    [Public Papers of the Presidents of the United States: George W. Bush (2005, Book I)]
    [January 15, 2005]
    [Pages 58-59]
    [From the U.S. Government Publishing Office www.gpo.gov]

    The President's Radio Address
    January 15, 2005

        Good morning. This week, I met with some of our fellow citizens from
    across the country to discuss one of the great responsibilities of our
    Nation, strengthening Social Security for our children and
    grandchildren.

        For 70 years, the Social Security system has fulfilled the promise
    made by President Franklin Roosevelt, keeping our elderly citizens out
    of poverty while assuring younger Americans a more secure future. Along
    with employer-funded pensions and personal savings, Social Security is
    for millions of Americans a critical element to their plans for a stable
    retirement. And for today's senior citizens and those nearing
    retirement, the system is sound. But for younger workers, Social
    Security is on the road to bankruptcy. And if we do not fix it now, the
    system will not be able to pay the benefits promised to our children and
    grandchildren.

        When President Roosevelt signed the Social Security Act in 1935, the
    average life expectancy was about 60 years, which meant that most
    Americans would not live to become eligible for benefits, then set at
    age 65.
        Today, most Americans enjoy longer lives and longer retirements. And
    that presents a looming challenge. Because Social Security was created
    as a pay-as-you-go system, current retirees are supported by the taxes
    paid by current workers. Unfortunately, the ratio of workers to retirees
    is falling steadily. In the 1950s, there were about 16 workers paying in
    for each person drawing out. Today, it's about three workers for every
    beneficiary. And by the time today's workers in their mid-twenties begin
    to retire, there will be just over two.
        What this means is that in the year 2018, the system will go into
    the red, paying out more in benefits each year than it receives in
    payroll taxes. After that, the shortfalls will grow larger until 2042,
    when the whole system will be bankrupt. The total projected shortfall is
    $10.4 trillion. To put that number in perspective, $10.4 trillion is
    nearly twice the combined wages of every single working American in
    2004.
        Every year we put off the coming crisis, the higher the price our
    children and

    [[Page 59]]

    grandchildren will have to pay. According to the Social Security
    Trustees, waiting just 1 year adds $600 billion to the cost of fixing
    Social Security. If we do not act now, Government will eventually be
    left with two choices, dramatically reduce benefits or impose a massive,
    economically ruinous tax increase. Leaving our children with such a mess
    would be a generational betrayal.
        We owe it to the American worker to fix Social Security now, and our
    reforms begin with three essential commitments. First, if you're
    receiving your Social Security check or nearing retirement, nothing will
    change for you. Your benefits are secure. Second, we must not increase
    payroll taxes on American workers because raising taxes will slow
    economic growth. Third, we must give younger workers, on a voluntary
    basis, the option to save some of their payroll taxes in a personal
    retirement account.
        Unlike Social Security benefits, which can be taken away by
    politicians, the money in a personal account would be yours. And unlike
    the money you put into Social Security today, the money in personal
    accounts would grow. A child born today can expect less than a 2 percent
    return after inflation on the money they pay into Social Security. A
    conservative mix of bonds and stocks would over time produce a larger
    return. Personal accounts would give every younger worker, regardless of
    income, the chance to save a nest egg for their later years and pass
    something on to their children.
        Saving Social Security is an economic challenge, but it is also a
    profound moral obligation. Today's young Americans deserve the same
    security their parents and grandparents enjoyed. Because the system is
    broken and promises are being made that Social Security cannot keep, we
    need to act now to strengthen and preserve Social Security.
        I look forward to working with Members of Congress from both parties
    to keep the promise of Social Security.
        Thank you for listening.

    Note: The address was recorded at 7:25 a.m. on January 14 in the Cabinet
    Room at the White House for broadcast at 10:06 a.m. on January 15. The
    transcript was made available by the Office of the Press Secretary on
    January 14 but was embargoed for release until the broadcast. The Office
    of the Press Secretary also released a Spanish language transcript of
    this address.