    [Public Papers of the Presidents of the United States: George W. Bush (2005, Book I)]
    [February 12, 2005]
    [Pages 226-227]
    [From the U.S. Government Publishing Office www.gpo.gov]

    The President's Radio Address
    February 12, 2005

        Good morning. In my State of the Union Address, I discussed the need
    to act to strengthen and save Social Security. Since then, I have
    traveled to eight States and spoken with tens of thousands of you about
    my ideas. I have reminded you that Social Security was one of the great
    moral successes of the 20th century. And for those born before 1950, I
    have assured you that the Social Security system will not change in any
    way and you will receive your checks. I've also warned our younger
    workers that the Government has made promises it cannot pay for with the
    current pay-as-you-go system.

        Social Security was created decades ago for a very different era. In
    1950, about 16 workers paid into the system for every one person drawing
    benefits. Today, we have only about three workers for each beneficiary.
    And over the next few decades, baby boomers like me will retire, people
    will be living longer, and benefits are scheduled to increase
    dramatically. Eventually, there will be just two workers per
    beneficiary. With every passing year, fewer workers will be paying ever-
    higher benefits to ever-larger numbers of retirees.
        So here is the result: 13 years from now, in 2018, Social Security
    will be paying out more than it collects in payroll taxes, and every
    year afterward will bring a new and larger shortfall. For example, in
    the year 2027, the Government will somehow have to come up with an extra
    $200 billion a year to keep the system afloat. By the year 2033, the
    annual shortfall would be more than $300 billion a year. And by the year
    2042, the entire system would be bankrupt. If we do not act now to avert
    that outcome, the only solutions would be dramatically higher taxes,
    massive new borrowing, or sudden and severe cuts in Social Security
    benefits or other Government programs.
        To keep the promise of Social Security alive for our children and
    grandchildren, we need to fix the system once and for all. Fixing Social
    Security permanently will require a candid review of the options. In
    recent years, many people have offered suggestions such as limiting
    benefits for wealthy retirees, indexing benefits to prices instead of
    wages, increasing the retirement

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    age, or changing the benefit formulas, and creating disincentives for
    early collection of Social Security benefits. All these ideas are on the
    table.
        I will work with Members of Congress and listen to any good idea
    that does not include raising payroll taxes. But we cannot pretend that
    the problem does not exist. Social Security will go broke when some of
    our younger workers get ready to retire, and that is a fact. And if
    you're a younger person, you ought to be asking your elected officials,
    ``What are you going to do about it?'' Because every year we wait, the
    problem becomes worse for our children.
        And as we fix Social Security permanently, we must make it a better
    deal for younger workers by allowing them to set aside part of their
    payroll taxes in personal retirement accounts. The accounts would be
    voluntary. The money would go into a conservative mix of bond and stock
    funds that would have the opportunity to earn a higher rate of return
    than anything the current system could provide. A young person who earns
    an average of $35,000 a year over his or her career would have nearly a
    quarter million dollars saved in his or her own retirement account. And
    that money would provide a nest egg to supplement that worker's
    traditional Social Security check or to pass on to his or her children.
    Best of all, it would replace the empty promises of the current system
    with real assets of ownership.
        Reforming Social Security will not be easy, but if we approach this
    debate with courage and honesty, I am confident we will succeed, because
    our children's retirement security is more important than partisan
    politics.
        Thank you for listening.

    Note: The address was recorded at 7:32 a.m. on February 11 in the
    Cabinet Room at the White House for broadcast at 10:06 a.m. on February
    12. The transcript was made available by the Office of the Press
    Secretary on February 11 but was embargoed for release until the
    broadcast. The Office of the Press Secretary also released a Spanish
    language transcript of this address.