    [Public Papers of the Presidents of the United States: George W. Bush (2005, Book I)]
    [April 15, 2005]
    [Pages 604-614]
    [From the U.S. Government Publishing Office www.gpo.gov]

    Remarks in a Discussion on Strengthening Social Security in Kirtland,
    Ohio
    April 15, 2005

        The President. Thank you all for coming. Please be seated. I
    appreciate you coming, Steve, thanks.
    Glad to give you a ride home on Air Force One. [Laughter] I really do
    like working with Steve. He's a thoughtful fellow who cares about
    issues, and this is--what we're here to talk about is an important
    issue, which is Social Security.
        Before I do, I want to thank the community college for hosting us.
    I'm a big believer in community colleges. Community colleges have got
    the capacity to change curriculum to meet the needs of a local
    workforce, for example. And one of the real challenges of the 21st
    century is to make sure people have got the skills necessary to fill the
    jobs of the 21st century. And a fabulous place to find those skills is
    our community colleges.
        So thanks for what you do. Thanks for being a host. Thanks for
    letting us come and have a--what I think you'll find to be a really
    interesting educational experience about a vital issue confronting the
    country.
        I want to thank Lieutenant Governor Bruce Johnson for joining us today. I appreciate State Treasurer
    Jennette Bradley for joining us today.
        I want to thank the mayor, Ed Podojil,
    who is here. I appreciate you, Mr. Mayor. And I want to thank Dave
    Anderson. The last time I saw Dave, I said
    to Dave, I said, ``Dave, fill the potholes.'' [Laughter] That's just a
    piece of advice. [Laughter] And so I saw him in line coming in. He said,
    ``I'm just here to report for duty, Mr. President. I did fill the
    potholes.'' [Laughter] You'd get reelected if you want to run again.
    [Laughter]
        Anyway, I want to thank Anita Isom, who's
    with us. Anita is a young lady I met when we landed there at the airport
    in Cleveland. She is a volunteer, and she has helped and been awarded
    because of her reading-related activities that benefit others. The
    reason I like to mention a soul like Anita is that, no matter what your
    age, no matter where you live, you can help this country by becoming a
    volunteer, by helping somebody who hurts, by teaching somebody to read,
    or feed somebody who's hungry, or put your arm around somebody who needs
    love.
        I like to remind people that the greatest strength of this country
    is the heart and souls of our fellow citizens and the great compassion
    of our people. And so if you're interested in serving America, do so by
    becoming a volunteer in the community in which you live and help change
    this country one heart and one soul at a time.
        So, Anita, thanks for coming. Thanks for
    meeting me at the airport.
        Let me talk about Social Security. I could be talking about a lot of
    things, peace

    [[Page 605]]

    and freedom. The world is changing right now because societies are
    becoming more free. And as societies become more free, more democratic,
    the world will become more peaceful.
        Today I went to a little restaurant, and the owner happens to be Lebanese American. And he said,
    ``Thank you, Mr. President, for staying focused on a country like
    Lebanon and insisting that Lebanon be allowed to have free elections.''
    And I assured him, like I'll assure you, that when America speaks, we
    mean what we say. When we say ``free elections'' to the Syrians, we mean
    free elections. Get out of Lebanon, and let this good country have a
    free election as scheduled. When I say, ``Get out of Lebanon,'' I mean
    out of Lebanon with all your troops and all your security services and
    all the people trying to influence that Government. It is in the world's
    interest that Lebanon be allowed to have free elections because a free
    society will help spread the peace.
        We're dealing with a lot of issues, and in Washington, DC, I've
    submitted a tough budget and expect the Congress to be wise about how
    they spend your money. I also know that Congress needs to stop debating
    and get an energy bill to my desk now, during this session.
        Congress also needs to take serious this issue about Social
    Security. People say, ``Why did you bring it up?'' I said, ``I brought
    it up because I see a serious problem that needs to be fixed now, before
    it's too late. I also brought it up because the job of a President is to
    confront problems and not pass them on.'' The easy route in politics is
    to say, ``Well, we got us a problem. We'll just let the next person
    handle it.'' The easy route for a Member of the United States Senate is
    to say, ``There is a problem, but it perhaps can wait. We'll just let
    another United States Senate fix it or send it to the House.'' That's
    not the way I think. I think I got elected because people expect me,
    when I see a problem, to bring it to the fore and to work with people to
    get it solved.
        And here's the problem in Social Security. There's a lot of people
    like me getting ready to retire. [Laughter] As a matter of fact, I'm
    retiring in 4 years--at least I hit retirement age in 4 years, which is
    convenient--[laughter]--in my case. I turn 62 in 2008. And I'm not the
    only one turning 62 in 2008. As a matter of fact, there's a lot of us.
    We're called the baby boomer generation. And not only is my generation
    fixing to retire, we are living longer than previous generations. And
    not only are we living longer than previous generations, we have been
    promised greater benefits than the previous generation. In other words,
    people running for office say, ``Put me in office, and I'll increase
    your Social Security benefits for you.'' And guess what? They did.
        And so a lot of us are getting ready to retire, and the problem
    comes because there's not a lot of people paying into the system. See,
    in 1950, there were 16 workers for every beneficiary. So you can imagine
    the load was somewhat lighter than today, when there's now 3.3 workers
    for every beneficiary. And soon there's going to be two workers for
    every beneficiary. You've got fewer workers paying into a system that is
    going to require more and more out-flow, because a lot of us are
    retiring, living longer, and been promised greater benefits. And the
    math just doesn't work.
        It's a pay-as-you-go system, by the way. That means, when the money
    goes in, it comes right out. It's not a trust. I mean, some people in
    America, I suspect, think that the Federal Government all these years
    has been collecting your payroll taxes and we're holding it for you, and
    then when you get ready to retire, we give it back to you. That's not
    the way it works. The way it works is, is that we collect your payroll
    taxes and we pay the current retirees their benefits, and then with
    leftover money, we spend it on other things. That's

    [[Page 606]]

    the way the system works. It's pay-as-you-go.
        And in 2017, the pay-as-you-go system is going to go negative. In
    other words, more money goes out than comes in through payroll taxes.
    And every year thereafter, if we don't do something, it gets worse and
    worse and worse and worse. To give you an example of how bad it gets, in
    2027 the Federal Government is going to have to come up with $200
    billion more a year just to make good on the payments, and it gets worse
    the next year and the next year and the next year.
        I also want to assure those of you who are on Social Security, you
    will get your check. See, nothing changes for somebody born prior to
    1950. And that's very important for people in Ohio to hear, because I
    fully understand a lot of people count on that Social Security check.
    That Social Security check means a lot to a lot of people in America,
    and they're counting on it. That's why, for example, in some political
    campaigns people try to say to seniors, ``You know, if so-and-so gets
    into office, he's going to take your check away from you.'' That's the
    old scare tactics. Sometimes during this debate it seems like people are
    resorting to those scare tactics. They're telling seniors, ``Really what
    they're talking about is taking your check away.'' Let me just tell you
    point-blank, if you're receiving a Social Security check in Ohio, this
    Government of ours will continue to honor you, honor that commitment.
        This issue isn't about you. This issue is about your grandchildren.
    The issue confronting the Social Security system is an issue for young
    workers, young people coming up. One time I was having a discussion, and
    the person said, ``I saw a survey.'' I said, ``Oh, yeah, what did it
    say?'' ``It said young workers like me are more likely to see--think
    we're more likely to see a UFO than get a Social Security check.''
    [Laughter] That may be pretty close to accurate.
        I'll tell you this, if this Federal Government doesn't act, your
    bill, your payroll taxes are going to have to go up a lot in order to
    pay the promises made to me, or the Government is going to have to slash
    the benefits, or the Government is going to have to make dramatic cuts
    in other programs. And so I see a problem. I think the math is clear.
    And so now is the time to get something done.
        And so I stood up in front of the United States at my State of the
    Union Address and said to the Congress, ``Here's the problem. And I'm
    going to put some ideas on the table,'' ideas that I didn't necessarily
    think of; ideas that President Clinton
    had thought of or Senator Moynihan, a great Member of the United States
    Senate from New York who, unfortunately, has passed away, or former
    Congressman Tim Penny--good ideas about
    different ways to permanently fix the problem. And that's what Congress
    must do. It must permanently fix the problem.
        In 1983, one of my predecessors, President Ronald Reagan, got
    together with Speaker O'Neill from Massachusetts, and they said, ``We
    got a problem. Let's fix it.'' See, the math wasn't working then,
    either. It was called a 75-year fix. They signed a bill--I love the
    spirit, by the way, of Republicans and Democrats setting aside their
    political parties and focusing on getting something done for the
    American people. And the President did that; the Speaker did that for
    the 75-year fix. The only problem is, 22 years later we're still talking
    about it. And so now is the time to bring people together from both
    parties to have a permanent fix, and all ideas are on the table. And I'm
    looking forward to discussing any good idea with a Democrat or a
    Republican.
        I imagine there's some people fearful in Washington, DC, about maybe
    laying out an interesting idea and that one of the political parties
    will get all over them for laying it out. If I had anything to do with
    it, it would be political amnesty for people bringing good ideas
    forward. Now is not the time to play political ``gotcha'' with a

    [[Page 607]]

    member of any political party for stepping up and bringing forth ideas
    to do what they think is right to help solve this problem permanently
    for generations of Americans to come.
        Now, one of the ideas that I think is important for the Congress to
    consider is to allow a younger worker to be able to set aside some of
    her or his own money in a personal savings account, as a part of a
    Social Security solution. See, I think Government ought to say, ``We'll
    give you an opportunity, if you want to--your choice.'' We're not
    saying, ``You must set aside money.'' We're saying, ``You ought to have
    the opportunity to. It ought to be voluntary to set aside some money so
    that you can earn a better rate of return on your money.'' People ought
    to be given a chance to invest in a conservative mix of bonds and
    stocks.
        In other words, it's part of a permanent solution in order to make
    sure the younger worker gets a better deal. The younger worker ought to
    be allowed to set aside some of the payroll taxes. And this is a
    concept, by the way, that has been tried before. I haven't invented the
    idea. As a matter of fact, the Federal--Congress before has said we
    ought to allow people working in the United States Congress and
    Congressmen and United States Senators to do just what I described. The
    Federal employee Thrift Savings Plan allows Members of Congress and the
    United States Senate to take some of their money and set it aside in a
    personal savings account. Why? Because they know they'll get a better
    rate of return on their money than if the Federal Government held it.
    And it seems fair to me that if setting aside money in a personal
    savings account is good enough for a Member of the United States
    Congress, it's good enough for workers all across America.
        Okay, so I went to school with a guy who made all A's. It's probably
    recognized by now I didn't do all that well in college at times--
    [laughter]--and I brought him with me. He's an expert. He's my National
    Economic Adviser. But I want you to notice,
    you students out there, who's the President and who's the adviser.
    [Laughter]
        I've got a fabulous staff. People need to judge the President based
    upon who he listens to. And as you know in foreign policy matters, I
    listen to some really capable people, Condi--Condoleezza Rice, the Secretary of State; Secretary
    Rumsfeld. And on the domestic side, I've
    got great people working with me. One of them is Al Hubbard, a business guy out of Indiana, started businesses,
    ran businesses, entrepreneurial. He's agreed to come and serve as the
    National Economic Adviser to the President. He briefs me on a regular
    basis. And one of the big issues that I've got him working on is Social
    Security.
        I want to thank you for coming, Al. And
    if you got something to say, now is your opportunity. [Laughter] Please
    don't try to defend yourself because the President always has the last
    word. [Laughter]
        Allan B. Hubbard. Yes, sir, I've
    learned that very quickly. Thanks for giving me this opportunity.

    [At this point, Mr. Hubbard made brief remarks.]

        The President. You're the guy who authored
    the bill?
        Raymond Sines. I had the first bill in
    1994.
        The President. Really.
        Mr. Sines. Introduced it.
        The President. If you got any spare time, you might want to come up
    to Washington and work the issue with me. [Laughter]
        Mr. Sines. Well, Mr. President, I really
    like Lake County. [Laughter]

    [Mr. Sines, commissioner, Lake County, OH, made further remarks,
    concluding as follows.]

        Mr. Sines. I have three daughters, and
    kind of in the same mode as you, we're in a special club when you raise
    daughters.

    [[Page 608]]

        The President. Yes. Your hair is about as white as mine. [Laughter]
        Mr. Sines. Yes, it is, and it's getting
    whiter--and it's getting whiter.

    [Mr. Sines made further remarks.]

        The President. It must make you feel good to be able to sit here in
    front of all these TV cameras and say, ``I saw a problem. I worked with
    people from both sides of the aisle to fix it, and it's working.''
    That's the spirit the people in the United States Congress must hear.
    It's not time to play politics. It's time to fix the problem. It's time
    to set aside all this business about, my party may look good, or so-and-
    so may look good, and so-and-so may look bad. We've really got an
    opportunity, a need to fix it.
        And secondly, I am--I just want you to know that like you went
    through, there were some moments as to whether or not you thought the
    thing would pass. Yes, well, you know something, I'm going to be
    relentless on the subject because I believe the American people, once
    they understand there's a problem, once they understand the math, and
    once seniors understand that nothing is going to change, the next
    question to Members who have been elected is, ``Why aren't you doing
    something about it?'' See, if there's a problem--you saw the problem--
    and people begin to recognize the nature of the problem and the size of
    the problem and the cost of inactivity, and senior citizens understand
    that the propaganda they may have heard about somebody taking away their
    check simply isn't true, the next logical extension of the debate and
    the discussion is, ``Say, if we got a problem and I'm going to get my
    check, what are you going to do about my grandkids?'' It's a
    generational issue.
        And we're just starting. So don't worry about me, Ray. I'm feeling pretty good about where we stand. The
    American people are wise. They just need to know the facts.
        Part of the facts is understanding we have a problem, and part of
    the facts is what you're going to do about it. And today, this is an
    interesting opportunity for people to see a system that is--I bet most
    people in America don't understand what happens here in Ohio when it
    comes to the retirement system. And so thank you for being an innovator,
    and thank you for being a leader.
        Now, who's next, Hubs?
        Mr. Hubbard. Mr. Scott Johnson, who is
    very involved with the Ohio Public Employees Retirement System. And he
    can describe this new innovation that Ray provided through the
    legislature.
        The President. Good. Tell us what you do.
        Scott Johnson. Thank you, Mr. President.
    I'm Scott Johnson. I'm Governor Taft's director of administrative
    services. That's a central services organization similar to your General
    Services Administration, only adding human resources and personnel.

    [Mr. Johnson made further remarks.]

        The President. By the way, I went to West Virginia the other day and
    saw the asset base of the so-called Social Security trust. You know
    what? It was about four or five file cabinets full of paper. [Laughter]
    It was the IOU left behind from one hand of Government to the other hand
    of Government.
        Mr. Johnson. We've been operating that
    since 1935, but of course, society has changed a bit over that period of
    time.

    [Mr. Johnson made further remarks.]

        The President. Sorry to interrupt you. Presidents do that sometimes.
    [Laughter] Portability--so if somebody is listening, and they're not
    exactly sure what that means and why that would be important to them----
        Mr. Johnson. University professors
    typically move around----
        The President. Right.

    [[Page 609]]

        Mr. Johnson. ----and in mid-career may
    move from one university to another. And so they've already gotten some
    sort of retirement system underway and would like to move that from
    where they are to where they're going.
        The President. If they change jobs, they could take their retirement
    account with them.
        Mr. Johnson. Exactly.
        The President. Yes. That's important for people to know. That's a
    concept that's an important part of any good plan, would be to recognize
    the needs of the person that is receiving a part of their retirement.
    They can move.
        Go ahead.

    [Mr. Johnson made further remarks.]

        The President. I think that's a reasonable concept. Don't you,
    folks? Government says to the people, ``You have a choice to make,'' you
    know?
        Mr. Johnson. So what you, therefore, have
    with that combined program is a system where the portion that the
    employer, the State or the county or the city, contributes is
    administered by the professionals at the system. And the amount that the
    employee himself or herself contributes could be managed by that
    employee.

    [Mr. Johnson made further remarks.]

        The President. Yes, I guess you can't take the money and put it in
    the lottery----
        Mr. Johnson. Well, even though we run a
    lottery----
        The President. ----or on the trotting jockey--trotters or whatever
    it is next door here.
        Mr. Johnson. No, sir, you can't do that.
        The President. The point is that there is a relatively conservative
    or conservative mix of what's available for people to invest in. Is that
    an accurate assessment of the choices people have to make?
        Mr. Johnson. The choices are all
    responsible ones, Mr. President.
        The President. I don't know about the lottery being irresponsible--
    [laughter].
        Mr. Johnson. But there is a great deal of
    variety and individual ability to be aggressive or not so aggressive as
    one chooses.
        The President. That's right. See, it's an interesting concept that
    the people of Ohio have put in place. And the government basically said,
    ``Hey, why don't we trust people? After all, it's their own money. Why
    don't we give them a chance to''--but you just can't go--there is a
    certain set of parameters, I presume, Scott,
    that--just like there is for the Federal employees, by the way. In other
    words, ``Here's some options for you.''
        Some people think about whether or not people ought to be allowed to
    invest. They call it risky. I don't think it's risky to let people earn
    a better rate of return on their money, but obviously there's some
    parameters. There's some go-bys. And as you said, I think there's eight
    different options--nine different options.
        Mr. Johnson. Nine, yes.
        The President. In other words, the Government says--the Government
    does play a role and says, ``Here's nine different opportunities for you
    to have a mix of stocks and bonds.'' Or it can go totally bonds, totally
    stocks, or is it generally a mixture? How does it----
        Mr. Johnson. Mr. President, there are
    layers of choices you can make. You could, if you wish, choose one of
    three pre-mixed options.
        The President. Got it.
        Mr. Johnson. One would be conservative,
    one less conservative, and one, frankly, aggressive. Or you could, if
    you wish, develop your own asset mixture. You could have some bonds. You
    could have some equities. You could have TIPS. Conceivably, you could
    invest it all in bonds.
        The President. Yes.
        Mr. Johnson. You could do that if you wish
    to do so.

    [[Page 610]]

        The President. Okay. You got any average rate of return on these
    programs? Or is that impossible to do?
        Mr. Johnson. It's not impossible to do,
    but it's beyond my level of expertise. [Laughter]
        The President. Okay. Well, I was talking with Senator
    McCain, who told me that he thought his rate of
    return, I think, was over 7 percent in his employee retirement Thrift
    Savings Plan, over time. In other words, a conservative mix of stocks
    and bonds that the Government--Federal Government allows Federal
    employees to make, a rate of return over 7 percent. You see, if you're
    keeping your money in the Social Security system, it's about 1.8
    percent. And the difference for a younger worker between 7 percent and
    1.8 percent over time is a lot of money, because interest compounds. It
    grows. Money grows over time.
        And I think that's one of the reasons why employees said, ``If it's
    good enough for professors, why don't you let me have a taste of this
    too? Why don't you give me a chance to watch my money grow and let me
    control it, and let me own it?''
        So, I appreciate you bringing that forward, Scott. Thank you.
        Mr. Johnson. Yes, sir.
        The President. Very good job.
        Betty Young, welcome. What do you do, Betty?
        Betty Young. Thank you, Mr. President, and
    it's an honor and a pleasure to be here. I'm the executive director of
    human resource services for the University of Cincinnati.

    [Ms. Young made further remarks.]

        The President. First, you notice that Betty
    talked about 401(k)s and IRAs. I don't remember 401(k)s when I was
    growing up. In other words, there is a new culture in America when it
    comes to people managing their own assets; 401(k)s encourage management
    of your own assets--IRAs. In other words, more and more people in
    America are now becoming used to controlling their--managing their own
    money.
        I presume you find a certain reticence initially, when--that says,
    ``I'm not so sure I can do this.''
        Ms. Young. But you don't have to be a Wall
    Street wiz.
        The President. Right.
        Ms. Young. For example, the university
    requires that the different providers that offer these programs, that
    they provide educational materials.

    [Ms. Young made further remarks.]

        The President. That's good. You know, interesting thing that
    Betty talked about was encouraging people to
    open up a quarterly statement, or if you so choose, you can look at your
    wealth on a daily basis. I think that's an interesting concept. It seems
    like to me we'd like all of America doing that, watching their assets
    grow, not just Wall Street wizzes but everybody. I mean, if more people
    owned something--I like the idea of having a program in Ohio where it
    encourages ownership--not just one type of person but all people have
    got access to ownership.
        It seems like to me a more hopeful America is going to be one in
    which people say, ``I'm watching my assets grow, and I'm more''--let me
    just say, politicians will be--their actions will be a lot more
    scrutinized when somebody is watching whether or not the decisions made
    in Washington is affecting their work on a daily or quarterly basis. In
    other words, the more people paying attention to their assets, the more
    people will be paying attention to what happens in Washington, DC, or in
    Columbus, Ohio.
        So thanks for bringing that to my mind. Let me ask you this:
    Obviously, there's a certain role for the State, and that is the State
    has chosen the providers--is that right, screened and chosen the
    providers?
        Ms. Young. Yes. The Ohio Department of
    Insurance screens and chooses the providers that participate in the Ohio
    Alternative Retirement Program.

    [[Page 611]]

        The President. So the charge that somehow a fly-by-night is going to
    get a hold of somebody's retirement account and fritter it away is just
    frivolous.
        Ms. Young. Correct, because if there's ever
    a problem, for example, with one of the providers, then as the person
    that manages the program at the University of Cincinnati, then I can
    contact the Department of Insurance or go directly to that company about
    any issues that we may have.
        The President. One of the other things that Betty talked about was mixing risk. And people need to
    understand that you can constantly change the risk of your asset base,
    that, for example, if you're 20 years old, you can take a little more
    risk. And when it comes time for fixing to retire, you switch from,
    perhaps, stocks--mix of stocks and bonds to a greater mix of bonds to
    stocks, so that you're able to decide for yourself what kind of asset
    base you have relative to where you are in the retirement--how close you
    are to retirement age. And I presume people are doing that, constantly
    switching in and out all the time to manage their assets.

    [Ms. Young made further remarks, concluding as follows.]

        Ms. Young. So I have my funds in a portion
    that is guaranteed 6 percent. That won't change during the life of the
    account.
        The President. About 6 percent--it's a lot better than 1.8 percent
    in the Social Security system. And the difference between the 6 percent
    and the 1.8 percent over Betty's lifetime is a
    significant amount of money. And that's important for people to
    understand. What we're trying to do is to learn lessons from a State
    like Ohio, apply it at the Federal level, so workers get a better deal.
    And part of a better deal is a better rate of return. And part of a
    better deal, by the way, is saying, ``I own it.''
        You listen to Betty's language. She's
    talking about her assets. She's not relying upon the Government. She
    says, ``These are my assets, and I own these assets.'' And that's
    important. The more people own an asset, and the more people are able to
    say, ``I'm going to pass it on to my son or daughter, whoever I
    choose,'' the better off America is, you see, being able to spread
    wealth.
        Thank you, Betty. Good job.
        Let me say one thing about the Social Security system before we get
    to Rick. Do you realize the system today is
    structured so that if you die early and you leave behind a spouse--say,
    you started working and contributing to the system at age 21, and you
    died at 51, 30 years of work, and you leave behind a spouse, and the
    spouse works--like many families in America, there's two spouses
    working--that the--and the spouse is the same age as the husband or
    wife, there are no death benefits if you're younger than 62 years old.
    And secondly, when the surviving spouse retires, he or she will get to
    choose between the survivor benefits or the contributions that he or she
    has made--is owed by the Government, whichever is greater, but not both.
        Now, think about that. That's a system in which the person who's
    worked for 30 years, put in the money, and it's just gone. I don't think
    that makes sense for a good retirement system. The system here in Ohio
    essentially says that, if the principle were applied to the Federal
    Government, you have an asset. It grows. You watch it. You manage it,
    and if you pass away, you can leave it to your spouse to help that
    person transition, then help that person live life. It's an asset. This
    asset doesn't exist in a file cabinet in West Virginia. It's yours. It's
    an asset that you call your own, that can help you.
        Now, when people retire here, I presume you can't spend all your
    asset base at once.
        Ms. Young. You could take a withdrawal on a
    lump-sum basis, but normally, again, your ARP provider is going to work
    with you to design how you should now start drawing down on your money
    to ensure

    [[Page 612]]

    a level of income throughout your remaining lifetime.
        The President. That's what the--that's the vision at the Federal
    level for a personal account, is that there will be a drawdown to help
    complement the check, however big it's going to be, from the Federal
    Government. All I'm telling you is, we made promises to younger workers
    we can't keep. In other words, we've said, ``We can pay you.'' We can't.
    Do you realize that in order to make sure that the payments that we
    promised to retirees are kept, that a younger worker may have to pay
    upwards of an 18-percent payroll tax? Try that on if you're a small-
    business owner. Try that on if you're struggling to get ahead. We need
    to fix it now, and one way to--a part of making sure the retirement
    system works well is to listen to the example right here in the State of
    Ohio.
        Rick, ready to roll?
        Richard Stenger. I certainly am.
        The President. Okay. What do you do?
        Mr. Stenger. I'm currently one of the
    directors of the Lake Metroparks system. We want to welcome you back to
    Lake County. The last time you were here----
        The President. Yes, I know--[inaudible]. Thank you.
        Mr. Stenger. You and 20,000 friends came
    and had a good day. [Laughter]
        The President. I hope LaTourette
    stayed behind to clean up. [Laughter]
        Mr. Stenger. Steve got busy. He was
    there, but he was watching us. [Laughter]
        The President. Okay. He was an
    executive. [Laughter]

    [Mr. Stenger made further remarks.]

        The President. How did your money do in the Social Security system?
        Mr. Stenger. Yes, 1.8, I think, right?
        The President. Yes. You take a 6-percent differential, or 5.2-
    percent differential over a number of years, and you're going to see
    some serious money. And it ought to grow. The Government ought to give
    opportunities to our fellow citizens to have their money grow in a
    conservative mix of stocks and bonds, just like they did. It seems to
    make sense to me.
        Mr. Stenger. Mr. President, one of the
    things that I found very helpful and interesting is the system does a
    good job of educating, because you come in and you're not sure what to
    do, and many people are afraid of change. They had a battery of
    questions you could answer, I think 20-some questions, and it sort of
    guided you as to where you fit on the investment scale. If you answered
    the questions, it would give you a score, and the score sort of
    categorized you into, you're okay to aggressively do it, conservatively
    do it, moderately do it. So people who are afraid of it don't know--you
    answer this battery of questions, and it gives you a pretty neat answer.
        The President. Yes. See, that's an interesting point. I think some
    people are fearful of the obligation, I guess, if that's what it--of
    investing their own money. They're not exactly sure what the words mean.
    It's kind of an interesting assumption here in America, the investor
    class is only a certain type of person. I don't buy into that. I think
    all people are capable of learning what investment means. People from
    all walks of life, all neighborhoods have got the capacity to manage
    their own money. And you say the system helps people learn the words and
    learn what all this means. I mean, it's kind of fancy--rate of return,
    bonds and stocks.
        Mr. Stenger. And the nice thing about it
    too, as Betty mentioned earlier, you can change. If you realize, ``Well,
    I went real aggressive,'' and your lifestyle changes for whatever reason
    and you want to change, you can get online--you can do it daily if you
    so desire--you can take your quarterly statement, analyze it, make
    changes appropriately if you so desire. It's not like you're stuck with
    the choice you made.
        The President. How do you make sure, like, these firms don't gouge
    you when it comes to fees? They've got a captive audience. They've got
    you pretty well roped

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    in once you make the decision. How does Ohio make sure that these fees
    aren't going up, that they're reasonable?
        Mr. Stenger. The fees are defined--Scott
    would know more than I do, but if I read right, the fees are defined,
    depending on the plan you chose. I think the plan I chose, they're about
    .24, if I'm not mistaken.
        The President. .24--sounds reasonable.

    [Mr. Hubbard made further remarks.]

        The President. I appreciate that.
        What else you got, Ricky?

    [Mr. Stenger made further remarks.]

        The President. Well, I appreciate that. Listen, thanks for sharing
    this with us.
        I got on the airplane; I started paying attention to what I was
    going to hear today; and I was amazed at the willingness of the great
    State of Ohio to think differently on behalf of the people who live
    here. And it struck me about how relevant this conversation was going to
    be, for others to listen to what is possible for Social Security.
        Now, look, we need to come together in Washington, and we need to
    work on a permanent fix. All options are on the table. But part of that
    solution, in order to make it a better deal for younger workers, is for
    people of both parties to trust people with their own money, to devise a
    system that would work similar to the State of Ohio, that would say,
    ``We're going to let you earn a better rate of return for your money,''
    that would enable a mom or a dad to pass on their assets to whomever
    they chose, that would encourage portability, but that makes sense. It
    makes sense. The more somebody owns something in America, the more
    they're going to have a vital stake in the future of this country.
        The State of Ohio has incorporated a lot of really important
    principles in this bill, Ray, and I want to
    thank you for that. One of the key principles is, Government has got to
    trust people. The more Government trusts people, trusts people with
    their own money, the more content, the more prosperous our society will
    be.
        And so I want to thank you all for sharing with us. I hope you found
    it as educational as I have. I look forward to continuing to take this
    message to the people of the United States of America. I have great
    faith in the wisdom of the people of this country, and I fully
    understand that when the people of this country understand the depth of
    the problem that a young generation of Americans is going to face, and
    when senior citizens understand that they're going to get their check,
    the question is going to start to be to Members of Congress of both
    political parties, ``How come you're not fixing it,'' because America is
    going to realize that every year we wait it's going to cost the young
    generation of Americans $600 billion to make this right.
        And here's a fascinating idea, started right here in the great State
    of Ohio, sponsored by both Republicans and Democrats, that's working.
    And Congress needs to pay attention to things that work.
        Thank you all for coming, and God bless.

    Note: The President spoke at 1:03 p.m. at Lakeland Community College. In
    his remarks, he referred to Representative Steven C. LaTourette of Ohio,
    who introduced the President; Mayor Edward J. Podojil of Kirtland, OH;
    and Mayor David E. Anderson of Willoughby, OH. Discussion participant
    Scott Johnson referred to Gov. Bob Taft of Ohio.

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