own and operate a private ambulance
service. It was started by our parents in 1967. And my brother and I
purchased it from them in 1986.

THE PRESIDENT: And why are you here? Besides bring your lads to the other
Washington?

MR. BALLARD: Right. Well, first of all, I'm in a fairly unique situation,
in that probably two-thirds of our customers are on Social Security. Yet
the majority of my work force are in their early 20s, some of them are in
their early 30s. So we have a lot of people that I work with currently who
are on Social Security, and a lot of younger employees who will be impacted
by these proposed changes.

THE PRESIDENT: So, like, if they were here, what would your younger
employees say about Social Security? Do they ever talk about it? Do they
ever think about it, do they ever --

MR. BALLARD: Not really. They don't talk about it too much, but I think if
some of the changes that you are proposing are implemented, I think they
will talk about it a lot more, and I think they'll take a much greater
interest in it. We've seen that with our company 401(k) plan. Most of them,
they don't talk about retirement at all, but once they start seeing
something on paper, saying, oh, that's mine, and it's been in there a few
years and they start to see it build, they become more interested in it,
and they start doing whatever they can to manage it and make it grow so
it's there when they retire.

THE PRESIDENT: That's kind of an interesting thought, isn't it -- when you
see it on paper, the value of something, you begin to actually pay
attention to what causes values to go up -- good policies that enhance
growth. And what Scott just said is, he talked about the first change in
retirement in America was the movement toward defined contribution plans,
which 401(k)s, which really has promoted an ownership society, hasn't it? I
mean, people wake up and they look at their account, and say, I'm so sure
this person's policies are beneficial to my being able to earn a better
rate of return. You pay attention because it's their own money. It's one of
the benefits of a personal account in Social Security.

* * * * *

THE PRESIDENT: Right. Good. I appreciate you sharing that. (Applause.) Make
sure you tell your customers -- tell your customers, nothing changes with
Social Security for them. And tell your younger workers, they can do
something about it. They can write their senators, they can write their
congresspeople. You can let them know you expect the members of the United
States Congress to hear the fact that there's a problem, and then to do
something about it. That's what they can do.

We've got with us Bob McFadden. Looking sharp. (Laughter.) I didn't come
close, I know. (Laughter.) Thanks for coming. I appreciate you taking time
to be here. You are from Medford, New Jersey.

MR. McFADDEN: Yes, sir.

THE PRESIDENT: And why have you come from Medford, New Jersey to share some
thoughts?

* * * * *

THE PRESIDENT: The 1 or 2 percent that the money inside the Social Security
trust now earns -- is that right? Is he right at -- is it even as high as 1
percent?

MR. BIGGS: No, it's -- right now it is low because interest rates are low.
Over the long-term, we're looking at around 3 percent. So you still do have
a --

THE PRESIDENT: So it's more than double. But right now, it's, like -- yes,
never mind. (Laughter.) Don't worry about it. (Laughter.) You can still
keep your job. (Laughter.) Go ahead. Seven and a half percent since 1924.
That's a great rate of return. Imagine if you're 50 years old and you start
-- if you start -- if you hold that money for 50 years at that rate, it
compounds and grows and ends up being a lot of money, is what you're
saying.

MR. McFADDEN: Yes, sir.

THE PRESIDENT: Yes, okay. I'm glad I invited you. (Laughter.)

* * * * *

THE PRESIDENT: Let me say this. You brought up a very interesting point.
There's kind of an assumption that only a certain group of people at a
certain income can manage an account. It's -- it's as if you've got to have
a net worth of "X" before savings becomes a real part of your life. I
reject that. Bob rejects that.

Secondly, the interesting -- there's a -- African American males die sooner
than other males do, which means the system is inherently unfair to a
certain group of people. And that needs to be fixed. It's not a --
(applause.)

MR. McFADDEN: I agree, Mr. President, because from the minimal research
that I've done, the average African American male right now is -- the life
expectancy is 69, and I may be off a little bit. But if you're telling me
that it's 69, and the age is going to go to 67, you do the math.
(Laughter.)

THE PRESIDENT: Right.

MR. McFADDEN: That's two years. (Laughter.)

THE PRESIDENT: Glad you came. Thanks. Welcome, girls. Glad you all came.
(Applause.)

Okay, I thought we would try to find somebody who represents the youth
movement. I'm not saying you all are old, but we have found us a dairy
farmer from the great state of Utah, Josh Wright. Welcome, Josh. Thanks for
coming. He asked me if I could fix the BCS -- (laughter and applause.) No,
I'm not going there, Josh. I'm staying on Social Security. It may be a
little easier to fix, anyway. (Laughter.)

MR. WRIGHT: But he said that they wouldn't be able to take Texas, and --

THE PRESIDENT: Wait a minute. You don't need to talk about private
conversations. (Laughter.) Okay, you're a dairy farmer?

MR. WRIGHT: That's correct.

THE PRESIDENT: Good. Milking those cows.

MR. WRIGHT: Yes. Not today, obviously. I made my dad stay home and do it.
But we have a dairy farm in central Utah, and you can fit the whole town in
this building here.

THE PRESIDENT: Kind of like Crawford.

MR. WRIGHT: There's a lot more cows than there are people, so I spend a lot
of time talking to animals. (Laughter.)

THE PRESIDENT: Are they talking back yet? (Laughter.) When they start
talking back, give me a call. (Laughter.)

MR. WRIGHT: Not when I have a stick in my hand, they don't say a lot.
(Laughter.)

* * * * *

THE PRESIDENT: Do you think he's listening? Have they got C-SPAN out there
in Utah?

MR. WRIGHT: I don't know. (Laughter.)

THE PRESIDENT: See that red dot? That's him, if he's listening.

MR. WRIGHT: He's probably watching the horse channel. He loves that
channel. (Laughter.)

THE PRESIDENT: I appreciate you coming.

MR. WRIGHT: Thank you for letting me.

THE PRESIDENT: If nothing happens, at your age, it will be bust by the time
it comes time for you to retire. That's why we have a person in the mid-20s
here -- besides the fact the guy's got a pretty good sense of humor.
(Laughter.) If nothing takes place, if Congress says, oh, don't worry,
we'll just push it down the road; why do we need to deal with it, there's
no crisis -- if nothing happens, and we don't start moving on it now, by
the time Josh gets to retirement age, the system will be flat broke.

And that's not right, it doesn't seem like to me. It seems like people who
have been elected to office must say, we want it to be wholesome and
healthy, like it has been for other generations. Oh, I know there's a lot
of politics here in Washington, and people are -- some are afraid to touch
it, some don't want to touch it, some provide excuses not to touch it. I
know, I've heard it before. But I believe that the President has a
responsibility for setting the agenda, and I believe people who have been
elected to the House of Representatives and the United States Senate has an
obligation to confront problems head on. (Applause.)

By the way, tell the old man, 1946 was a great year.

MR. WRIGHT: It was a great year.

THE PRESIDENT: You wouldn't be sitting here if it wasn't, you know. Anyway.
(Laughter.)

We've got a mom and her daughter with us. I'm so glad you both came. Thanks
for being here. Sonya is the daughter. Rhoda is the mom. And I want the
Stone women to talk about their lives and how it relates to Social
Security. If you don't mind, Sonya, why don't you start? What do you do?

MS. STONE: Sure. I'm a chief financial officer for a firm here in
Washington. But I'm really here as a mom. I happen to be a divorced mom,
raising three children -- two wonderful boys, Jeff and Eric, that are here
with me -- and I have a beautiful daughter, Emily, who is also here with
me. She's nine years old. Emily has been severely disabled since birth,
both mentally and physically, and she will be dependent on Social Security
for her lifetime. And I would like to make sure that Social Security is
going to be there for her as its been for my mother.

THE PRESIDENT: Good. A CFO, like, you know something about numbers?

MS. STONE: I know a little bit about numbers, and I --

THE PRESIDENT: I presume you've looked at the numbers.

MS. STONE: I have looked at the numbers. And I would very much like to see
the current Social Security system improved with the establishment of
personal accounts, so that families could harness the power of the capital
markets to allow them to build a nest egg over the course of their
lifetimes that could then be passed on to their families. And I know that
if my father, who paid in for over 40 years, had had the opportunity to
establish an account like that, that would then have grown and survived
him, and been available to not only provide for my mom, but ultimately for
his grandchildren and his granddaughter, who he never knew, I think that
would have made him very happy.

THE PRESIDENT: Sure. I think it's important for people to understand
compounding rate of interest. In other words, if you take a dollar, set it
aside and it grows at three percent over 30 years or 40 years, and compare
that to the same dollar that grows at 7 percent on an average basis over 30
years, there is a huge difference in money.

So it matters how much money -- how much interest, or how much rate of
return your money earns. We're kind of throwing around these words as if
everybody understands compounding rate of interest and rate of return, but
what people need to understand is that the money that's now -- your money
in the government is earning much less than it's capable of generating
under safe conditions. Safe conditions -- I think that's what you're
saying.

MS. STONE: That's what I'm saying. And I would just add that, as a mom, I
know what it's like to lay awake at night and worry about the future of
your children. And I know one thing about moms, they know how to make tough
choices; we make them every day, on everything from health care to
education to which bill to pay next. And I think we understand that
whenever you're faced with a difficult problem, the sooner you start and
the more honest you are about the nature of the problem, the greater chance
you have of success. So I'm very hopeful that we would get started.

THE PRESIDENT: Good, thanks. Well done. (Applause.) Now what about your --
introduce your mom.

MS. STONE: I would like to introduce my mom. This is my mother, Rhoda
Stone. And she is grandmother of three, and originally from Helsinki,
Finland, and has been here over 40 years.

THE PRESIDENT: Fantastic. Same age as my mother.

MS. STONE: Just turned 80.

THE PRESIDENT: Is she still giving you instructions?

MS. STONE: Every day, and I do my best.

THE PRESIDENT: It never stops, does it? (Laughter.) No.

MRS. STONE: It shouldn't stop.

THE PRESIDENT: That's right. (Laughter.) Let her rip.

* * * * *

THE PRESIDENT: Thank you for saying that. Good job.

Yes, I think one of the interesting things that Rhoda talked about is the
need for people to understand that Social Security is a part of retirement
income. That's why it was created, and therefore, the idea of developing
the habits early -- necessary to make sure you've got that which is
necessary to live on, such as saving money, is important. I happen to
believe that once personal savings accounts are part of the Social Security
system, that it will encourage other savings to take place, as well. People
will be able to see the benefits of savings, understand how important it is
as a dad to, say, two beautiful little girls, to start setting aside money
for college education is a way to save, not necessarily for retirement in
this case, but to be a good -- to be a good dad and do your duty as a
father.

And so I appreciate that point. In other words, it's a point that says that
people have got to understand you have a responsibility to set aside money
so that you can live comfortably. And it worked in your case. Thankfully
you had a wise husband.

MS. STONE: I wish we would have had a chance to put --

THE PRESIDENT: As additional -- as addition to the savings you set aside
out of the personal savings accounts. I agree.

And that's -- so it's a -- this is a -- I hope you've -- I hope you have
come away with a better understanding of the importance of this issue. I
mean, we've got people of all generations here, people who say, look, this
is an issue. And the fundamental question confronting the people elected to
the United States Congress is, will they act? I will assure you, I'm going
to ask them to act. I think that one of the reasons I'm sitting here is
because I said to the people of the country, we have an issue with Social
Security, we have a problem, I think it's important to be a problem solver;
give me four more years, and I intend to work with people of both parties
and solve problems. And there is a problem with Social Security.
(Applause.)

I see a problem. I also see a solution. And I realize that it's going to
require bipartisan cooperation. And I look forward to working with members
of both political parties in both Houses, to come together and do our duty.
(Applause.) I realize it's not going to be easy. This isn't easy. If it
were easy, it would have already been done. It kind of makes it fun,
though, doesn't it? Take on the tough jobs.

Members who will work -- constructively work with us will be able to look
back and say, I did my duty. I came to Washington to be more than just a
place holder. I came to Washington to analyze a problem, to deal with a
problem, and to leave a legacy behind of fixing the problem. And so I'm
looking forward to working with the members of Congress.

I want to thank our panelists who are here. I want to thank our audience
for coming. May God bless you all. (Applause.)

END 11:33 A.M. EST
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