    [Public Papers of the Presidents of the United States: George W. Bush (2005, Book I)]
    [April 5, 2005]
    [Pages 559-566]
    [From the U.S. Government Publishing Office www.gpo.gov]

    Remarks on Strengthening Social Security in Parkersburg
    April 5, 2005

        Thank you all. Please be seated. Thank you all. It is nice to be
    back in Parkersburg. Thanks for having me. It just seems like yesterday
    that I was here. [Laughter] It's

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    great to be back in West Virginia as well. I'm struck by the--every time
    I come here I'm struck by the beauty of this State. And of course, you
    put on a beautiful day, for which I'm grateful.
        One of these days I'm going to bring my mountain bike. I love to
    exercise. I'm doing it to make sure that I do the job you expect me to
    do, and I'm doing it to set an example as well. I think people need to
    get out all around our country, walk every day or ride your mountain
    bike every day, get a little exercise every day, stay fit and healthy.
        Speaking about staying fit and healthy, that's what we need to make
    sure we do for our Social Security system too. I'm here to remind the
    good folks of West Virginia that we have a problem, and we have a duty
    to renew one of great--America's great institutions, and that's the
    Social Security system.
        I've now traveled to 20 States to talk about Social Security, 20
    States in 2 months, all aimed at making sure that the American people
    understand the situation with Social Security. And more and more
    Americans understand there is a problem, and I hear from more and more
    Americans that they expect those of us who are honored to serve in
    Washington to fix the problem.
        I have just come from the Bureau of Public Debt. I want to thank Van
    Zeck, Keith Rake, and Susan Chapman.
    Susan was the tour guide there at the Bureau of Public Debt. I went
    there because I'm trying to make a point about the Social Security
    trust. You see, a lot of people in America think there's a trust, in
    this sense, that we take your money through payroll taxes, and then we
    hold it for you, and then when you retire, we give it back to you. But
    that's not the way it works.
        There is no trust fund, just IOUs that I saw firsthand, that future
    generations will pay. They will pay for them in either higher taxes or
    reduced benefits or cuts to other critical Government programs.
        The office here in Parkersburg stores those IOUs. They're stacked in
    a filing cabinet. Imagine, the retirement security for future
    generations is sitting in a filing cabinet. It's time to strengthen and
    modernize Social Security for future generations with growing assets
    that you can control, that you call your own, assets that the Government
    cannot take away.
        I'm sorry that Laura is not traveling with me
    today. She's doing great. She and I will be taking off tomorrow morning
    to pay our country's respects to a great world leader in His Holiness.
    He shows that one man can make an enormous difference. And I look
    forward to honoring the memory of Pope John Paul II. So, she's packing her bags. [Laughter]
        I want to thank the President of West Virginia University at
    Parkersburg. Madam President, I'm sorry I missed your inauguration.
    [Laughter] But thank you for serving. Dr. Marie Gnage is with us. I appreciate you letting us use this
    facility.
        Before coming out here, I had the honor of saying hello to a lot of
    folks who are involved with the community college system of West
    Virginia. I'm a strong believer in the community college system around
    our country, because I understand that the community college system is
    a--provides a great opportunity for many of our young and for many of
    our workers to gain the skills necessary to fill the jobs of the 21st
    century. The community college system provides a wonderful opportunity
    for States and communities to say to potential employers, we have got a
    fantastic asset in our midst to make sure that the workers can fill the
    jobs that you desire. And so for those of you involved in the community
    college system around the State of West Virginia, thanks for being here
    and thanks for what you're doing.
        I want to thank the secretary of State, Betty Ireland, for joining us. I'm proud you're here, Madam Secretary.
    Thanks for taking time. I want to thank Mayor Jimmy Colombo for joining us. Mr. Mayor--there

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    he is. Thank you, Jimmy. I appreciate the way the mayor approaches his
    office. He doesn't care whether I'm a Republican or Democrat or
    independent; he just--he's a hospitable fellow. [Laughter] Every time I
    come to this part of the world, he says, ``Welcome.'' And I appreciate
    you, Mr. Mayor, and I appreciate you being here today. Thanks for
    coming.
        I want to thank all the State and local officials for joining us
    today. When I landed, I met June Roberts. She's
    a volunteer with the Retired and Senior Volunteer Program. We call it
    RSVP. They exist all around the country. In 2001, she founded Senior
    Stitchers. Listen to what these good folks do: They prepare sewing and
    craft projects, including wheelchair pads, blankets for local child
    service agencies, senior centers, and hospitals. These are good folks.
    They're taking time out of their lives. June and her buddies--I think
    she said there's eight or nine of them--take time out of their day to
    volunteer to help make somebody's life better.
        Let me tell you one way you can help the good folks in Parkersburg.
    A way to serve our country is to find somebody who hurts, take time out
    of your life, surround them with love, feed the hungry, find shelter for
    the homeless, listen to that universal call to love a neighbor just like
    you'd like to be loved yourself, and you'll be serving America.
        So where is June? I think June is here
    somewhere. June, thanks for coming. Thank you for setting such a good
    example.
        On my trips around this country, I have made it as clear as I
    possibly can that the Government will keep its promise to those who have
    retired or near retirement, and that's very important for a lot of
    people to hear. I understand how important the Social Security check is
    to a lot of our citizens. A lot of people depend on that Social Security
    check. And therefore, I understand that when it comes time to talking
    about making sure the system is strong for a younger generation,
    sometimes the message can get confused. In other words, when a senior
    hears the President talking about Social Security, he or she may be
    concerned about whether or not that check that they're getting today is
    going to continue to come tomorrow. I understand that.
        And I can understand why people are sometimes confused because
    there's a lot of propaganda in the mix. In other words, people are
    saying things that simply aren't true. They're saying, ``Well, if you
    try to reform the system for a younger generation of Americans, then you
    may not get your check.''
        I'm here to tell you, those who've retired are going to get their
    check. Those who are near retirement are going to get their check. The
    system will not change in any way for people who have been born prior to
    1950. And I'm going to keep saying it over and over again.
        The problem is that the Government is making promises to younger
    Americans that it cannot keep, and that's important for folks to hear.
    You see, Social Security was designed as a pay-as-you-go system, not as
    a trust system. Pay-as-you-go, the--you know, the workers will pay into
    Social Security through the payroll taxes, and then it immediately gets
    paid out. It gets paid out to pay for benefits, and if there's any money
    left over, it pays for a lot of other Government programs. What goes in,
    goes out. Right now, more money is coming into the Social Security
    system than going out. And that's how we help fund the programs. A lot
    of people in West Virginia don't understand that, that the system is a
    pay-as-you-go system. And this works fine, so long as you got enough
    workers paying for the benefits of those who've retired.
        In 1950, there were 16 workers paying into the system for every
    beneficiary. In other words, the Government promised you your retirement
    check, and there's 16 people paying for that check. That kind of keeps
    the load relatively light. Today, there are three workers paying for
    each beneficiary. In other words, one of the things

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    that's happened for the Social Security system that people must
    understand is that there are fewer people paying into the system per
    beneficiary. In a relatively short order, there will be two workers
    paying into the system for every beneficiary.
        Now, that's just only half of the equation. And here's the other
    half: Americans are living longer and enjoying longer retirements. Life
    expectancy has increased. They're collecting benefits for longer periods
    of time. In other words, if you've retired and you're living longer, the
    system must pay your benefits longer--fewer people paying into the
    system, and people are living longer, collecting their benefits longer.
    So you're beginning to get a sense to where the bind is coming.
        And not only that, there's a lot of us who are getting ready to
    retire. We are called the baby boomers. There's a big bulge of baby
    boomers, when you look at the charts. I know; I'm one. As a matter of
    fact, my retirement age--or when I become eligible for retirement
    benefits is 2008. That's when I turn 62. It's quite a convenient date in
    my case. [Laughter] And to compound the issue even further, a lot of
    people running for office in the past have said, ``Vote for me; I will
    increase your Social Security benefits.'' And so my generation has been
    promised greater benefits than the previous generation. So you've got a
    lot of people living longer, getting greater benefits, with fewer people
    paying into the system.
        And when I start drawing out and when my generation starts drawing
    out of the system instead of paying in the system, the stresses on the
    system will really begin to grow. And that's important for you to
    understand. In other words, when you start thinking about whether or not
    the system is solvent for younger Americans, think about this: In each
    passing year, we'll have fewer workers paying even higher benefits to a
    larger number of retirees, and therein lies the problem.
        Social Security is going to be fine for those of you who have
    received your check. It's going to be fine for people who have retired
    or who will retire and your birth date is prior to 1950. You're--nothing
    is going to change. The system is in good shape for you. It is not going
    to be fine for younger workers coming up. In 2017, the Social Security
    system will go into the red. That means more money will be going out of
    the system than coming in. In other words, baby boomers will be
    retiring, start to living longer, greater benefits promised to us, and
    the pay-as-you-go system goes negative. More money will be going out
    than coming in through payroll taxes. And every year after that, the
    shortfall gets worse. In other words, it's an accelerating problem.
        As a matter of fact, according to the Social Security trustees,
    waiting just one year adds $600 billion to the cost of fixing Social
    Security. The longer we wait, the more the problem becomes severe. In
    2027, there will be $200 billion going out more than coming in. Somebody
    is going to have to pay for that. Somewhere there's got to be a give in
    the system. We have a real problem.
        The good news is more and more Americans are beginning to understand
    we have a real problem. And more and more Americans who are receiving a
    Social Security check are being reassured that nothing will change. And
    when that happens, there's a fundamental question that's being asked. A
    lot of grandparents are now starting to ask, ``What are you going to do
    for my grandchildren?'' I believe this is a generational issue. This is
    an issue where, once folks understand nothing is going to change and
    they understand we have a problem, the logical question to people like
    me and others in Washington, DC, is, ``How are you going to take care of
    my grandchildren?'' It's a natural inclination for grandparents to start
    worrying about their grandchildren. And it's a legitimate concern.

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        I met with Betty Earl coming in. She's lived
    in Parkersburg for about 40 years--or the area for 40 years. She has two
    daughters in their thirties. She doesn't think the Social Security
    system will be there when they retire. She represents the attitude of a
    lot of folks, now that this issue is becoming clarified. She said, ``It
    doesn't take an Einstein to see where Social Security is headed.'' And
    she doesn't want Congress to wait until Social Security goes bust before
    starting to fix it.
        I appreciate that understanding. I appreciate Betty Earl. I doubt she's got a Ph.D. in economics. Maybe she does.
    But it doesn't retire--doesn't require much education and brilliance to
    figure out we've got a serious problem, when you think about the math:
    More people living longer, with greater benefits, and fewer people
    paying into the system.
        And so Betty wants to know, like a lot of
    other people want to know, ``What are you going to do about it?'' And
    I'm here to tell you, I'm willing to listen to any idea. This isn't a
    Republican problem or a Democrat problem; this is a problem for the
    United States of America. And I think now is the time for people in
    Congress to stop playing politics with the issue and come to the table
    with how they think it ought to be fixed.
        I recently traveled the country on some stops with former Democrat
    Congressman Tim Penny, a Democrat from
    Minnesota, who has some good ideas. As a matter of fact, I mentioned his
    name, I think, in my State of the Union Address. I mentioned former
    President Clinton's name in the State of
    the Union Address, because when he was President, he put forward some
    interesting ideas as what we ought to consider as to how to fix this
    issue permanently. He spoke of increasing the retirement age. Then he
    talked about tying Social Security benefits to prices rather than wages.
        In 2001, I put together a Commission in anticipation of Social
    Security becoming a greater issue. As a matter of fact, I campaigned on
    the issue in 2000. And I asked the Democratic--former Democrat Senator
    Daniel Patrick Moynihan of New York to chair the Commission. He's a
    thoughtful fellow. He--I put Republicans and Democrats on the
    Commission. I said, ``Why don't you all come together and make some
    recommendations,'' which they did, all aimed at strengthening Social
    Security for a younger generation and permanently fixing the problem.
        And there's some basic principles that ought to guide our efforts.
    First, we should not raise the payroll tax rates, in order to make sure
    that--the reason I say that is that it would cost our economy jobs. One
    of the things, when we put policy in place, we ought to make sure that
    policy encourages economic vitality and growth and that we're
    stimulating the small-business sector of our economy. We must make sure
    that Social Security continues to provide dignity and peace of mind for
    low-income Americans. In other words, the system ought to be structured
    so low-income Americans are--have got dignity in retirement.
        Americans must reject temporary measures. In other words, you'll
    hear people in Washington say, ``Well, we got a 75-year fix, for
    example.'' You know, in 1983, the issue came to focus, and President
    Reagan and Speaker Foley as well as other
    Republicans and Democrats set aside their partisan differences and said,
    ``Look, we have an obligation to act on behalf of the country.'' And
    they came together and put what they thought was a 75-year fix to the
    problem. The problem is that the 75-year fix wasn't a 75-year fix,
    because here we are, 22 years later, talking about it again. See, that's
    a misnomer.
        What was--I like the spirit of them coming together, trying to work
    it out. But they didn't permanently solve the problem. See, the job of
    the President is to fix problems, not pass them on to future Presidents
    and future Congresses.

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        And so I'm going to continue to call upon Congress and say, ``One,
    I'm going to work with you. I'm interested in your ideas, and when we
    get together, let's permanently fix the problem. Let's do our duty.
    Let's do that which the American people expect of us.''
        The Senate, I thought, passed an interesting resolution the other
    day. On a 100-to-nothing vote, they called for a permanent fix. That was
    constructive. [Laughter] That was step one. [Laughter] Step two is, now
    let's just follow through and deliver one.
        As we make Social Security permanently solvent for a younger
    generation--senior citizens are receiving their check today, going to
    get their check, nothing will change. People, baby boomers, like me,
    are--born prior to 1950, the system is strong enough to take care of us.
    We must worry about a younger generation of Americans. And as we work to
    make the system permanently reformed, we need to make it a better deal
    for our younger workers too. And here's an idea that I think people
    ought to consider.
        I think people ought to have a--given an opportunity to have more
    control over their own retirement funds, the chance to tap into the
    power of compound interest, the ability, if they so choose, to watch
    their money grow in an account, a savings account of bonds and stocks.
    That's why I proposed that Congress consider allowing younger workers to
    set aside part of their Social Security contributions in a voluntary
    personal retirement account.
        A voluntary account--you notice I keep saying ``voluntary.'' I mean,
    doesn't it make sense for Government to say to a younger worker, ``If
    you so choose, you should be allowed to take this option''? Nobody is
    saying, ``You must take the option,'' or ``you can't take the option.''
    What we're saying is, ``If you decide to, you should be allowed the
    opportunity to invest about a third of your payroll taxes in a
    conservative mix of bonds and stocks.'' The money would grow over time.
    It could provide a better rate of return than anything the current
    Social Security system can provide. And that's important. It's that
    difference between what the current system provides and what you can
    earn in a conservative mix that makes a big difference about what you
    have when it comes time for you to retire.
        A younger worker earning an average of $35,000 a year over a career
    could retire with a nest egg, under this plan, of nearly a quarter
    million dollars, a nice addition to that worker's Social Security check.
    You see, the savings account is in addition to, a part of the retirement
    plan, not the retirement plan; it's a part of a Social Security
    retirement plan.
        Since 1983, the last time Congress tried to reform stock
    investments--tried to reform, the stock investments on average have
    returned more than a thousand percent. That's how your money grows.
    Notice I said ``conservative mix.'' You can't take your money and put it
    in the lottery or take it to the track. I mean, there's a conservative
    mix. When I say ``conservative mix,'' I mean conservative mix. But a
    conservative mix will get you a better return on your money than the
    current system. And it's that differential, that rate differential which
    grows over time to enable a younger worker who only makes 35,000 over
    his or her lifetime to end up with a nest egg of $250,000 as part of a
    retirement package. And that's your money.
        Again, I repeat, younger workers can choose to join this if they
    want to. You know, a lot of folks say, ``Well, you know, the investment
    may be too difficult.'' But just think about what's changing in America
    today. Mayor, when you and I were
    coming up, they didn't talk much about 401(k)s. The 401(k) now is
    available for a lot of workers. A lot of workers are watching their own
    money grow through a 401(k) account. They understand what the investment
    world is like. I don't remember, when I was growing up, worrying about
    the solvency of the Social Security system. I hear

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    from a lot of younger folks; a lot of your grandchildren are saying,
    ``What are you going to do about it, Mr. President,'' and, ``By the way,
    just give me a chance to make decisions for myself. Give me a chance to
    build up hard assets, instead of paper assets in a file cabinet.''
        We've got to make sure that there are strict guidelines. We've got
    to make sure the earnings aren't eaten up by hidden Wall Street fees.
    We'll make sure the good options to protect investment from market
    swings on the eve of retirement. There are ways to make sure the system
    works. You're not going to be able to empty all your account out when
    you retire; it's going to be a part of a retirement plan.
        But this concept isn't new, and this is what people must understand.
    You see, we've had what's called the Thrift Savings Plan for Federal
    employees and Members of Congress for a long period of time. And you
    know what the Thrift Savings Plan says? It says Members of Congress,
    United States Senators, people who work in Washington or elsewhere for
    the Federal Government can set aside some of their own money as part of
    their retirement plan in a conservative mix of bonds and stocks.
        I found that to be really interesting. You see, it's pretty
    interesting that Congress a while ago thought this was a good idea, to
    allow their money to grow at a decent rate of return in a conservative
    mix of bonds and stocks. And it seems to make sense to me that if it's
    all right for the United States Congress and the United States Senate to
    give people the option of watching their own money grow, then it ought
    to be good enough for workers all across the United States.
        I just talked to Drew Kefeli. He's a single
    dad. He became interested in Social Security reform because of his 16-
    month-old daughter. Interestingly enough, he named his daughter
    Jenna. [Laughter] The guy has got great taste.
    [Laughter] He likes the idea of personal accounts because he wants to
    build, to leave something to Jenna. Under the present system, the
    Government will keep the money he's put into Social Security if he dies
    before he can collect.
        Think about the system today. I met with widows whose husband
    predeceased them, and he might not have been 62 years old when he died,
    and there she is, with maybe family members and nothing but a small
    amount of money for burial. Yet all the money that the person put in the
    system is just kind of--it's not around. Or you take a spouse who's been
    working all his or her life, and both spouses worked, which is very
    common in America today, both contributing to the Social Security
    system. One dies early, and then the remaining spouse gets to keep their
    survivor benefits or his or her own retirement benefits but not both. In
    other words, one of the two have been contributing to the system, and
    they get nothing for the contribution.
        See, if you're allowed to set aside some of your money, like
    Drew wants to do, into your own asset base, if a
    tragedy strikes early it will give you an asset to leave to somebody you
    love. It's your money. You get to decide what to do with it. As Drew
    said, he said the personal account would give him greater peace of mind
    about Jenna's future. I like that idea. I like
    the idea of making sure inheritance is not just a privilege limited to
    the wealthy. I like the idea of encouraging an ownership society where a
    mother or father, as a result of hard work, can set aside money, if he
    or she chooses, in a personal account that he or she can leave to
    whomever she wants or whomever he wants. I think it's healthy for a
    society to have assets passed on from one generation to the next.
        The American Dream is built on the independence and dignity that
    come from ownership. Ownership shouldn't be restricted in America. We
    want more people owning their own home, and that's happening all across
    our country. Do you realize more minority families own a home today than
    ever before in our Nation's history? And that's important. I want more

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    people owning their own business. I love the idea of people saying to
    me, ``Mr. President, I'm proud of my business. I started my own
    business.'' And I think it makes sense to have people being able to own
    and manage their own money, a part of their own money in the Social
    Security system. After all, the payroll taxes are contributed. That's
    not Government money. That's your money. And the Government ought to
    give you--be wise enough to let you manage some of it.
        I'm going to continue to discuss this issue around the country. It's
    an important issue. Once the grandmoms and granddads understand that
    they're going the get their check, a lot of them are going to start
    saying to the elected officials, ``What are you going to do about my
    grandchildren?''
        Franklin Roosevelt did a good thing when he created the Social
    Security system. It's worked. But the math has changed. A lot of people
    are getting ready to retire. They're going to live longer, receive
    greater benefits, and fewer people paying in the system. The longer we
    wait, the more costly it's going to be to a future generation of
    Americans. And now is the time to act, because your retirement security
    is a lot more important than partisan politics.
        Thanks for letting me come by. God bless. Thank you all.

    Note: The President spoke at 11:14 a.m. at West Virginia University at
    Parkersburg. In his remarks, he referred to Van Zeck, Commissioner, D.
    Keith Rake, Deputy Assistant Commissioner for Public Debt, and Susan
    Chapman, Director of the Division of Federal Investments, Bureau of the
    Public Debt; West Virginia Secretary of State Betty Ireland; and Mayor
    Jimmy Colombo of Parkersburg, WV.