    [Public Papers of the Presidents of the United States: William J. Clinton (1998, Book I)]
    [May 1, 1998]
    [Pages 653-662]
    [From the U.S. Government Publishing Office www.gpo.gov]

    Remarks at a Roundtable Discussion With Employees of Therma, Inc., in
    San Jose, California
    May 1, 1998

        The President. Thank you very much. I want to thank Joe and Nicki for welcoming me here.
    I want to thank Dan Kirby for the tour through the
    operations. He did a great job. Thanks to Congresswoman Zoe
    Lofgren and Mayor Susan Hammer, my good friends, for joining me here today. I thank the
    labor leaders that are here, Amy Dean, Ray
    Lancaster, Mark Van Den Heuvel, Steve Preminger. But
    most of all, I thank all of you for giving me a chance to leave
    Washington and come out and visit the real world. It's great. Thank you
    very much.
        Before I say a little more about why I came here today, I'd like to
    make a brief comment on something very important to your future that did
    happen in Washington, DC, late last night. Last night an overwhelming
    bipartisan majority of 80 Members of the United States Senate voted for
    a treaty that will permit us to bring Poland, Hungary, and the Czech
    Republic into the NATO military alliance.

    [[Page 654]]

        Now, why does this matter to you out here on this factory floor? I
    think it's very important to you and to every American. We fought two
    World Wars and lost a lot of Americans, and waged a long cold war in a
    deeply divided Europe. The Berlin Wall fell, communism dissipated,
    giving us the chance for the first time in history, ever, to deal with a
    Europe that is free, democratic, and undivided. That's important. If we
    can do that, that means you will know that you'll have stable partners
    for trading purposes. You can sell them things; you can buy things from
    them; you can be a part of growing. Even more important, it means you
    know that your children will likely never have to go there to fight and
    die in a war. And furthermore, you know that we'll be able to work
    together on the problems that do exist in the world, to contain them.
        Now, just in the last few years since I've been President, we have
    used NATO for those purposes. We've brought in two dozen other countries
    in a Partnership For Peace, and they work with us all over the world,
    training, working with our militaries together. We made a special
    agreement with Russia and with Ukraine. And together, we went into
    Bosnia and stopped the bloodiest war in Europe since the end of World
    War II, with no conflicts, no shooting, no deaths.
        So that's why this is important. Poland, Hungary, and the Czech
    Republic--three more partners that will make our alliance stronger. If
    we have to do something in the future, that's three more countries that
    will be contributing people, sharing our burden, and building a future
    of strong partnership based on trade and commerce and travel and
    visitation, not on conflict. It's a big deal.
        And I would like to thank the Senate Majority Leader, Trent
    Lott; the Senate Minority Leader, Tom
    Daschle; Senator Jesse Helms; Senator Joe Biden--all
    of them. This was an unusual coalition of people--[laughter]--who worked
    together to do something that a lot of people didn't think we could do.
    And it's going to make a better world for our children. Ten years from
    now, it will look like an even bigger vote than it does this morning. So
    I thank them.
        I'd also like, before I begin, to offer my condolences to the family
    of the police officer, David Chetcuti, who
    was killed in the line of duty last Saturday, and express my gratitude
    for the bravery he showed when he lost his life. And in that connection,
    I'd like to thank the police officers from the motorcycle crew from
    Santa Clara County, because they had to accompany me on this visit, and
    they're missing his memorial service that is going on this morning. So I
    thank them for doing that.
        Now, let me tell you why I came here: because, to me, you guys
    represent the future. You're good at what you do; you're changing all
    the time; you're committed to getting better; you're operating in a
    global economy; you have a good management-labor partnership; you have
    apprenticeships for new workers; you have training for veteran workers
    to make sure they learn new skills and master new technologies. You're
    proving that Silicon Valley's economic revolution does not just include
    computer programmers; it can include all the workers of America if we're
    all well-trained, highly competitive, and the best in the world at what
    we do.
        You're evidence of that. I thank you for it. I wanted America to see
    it. And mostly, I wanted to talk to you and your representatives behind
    me about how we can do this all over America, in every part of America,
    and set the processes in motion that will keep it going year-in and
    year-out.
        You are a very important part of this wonderful economic renaissance
    going on in America now. Yesterday we saw that the economic strategy
    that we put in place over 5 years ago in Washington did, in fact, work
    to unleash the competitive capacities of America. We said we were going
    to reduce the deficit and balance the budget. We were going to invest in
    our people, in education, in technology, in scientific research, in
    environmental investment. And we were going to trade more with the rest
    of the world. We were going to open more avenues to trade our goods and
    services.
        Yesterday we saw more evidence that it's working. The economy grew
    in the last quarter at over 4 percent. Unemployment was the lowest in 28
    years; inflation, the lowest in 30 years; consumer confidence, the
    highest in a generation. For 5 years in a row now, our country has been
    rated the most competitive economy in the world. You did that, you and
    people like you all over America, and you should be very, very proud of
    yourselves.
        Another reason I wanted to come here was because this company proves
    that even in Silicon Valley, opportunity to participate in that new
    economy embraces more than those who work

    [[Page 655]]

    directly with computers or in laboratories or in offices; and also
    shows, as this gentleman demonstrated, that computer technology has
    revolutionized every aspect of American labor and therefore that we all
    must become more familiar with it.
        I couldn't believe it--I told the folks that were going around with
    me that at one point during my long service as Governor of my State, I
    would go out about once a month and spend a shift working in different
    kinds of factories. And I was around a lot of sheet metal workers. I've
    seen a lot of welding in my life, and it was a long time ago now, a few
    years--that's light-years as fast as things are changing--but the
    machines I saw today and the level of the work I saw, it's just so
    breathtakingly different than just 10 years ago, it's almost
    unimaginable. You, of course, understand that better than I do. But for
    somebody like me who hasn't seen this work in a few years--I don't have
    as much time as I used to, to do these sort of things--[laughter]--it
    was quite shocking in a very positive way.
        And again, I say I think it's important that all of America see that
    these kinds of things are going on and that all American workers in all
    forms of endeavor have an important role to play in building our future.
        The other point I wanted to try to explore today is how we can
    really make sure that everybody has a chance to participate in it,
    because you know as well as I do that even though the unemployment rate
    is the lowest it's been in 28 years, there's still places in America
    where it's fairly high. And there's still workers in America who work at
    tasks where they're not improving their productivity; they're not
    learning new skills; they're not mastering new technologies; and they're
    not getting raises.
        And what we have to do now at this moment when the economy is
    working so well is to try to devise systems that will work for everybody
    who is willing to work for himself or herself. We have to try to make
    sure that the lessons that you live every day in this place are somehow
    learned where they don't exist.
        We're doing what we can in our administration to create the special
    economic incentives to go into inner-city areas and isolated rural areas
    where there hasn't been a lot of new investment. We're doing what we can
    to give people the ability to start their own businesses more easily in
    those places. But I think you know that unless we can guarantee a world-
    class education to all our kids and a system of lifetime learning for
    all workers in America so that they can always continue to learn new
    skills, we will not be able to reach the people that presently have not
    yet fully participated in this recovery.
        You've done a great job on that, and I just wanted to be here. I've
    done my best to do two things that I think are important. One is to open
    the doors of college to all Americans of any age. With our HOPE
    scholarships now, we give virtually all Americans a $1,500 tax credit
    for the first 2 years of college and then credits for the second and
    third year, and for people who, like many of you, might want to go back
    and get further training, we've increased scholarships and made the loan
    program better. And there's also now an education IRA so that you save--
    for example, for your children's education, you can put the money into
    an IRA and that money is not subject to tax when you put it in. And then
    the gain is not subject to tax when you take it out if you use it for
    your children's education, to try to help make it easier for people to
    save for education.
        The other thing we're trying to do is to create a training
    opportunity for people who work in companies that are not as
    sophisticated or advanced as yours, by passing what I've called--and
    I've been trying for 5 years to pass this--the ``GI bill'' for America's
    workers. We have literally dozens of Federal training programs. And if I
    gave you a sheet of paper and a pencil and I asked you to write down
    five of them, I bet you there's not a person in the room who could do
    it--probably including me. [Laughter] But there are dozens of them. And
    they were all created for some particular good purpose when the economy
    was more static than it is, before it started changing like it is now.
        What I've been trying to do for 5 years is to collapse all the
    programs, put it in a fund and just give everybody a certificate who's
    eligible for the training and let them take it to the local community
    college or wherever else, to let the people who need the training have
    the money and then choose the place where they want to get the training.
    I think most of you have enough sense to plot your own future, and most
    other adults do in this country, too. And it would be a lot better than
    having all these separate bureaucracies and programs there.

    [[Page 656]]

        So we're working on that. The House has passed a good bill. The
    Senate has got a bill up--I think they're going to take it up today. And
    I hope that this vote last night on NATO is a good indicator of what
    might happen on the ``GI bill'' for America's workers. Because think
    what it would mean if every person in every workplace in America--every
    person in every workplace in America--if they lost a job or if they were
    grossly underemployed, could get a certificate which would basically
    empower them to get further education and training at any point during
    their life. It could revolutionize the lives of a lot of those folks
    we're talking about that have not yet fully participated in the
    recovery. And I hope we can get the support for it.
        The last thing I'd like to say is that if you all are going to keep
    producing more things in less time at higher quality, you've got to sell
    them someplace. And you have to sell them to companies that in turn sell
    their products. Everybody you sell something to has got to sell what
    they sell--produce to somebody else. Otherwise they can't buy your
    product. So it's very, very important that we have a growing American
    economy and a growing world economy.
        If we don't have a growing world economy, we're going to be in deep
    trouble. Why? Because we have 4 percent of the world's population, but
    we have 22 percent of the world's wealth. Now, you don't have to be a
    mathematical genius to know that if you've got 4 percent of the
    population and 22 percent of the wealth and 96 percent of the people are
    living someplace else, and for the next 20 years in the developing
    countries, they're projected to grow at 3 times the rate of the rich
    countries, somebody has got to sell something somewhere else than
    America in order to maintain our 22 percent share, in order to maintain
    the opportunities that we all want for our children.
        And that means that we have to help other people get wealthier, too.
    And you may have noticed, in Washington we're having a big argument now
    about whether we should pay our fair share to something called the
    International Monetary Fund, the IMF. What that fund does is to help
    countries who get in trouble stabilize their economy so they can start
    growing again--from our point of view, so they can start buying our
    products again.
        Now, we're out here in California--30 percent of our economic growth
    in the last 5 years has come from selling to other countries. Over 30
    percent of our exports go to Asia. You have been reading in the papers,
    I'm sure, that a lot of those Asian countries are in trouble. The IMF
    does not just go in and give people money; it says, if you've got a
    problem, you've got to clean up your act, organize your business
    properly, start running your economy efficiently, and if you'll do these
    things, then we'll help you get stabilized and start growing again.
        Those Asian countries are our trading partners. They're an important
    part of our future. And I think we ought to pay our fair share to the
    IMF. I don't care what other political business is going on in
    Washington--and there is a lot of other things that are going on here--
    we should do whatever is necessary to keep this expansion going. And I
    hope that you will send that signal. And I want to thank you
    representative, Zoe Lofgren, for being strongly
    in favor of this position. But we've got to convince the Congress that
    America, if we want to lead the world economically, has at least got to
    pay our dues and put in our part of an institution that is going to help
    Asia come back so we can keep selling.
        I guess that's a long-winded way of saying the best way for us to
    succeed is for me to do my part and you to do yours. And I'm going to
    try to do that. But one of the things that we have to do is get the
    focus in Washington on basic things: How do we build a world-class
    education system; how do we support companies that are committed to
    changing technologies; how can we make sure workers can continue to get
    the education and training they need? That's what I hope to learn from
    you here today, and what I hope through your voices all America will
    hear on the news tonight and tomorrow morning.
        Thank you for the example you set for our country. Thank you very
    much.

    [At this point, the discussion proceeded, and it is joined in progress.
    Joe Parisi, founder and president, Therma, Inc.,
    said that his company tried to be ahead of the curve and benefited from
    training schools established in partnership with employee unions.]

        The President. How do you determine--first of all, who pays for the
    training?
        Mr. Parisi. The employers donate so many cents per hour toward a
    training fund.

    [[Page 657]]

        The President. And are the training programs just for the employees
    of your company, or do they include people from other companies?
        Mr. Parisi. All of the people in the construction trades go to the
    training schools.
        The President. And is there a regular schedule for doing it, or does
    it depend on what new things you're doing at any given time?

    [Mr. Parisi explained that most of the employees participate in a 5-year
    apprenticeship training program in order to become a journeyman and that
    60 percent of employees at the journeyman level continue their education
    in evening classes.]

        The President. And you started this company 31 years ago?
        Mr. Parisi. Yes.
        Nicki Parisi. Yes.
        The President. When Nicki was underage. [Laughter] Now, I didn't
    want to put this out on the record. How many employees did you have when
    you started?
        Mr. Parisi. Well, one or two. [Laughter]
        The President. And how many do you have here today?
        Mr. Parisi. You're looking at them--1,600, I think, give or take.
        The President. That's pretty good growth. That's impressive.
        LeRoy, do you want to talk about----

    [LeRoy Ginn, project manager, Therma, Inc.,
    discussed how the company gave its employees opportunity to prosper in
    their careers.]

        The President. Give us an idea of the different kinds of customers
    you have. Do you serve people in the computer business, people in the
    biotech business?

    [Mr. Ginn said the company served every major computer manufacturer, as
    well as manufacturers of tools to make computer chips. Another
    participant noted that the short product life cycle in the technology
    industry encouraged Therma employees to be innovative in order to help
    their customers stay competitive. Another praised Mr. Parisi and his
    wife, Nicki, cofounder and chief executive
    officer, Therma, Inc., for promoting independent decisionmaking by field
    personnel.]

        The President. Good for you.

    [The participant explained that the fast turnover of projects in the
    high-tech industry fostered utilization of the best talent. Patricia
    Glenn, customer service manager, Fix Air Co.,
    said that time constraints mandated cooperation among companies in the
    industry. Other participants cited the willingness of employees to adapt
    and react quickly because of the level of trust placed in them.]

        The President. That may be the single, most significant revolution,
    even more important than all the technology, that's occurred in
    manufacturing in America over the last two decades or so. The companies
    that are doing really well are the companies that empower their workers
    and that learn from them as well as teach them, and where people are
    working together.
        I can go to any part of America and spend half an hour in a plant
    and immediately know, without anybody having to say anything, how people
    feel about that, because that's the most important thing that you see--
    anyplace you go, whether the answer is a good one or not a good one,
    it's down deep inside the most important thing to the people that work
    there.

    [A participant commented that the lack of a formal hierarchy at Therma
    allowed for a friendly and cooperative work environment. Other
    participants concurred that the company's teamwork approach inspired
    both customer and employee loyalty over the long term.]

        The President. That's what you said, right?
        Participant. It's true. That's right. [Laughter]
        The President. You could go somewhere else.

    [Participants described training and learning opportunities provided to
    employees to enhance their skills and improve their careers.]

        The President. You know, it's interesting, I have worked hard--with
    limited success, I might add, but more than I would like--more than I
    thought in the beginning we'd have--with the Vice President, to try to organize this kind of workplace in as
    many Government agencies as possible. And it's harder in some ways,
    because you're organized to make good things happen and to make good
    things happen in a hurry. A lot of people who go to work for the
    Government are terrified that something bad will happen, and it will be
    on them, and they'll read about it in the newspaper, and then they'll
    have to be a scapegoat for it.
        So what that tends to do is to create a kind of a--to reinforce the
    sort of bureaucratic mentality: Don't venture out, don't try, because if
    you make a mistake, it will be in the papers;

    [[Page 658]]

    all the taxpayers will be mad; you'll be the goat; you'll be out the
    door sort of thing. As a consequence, more mistakes are made.
        If you think about it, we've still got--we are really trying to
    create an environment in which we can respond more quickly to people's
    needs. We're having--just a little example--we're having millions of
    people this year are filing their income taxes by E-mail or telephone,
    in just a few minutes. And most people have a fairly simple form. There
    may be, I don't know, some percentage that will be harder to check, or
    whatever. But the point is, it's really worth doing because it's a
    hassle on the best of terms and to make it easier for people is a good
    thing to do.
        And the Social Security Administration, believe it or not, won an
    award, over L.L. Bean and a lot of other places, for the best telephone
    service of any major, big organization in America. [Laughter] But we
    really worked at it.
        But it requires getting people to not be afraid to try something
    new, and to let them know that, assuming they're not abusing the
    citizens or something, that if you're actually out there trying to do
    something new and you're taking a chance, if it doesn't work out, you're
    not going to be punished because you want people to feel that way.
        But it is really--it's an enormous challenge to try to create the
    flexibility and productivity you have in an organization like this,
    where you have clear common goals. I mean, it's not like there's no
    uniformity of objective--or uniformity of standards. But you still have
    some creativity in carrying it out. And you've kind of got my juices
    flowing to keep trying today.
        But every effort we've made in Government has been worth it. But I
    just--I want to urge all of you to support us in doing that, too,
    because it's like everything else. If you give people a lot of freedom
    and you ask them to try, once in a while you make a mistake, because
    nobody is perfect. And you have to create an environment in which your
    people are trying to do the right thing for the right reason and not
    being reckless in doing it--you support that.

    [A participant agreed with the President, and Ms. Parisi asserted that
    if mistakes were not made, nothing was being attempted. She then quipped
    that she and her husband could make a lot of mistakes, but their
    employees covered them up.]

        The President. I could say something hilarious about that but I
    won't. [Laughter]
        Let me say again, though, I think--one of the places, interestingly
    enough, where we've had quite a bit of success is a place that you might
    not expect, is in the military, because we have very rigorous, uniform
    training characteristics. I was out here a couple of years ago, actually
    in the harbor at Oakland, having lunch on an aircraft carrier with some
    career Navy people. And I talked to an enlisted man who had done 19
    years in the Navy, and he'd quit and gone to work in the private sector
    for 2\1/2\ years, and he came back to the Navy because he said that as
    compared to the private sector job he had, he had much more
    responsibility and they trained him--they gave him at least one new
    skill every year. It was fascinating. And he said, ``Eventually I'll
    have to quit this, and I'll still be a young person,'' but he couldn't
    find another job in the private sector where someone was always teaching
    him something new and where he was being given more and more
    responsibility. And that's basically what I'm hearing from all of you.
        Participant. Hopefully.

    [A participant discussed Mr. Parisi's devotion to the company's training
    center and stressed the importance of training in the high-tech
    industry.]

        The President. You'd be amazed how little of this is done in some
    other parts of the country and some other sectors of the economy. And
    yet I'm convinced you would have pretty much the same pay-off
    everywhere, because what you go around here, you see that--I mean, sure,
    you're serving all these high-tech industries, but if this company were
    located out in the middle of the country somewhere where you had a
    totally different customer base, you would still be making more money if
    you were doing the same things you're doing here. Isn't that right? And
    you would still have that gentleman over there running your computer
    program for you and you'd still have all this--in other words, you'd be
    doing all this stuff that you're doing here, even if you had a different
    customer base.
        That's what we've got to get people to understand, that we need--
    that you can't--education and technology dominate every form of
    production. And just the fact that your end users happen to be in
    Silicon Valley predominantly, or be in this kind of business, is almost
    incidental

    [[Page 659]]

    to what we should be doing in every workplace in America, I think.

    [A participant said he had acquired skills he could take elsewhere if
    necessary, though he wanted to stay at Therma. Other participants agreed
    and discussed the level of cooperation within the company and with
    specialists in the industry, as well as the rate of growth of companies
    in high-tech fields, particularly the pharmaceutical-biotechnology
    industry.]

        The President. For whatever it's worth, our people believe that that
    will continue for another 20 years because of the human genome project
    and all the mysteries we're unlocking. Just 2 years ago--year before
    last, we found these two genes that are predominate in causing breast
    cancer. We've seen splicing of nerves in laboratory animals that
    actually repair the spines of laboratory animals that have been broken,
    so that they can actually have lower body movement again, which offers
    the possibility, if we can work out the genetic sequencing in people,
    that people who are in wheelchairs because of spinal cord injuries may
    be able to walk again.
        All these things are happening, and the pace at which these genetic
    discoveries are being made is accelerating rather dramatically. So I
    think there will be more of it.

    [A participant noted that Therma process engineers designed the process
    for a biotechnology firm to make its product.]

        The President. That's an amazing story. [Laughter]
        Participant. No, it happens all the time.
        The President. Just your typical sheet metal worker story.
    [Laughter]
        But again, it shows the power of ideas. And if you think about it,
    work can be a lot more interesting now than it even could have been 50
    years ago, when it wasn't being powered by ideas and repetition was
    important in building the kind of traditional industrial society. Now
    work can be fun and good because the whole economy is being powered by
    ideas. And that means also that there is an unlimited, inexhaustible
    supply of future human endeavor, which is why I believe, for example,
    that the environmental movement, the movement to have--to deal with the
    problems of climate change and global warming, which we've seen a little
    bit--a taste of with El Nino this year, that that will not cost jobs,
    that will generate jobs, because we'll have to figure out how to do it
    and ideas will be brought to bear on it. All these little people that
    come up with all this stuff and then become fabulously wealthy are just
    idea machines.

    [A participant agreed, noting that the ban on chlorofluorocarbons and
    certain other refrigerants caused problems in industry, but was also the
    catalyst for many cottage industries in alternative technologies.]

        The President. The CFC thing is a great example. When we took
    chlorofluorocarbons out of the atmosphere, it not only--it was projected
    to have a modest negative impact on our economy, and instead it had a
    noticeable positive impact. And I think that the important thing for the
    Government, for us, to do is to--when we make these rules is to make
    them in such a way that allows these kinds of processes to develop.
        Participant. Phase them in?
        The President. Yes. And to give a market solution a time to work.
    That's a big concern I had when we went to Japan last December to try to
    come up with some rules about how to deal with climate change. I am
    positive that--if you look at what puts carbon dioxide into the
    atmosphere today, about a third of it comes from vehicles; about a third
    of it comes from buildings, both residential and commercial; and about a
    third of it comes from power plants and factories. And we now know that
    there is available technology--just for example--you can buy windows now
    which let in 6 times as much light and let out only one tenth as much
    heat. They cost about 3 or 4 times as much, but if they have a 2-year
    payout, then after that, you're making money. And once you get the
    technology, once it all works out, then we will be doing these things
    that we ought to do for the environment because they also are good for
    the economy. You have to turn the problem into an idea machine.

    [A participant described how the company's energy retrofit department
    helped companies run more energy-efficient buildings and operations by
    upgrading equipment and operating controls.]

        The President. Yes, what do you require? If you start something new
    like that, how quick does it have to pay out for you to think it's worth
    doing?

    [[Page 660]]

    [A participant replied that most customers wanted to see the payback in
    energy savings in 1 year, but that some were only interested in low
    construction costs, no matter how quick the payback.]

        The President. Well, we're trying to see if we can make a few
    changes in the Tax Code that will change that behavior, because in
    manufacturing processes there are like--there's not one big thing, as
    you know, there's dozens of little things that can be done, all of
    which, at least the ones that I've studied, have a 2-year or less
    payout, which dramatically cuts your energy bill. And then after that,
    you're making money eternally.
        And so we're trying--I have asked the Congress to adopt some minor
    changes in the Tax Code which won't cost a lot of money, but which would
    give significant incentives if you're right up against that decision--
    you say, ``Well, can I wait a year, year and half to get this money
    back?''

    [Participants said that such incentives would be a big stimulus to their
    industry, noting that decisions were too often based solely on bottom-
    line profit and stock market success.]

        The President. They would have been better off waiting in the last 5
    years. Wait and wait and wait. [Laughter]
        Participant. It's a tough call.
        The President. You've got the biggest stake in this. [Laughter] I
    asked him if it was true he had nine children. My notes said he had nine
    children. He said it was true, and I said, congratulations. [Laughter]
    Well, I mean, it's true; you have a stake in this meeting. You have nine
    kids that will be able to do hundreds of different things that haven't
    even been invented yet by the time they're old enough to go into the
    workplace.
        Johnny Gooch. That's true.
        Participant. What's the age span of them, Johnny?
        Mr. Gooch. Oh, God. [Laughter]
        The President. He's going to start bragging now. [Laughter]
        Mr. Gooch. From 23 to 17 months.
        The President. Do you have twins?
        Mr. Gooch. Yes. Most of you know who know me, I have 2 sets of
    twins, 8 years old and 17 months. Big span. [Laughter]
        The President. That's great.
        Participant. ----extended production. [Laughter]
        The President. Here's a man who wants to be taken care of in his old
    age. [Laughter]
        Participant. There won't be enough Social Security. [Laughter]
        The President. Oh, yes, there will. [Laughter]
        I will say, though, one of the things we're doing now is we're
    undertaking a process across the country to determine what we have to do
    to change and modernize both Social Security and Medicare to make sure
    it's there when the baby boomers retire.
        The generation of people who will turn--the oldest baby boomers--I'm
    one of them--the people that were born between '46 and '64, that group
    of people, are the largest group of Americans in a given generation in
    history, until last year when we got--last year there was finally a
    group of school children that were more numerous than the baby boomers.
    But that skips a whole generation and then some. So that when we're all
    in the retirement system, which is roughly 2029--that is when we're all
    65 or over, which is about 2029, we'll all be--all the baby boomers will
    be 65 or over--if we continue the projected work force participation
    rates and the projected retirement rates, there will be only two people
    working for every person who's drawing Social Security. And, so, we're
    going to have to make some fairly substantial adjustments to make sure
    that the benefits are there to provide at least the minimal support that
    Social Security provides today.
        About half of the seniors in America would be living below the
    poverty line if it weren't for Social Security, although almost all
    seniors have income over and above Social Security. Social Security
    itself is not enough for hardly anybody to maintain the standard of
    living they had before they retired, but if they didn't have it, they'd
    be in trouble--most people. So what our trick has got to be is to figure
    out how to keep what is good about it, but to make the adjustments
    necessary so that it's financially stable and so we can--and maybe have
    a little bit higher growth rate from our investments--so that we can
    deal with the coming population changes.
        Participant. The one thing nice about the unions is that they have a
    fabulous pension program. They retire real well.
        The President. Pension plan.

    [[Page 661]]

        Participant. [Inaudible]--with the advancement of all of the medical
    advancements and lifestyle changes, that the retirement age of 65 is a
    little bit shy now, that we can extend that out.
        The President. Yes. We're raising it to 67.
        Participant. I think it should be even higher than that. I think
    people are productive way after that.
        The President. Well, one of the things that we're trying to do to
    deal with that--we've raised it to 67, and then we have made it
    possible--we've put incentives in the system for people who want to work
    to work longer.
        If you raised it to 70, for example, the real problem with that is
    that the--and, of course, you have early retirement at 62 and you take a
    discount. You'd change the discounted value. So the more you raise the
    retirement age, the less you get if you retire earlier. But the real
    problem with going--and we're looking at this, and as I said, we've
    tried to raise the incentives, for example, now, for people to keep
    working. Because if they keep working, they keep paying taxes and
    they're paying into the system even if they're also drawing some Social
    Security. And that really makes a huge difference in leveling up the
    system.
        But if you go to 70, you could probably work here comfortably at
    70--here--but there's still a lot of people who work in jobs where it
    would be quite difficult for them to work that long. And so, if--you
    say, well, but you still have the early retirement option--that's true,
    but the early retirement option is worth considerably less, because you
    take the present value of the whole deal, because you move the full
    retirement out later than if you retired at 62, you get a little less.
        I agree that it has to be raised, and we are raising it to 67. We've
    tried to--and one of the things that--one of the variables that's being
    looked at is whether it should be raised more. Other people have
    suggested that we have, for younger workers, some portion of the payroll
    tax available for their own investment decisions on the theory that--
    now, that looks like a wonderful idea now because the stock market has
    gone from 3200 to 9000 since I've been President, and there's no
    precedent for that in history.
        It's also true that over a 30-year period--any given 30-year period
    in the 20th century, stocks have always outperformed guaranteed
    Government investments. The problem is, if you had an individual
    account, it's not true in every month of every year. So what happens if
    you have to retire in a year when the thing is down for several hundred
    points and you don't get it out. If there's some way to sort of share
    the gains, if you will, across the years--that's one of the things we're
    looking at. Because, obviously, if we could generate a higher rate of
    return for the investment that you make in your payroll tax, it would
    make Social Security more attractive to younger workers.
        The other thing, don't forget, that Social Security does that other
    retirement systems don't, is it's also--it's a disability plan and it's
    a survivors insurance policy. So if you pay into Social Security here
    and something happens to you, then your surviving family at least get
    something to help them survive, and that can be quite important.
        But let me just say this--there is a huge amount of discussion about
    this out there now, and I think most Americans know we've got to make
    some changes. And I think most Americans will support us making some
    substantial changes, because there is no point in being dishonest about
    it, we can't sustain the present system as the baby boomers retire at
    the present rates of return.
        But there is also--it's important not to overlook how much good this
    program has done to stabilize--the poverty rate among seniors in America
    is now under 11 percent, and it is lower than that of the population as
    a whole. It has been for over 10 years now, for the first time in the
    whole history of America. And that's something that our country should
    be proud of. So we have to figure out how to save the best parts of it.
        But you ought to tell--if you have any ideas, specific ideas, or you
    want to even organize the folks in the company to put their ideas up, if
    you give them to Congresswoman Lofgren, I
    promise you they will be carefully reviewed by our group, because we're
    actually trying to go out in the country, tell people what the facts
    are, and figure out what the best resolution is.
        Participant. Mr. President, I think I see a signal here that we have
    to quit. [Laughter]
        The President. This is Clinton's Second Law of Politics. When you
    start to have a good time, you're supposed to be somewhere else.
    [Laughter]

    [[Page 662]]

        I've enjoyed this immensely. Thank you all very much. Thank you. I
    appreciate it.

    Note: The President spoke at 12:35 p.m. in the Therma, Inc., warehouse.
    In his remarks, he referred to Dan Kirby, floor manager, and Johnny
    Gooch, sheet metal foreman, Therma, Inc.; Mayor Susan Hammer of San
    Jose; Amy Dean, business manager, and Steve Preminger, community
    services director, South Bay AFL-CIO Labor Council; Ray Lancaster, Jr.,
    business representative, Plumbers, Steamfitters and Refrigeration
    Fitters Union Local 393; Mark Van Den Heuvel, business representative,
    Sheet Metal Workers Union Local 104; and David Chetcuti, a Millbrae, CA
    police officer who was shot and killed in the line of duty on April 25.