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From project votesmart, http://www.vote-smart.org
Speaker: President George
W. Bush
Title:
President Discusses
Strengthening Social Security in Florida
Location:
Tampa, FL
Date:
02/04/2005
President
Discusses Strengthening Social Security in Florida
Tampa Convention
Center
Tampa, Florida
4:07 P.M. EST
THE PRESIDENT:
Go ahead and sit down, please. Thanks for the warm welcome. It's good to be
back in Florida. (Applause.) I'm looking for my little brother, but he
didn't show. (Laughter.) It's okay, I love him anyway. Plus, he's doing a
great job as the Governor. (Applause.)
Thanks for
coming today. This is my fifth stop after the State of the Union address to
talk about important issue for our country. (Applause.) As you can see, I'm
joined by some distinguished citizens who are going to share some of their
thoughts about the Social Security system. That's what we're here to talk
about. But before we get there, I do want to recognize some folks, and I've
got some other things to say, as well.
First, I am
really proud to have been met at the airport and have traveled over with
two members of the Congress, starting first with United States Senator Mel
Martinez. (Applause.) Congresswoman Ginny Brown-Waite -- thank you for
coming, Ginny Brown. (Applause.) Congressman Adam Putnam. (Applause.) The
Lt. Governor came, for which I am grateful -- Toni Jennings. Thanks for
being here. (Applause.)
Margaret Goodson
is with us today. Margaret, please stand up. I met Margaret at the base of
Air Force One. (Applause.) Margaret is a volunteer for Meals on Wheels.
(Applause.) The reason I like to herald volunteers is, one, to encourage
people to volunteer, but as well, to remind our fellow citizens our true
strength, the great strength of America, is the hearts and souls of our
citizens, the fact that people like Margaret are willing to help somebody
out -- somebody, in this case, who's hungry.
If you're
interested in serving the country, find somebody who is looking for shelter
and help them find housing; love somebody who hurts; help somebody get rid
of an addiction. You see, that's what -- that's how you change a society.
And, Margaret, you're part of the army of compassion, and I want to thank
you for your service. (Applause.)
We're headed
toward peace, and that's important. (Applause.) We're still at war. I wish
I could report to the nation during my State of the Nation, and here in
Florida, that the war is over. It's not; there's still an enemy that cannot
stand America, that still wants to inflict harm on our people, precisely
because we refuse to relent in our love for freedom. But we're making good
progress.
First, I want to
thank the troops and their families for helping us -- (applause) -- for
helping us stay on the offensive against the terrorists and the haters.
Every time a terrorist is brought to justice, our children and
grandchildren are safer. But, as well, every time a democracy is born in a
part of the world and around the world, our children and grandchildren are
safer, as well.
We've seen a
remarkable, remarkable series of events when you think about it. In a very
brief period of time, Afghanistan became a democracy, people were able to
vote for a President of that country -- they tell me, for the first time in
5,000 years. Millions of people showed up at the polls. The first voter was
a woman who was not allowed to participate in democracy during the Taliban.
(Applause.) And that's important for our children and grandchildren. The
fact that Afghanistan is free sets a powerful example in a part of the
world that is in need for powerful examples of a free society.
The Ukraine
elected a President in the last four months. The Palestinians have elected
a new leader who shows he's willing to stand up and fight off the terror.
And we're -- Condi Rice, by the way, is headed over there to work with both
Israel and Palestinians to -- (applause) -- help Palestine develop a
democracy.
If you're
interested in true peace in the Middle East, like I am, I fully understand
that for there to be true peace, the Palestinian people must be allowed to
express themselves in the ballot box, give their opinions in the public
square. There must be a free press. In other words, there must be a true
democracy in order for there to be peace in the Middle East. We're headed
that way.
And finally, as
you know, last Sunday the Iraqi citizens, in spite of threats and violence and
beheadings and all kinds of horrible acts, went to the polls by millions.
They defied the few acts of the terrorists. (Applause.) Every time a
society becomes a free society, our children and grandchildren are better
off, because free societies are peaceful societies. Democracies promote
peace, and that's what we're interested.
So I'm
enthusiastic and optimistic about what is taking place in the world, and I
believe the United States has a duty and an obligation not only to future
generations of Americans, but to people who live in tyranny, to promote
democracy wherever tyranny exists. I believe every soul yearns to be free;
that's what I believe. I believe everybody desires to be free. The Iraqi
elections helped prove that point. The people did incredibly brave things
in order to express their will. It's because people love freedom and if
given the chance to be free, they accept freedom.
Our mission in
Iraq is to continue to stand with the Iraqi government. We will not put an
artificial timetable of withdrawal out. That would be a -- (applause.) Such
a decision would embolden an enemy. It would send the wrong signal. Here's
the game plan. The game plan is to stand with the Iraqis, is to train them
better, is to give them a chain of command, is to work with their junior
officers so that the Iraqi units -- which did very well on election day --
have got what it takes to defend their own country. You see, this new
democracy, like any new democracy, is going to want to defend itself. And
as -- and people say, well, are you sure they want to defend themselves? I
say, absolutely. Look what they did on election day. If they're willing to
defy the terrorists by going to a ballot box, they're willing to take the
training necessary to defeat the terrorists where the terrorists exist. And
when Iraqis are ready to defend themselves, our troops are coming home with
the honor they've earned. (Applause.)
I don't know
about you, but the hug between the mom from Pflugerville, Texas whose son
died on the battlefield and the woman whose dad had been -- Saddam Hussein
had ordered her dad's assassination, human rights activist inside of Iraq,
who voted and flew over to represent her country in Laura's box -- I
thought the hug was about as profound a measure of compassion and decency
and respect and thanks that I've ever seen. It was a -- (applause.)
And for those of
you who have got a loved one in the theater, or has a loved one in the
theater today, you got to know that the Iraqi people appreciate our
sacrifices. And I believe generations of Americans to come will appreciate
the fact that this generation not only stood strong in the face of a Saddam
Hussein, but stuck it out and helped the Iraqi people develop a democracy.
Democracies lead to peace. And we have a duty -- we have a duty to help
this world become more free so our children and grandchildren can grow up
in a peaceful world. (Applause.)
We have a duty
to make sure there's a retirement system for our children, too. And that's
what I want to talk about. (Applause.) First of all, it's pretty
interesting we're talking about Social Security, isn't it? It used to be
called the third rail of American politics -- if you touched it, you would
be shocked. (Laughter.) Sometimes shocked out of politics. (Laughter.) I
campaigned on the issue because I thought it was important to do so. I also
believe the role of a President is to confront problems -- not to pass them
on to a future President, future Congress, or a future generation.
(Applause.)
So the question you
ask is, do we have a problem. Well, here it is. When Social Security was
designed, the life expectancy was about 60 years old. In other words, you
were expected to live that long. Today, life expectancy is 77 years old. In
other words, people are living longer.
Secondly, there
is a group of folks fixing to retire -- a big bulge of us. We're called the
baby boomers. So not only are people living longer, but there's a whole
bunch of people who are going to be living longer that are eligible for
Social Security.
Thirdly,
benefits are going up dramatically. So you've got a lot of people living
longer, getting greater -- with greater benefits promised. And what this
chart will show you here is that you got fewer people paying in. In 1950,
16 workers were paying to the system to support on beneficiary. That
obviously makes a system more affordable than one in which only 3.3 people
are paying per beneficiary. Fewer workers putting in money to pay for more
workers who are living longer and getting more benefits -- that is a
problem. And it's a problem defined by that chart which shows that in 2018,
the Social Security system goes negative, more money going out to
beneficiaries than coming in through payroll taxes. That's a fact. And
every year thereafter, the gap grows wider.
So, to give you
an example, in 2027, the system will be $200 billion short. In other words,
they collect X amount of payroll taxes, but because baby boomers like me
are living longer and have been promised greater benefits, we're $200 billion
short that year -- that year. And the next year is bigger than $200
billion. In 3037 [sic}, it's like $300 billion. And finally in -- 2037,
it's $300 billion. In 2042, it's bust. Those are the facts.
So, I see a
problem. And I think it's time to address it square on. That's why I spent
a great deal of time in the State of the Union. Now, this is not a problem
for people who have retired or near retired. This is not a problem for
people who are now on Social Security who were born before 1950. It is not
a problem. I don't care what they tell you; I don't care what the brochures
say. The Social Security trust is sound and solvent for people who are
counting on the checks today and people are going to be counting on the
checks who are near retired. It's just the way it is.
The problem
exists for younger folks. The problem is younger folks are going to be
coming up in a world where either you got to raise taxes dramatically,
borrow significant amounts of money, slash government programs, slash
benefits in order to make that red in that chart go away. And that's the
dilemma we have right now. That's the problem those of us who are in
Washington, D.C. must confront, because every year you wait, the problem
becomes worse for our kids.
I think now is
the time to take on the issue. And that's exactly what I intend to do.
That's why I have been to five states since the State of the Union, and
that's why I'm going to continue traveling our country, saying to the
American people, here's the problem. We'll have somebody else describe it,
as well. And the reason I believe that's important to do is because I think
the American people actually have a lot to do with how Congress responds.
You may not think that, but having been up there long enough to tell you
how it works, you can make a difference in how people respond.
Once people
recognize there's a little bit of denial in Washington -- they'll say
there's not a problem. There's a fair number of people who say, it isn't a
problem. If that's the prevailing view, nothing is going to happen, I fully
recognize that. So step one is to say, we have a problem. And step two is
to start coming up with a solution. And I have a responsibility to be
involved with that, as well. It's one thing for a fellow to say, you've got
a problem, you all go figure it out. That's not my style. My style is to
say, we've got a problem, and we're going to figure it out. (Applause.)
All ideas are on
the table except running up the payroll tax. And I don't care whether it's
a Democrat idea, Republican idea, independent idea, I'm interested in
ideas. And so I'm going to say, like I have been saying before to the
United States Congress, bring them up. Let's see what you think we ought to
do to solve the problem, and I'll work with you. This is not one of these
moments where we're trying to gain political advantage. I think this has
got to be a moment where people from both parties come together and say,
here is a problem. For generations -- it's not a problem for just
Republican youngsters, it's not a problem just for Democrat youngsters.
It's a problem for every youngster coming up in America. And therefore, I
want to work with members of the Congress. And so I said in my speech the
other day, other people have had some good ideas; they're on the table. And
if you want to lay one out, I promise you there won't be political
retribution for having done so.
Now, I've got
some of my own ideas. And I want to share one idea with you, and we've got
some panelists here that think it's pretty good idea, too, and they're
going to give you a different perspective, perhaps, than the one I give
you.
The way the
system works is that you write a check -- you don't write a check -- they
take it out of your check, a payroll tax, and it immediately goes to pay somebody's
benefit. That's the way it works. It's a pay-as-you-go system, and we'll
discuss that in a minute. What I think you ought to do is be able to take
some of the money you're paying in and set up what's called a personal
retirement account. First of all, there's the -- there's a simple
principle, and it's -- actually, it's your money that's going into the
Social Security trust. You're working and you're paying the payroll taxes,
and I think some of that money ought to go into a retirement account.
And why that is
important is because with a conservative mix of stocks and bonds, you will
be able to get -- your money will be able to get a better rate of return
than the money inside the Social Security trust. And by getting a better
rate of return inside the Social Security trust, your nest egg will grow
big enough to help you when it comes time to retire. Not fully take care of
all your retirement obligations, because you'll still have money in the
Social Security trust, which you'll be able to receive at the appropriate
time, but it will help complement the money. And that's important. And
that's an important aspect of making sure that the promises made to the
younger workers are more likely, or more closely to be delivered.
Secondly, I like
the idea of promoting an ownership society. I think it makes sense to have
people feel a stake in the future by owning something. I like the concept
of people getting a quarterly statement about how their stocks and bonds
are doing in their own personal account.
Thirdly, I like
the idea of somebody being able to say, my money has grown to X; I'm not
going to necessarily need it to retire, and I want to leave it to whomever
I choose to leave it to. In other words, you're asset, your decision as to
who ends up with the money that you have saved.
See, I think all
these concepts are an important part of helping to strengthen Social
Security for generations to come, the most important aspect of which, is
that the money will earn a greater rate of return than that which is now
being earned in the Social Security trust. So a dollar will be a lot bigger
when it comes time to retire than a dollar that had been kept in the trust.
That's called the compounding rate of interest.
Now, some of you
are beginning to glaze over -- I understand. (Laughter.) Think about
private property in an account that you can pass on to who you want, that
earns a better return than the current system, and you'll end up with more
money.
Now, there's
some rules, and it's important for you to know the rules. One, you can't
take your money that you set aside in the personal account and go to the
race track. (Applause.) Or take it to the lottery. You can't do that. There
will be a prescribed mix of conservative stocks and bonds into which you can
invest, similar to the employee thrift plan at the federal government
level. See, this already exists, by the way. I haven't invented this.
Federal employees now get to do that. They get to take a portion of their
money and put it in a conservative mix of stocks and bonds, five different
programs they get to choose from, so they get a better rate and more money.
Secondly, you
can't pull it all out when it comes time to your -- you can't take it all
and then go to the track. (Laughter.) You're not allowed to do that. You
can take it out -- withdraw it in an orderly fashion so as it complements
your Social Security check. And those are important things for people to
understand.
Thirdly, there
are ways to make sure that you can invest in very safe certificates as you
head into retirement. People are going to say, well, what happens if the
stock market goes down the year I'm going to retire? Well, first of all,
you've had your money in the market over an extended period of time. But if
you're worried about that, there are ways to invest the money prior to
retirement to help kind of shield from a cyclical market. What I'm telling
you is these investment vehicles will be safe. There's all kinds of
rhetoric about, well, you're not going to let people gamble their money.
Well, if things are done in a conservative fashion, you will be able to
achieve the objective of getting a better rate of return on your money and
have more money available for you on retirement than if it had sat in the
Social Security trust. In other words, that money will grow better.
It's very
important for people to understand that there's going to be some tough
decisions we have to make. And the purpose of personal accounts is not only
more freedom, but it's to try to get your retirement nest egg close to that
which has been promised. That's what we're talking about.
Now, that's one
idea. And I'm willing to debate it, and campaign on it, and talk to people
about it. And I expect the Congress to take it seriously, just like I'll
take every idea that they put out seriously. This is going to require a
joint effort to get the job done. And I'm looking forward to working with
these members. I've got -- there's some sympathetic ears here, which I
appreciate. Other members are watching very carefully. They're listening
carefully. If you've got a concern about Social Security, you tell your
people about it. Just let me remind you, if you're a senior, nothing
changes. And if you're a youngster, I'd be knocking on the members of the
Congress and the Senate's door to say, what are you going to do about that
chart to make sure I can grow up in a -- (applause.)
Olivia Mitchell
is with us. Olivia, tell them what you do.
DR. MITCHELL:
Thank you, Mr. President. I teach pensions and Social Security at the
Wharton School at the University of Pennsylvania. And I thank you because
in the last couple of years, the students are finally sitting up and paying
attention because of what's in this graph.
* * * * *
THE PRESIDENT:
Yes, it's a very important point she made. The private account -- the
private retirement accounts alone don't fix Social Security. They are part
of a larger solution. And that's what's important to know. It's just the
fact that you can earn better rates of return within a private account that
it makes it -- that it helps mitigate the other changes in the system that
will be necessary to eradicate the red ink.
Well, thanks for
coming. Gosh, I'm -- you know, it's interesting -- well, anyway, I find it
interesting that younger people are now paying attention to the issue.
That's important. See, when the word gets out to the Congress that says
there's a lot of young folks who are saying, I don't think I'm ever going
to see a dime unless Congress acts, that will get people acting, because
there's a lot of young folks. The key is to make sure our seniors fully
understand that they're not going to see anything change.
Dwight Dillard,
right here. You worked -- you've worked most of your life, haven't you?
MR. DILLARD:
Yes, sir, I have.
THE PRESIDENT:
From where, initially?
MR. DILLARD:
Initially, in the Midwest.
THE PRESIDENT:
There you go.
MR. DILLARD: Lee
Summit --
THE PRESIDENT:
Been there, Lee Summit -- fine place, by the way. Went to Lee Summit High
School. I didn't attend Lee Summit High School. I actually gave a speech at
Lee Summit High School. (Laughter.)
MR. DILLARD:
Yes, and your father did, too.
THE PRESIDENT:
Yes, he did. Ever since the Adams boys went to Lee Summit, there hadn't
been a father and son President team go. (Laughter and applause.) Are you
on Social Security now?
MR. DILLARD:
Yes, sir, I am. I've been retired for about 10 years.
THE PRESIDENT:
Right. So he's receiving Social Security. Dwight, when we visited him back
there, he just wanted to make sure the Social Security system stayed the
same for him. If you're on Social Security today, you're not interested in
somebody coming along saying, let's just change the rules. And that's not
happening. I hope you understand that.
MR. DILLARD:
Yes, I -- yes, I do.
THE PRESIDENT:
Good.
MR. DILLARD: I
understand it completely and I'm -- my worry is for my children and
grandchildren.
THE PRESIDENT:
Right.
MR. DILLARD:
That's my concern.
THE PRESIDENT:
That ought to be the concern of every grandparent and parent, when you
start thinking about the facts: $200 billion in 2027, bigger the next year,
bigger the next year, bigger the next year, and bust in 2042. So I
appreciate you coming. You got anything else you want to add, Dwight?
MR. DILLARD: No,
sir -- other than I think it should be acted on, the sooner the better.
THE PRESIDENT:
By the way, Dwight worked at Sheet Metal Local Number Two Union. This is --
what we're talking about here is, we're talking about a plan for everybody.
This isn't just a management plan, this is an everybody plan. This is an
idea that we've all got to come together. Whether you're union or
management, Republican or Democrat, people from all walks of life must put
their minds together to get something done, so our youngsters are not
strapped with a system that's going to make it hard for this country's
economy to continue to remain the best in the world, where people are going
to be able to realize their dreams. That's what we're talking about.
So thanks for
coming, Dwight.
MR. DILLARD:
Thank you, sir.
THE PRESIDENT:
You did a heck of a job. (Applause.)
Carlos -- Carlos
Huertas. Bienvenidos.
MR. HUERTAS:
Gracias.
THE PRESIDENT:
Why were you interested in joining us? First of all, let's talk about your
family.
* * * * *
THE PRESIDENT:
So tell me about -- let's see, what do you do for a living?
Mr. HUERTAS: I'm
a support engineer for a company that makes manufacturers electronic
laboratory equipment.
THE PRESIDENT:
Good, yes. How's business?
MR. HUERTAS: It's
good. PerkinElmer is a very good company.
THE PRESIDENT:
It's good to hear. It's nice to hear, isn't it? (Applause.) Actually,
speaking about business, we had some good news today. The national
unemployment rate dropped to 5.2 percent and 146,000 jobs were added in
January. (Applause.) That's good.
MR. HUERTAS:
That's very good.
THE PRESIDENT:
Keep going. You're planning for your retirement, although you're awfully
young.
* * * * *
THE PRESIDENT:
Yes, see, it's an interesting thing what he's saying. First of all, he says
he's got a 401k. When I was coming up, those were three -- three numbers
and one letter in the alphabet. No one knew what it meant -- 401k. There's
a different mentality amongst younger folks in America. A 401k means it's a
plan that he owns and he manages. That's how the retirement system works.
He gets the statements.
MR. HUERTAS:
Right.
THE PRESIDENT:
He sees the mix of stocks and bonds grow. I presume it's been growing.
MR. HUERTAS:
Yes, it has. And the thing I like about the proposed reforms to Social
Security is that, just like I do on the 401k, I can invest in the market
where I get a better return, plus I can keep control of my finances just
like I like it.
THE PRESIDENT:
Yes. See, people say, well, I wonder if I can do that? In the employee
thrift plan, you've got five plans to choose from. We're not talking about
needing to become a great financial analyst in order to make decisions.
These are decisions that are common-sense decisions that anybody can do
over -- with a little -- just a little confidence. And you might explain to
people how easy it is in a 401k to make rational decisions for your own
money.
MR. HUERTAS:
Normally, there's a manager, right, that is the finance manager that
controls the funds. All you need to do is decide how much money you want to
put on each account. And of course, there's always a choice of -- whether
you are younger, you usually put more money on the risky finances and less
money on the other one. When you are older, like I'm getting, I will put
less money on those risky -- (Laughter.)
THE PRESIDENT: I
wish I was your old. (Laughter.)
MR. HUERTAS: So
anyway, it's pretty simple. There's obviously a lot of funds out there. But
my understanding is that in this reform, there's going to be just a few of
them.
THE PRESIDENT:
Yes, just a few choices to choose from, and no high-flyers, reasonable --
reasonably managed risk. And that's important for people to know.
Thanks for
coming, Carlos. You did a fine job there.
MR. HUERTAS: My
pleasure. (Applause.)
THE PRESIDENT:
Yes, I'm looking forward to meeting your wife, sons and daughter.
Jennifer.
Jennifer has got the hardest job in America. She's a single mom.
MS. LALANI:
Well, thank you. (Applause.) Thank you.
THE PRESIDENT: All
right, Jennifer, what do you do?
MS. LALANI: What
do I do? Besides raising my two lovely children, which again -- like you
said, it is the hardest job, the most challenging job, but the job I really
truly love -- I'm actually a pharmacist. And I currently work for a major
chain. And what I do is I manage 30 of their stores.
THE PRESIDENT:
So you're a manager?
MS. LALANI: Yes,
so being a mom was a great training ground for a corporate job. (Laughter.)
It taught me about multi-tasking.
THE PRESIDENT:
Very good. Nice long word, multi-tasking. Very good. (Laughter.) Inject a
little intellectual strength here in this conversation.
MS. LALANI: Yes,
there you go. Corporate talk.
THE PRESIDENT:
That's right. It is. All right, tell me what your concerns are on the
Social Security plan.
* * * * *
THE PRESIDENT:
Yes, that's an interesting point. I don't mean to interrupt you, but it's a
great point. If you put a lot of money in the system and you die early, and
your child is over a certain age, that asset of yours goes to somebody
else. That's the way the system works. In other words, you have nothing
left over under the current system. That's what you're saying.
MS. LALANI:
Absolutely. From what I've read, these personal retirement accounts,
whatever is in there, would go on to your estate and to its heirs.
THE PRESIDENT:
Absolutely.
MS. LALANI: I
think the single moms out there who have to help fund their kids' college
education, if they were to pass on, at least there would be something there
for the children.
THE PRESIDENT:
Precisely. The point is, is that, as Jennifer has mentioned, it's her money
that she has been paying in, But yet, there was nothing there go give. And
there's something -- I think one can achieve peace of mind by having assets
that you call your own, that you can pass on. And that's one of the
interesting aspects of a personal account. It's, to me, promoting the idea
of a mom working and saying, this is -- I'm building up this for my kids,
is really an important part of a stable and generous society.
And so I want to
thank you for bringing that up. Good job. (Applause.)
By the way,
people say, can you afford to do this? Well, first of all, I don't think
you can afford not to do it. But we have got a plan; our idea is that we
phase in these accounts slowly so that the transition cost is manageable in
the budget process. In other words, these things just don't start all at
once. You can start by putting $1,000 aside, or up to 4 percent, which is
ever [sic] less, and over time that grows $100 a year, so eventually, you
get to the 4 percent cap -- 4 percent of your income. So if you're making
$90,000, you can have an account of $3,600 a year. But it's going to be
phased in so that the transition cost is manageable.
We believe --
this administration believes that the slower you start and let these
accounts grow, the more people will see that it's fiscally -- a fiscally
responsible way to begin a brand-new idea.
Jim Browne. He's
the youngest guy up here. Congratulations. (Laughter.) All right, what do
you do?
MR. BROWNE: I
work for the Pinellas County government at the tax collector's office.
(Laughter.)
THE PRESIDENT:
Great. Thank you. (Laughter.)
MR. BROWNE:
Sorry.
THE PRESIDENT:
That's good, he knows something -- in other words, he's an expert on the
subject. (Laughter.) You had some interesting things to say.
MR. BROWNE: Yes.
Well, first off, I'd like to say how much I appreciate you bringing up the
subject of the future of Social Security. For many of my generation, we
don't anticipate the system being there for us as it stands.
THE PRESIDENT:
Let me stop there. Hear what he said? First of all, when I was 27 years
old, I don't remember having a discussion with anybody about whether or not
Social Security would be there. Any other baby boomers here remember
talking about Social Security and its viability when we were 27? No. The
dynamic has changed. There are 27-year-olders all over the country saying,
is the system going to be there, and what are you going to do about it? Go
ahead. (Laughter.) Not, what are you going to do about it; what I'm going
to do about it. (Laughter.)
* * * * *
THE PRESIDENT:
Portability means, when you change jobs the account goes with you, it's
yours, like, forever, until you pass it on to somebody else. Good point. I
wish I'd have thought of that. (Laughter.) Is that it? You're full of
wisdom; you might as well -- you're on a roll. (Laughter.)
MR. BROWNE:
Well, I just hope that Congress will work together in a bipartisan fashion,
because this is -- (applause.) Well, this is something that is not going to
be anything that's going to disappear anywhere in the near future -- well,
actually, the way it stands, it just might. (Laughter.)
THE PRESIDENT:
No, it won't disappear in the future because there's still going to be
liability -- people are still going to want the checks the government has
promised. The problem won't go away, it just gets worse. That's exactly
right. When you're getting your check, and the government says they're
going to give you one, you expect it. And so as this thing gets redder and
redder and redder, the measures become more and more draconian, to make
sure we fulfill the obligations.
It's not going
away. You're right, it 's not. Bankrupt doesn't mean it disappears;
bankrupt means it's just flat broke. And it means we're going to have to do
something dramatic to fix it. And now is the time to get after it.
Listen, a good
presentation by all the people up here. I hope this helps you understand
that this is -- I mean, it's one thing for me to come and kind of opine;
it's another thing for people who have thought about the issue to give you
their opinions. And there's a lot of people like them all over the country
who are concerned enough to come on a stage, by the way, in front of all
these cameras, and express their opinions. And I want to thank you all for
doing it.
Let me -- I'll
answer some questions, if you've got time. (Applause.) Let me answer some
questions, and we'll get out of here. You did good. Thank you. You've got
the best view in the house. (Laughter.)
Any questions?
Yes, sir.
Q (Inaudible).
THE PRESIDENT:
Yes, 19 -- he's worried about the notch issue. We don't think that's going
to be an issue. Before 1950, everything stays the same -- before your --
before those -- for those who were born on 1950 and before, everything
stays the same. And afterwards, the program will be -- a personal account
will begin to affect them.
Yes, ma'am.
Q -- to the way
you're proposing?
THE PRESIDENT:
Yes, she's asking about the cost of the transition. It's estimated about
$600 billion over a 10-year period of time to get the personal accounts
started on the -- the way we've suggested they grow. It's a good question.
Yes, ma'am.
Q -- really
understand how is it the new plan is going to fix that problem?
THE PRESIDENT:
Because the -- all which is on the table begins to address the big cost
drivers. For example, how benefits are calculate, for example, is on the
table; whether or not benefits rise based upon wage increases or price
increases. There's a series of parts of the formula that are being
considered. And when you couple that, those different cost drivers,
affecting those -- changing those with personal accounts, the idea is to
get what has been promised more likely to be -- or closer delivered to what
has been promised.
Does that make
any sense to you? It's kind of muddled. Look, there's a series of things
that cause the -- like, for example, benefits are calculated based upon the
increase of wages, as opposed to the increase of prices. Some have
suggested that we calculate -- the benefits will rise based upon inflation,
as opposed to wage increases. There is a reform that would help solve the
red if that were put into effect. In other words, how fast benefits grow,
how fast the promised benefits grow, if those -- if that growth is
affected, it will help on the red.
Okay, better?
I'll keep working on it. (Laughter.)
Yes, sir.
Q How do you
like these hard questions?
THE PRESIDENT:
You know. You watch my press conferences? (Laughter.) Please don't
encourage him. (Laughter.)
Q I've heard
this is going to be a volunteer personal account.
THE PRESIDENT:
Yes, it is.
Q And also would
a employee or a worker be able to go above and beyond what the government
is going to require if we decide to enter the program?
THE PRESIDENT:
Yes, interesting question. You can through an IRA, for example. I can't
answer that as -- what he's saying is, is that if he has a personal
account, can he contribute more beyond that which is being contributed
through a part of his payroll taxes. I would think so, yes, but I'm not
sure. I do know, however, that you can complement a personal retirement
account through the Social Security system with an IRA, which helps to
achieve the same objective, basically setting up a personal account. Thank
you.
Yes, sir -- yes,
ma'am.
Q First of all,
I'd like to say that I'm a volunteer -- one of your very loyal and
dedicated volunteers in Plant City.
THE PRESIDENT:
Well, thank you. (Applause.)
Q And I'm very
happy to have you as the President. (Applause.)
THE PRESIDENT:
Thank you.
Q Thank you.
(Applause.)
THE PRESIDENT:
Okay, okay, wait a minute. (Applause.) Thank you very much. I appreciate
you saying that. Now, having said that, however -- (laughter.)
Q I do have a
question. I'm on Social Security.
THE PRESIDENT:
Right.
Q And I'm
disabled, and I just wondered if there's going to an intensified program
into some of the disability benefits that they have now.
THE PRESIDENT:
No.
Q Okay.
(Laughter.) Whatever program that you put out for Social Security I'm fully
behind it. You have my support.
THE PRESIDENT:
Thank you, ma'am. (Applause.) I appreciate that. Yes, ma'am. Her question
was -- see, there is a Social Security benefit as a part of -- there is a
disability benefit as a part of Social Security. It won't change. We're
talking about the retirement aspect of Social Security.
Yes, ma'am.
Q Will it help
me when I grow up? (Laughter.)
THE PRESIDENT:
That's a loaded question. (Laughter.) Yes. It's -- that's the fundamental
reason we're here, is that the system isn't going to be worth a darn unless
we do something about it now. Thank you for asking that question.
Yes, ma'am.
Q President
Bush, welcome to Tampa. We're so happy you're back.
THE PRESIDENT:
Nice to be back, thank you. Good to see my friend, the former mayor,
Martinez, here.
Q Yes, we're so
excited about Senator Martinez.
THE PRESIDENT: The
other Martinez -- I'm talking about --
Q Oh, I'm sorry.
(Laughter.) My bad.
THE PRESIDENT:
Former Governor Martinez.
Q Can I make a
suggestion, as well as ask a question?
THE PRESIDENT:
You can do anything you want now that you got the mike. (Laughter.)
Q Well, I think
you'll like this. It's a simple suggestion. Regarding, the flexible
spending account, my suggestion is to encourage Congress to quickly get rid
of the "use it or lose it" law, which will also supplement the
help with Social Security. And then, my question is, for the three or four
options that will be available, will those options be federally-run
options? Or will they be from like commercial providers, say, like Fidelity
Investments?
THE PRESIDENT:
No, no, that's a great question. They'll be from providers. We don't want
the federal government making stocks and bond decisions. (Applause.)
They'll be private -- private sector, people who get paid to do this. And
the fees, by the way, will be -- we'll make sure that you don't get gouged.
I mean, obviously, what we want is people's money going into their personal
account, not going into big fee structures. And so there will be a -- it
will be regulated to that extent. In other words, there will a certain
sense of regulation, you can only invest in certain kinds of stocks and
bonds to be -- and the funds will be managed by people whose job it is to
manage them, outside of the government.
Let's see here
-- yes, sir.
Q Thank you,
sir. I'm 19.
THE PRESIDENT:
Yes.
Q And I want to
invest as much money as I possibly can in the market because I feel -- I
feel I can make a lot better return on my rate.
THE PRESIDENT:
Okay.
Q What is the --
how much can we put in? What's the most we can put in to these private
accounts?
THE PRESIDENT:
How much do you make?
Q Well, I'm a
student.
THE PRESIDENT:
Guess. (Laughter.) Go ahead, guess how much you're going to make. First of
all, let's just assume you make $50,000 your first year, over time, when
this is phased in, so we can afford it, you'll be able to put $2,000 a year
into your personal account from the -- from the payroll taxes. In other
words, there will be a 4 percent cap on what you can put in. And if you
make more money, you can put more money in.
But you can also
-- by the way, to answer this man's question, you can set up a -- you can
set up another savings account. You can set up your own IRA. And there's
all kinds of options for the IRA to do that.
I like your
attitude, man. Good luck. Are those your buddies next to you. Just met
them. Okay. (Laughter.) Would you recommend I call on them? All right,
fine.
Q Which one?
THE PRESIDENT:
Yes, sir. Either one -- both.
Q Hi, I'm a high
school student. I'm just wondering is there anything I can to prepare for
this new Social Security reform when I grow up?
THE PRESIDENT:
Yes, it is. That's a good question. You know, one of the issues is
financial literacy, is to pay attention to what it means, how stocks and
bonds work, compounding rate of interest. That's a very good question. A
lot of people, when you say, the interest grows at a certain -- over time
at a certain rate, people are not really sure what we're talking about. And
I think -- I think the idea of becoming more literate in financial matters
is a smart idea.
I also -- the
fact that you're here and paying attention to the issue, this is a
political issue. This is an issue that is going to require Congress moving
on. And sometimes it requires the people expressing their desires to get
Congress moving on the issue.
And I want to
thank you for coming and paying attention. I'm not so sure when I was your
age I would have showed up and hear some old guy talking about --
(laughter) -- talking about an issue like that.
Yes, sir.
Q Thank you, Mr.
President. Firstly, I'd like to say something that just -- my generation
doesn't believe that it will be there in its current form. I strongly
believe that. I don't believe the system will be there for me. I'm 28 years
old.
THE PRESIDENT:
Well, there's one thing on that. That's what's changing the debate. That's
what gives me confidence that people who are -- have been elected can stand
up and be rewarded for taking on the issue, not punished, because there are
thousands of people like him who say, I don't think I'm ever going to see
anything, and what are you going to do about it, particularly once our
seniors are convinced nothing is going to change. And that is a very
important point.
Go ahead.
Q My question
is, first of all, how do you prevent agendas from getting into the
investment choices that we'll have? And two, what can I do to help you?
THE PRESIDENT:
Well, I appreciate that. You can -- well, you can start by writing your
senators. One of them is sitting right here. I know he agrees with what
we're doing. (Laughter.) He's in good shape. (Laughter.) Well, I'm not
picking on anybody. Just -- there's two of them, and here's one. You can
just verbalize with one. (Applause.)
So, it's a very
interesting question, what can you do to stop agendas? I'm not exactly -- I'll
try to read what you mean in that question. It also -- it kind of teams up
with this woman's question here about, will government be kind of --
getting people to make certain kinds of investments? And the answer is, no.
Government -- government's job is to make sure that the risk portfolio --
in other words, the mix of investments -- is suited to getting a good
return at lower risk. But government's job is not to try to steer you to
one industry or another. We don't want government making investment decisions
on behalf of the American people. We want American people with good
advisors making investment decisions.
And that's a
good question. The government's role is to set the guidelines. In other
words, there will be -- and we do this. The thrift savings account -- if
anybody works for the federal government, is an investor in the thrift
savings account, you know what I mean. There's a series of five different
programs that you can choose from that have been, obviously, carefully
screened, and it combines a mix of stocks and bonds so that, like a 401k,
you can -- higher-risk portfolio the younger you are, if you feel like it,
and a lower-risk portfolio with a lower rate of return the older you get.
And there's -- people are expert at managing this in the private sector.
Listen, I can
stand here all day long answering questions, but I'm not, because I've got
to go back and have dinner with First Lady Laura Bush -- and I can't wait.
Thank you all for coming. God bless. Thanks for being here. (Applause.)
END 4:56 P.M.
EST
http://www.whitehouse.gov/news/releases/2005/02/20050204-13.html
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