    [Public Papers of the Presidents of the United States: George W. Bush (2005, Book I)]
    [May 4, 2005]
    [Pages 723-733]
    [From the U.S. Government Publishing Office www.gpo.gov]

    Remarks in a Discussion on Strengthening Social Security at the Latino
    Small Business Economic Conference
    May 4, 2005

        The President. Thank you all. Thanks for coming. Please be seated.
    Sientese. Thank you, Hector. Thank
    you for the job you're doing with the Small Business Administration.
    Thank you all for coming today to hear this conversation about how to
    make sure a very important part of our society functions well for a
    young generation of Latinos and people from all walks of life.
        So today we're here to discuss Social Security and the importance of
    Social Security. And I want to thank our panelists for

    [[Page 724]]

    joining us. I want to thank the Latino Coalition for hosting this
    reception. As I look out into the crowd, I see a lot of familiar faces
    and a lot of friends. It's great to see you all again. Thank you for
    coming.
        I want to thank Roberto de Posada, the
    chairman and president of the Latino Coalition. Thank you for hosting
    this event.
        I am honored to be joined today by--or we are honored to be joined
    by the chairman of the Ways and Means Committee from Bakersfield,
    California. It's relevant he is here. After all, it's his committee that
    is going to write the reforms necessary to make sure the Social Security
    system works for a younger generation of Americans. I have worked
    closely with Chairman Thomas on a lot of
    crucial issues. When he says he can get the job done, he means he can
    get the job done and has proven over the past 5 years that he can get
    the job done. Mr. Chairman, thank you for joining us.
        As well Congressman Chris Cannon
    from Utah is with us. Thank you for coming, Congressman; honored you're
    here.
        Before I talk about Social Security, though, I want to remind you
    the war on terror goes on. And today's report on the capture of a top Al
    Qaida operative, Abu Faraj al-Libbi,
    represents a critical victory in the war on terror. Al-Libbi was a top
    general for bin Laden. He was a major
    facilitator and a chief planner for the Al Qaida network. His arrest
    removes a dangerous enemy who was a direct threat to America and for
    those who love freedom.
        I applaud the Pakistani Government for their strong cooperation in
    the war on terror. I applaud the Pakistani Government and President
    Musharraf for acting on solid intelligence
    to bring this man to justice. The fight
    continues. We'll stay on the offensive until Al Qaida is defeated.
        Franklin Roosevelt did a wise thing when he set up the Social
    Security system. A lot of people throughout the last decades have
    counted on a Social Security check to help them in retirement. As a
    matter of fact, I'm sure you know people in your communities that rely
    upon their Social Security check completely to make sure they have
    dignity in their retirement. It was a wise idea to set up the system,
    and I am mindful that when anybody in Washington talks about Social
    Security, a wave of fear ripples through the senior community because
    they think somebody is about to take their check away.
        So I want to open my comments to you all to assure you that your
    loved ones who count on Social Security will get their check. Nothing
    will change for today's seniors who are getting a Social Security check.
    If you--as a matter of fact, if you were born prior to 1950, nothing
    will change. The system is solvent enough to keep its promises. And
    that's very important for people to hear. So when you hear all these ads
    and propaganda saying, well, you know--this talk about making sure the
    Social Security system is modern and the seniors are not going to get
    your check, just know it's not true, and please assure seniors it's not
    true, because it's not.
        The safety net will work for them, but there is a hole in the safety
    net for a younger generation of Americans coming up. And here's why--
    first, let me just describe the nature of the system, and that is, it's
    a pay-as-you-go system. You pay in payroll taxes, and the Government
    takes care of retirees and, with money left over, spends it on other
    programs. And all that is left is a file cabinet with IOUs. See, some in
    our country believe that the system works this way: You pay into the
    system; we hold your money for you; and when you retire, we give it back
    to you. That's not the way it works. It's a pay-as-you-go system.
        Now, the reason there's a hole in the safety net for people who are
    going to be paying into the pay-as-you-go system is because there are a
    lot of people getting ready to retire. We are called baby boomers. I
    happen to be one. I'm retiring

    [[Page 725]]

    in 4 years--at least I'm eligible for my retirement. [Laughter] I turn
    62 in 4 years. There are about 75 million baby boomers who will be
    retired when it's all said and done. There are 40 million baby boomers--
    I mean, retirees today. So think about that. We have 40 million retirees
    today, and in relatively quick order, there's going to be over 70
    million retirees. So we've got a lot more people that younger workers
    are going to have to pay for.
        Secondly, we are living longer. I plan to live a long time.
    [Laughter] It's why I'm exercising a lot. [Laughter] It's why I'm making
    right choices about what I put in my body. And I suggest all Americans
    exercise more and be wise about what you eat and what you drink. It'll
    help you live longer, they tell me. But a lot of us are going to live
    longer, and we've been promised greater benefits than the previous
    generation.
        So if you're a younger worker out there, you're now looking at more
    people retiring, who will be living longer--in other words, you have to
    keep paying more monthly benefits over time--who've been promised
    greater monthly benefits. And there's going to be fewer of you paying
    into the system. In 1950, there were 16 workers for every beneficiary.
    Today, there is 3.3 workers for every beneficiary. In short order, there
    will be two workers for every beneficiary. So young workers are going to
    be paying for more people living longer, getting greater benefits.
        And the pay-as-you-go system goes negative in 2017. In other words,
    there's more money going out than coming in. And in--and every year it
    gets worse. That's just the way it's going to work. And so in 2027,
    you're going to be $200 billion in the hole, for example. It will be 300
    billion in the 2030s, and the system is going to be broke in 2041. So
    you've got people who are starting to pay into the system now who are
    paying into a system that's not going to be around.
        And I don't want to make younger workers a lot of--nervous in
    America. The people who ought not to be nervous are the older Americans.
    You're going to get your check. It's the people paying for baby boomers
    like me who are going to retire who ought to be paying attention to this
    issue, because the system is insolvent.
        So I have an obligation to encourage Congress to act. And Chairman
    Thomas knows what I'm about to say: The
    longer we wait, the more expensive it's going to be. If Congress chooses
    to do nothing on this problem, you're either going to have to raise your
    payroll tax to, some estimate, 18 percent or cut benefits dramatically
    by 30 percent. So now is the time to get after it, in my judgment.
        Obviously felt that way because in the State of the Union, I spent a
    lot of time talking about it and subsequently have spent a lot of time
    talking about it. I'm going to continue traveling our country making it
    clear to people we've got a problem, because, see, once they figure out
    we've got a problem, the next course of action is going to be to say to
    Congress, ``How come you're not doing anything about it? How come you're
    allowing partisan politics to prevent good people from coming together
    to solve the problem?''
        I have an obligation to put some things on the table, and I've been
    doing that. First, I believe that future generations must receive
    benefits equal to or greater than the benefits of today's seniors.
    Secondly, I believe this country needs to set a goal that says, if
    you've worked all your life and if you paid into the retirement system,
    to Social Security, you should not retire in poverty. To me, that's a
    noble goal. Frankly, it's the kind of goal that Franklin Delano
    Roosevelt would strongly support.
        And so in my press conference the other night, I proposed a way of
    calculating future benefits for future retirees that said, ``If you're a
    low-income worker, your benefits ought to raise--rise with wage
    increases, and if you're an upper income

    [[Page 726]]

    worker, your benefits ought to rise with inflation.'' Seems fair to me.
    Seems like a noble calling for the United States of America, to
    recognize a lot of people work really hard and don't make a lot of
    money, but when it comes time to retire, there ought to be dignity in
    retirement. I also believe that younger workers--and by the way, what--
    that plan alone, that part of a plan, solves the majority of the
    solvency issue for a generation of Americans coming up.
        In other words, what I'm talking about, making sure that we
    permanently solve the Social Security problem, can be done. And I have
    an obligation to advance the process by putting out some ideas that I
    think are important. And I want to thank Chairman Thomas for his willingness to work with us on this issue, and
    I'll work with him on this issue.
        Now I want to talk about something else that I think the country
    ought to consider, and this pertains to younger workers. I think younger
    workers--first of all, younger workers have been promised benefits the
    Government--promises that have been promised, benefits that we can't
    keep. That's just the way it is. And I believe I have the duty as the
    President to be willing to confront that fact, to tell people the truth.
    The younger people in America got to understand that. We've given you
    promises we just can't keep.
        But one way to make a permanent solution to the Social Security
    system a better deal is to allow younger workers to take some of your
    own money and set it aside in a personal savings account that you can
    call your own. And the reason why that's important is because if you
    watch your money grow with a reasonable rate of interest, you know it
    compounds over time. There's a compound rate of interest, which means
    money grows and grows, bigger and bigger and bigger. For example, if
    you're making $35,000 all your life, and you're allowed to take a third
    of your payroll taxes and set it aside in a conservative mix of bonds
    and stocks that have a reasonable rate of return, then when you get
    ready to retire, you'll have $250,000 as part of a retirement plan.
    You'll get your Social Security check, whatever the Government can
    afford, plus money off of your nest egg.
        Money grows. And the current system doesn't encourage, doesn't take
    advantage of compound interest. And so step one is, letting a younger
    person own their own--manage their own money in a conservative mix of
    bonds and stocks will mean you get a better deal on your own money. This
    payroll tax is your money. And the Government ought to say, you get a
    better deal on your money, and you can watch it grow.
        Secondly, I like people owning something. The more people own
    assets, the better off America is. I reject this notion that the
    investor class is limited to only a certain kind of person. The more
    moms and dads accumulate assets, the better off it is for American
    families. I want more people being able to say, ``This is mine. The
    Government can't take it away. The Government can't spend it. It's not a
    part of a pay-as-you-go system.'' And when you pass away, you can leave
    it to whomever you choose. That's a part of America. And more people
    that have that--this idea, I think, is fair. It means you get a better
    deal on your own money. It's fair. It encourages ownership.
        Listen, the system today is a lousy deal for widows. The way it
    works today is, if you and your spouse are working and one of you dies
    early, then the spouse upon retiring gets to choose the survivor
    benefits that your spouse has paid into the system or your own benefits,
    which is ever higher, but not both. So think about that. Somebody may
    have died at age 52, started working at age 22, worked 30 years and put
    all that money in the system, and his or her spouse ends up having to
    choose, to decide what retirement account he or she wants, the one she
    contributed to or

    [[Page 727]]

    the one he contributed to, but not both. In other words, the money goes
    away.
        In a personal savings account, as you watch your money grow, a
    worker sets aside money in an asset base. That asset can go to help the
    widow or the surviving spouse. The system isn't fair today, and we need
    to make it fair. And we can make it more fair for people at the lower
    end of the income scale.
        Now, I want to--and during this conversation, some things will come
    out that I think probably--hopefully some questions will come out that
    are on your mind. I want to address a couple of things. One, I
    understand there is a need for more financial literacy in America, and
    so I've instructed the FDIC and the SBA and the Treasury Department to
    work with the Latino Coalition and the Hispanic Chamber and other groups
    to help make sure that financial literacy is more widespread in all
    neighborhoods and all communities. FDIC has got the Money Smart
    financial workshop program. They're going to work with the Latino
    Coalition. SBA has got a negocios.gov program on the web page. Treasury
    has got all kinds of financial learning materials that we can spread
    out. And we need your help.
        Secondly, what I'm talking about, though, is happening in America
    already. In other words, I'm not inventing something new to say to
    somebody, ``You can invest your own money.'' When I was coming up, there
    wasn't a lot of talk about 401(k)s or IRAs. There wasn't any. And
    today--yesterday I had an interesting experience. I went down to the
    Nissan plant in Canton, Mississippi, and it was a very diverse audience,
    a lot of assembly line workers. And I said, ``How many of you all have
    got your own 401(k)?'' I mean, the number of hands that went up was
    astounding. You've got people from all walks of life managing their
    money already. People are getting used to it.
        Matter of fact, this was such a good idea that the United States
    Congress a while ago decided in the Thrift Savings Plan, the Federal
    Thrift Savings Plan, to allow Federal workers, Members of the United
    States Congress, and Members of the United States Senate to manage their
    own personal account. See, and the reason why is, I'm confident, they
    took a look at the rate of return the Government can get versus the rate
    of return that you can get in a conservative mix of bonds and stocks and
    decided they'd want their money to grow--they'd want to watch their
    money grow faster than that available through the Government. And so
    they said--they just decided, ``We'll get to do this, too.''
        If it is good enough for a Member of the United States Congress to
    set aside some of his or her own money in a personal savings account so
    they get a better rate of return, they can pass it on to whomever they
    want, it ought to be good enough for workers all across the United
    States of America.
        I am honored to be joined by Fidel Vargas
    today. Fidel is an interesting man. He's already been a--he's 36, and
    he's already been a mayor of a California city. Did a fine job there.
        You know, when I first got elected, I recognized that the Social
    Security issue was going to be an issue that was going to require some
    sound thought and reasoning. People needed to be coming together to help
    think about this issue. And so I set up a Commission. Daniel Patrick
    Moynihan, the former Senator from New York, Democrat Senator, was the
    Chairman of it, and I asked Fidel to join.
        And welcome, Fidel. Thanks for coming. He
    is a--well, you'll see. He knows what he's talking about.

    [At this point, Fidel Vargas, managing director, TMG Advisors, Baldwin
    Park, CA, made brief remarks, concluding as follows.]

        Mr. Vargas. And I'm a little embarrassed to
    say, but I think I'll share with the President that the first time he
    ran, I didn't vote for the President. So excuse me for that, sir. But
    I'm sure--[laughter].

    [[Page 728]]

        The President. Turns out a lot of other people didn't, either.
    [Laughter]

    [Mr. Vargas made further remarks.]

        The President. Great job. Thanks for coming. The fact that you went
    to Harvard bothers me more than the fact that you didn't vote for me.
    [Laughter]
        Mr. Vargas. We both went to HBS.
        The President. That's right. I forgot that part. Anyway--
    [laughter]--good job. Thanks for coming.
        The message here is really important, that it doesn't matter whether
    you're a Republican or a Democrat on this issue; what matters is, do you
    care about the future of the country, and are you willing to set aside
    partisanship and work in a constructive way to get something done?
        If you're a senior, you're going to get your check. You know what's
    happening now? A lot of grandmothers and grandfathers, when they finally
    absorb that message, are beginning to say, ``What about my grandkids,
    Mr. President? It seems like there's a big problem coming for them. What
    are you going to do about?'' And now is the time to do something about
    it.
        Fidel, I appreciate your tone; I appreciate your constructive work
    on this issue. Thanks for coming.
        Our next guest is Russell Ybarra. He's un
    Tejano.
        Russell Ybarra. A true Tejano.
        The President. A true Tejano. Those are the best kind. [Laughter] A
    businessman--tell everybody what you do, Russell.
        Mr. Ybarra. Well, first of all, yes, I
    was born and raised in the Lone Star State, so we're neighbors.
        The President. Very good.
        Mr. Ybarra. Again, my name is Russell
    Ybarra, and I tell people the first three words I learned in Spanish was
    lechuga, tomate, y cebolla, because that was the order we put them on
    the tacos at my family's restaurant when I was growing up. [Laughter] So
    anyway, I'm the president and CEO of Gringo's Mexican Kitchen. We
    operate six stores in the Houston area and one in San Antonio.
        The President. Good. How are you doing? Making a little----
        Mr. Ybarra. We're paying our taxes--on
    time. [Laughter]
        The President. How about your ownership? You paying any of that?
        Mr. Ybarra. A little bit.
        The President. A little bit, that's good. Well, in other words,
    you're in business.
        Mr. Ybarra. Exactly.
        The President. That's good.
        Mr. Ybarra. We have a duty.

    [Mr. Ybarra made further remarks, concluding as follows.]

        Mr. Ybarra. Again, the 401(k) program in
    the food service industry is an exception, not the rule. And I thought,
    okay, we have a 401(k) program implemented, in place, and so we should
    just have everybody lining up to join the plan. Well, it didn't work out
    that way. We have very low participation and for good reason: Many of
    those that work for us are what you would consider low-wage earners.
        The President. Can't afford the contribution.
        Mr. Ybarra. Right. Exactly.
        The President. Payroll tax.
        Mr. Ybarra. Well, and that's just it.
    They're already paying 12.4 percent, basically, and have little or no
    disposable income to set aside for future retirement. So this really
    impacts them dramatically.

    [Mr. Ybarra made further remarks.]

        The President. The best thing is to let them take their payroll
    taxes they're paying into the system and have a plan that allows their
    money to grow just like a 401(k) can. That's the best thing to do for
    low-income workers. That's why the Social Security reform is a vital
    reform for people at the lower end of the wage scale. It's really
    important.
        Anyway, go ahead. Sorry to interrupt.

    [[Page 729]]

    [Mr. Ybarra made further remarks.]

        The President. Right. Remember, and this is important for people to
    hear, this is not the Government saying, ``You have to do this.'' This
    is Government saying, ``If you so choose to set aside some of your own
    money, you ought to be allowed to do so.'' It's optional. It basically
    says that Government is not going to dictate; Government just says,
    ``Here's an option to trust people with their own money.''
        And a couple of points I want to make on Russell. One, the
    entrepreneurial spirit is strong in America, and we need to keep it that
    way. Congratulations on starting your own business.
        Mr. Ybarra. Thank you.
        The President. This is a chance--you volunteered to come up here, so
    anybody listening on C-SPAN in the Houston area, looking for a good
    restaurant, Russell--[laughter].
        Mr. Ybarra. I'm currently also the
    Greater Houston Restaurant Association president.
        The President. Oh, good, yes.
        Mr. Ybarra. And I don't know if you know
    this or not, but the National Restaurant Association endorses your plan.
        The President. Well, thanks. I appreciate it.
        If you're making $8 an hour over your life, and you start having a
    personal account when you're 21 years old, and at the age 63 you'll end
    up with a $100,000 nest egg. That's if you stay at 8 all your life. In
    other words, that's how money grows. Wouldn't it be fantastic if a lot
    of folks who work for Russell's company were
    able to say, ``Here's my money. Here's the nest egg I built up for my
    family.''
        The more ownership there is, the more assets passed on through a
    community, the better off the community is going to be. And the idea of
    owning something ought to be spread throughout all America. That's the
    great promise of America. That's what we're all about. You come here;
    you work hard; you realize your dreams; and you have a chance to build
    something for your family. How many people--you said your dad and mom
    came. I suspect there's a lot of first generation of Americans here
    because their parents came over here because of dreams and hopes.
        By the way, speaking about restaurant employees, we've got to have a
    rational policy when it comes to immigrants coming to this country. I
    believe if there's--somebody is willing to employ somebody, and they
    can't find an American worker, and somebody is willing to do the job, we
    ought to make that connection a legal connection. People come here to
    work.
        And this, by the way, will make our borders more secure. As opposed
    to people having to get in the back of 18-wheelers and sneaking across,
    you know, Texas borders or trying to walk across the desert to find
    work, if you've got a pass that says, ``I'm a willing worker willing to
    work for a willing employer,'' it means they can just walk across
    normally and not have to try to sneak across. We'll be able to defeat a
    whole industry of document forgers and smugglers and coyotes, and it
    means we'll be able to uphold the dignity of persons around the world.
        Anyway, it's called diverting off the topic.
        Audience member. [Inaudible]
        The President. Por nada.
        Mr. Ybarra. One last point, Mr.
    President, and I think this is a profound one. The underlying benefit of
    what you're proposing is a lot like what we did with our core beliefs,
    reinvesting in our associates and local community. I feel by doing this,
    the American productivity will increase dramatically.
        The President. That's right. Well, basically, what he's just said is, ``If you own something, you have a
    vital stake in the future.'' I mean, think about how great it's going to
    be when Jose and Jessica, as they have an investment account--they're young,
    new married; we're about to talk to them here. But on a monthly basis, a
    quarterly

    [[Page 730]]

    basis, daily basis in some cases, you watch your assets grow. You open
    up a statement and say, ``Here is what I own.'' That encourages people.
    If they're seeing something they own grow, that the Government can't
    take away from them, it encourages. And it will enhance productivity,
    and it will enhance the spirit in a lot of communities.
        Good job. Thank you, Russell.
        Mr. Ybarra. Thank you.
        The President. It's great to see you.
        Jose. Jose and Jessica, welcome. Thank you all. Newlyweds?
        Jessica Gomez. No, 5 years.
        The President. See, not newlyweds. [Laughter] I'm glad you're here.
    Give us a sense of who you are, what you're doing.
        Jose Gomez. It's an honor to be here with
    you. My name is Jose Gomez. This is my lovely wife, Jessica. We've been
    married for almost 5 years. We have three beautiful kids. I currently
    attend DeVry University. I'm a full-time student.
        The President. Yes? What are you studying?
        Mr. Gomez. I'm studying network system
    administrator.
        The President. Network systems administrator--would you like to try
    to describe what that means to the technologically illiterate?
    [Laughter]
        Mr. Gomez. Basically, I will be taking care
    of a network in a business or something. But I, personally, want to own
    my own business.
        The President. Want to own your own business? That's great.
        Mr. Gomez. Yes, I want to start my own
    business later on, in the future.
        The President. Do you have any idea what it's going to be yet, or
    are you just getting the skills necessary----
        Mr. Gomez. Still getting the skills----
        The President. ----and the confidence necessary to launch?
        Mr. Gomez. That's correct. That's what I'm
    currently----
        The President. That's wonderful, though, isn't it? A guy sits up here with the President, ``I want to own my own
    business.'' [Laughter] You may take a few tips from Russell.
        Mr. Gomez. Currently I work in a job part-
    time, and they don't offer the 401(k). And I work basically on a check-
    to-check basis.
        The President. Yes.
        Mr. Gomez. What I like about your plan is it
    will give me the opportunity to start saving and looking for the future,
    for our retirement, and if we choose to, pass it on to our kids for a
    nest egg.
        The President. That's an interesting thought. You've got
    three little
    kids. Jessica, you
    want----
        Mrs. Gomez. I have three beautiful
    children: Joslynn, who is 4; Jovanni, who is 2; and Isabella, who is
    one.
        The President. Good, I'm looking forward to meeting them afterwards.
        Mrs. Gomez. They're looking forward to it
    too. I worry more about their future, as any other mother does. I worry
    about that if the system continues the way it is, as you said before, by
    the time they work, they're going to be working twice as hard to take
    care of us when we retire.
        The President. That's right.
        Mrs. Gomez. So then when they--it's time
    for them to retire, they're going to just be so worn out, they're not
    going to--they're going to be broke, both emotionally and financially.
        The President. Interesting thought, isn't it? Mom is sitting here, saying, ``I've watched--listened to
    the data.'' You know, the system starts to go broke 2017; 2041, as
    Fidel said, there's nothing left. And she's got
    little kids. She's going to be paying into that system, and so are they.
    It's a troublesome thought for moms and dads to think about the system
    as it is, and it's got to be just as troublesome to think that the
    Government is not--hasn't done anything about it. Now is the time to do
    something about it.
        You know, a lot--I talk to a lot of young folks like Jose and Jessica. There was an

    [[Page 731]]

    interesting survey once that somebody pointed up to me that said younger
    people think it's more likely they're going to see a UFO than get a
    Social Security check. [Laughter]
        Well, if you feel that way and you watch that money come out of your
    check every month, it's a little discouraging, isn't it, to be paying
    into something that you're not sure is going to be around. Yes, so this
    is a young person issue. Older people, the grandmoms and granddads, they
    don't have a thing to worry about. We're going to keep the promise. But
    it's the youngsters who are working hard, the moms and dads who are
    working hard, and the moms and dads who are worried about their children
    when they're coming up--that's what this issue is about, folks.
        And it is amazing to me that we're living in a town where people
    oftentimes say, ``Well, we can't cooperate with each other because of
    party politics.'' You heard a good Democrat sit up here and say
    he believes a reformed system will help his
    children and his community. That's the spirit that's needed. And we here
    in Washington, we need to think about people like Jessica and Jose, young kids, working
    hard, wants to start his business, got young kids, mom sitting up here
    saying, ``I'm worried about it.'' She's really saying this, ``You people
    in Government, how come you can't do nothing about it''--or ``anything
    about it?'' [Laughter]
        I've learned to correct myself early before it gets on the record.
    [Laughter] Fortunately, the First Lady is not
    here. [Laughter] She'd probably have some joke about it. [Laughter]
        Anyway, thank you all for coming. You got anything else you want to
    add? Well, I appreciate you letting us use you as an example. Looking
    forward to meeting the kids.
        Mr. Gomez. Thank you. It's been an honor.
        Mrs. Gomez. Thank you. It's very nice to
    be here.
        The President. Well, thanks for coming.
        Our final guest is Elizabeth Fernandez. Elizabeth, welcome. Tell us what you do.

    [Elizabeth Fernandez, member, Latino Coalition Social Security Task
    Force, made brief remarks.]

        The President. Yes, that's an important concept--sorry to interrupt,
    but you're right. To run up the payroll-tax rate is going to hurt a lot
    of small businesses. One of the things we've got to always be mindful of
    in Washington is how do you make sure the entrepreneurial spirit is
    strong. And one way to make sure it's not strong is to overtax the small
    businesses. And so I appreciate you bringing the payroll taxes in; it's
    a significant burden on many small businesses. And it's really, really
    an important point. Thank you.

    [Mrs. Fernandez made further remarks, concluding as follows.]

        Mrs. Fernandez. I don't know--do you
    have a financial literacy program, an education program set up to help--
    --
        The President. Yes, we do. That's--the FDIC, Treasury Department,
    SBA are very much involved with making sure people feel comfortable--I
    appreciate you bringing that up again, Elizabeth--people feel comfortable about what it
    means to invest. I recognize some people get nervous about it. You heard
    a Harvard man said he got--if he'd gone to
    Yale, he wouldn't have been so nervous, but nevertheless--[laughter].
    But he said--no, but it's a new thing. You know, some worry about it,
    but people need to be assured that there are thousands of their fellow
    citizens who are comfortable now investing their own money. They hadn't
    been doing it in the past.
        In other words, there's a new culture in America today. A lot of
    older Americans are saying, ``Well, this is too difficult for some,
    perhaps.'' But there's a lot of younger Americans who are getting
    comfortable with managing their own money through

    [[Page 732]]

    a series of programs such as 401(k)s or IRAs, defined contribution
    plans.
        And so--but you're right. We need to make sure people become more
    financially literate. And by the way, in terms of what you can invest
    in, you cannot take your money to the lottery. In other words, there's a
    conservative mix of bonds and stocks. And there are people to explain
    what it means.
        And you get to decide. If you're a younger worker, you may decide to
    have a more--a greater mix of stocks and bonds. As you get older, you
    may decide to diversify. But you're constantly making decisions for your
    own money. The Government doesn't make those decisions for you. The
    Government makes options available for you. And then when it comes time
    to retire, you can go into a Treasury bond account, a perfectly safe
    investment--all of which, by the way, all those investment vehicles
    yield a better rate of return than you're getting on the Government's
    money.
        I remember campaigning with John McCain on
    this issue, and he said that his Thrift Savings account--I think he said
    something like 7 percent rate of return on the money, as money grew over
    time. And that's compared to 1.8 percent in the current Social Security
    system. And that 5.2 percent difference in interest makes a huge amount
    of money--makes a huge difference for you in the amount of money
    available over time.
        So thanks for bringing it up. Elizabeth, anything else on your mind? You're awfully
    articulate. [Laughter]
        Mrs. Fernandez. No, I just--thank
    you for the opportunity to be able to share our concerns, and thank you
    for your efforts in this area.
        The President. Well, one of the things that Elizabeth said that triggered a thought here is that she
    said, ``This is a complex issue. There's a lot of misinformation.'' And
    I understand that. There's a lot of moving parts, as they say, which
    says to me I better keep working on it. And I'm going to. I'm just
    getting started. This is an issue that--I'm going to spend a lot of time
    talking about this issue. I will spend as much time as necessary.
        Congress has an obligation to act. I appreciate you saying I brought
    up an issue that I didn't need to bring up. I needed to bring it up.
    That's my job. The President's job is if--when he sees a problem, is to
    say, ``Let's deal with it,'' not to shirk the duty, not to pass it on.
        Fidel mentioned President Clinton--he started the process. I remember watching the
    townhall meeting you all had in Albuquerque in 1996, I think it was, and
    it was a fascinating discussion. Michael Boskin, who I think was on the commission then--I remember Mike,
    my buddy, talking about it. And I can't remember if you presented there
    or not.
        Mr. Vargas. I was there.
        The President. Did you present?
        Mr. Vargas. No.
        The President. Whew! [Laughter] I thought I might have dissed you
    there for a minute. [Laughter] But my only point is, is that that's what
    the President does. The President confronts problems, and now is the
    time to take this problem on.
        Mr. Chairman, I thank you for being here. Chairman Thomas would not be here if he didn't realize this was a
    very vital issue to people from all walks of life. And he wouldn't be
    here if he didn't believe that it was important to work together in a
    collaborative spirit to get something done. And so thank you for letting
    us advance the issue. I appreciate you providing the forum. I'm honored
    our panelists came here. Thank you all for being here again.
        May God bless you all, and may God continue to bless our country.

    Note: The President spoke at 10:31 a.m. at the J.W. Marriott Hotel. In
    his remarks, he referred to Small Business Administration Administrator
    Hector V. Barreto; Usama bin

    [[Page 733]]

    Laden, leader of the Al Qaida terrorist organization; President Pervez
    Musharraf of Pakistan; and Michael J. Boskin, senior fellow, Hoover
    Institution, who participated in a national Social Security forum
    townhall meeting with President William J. Clinton in Albuquerque, NM,
    on July 27, 1998. The Office of the Press Secretary also released a
    Spanish language transcript of these remarks.