    [Public Papers of the Presidents of the United States: George W. Bush (2005, Book I)]
    [June 14, 2005]
    [Pages 981-989]
    [From the U.S. Government Publishing Office www.gpo.gov]

    Remarks on Strengthening Social Security in University Park,
    Pennsylvania
    June 14, 2005

        The President. Mr. President, thanks
    for the great introduction, and thanks for having me. It's an honor to
    be here at Penn State University, one of the great universities in our
    country. I want to thank the president of this fine university,
    President Spanier, for having us. Thank you for letting me come here on
    this beautiful campus.
        Guess what happened? There was a pretty famous person at the airport
    today. [Laughter] And so I said, ``Why don't you ride over to the
    college campus with me here, the university campus. I need a briefing on
    what's going on.'' And Joe Paterno kindly agreed
    to travel with me. I said, ``Let's talk football.'' He said, ``Why don't
    you tell me what's going on in Washington.'' [Laughter] I tell you one
    thing about Joe Paterno; there's no more decent fellow on the face of
    the Earth--what a man who sets high standards. He loves his family. He
    loves this university. He loves his country, and my mother and dad love him. Coach,
    thanks for coming, proud you're here.
        I appreciate the FFA a lot. I appreciate the fact that the
    Pennsylvania FFA has made a table for the Crawford, Texas, FFA. I'm
    looking forward to telling the folks there at Crawford how decent the
    good folks here are in Pennsylvania. I really want to thank you for that
    gesture. I bet they like that table. I'm a little disappointed you
    didn't make the table for me. [Laughter]
        But thanks for what you--thanks for the example you have set. Thanks
    for understanding the importance of values. I mean, one thing that's
    really important about our farming communities all across the country is
    that in our farming communities you find the values of hard work, faith,
    love of family, and love of our country. And I want to thank you all for
    carrying on that tradition of carrying those values.
        I'm sorry my wife isn't here.
        Audience members. Aw-w-w!
        The President. Yes, I know, most people are sorry--[laughter]--she's
    not here instead of me. But she is doing great. I'm a lucky man when
    Laura said, ``I do.'' She

    [[Page 982]]

    is a fabulous First Lady, a great mom, and a great wife. And she sends
    her very best.
        I want to thank the Governor of the great State of Pennsylvania for
    joining us today, Governor Rendell. I'm
    proud you're here, and thank you for serving.
        I am traveling with members of the mighty Pennsylvania congressional
    delegation. First, Senator Arlen Specter--I
    appreciate you being here, Mr. Chairman. Senator Specter is battling
    cancer with incredible courage, and I appreciate your allegiance. I'm
    proud to be with Senator Rick Santorum, a
    graduate of Penn State University. Congressman John Peterson from this area. John, thank you for joining us.
        Dennis Wolff, the secretary of agriculture
    from Pennsylvania, I appreciate you being here, Dennis. I want to thank
    Chris Herr, the president of the Pennsylvania FFA
    Foundation. I want to thank Mike Brammer, the
    executive manager. Most of all, I want to thank you all for letting me
    come by.
        You know, when I landed, I met another person, named Mickey
    Peters. The reason I bring up Mickey is she is
    a volunteer with the Centre County Cooperative Extension 4-H program.
    She has been a volunteer for more than 40 years and helping instill
    values and reminding all of us that we have a commitment to serve our
    respective communities. The reason I bring up Mickey is because, if
    you're interested in serving your country, your State, or your
    community, volunteer. See, the great strength of this country lies in
    the hearts and souls of our citizens. If you want to truly be a patriot
    in America, feed the hungry; find shelter for the homeless; love a
    neighbor just like you'd like to be loved yourself. Mickey, thank you
    for coming, and thank you for the example you have set.
        I am particularly grateful to come to speak to younger Americans and
    a few older ones here I see scattered around. [Laughter] We're living in
    historic times. These are amazing times. And I hope you're as excited
    about them as I am. I wish I could tell you this wasn't the truth--the
    case, but the case is, we're still fighting the war against terrorists.
    It's a different kind of war. But it's a necessary war, because our most
    solemn duty is to protect the homeland.
        Our strategy is clear: We will stay on the offensive against the
    enemy. We will find them where they hide. We will bring them to justice.
    We will defeat them in foreign lands so we do not have to face them here
    at home. And for those of you with a relative in the United States
    military, I want you to do me a favor and thank them on behalf of the
    Commander in Chief, but more importantly, thank them on behalf of a
    grateful nation for their sacrifice and service.
        The second part of our strategy to defeat terror, to spread the
    peace, is to spread liberty, is to help those courageous souls who
    demand the God-given right to live in a free society. Freedom is on the
    march around the world now. We're living in amazing times when millions
    of people in Afghanistan, when given a chance, went to the polls to say,
    ``We want to live in a free society.'' Freedom is on the march in places
    like Lebanon and Ukraine. Freedom has taken hold in Georgia. Freedom has
    taken hold in Lebanon. Freedom has taken hold in Iraq, where 8.5 million
    citizens defied suiciders and killers to say with a loud voice to the
    world, ``We want to be free.'' And a free society is a necessary part of
    spreading the peace.
        So as you watch the dramatic changes taking place in the world, keep
    in mind we're laying the foundation for a peaceful world, a world in
    which boys and girls from all cultures and all countries can realize
    their dreams, can live in a free society. There's no doubt in my mind
    this world will be better off as freedom spreads. And I'm proud that the
    United States of America is taking the lead in spreading democracy and
    freedom around the world.
        There are dramatic times here at home. As you know, there are
    dramatic changes

    [[Page 983]]

    in agriculture taking place. Now, farming is still the first industry in
    America. It is a luxury that we live in a country that can feed
    ourselves, and we need to keep it that way. The American agriculture is
    diverse, and it's a complex industry, where family farmers are CEOs,
    where the occupations in agriculture run from engineering and food
    science to business management and to biotechnology. Which says to me,
    you better take advantage of the educations you got. Which says, you got
    to learn, you got to set high standards and work hard, read more than
    you watch TV, take your teachers seriously because you're going to need
    a good education in order to be able to compete in this world.
        We started our--we made good progress for the agriculture community
    by this farm bill I was honored to sign 3 years ago. This is a farm bill
    that provided a strong safety net for our farmers. It allows farmers and
    ranchers to plan and to operate based upon market realities, not
    Government dictates. You see, we tried to reduce Government interference
    in the agricultural market and, at the same time, create incentives for
    sound conservation practices. The bill I signed and the Congress passed
    has helped strengthen the farm economy and promoted independence by our
    farmers and helped preserve the farming way of life. And now we've got
    to build on the successes.
        I've got a good man as the Secretary of Agriculture in Mike
    Johanns. He actually grew up on a farm. Some of
    you will be pleased to hear he grew up on a dairy farm. He's going to be
    speaking to an FFA group in Illinois. He's going to be listening to
    farmers and ranchers all across our country as we prepare for a new farm
    bill. But one thing is for certain--he doesn't need to travel the
    country for me to understand this: In order for the agricultural sector
    of America to be strong, we got to keep your taxes low.
        The tax relief we passed has helped our economy overcome a lot of
    challenges. The small-business sector is strong today because small
    businesses are paying fewer Federal taxes. The entrepreneurial spirit is
    strong today because of the tax relief. More people are working today in
    America than ever before in our Nation's history. The national
    unemployment rate is 5.1 percent. We're making good progress. But in
    order to make sure this progress continues, Congress needs to make the
    tax relief we passed permanent.
        And speaking about tax relief, in order to make sure our farms stay
    within our farming families, we need to get rid of the death tax once
    and for all. It makes no sense to tax a person's assets twice, once
    while they're living and again after they die. For the sake of family
    farmers, Congress needs to get rid of the death tax forever.
        To keep agriculture strong, to make sure these good folks have a
    chance to make a good living in the agricultural sector, we need to
    continue to open up new markets abroad. I always told the American
    people, ``If you're good at something, let's promote it.'' We're really
    good at growing things, so why don't we grow things and sell them
    abroad? I mean, we've got enough food to feed ourselves, so it seems
    like to me to be a good strategy to open up markets so others can buy
    our crops, our soybeans and our corn, our products we grow right here at
    home.
        My administration supports trade initiatives that level the playing
    field, and one such initiative is the Central American Dominican
    Republic Free Trade Agreement, which is coming before the United States
    Senate and the House of Representatives. Let me tell you why I think
    this is a good deal for all Americans as well as our farmers and
    ranchers. Right now the United States is open to more than 80 percent of
    the goods being sold out of Central America into our own markets, and
    yet 80 percent of our goods don't have equal access to their markets,
    markets of about 44 million people. Catch this: The United

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    States is already open to more than 99 percent of Central America's
    agricultural products. In other words, we've opened up our market, but
    our farm exports to Central America are losing ground every day to third
    countries that have got trade deals with these nations.
        As your President, it seems like to make sense to me to say, ``If we
    treat you this way, you treat us''--that's what fair trade is all about.
    By opening up Central American markets, it will help our farmers. The
    American Farm Bureau Federation estimates that CAFTA could boost our
    agricultural exports by $1.5 billion, when fully implemented. For the
    sake of fairness and for the sake of the agricultural economy, the
    United States Congress needs to pass the CAFTA trade agreement now.
        To keep American agriculture strong, we need to ensure that all
    Americans have access to affordable, reliable, and secure supplies of
    energy. You know, when I first came to Washington, DC, nearly 4 years
    ago--a little over 4 years ago--I knew we had a problem with energy.
    See, we're too dependent on foreign sources of energy. So we developed a
    strategy that would make us less dependent on foreign sources of energy.
    And by the way, one reason why you're seeing your gasoline prices go up,
    why farmers are paying higher fertilizer prices, why it costs more to
    fill your tractor, is because we're dependent on foreign sources of
    energy.
        And so I said to the United States Congress, ``Why don't we get wise
    about our energy policy.'' Why don't we do things differently. Why don't
    we encourage conservation. Why don't we make sure we spend money so we
    can have clean coal technology, so we can use the coal resources of a
    State like Pennsylvania in our electricity plants that has zero
    emissions. Why don't we continue research and development, so we can use
    soybeans or corn to develop new sources of energy.
        I was at a plant the other day in Virginia. It was a soy diesel
    refinery. They're taking crops grown right here in America, putting them
    in the refinery, and out comes a fuel that we can use in diesel engines.
        We need to be using clean, safe nuclear power. We need to make sure
    that the United States of America diversifies away from a hydrocarbon
    society so we're no longer dependent on foreign sources of energy. The
    House has passed a bill. The Senate will have the bill on the floor.
    This Congress needs to stop debating energy policy and get a bill to my
    desk before the August recess break.
        Now, I want to talk about one other subject that the young here need
    to pay attention to, and that's the Social Security issue. First, you
    know, some people have said to me in Washington, ``Why did you bring it
    up? Why did you talk about such a politically difficult subject?'' Well,
    here's why. I think there's a problem. I'm about to explain why there is
    a problem. But I also know what the nature of the job of the Presidency
    is. The job of the President is to confront problems and not pass those
    problems on to future Presidents and future Congresses. The easy path is
    to do nothing. That's the easy political path. The tough path is to come
    together and get something done. But let me tell you something: By doing
    nothing, you're about to hear that we will have done a disservice to a
    younger group of Americans coming up.
        Franklin Roosevelt did a wise thing when he created the Social
    Security system. Social Security has been an important safety net for a
    lot of seniors. And for seniors receiving a check today, I want to
    assure you you're going to continue to get your check. The system is
    solvent for our seniors. You have nothing to worry about. I know all the
    political ads and the propaganda. I'm sure, Governor, you've had to put
    up with that occasionally. But the truth is--the truth is, if you're
    born prior to 1950, you're going to get your check. I don't care what
    the politicians say.

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        Here's the problem. The problem exists for a young generation of
    Americans. And the reason why is there are a bunch of people getting
    ready to retire. We're called baby boomers. I'm one. I was born in 1946.
    I reach retirement age in 2008. It's a convenient year for me to reach
    retirement age. [Laughter] The problem is there's a lot of people like
    me getting ready to retire. Do you realize today there are about 40
    million retirees receiving benefits? By the time the baby boomers
    retire, there's going to be about 72 million of us receiving benefits.
    We got a whole lot of people getting ready to retire.
        And we're living longer. My generation will live longer than the
    previous generation. Coach Paterno said, ``Are
    you exercising a lot, Mr. President?'' I said, ``All the time, Coach.
    I'm trying to live longer than the previous generation.''
        And not only that, but when people were running for Congress in
    previous years, they'd say, ``Vote for me. I'll make sure your benefits
    go up faster than the rate of inflation.'' And that's what happened.
    That's one of those political promises that was kept. So you've got a
    lot of baby boomers like me, a whole lot of us, going to be living
    longer, getting greater benefits than the previous generation, which is
    all fine and good until you realize the other half of the equation.
        Now, in 1950, early fifties, there was about 16 workers for every
    beneficiary, which meant the load wasn't all that heavy when you're
    paying your payroll tax to take care of a beneficiary. Today, there's
    3.3 workers per beneficiary. When a lot of these kids get older, there's
    going to be 2 workers per beneficiary. You've got fewer workers, fewer
    people taking care of people like me who will be living longer and
    receiving greater benefits. And that's the problem.
        In 2017, there will be more money going out than coming in. And
    every year thereafter, it gets worse. In 2027, there will be about a
    $200-billion-a-year shortfall. And it gets worse until finally, 2041,
    the system would be bankrupt.
        So we're looking at a bankrupt system for younger workers. We're
    asking younger workers to pay payroll tax, to pay hard-earned money into
    a system that's going broke. That doesn't seem right to me. That doesn't
    seem fair, to know the facts and not do something about it. And so
    that's why I went in front of the United States Congress and I said,
    ``We've got a problem. The problem--the facts are irrefutable, and now
    we need to do something about it.'' I said, ``Why don't we get rid of
    all the partisan bickering in Washington, DC, and come together for the
    good of a generation of people coming up.''
        I believe I have more--a responsibility more than just bringing the
    problem out there. And so I have talked about solutions, and I'd like to
    share some of my thoughts with you. First, a reformed system--now,
    remember, if you're getting your check, I'm not talking to you. Nothing
    changes for people receiving their checks. I met a lot of grandmothers
    and grandfathers who kind of went, ``Thank goodness, I'm going to get my
    check.'' And then, you know what the next question is? They say, ``What
    are you going to do about my grandkids, Mr. President? What do you and
    the Congress intend to do about a group of youngsters getting ready to
    go into the workplace?'' So I said, ``The first we got to do in a
    reformed system is to say to future generations, `You'll receive
    benefits equal to or greater than the benefits today's seniors get.' ''
    Seems to make sense to me.
        Secondly, I said a reformed system must reassure future generations
    that those who depend most on Social Security will have the most
    protection in their retirement. In other words, I don't believe anybody
    ought to retire into poverty. I don't believe we ought to have a system
    where somebody is working all their life, and then they get a check, and
    it keeps them in poverty. That doesn't make sense to me.

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        And so I've adopted the idea put out by a Democrat named Robert
    Pozen. I think Mr. Pozen has got a good
    idea, and here's what it says. It says that the Social Security checks
    for the highest 1 percent of Americans will remain the same in today's
    dollars as the checks received by beneficiaries today. It means no cut
    in benefits to the upper 1 percent. The other 99 percent of American
    workers will get bigger checks in today's dollars than the current
    retirees, which means an increase in benefits. The top 1 percent earners
    would have their benefits go up at the cost of living. The lower income
    Americans would have their benefits go up with wages, and it would be
    scaled in between. And that's important because, you see, if Congress
    were just to adopt that part of the proposal, it would solve, by far,
    the biggest problem we face in funding Social Security for the out-
    years.
        Now, it takes other measures, and I want to work with Republicans
    and Democrats to look at other ways to make the system permanently
    fixed.
        We've got some folks here that are dairy farmers. Jeff Grove, and his son, Caleb, are with us.
    Jeff is a third-generation dairy farmer. Caleb will start his first year
    with FFA this fall in Shippensburg, Pennsylvania. Jeff and his brother,
    Jay, run the family farm. By the way, their mom,
    Anna, is here. Boys, listen to your mother.
        Caleb wants to join the family business when he's finished school.
    If he chooses to, Jeff could retire at 65 and
    start drawing benefits in 2021. Under a system with progressive
    indexing, he could expect a benefit of over $12,000 a year in today's
    dollars--today's dollars--compared to about $11,000 in today's dollars
    for a similar worker. In other words, the program would be beneficial to
    Jeff. That means after adjusting for inflation, his benefits would be 10
    percent higher.
        What I'm trying to do is to tell you the system that Mr.
    Pozen has proposed goes a long way toward
    fixing the system, but it's a good deal for people paying into the
    system today.
        If Caleb turns out to be a farmer just like
    his dad, he can expect an annual benefit of more
    than $15,700 in today's dollars. In other words, the system helps us
    achieve what we want, permanent solvency and to say you're not going to
    retire into poverty. That makes sense. Under the reform proposed by Mr.
    Pozen, 99 percent of Americans will see
    their benefits grow, and no one's benefits will be cut.
        It's important for Congress, if they've got a better idea, to bring
    it up. If you think you can do better in solving this problem, I don't
    care whether you're a Republican or a Democrat, put your ideas on the
    table. That's why they sent you to Washington, DC, in the first place.
        So, I've got some ideas to permanently solve the Social Security
    deficit and the problem, so we can say to youngsters, ``When you work
    and pay something into the payroll system, there will be something for
    you when you retire.'' And I've got another idea that I want Congress to
    consider, and that I want people in this country to listen to carefully.
    And it's to make sure the system is a better deal for younger workers.
        Now, first, let me describe how Social Security actually works. It's
    called a pay-as-you-go system. You work hard, and you pay through
    payroll taxes, and we go ahead and spend. We spend on the benefits for
    retirees, and then, with the money left over, we spend on programs. See,
    some people think, well, the Social Security system is one where we take
    your money, and we hold it for you, and then when you retire, we give it
    back. That's not the way it works. You pay. We pay out the money for the
    retirees, and the money left over--see, there's money left over until
    2017--it goes ahead and funds all the different programs of Government.
    And do you know what's left behind? Paper, IOUs

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    in a file cabinet in West Virginia. [Laughter] Those are the assets of
    the Social Security system.
        In order to make sure there's real assets in Social Security, I
    think we ought to allow younger workers, if they so choose, to take some
    of their own payroll taxes and set up a voluntary personal savings
    account. I think it makes sense to encourage people to build a nest egg
    they call their own--by the way, a nest egg the Government cannot take
    away, a nest egg the Government can't take and spend on programs that
    they like.
        I'll tell you why it makes sense to allow younger workers to take
    some of their own money as a part of a Social Security system, if that's
    what they so choose, is because people can get a pretty good rate of
    return on a conservative mix of stocks and bonds or a portfolio of bonds
    only. A conservative mix of stocks and bonds can yield you 4.6 percent.
    By the way, you get about 1.8 percent on your money in the Government.
    It's a lousy rate of return compared to what a conservative mix of bonds
    and stocks will get you.
        And the important thing about earning 4.6 percent is that over time,
    your money compounds. It grows, and that's important. If you're a
    youngster and you start saving some of your own payroll taxes--and I
    say, by ``some of your own payroll taxes,'' sometimes if you listen to
    the rhetoric in Washington, it sounds like the people there believe the
    payroll tax is the Government's money. It's not the Government's money;
    it's the people's money. The people are working hard for that money.
        Let me just give you an example. Suppose one of your brothers or
    sisters becomes a farmer and marries a food scientist, and they earn
    typical wages from both those professions. And you enter the workforce
    in 2011, and you work your entire career. And you're allowed to put a
    third of your payroll taxes aside, and it grows at 4.6 percent and
    compounds over time. By the time you retire, you'll have a nest egg of
    $570,000--your money. It's a part of a Social Security system. It would
    supplement your Social Security checks, but it's your money. No one can
    take it away from you. It's your money. It's money you can pass on to
    whomever you choose. And that's an important part of an ownership
    society in America.
        It's important--let me tell you--let me give you an example of the
    Social Security system today that I think is patently unfair. You've got
    two folks working in their family. One of them dies before age 62. You
    know what the Government pays? Burial benefits, period. And then when
    the other spouse reaches a retirement age, he or she gets to choose the
    benefits from her work or his work or the spouse's work, which is ever
    higher, but not both. In other words, the way the system works today,
    you've worked all your life, and you predecease your spouse, and the
    spouse's benefits are greater than yours would have been, the money you
    earned just goes away.
        That doesn't seem fair to me, that you've got Americans all across
    the country working hard to put bread on the table, and they get a bad
    break, and they die early, and the money they've contributed to the
    Social Security system just isn't around for the surviving spouse.
        It seems like to me it makes sense to let workers, if they so
    choose, to take some of their own money and put it aside in a personal
    savings account. And if something bad happens, like early death, there
    would be some assets for the surviving spouse, assets he or she could
    live on to help the family, assets to help with the grief, and assets to
    make their life better in retirement.
        No, the idea of giving younger workers the ability to take some of
    their own money and set it aside so they can watch their money grow is
    an idea that's already taken hold here in America. Some of us older
    guys, like Specter and Rendell and others here, when we were coming up,
    we weren't

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    sure what a 401(k) was. There weren't any. We didn't know what IRAs were
    in those days. There's a whole investor class of people growing up in
    America, people who are used to watching their money grow. And it seems
    to make sense to me to make sure a modernized, reformed Social Security
    system for a young generation of Americans ought to incorporate this
    idea, if that's what they choose to do, as a part of a modern retirement
    system.
        This isn't a new idea, by the way, in Washington, DC. I think you'll
    find this interesting--at least I certainly did when I started looking
    in on the issue--is that the United States Congress has set up what is
    called a Thrift Savings Plan. It's a plan that lets United States
    Senators and Members of the House of Representatives set aside some of
    their own money in a conservative mix of bonds and stocks. You know what
    I think? I think if that plan is good enough for Members of the United
    States Congress, it's good enough for workers all across America.
        I've come today to tell you that there are some of us in Washington,
    DC, who do not want to leave you saddled with a retirement system that's
    going broke, that we realize we have an obligation to address this
    problem. I'm enjoying traveling the country talking about the Social
    Security issue. It gives me a chance to get out of Washington, gives me
    a chance to remind the skeptics and critics that there are people in
    Washington, DC, who care about the common good, that care about
    addressing problems. There are people in that Nation's Capital that have
    gone there for the right reason, to focus on the people's business and
    to come up with solutions, so that when it's all said and done, no
    matter what your party might be, we can say, ``Job well done. We came to
    Washington--we didn't spend a lifetime there--we worked hard, and we did
    the people's business.''
        I'm going to continue working this issue, State after State after
    State. I'm going to continue to call upon the United States Congress,
    members of both political parties, to stand up, to do what's right for a
    young generation of Americans coming up, to fix this Social Security
    system once and for all so a young generation of Americans will have
    that same sense of security that previous generations had when it came
    time for them to retire.
        There's no doubt in my mind, we're going to get this job done. And
    if you're interested in the subject, pay attention. Call your elected
    Representatives. The voice of the people can determine what takes place
    in Washington, DC.
        I want to thank you all for giving me a chance to come by and visit
    with you. I want to thank the members of the FFA for being leaders, for
    making right choices, for setting high standards, for setting the
    example, and for serving the communities in which you live. May God
    bless you all, and may God continue to bless our country.

    Note: The President spoke at 1:54 p.m. in Eisenhower Auditorium at
    Pennsylvania State University. In his remarks, he referred to Graham
    Spanier, president, and Joe Paterno, head football coach, Pennsylvania
    State University; Gov. Edward G. Rendell of Pennsylvania; and Robert C.
    Pozen, former member, President's Commission to Strengthen Social
    Security. The Office of the Press Secretary also released a Spanish
    language transcript of these remarks.

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