    [Public Papers of the Presidents of the United States: George W. Bush (2005, Book I)]
    [February 10, 2005]
    [Pages 199-213]
    [From the U.S. Government Publishing Office www.gpo.gov]

    Remarks in a Discussion on Strengthening Social Security in Raleigh,
    North Carolina
    February 10, 2005

        The President. Thank you all for coming. Thanks for coming. Okay.
    Thanks for the warm welcome. We got a lot of work to do here. [Laughter]
        Audience member. [Inaudible]
        The President. Yes, thanks. Okay. Listen, we're here to talk about
    an important subject. And I want to thank some of our

    [[Page 200]]

    fellow citizens for agreeing to join me up here on the stage. It's not
    easy, frankly, to go from kind of a quiet civilian life to agree to sit
    up here with the President and all the cameras. [Laughter] But I think
    you're going to find this to be a very interesting dialog about Social
    Security.
        I've got some things I want to say before we talk about Social
    Security. First, I send greetings from Laura. On
    the way out she said, ``When you get down to North Carolina, tell
    everybody hello, and make sure that the panelists get to talk.''
    [Laughter] She knows me well. [Laughter]
        I know that Elizabeth Dole helped set up
    this event. I am--she is staying back in Washington because there are
    crucial votes coming up. I believe that one of our--an important
    initiative, and that is to bring reasonable legal reform on class-action
    lawsuits, will pass. So she and Senator Burr are staying back to vote. I
    hope you excuse them. I certainly did. [Laughter]
        I'm also pleased that a person who set an example of what it means
    to be a person who sticks to his principles and is a fine United States
    Senator has joined us, Senator Jesse Helms.
    Thank you for coming. Proud you're here. It sounds like to me they still
    remember you. [Laughter]
        I want to thank the statewide officials who are here. They were
    bravely standing at the base of Air Force One when I arrived, and the
    wind was blowing hard, but they nevertheless stuck it out and greeted
    me. I want to thank you for being there. I want to thank the local folks
    who are here.
        I met a fellow named Jim Van Strien. He's
    what I call a USA Freedom Corps volunteer. He works for the RSVP
    program. He's been helping to welcome U.S. service men and women home.
    He's the kind of fellow who--[applause]--let me finish, and then you can
    thank him. He's the kind of fellow who's taken time out of his day to
    volunteer to make somebody else's life better.
        Now, the strength of this country is the fact that we've got
    millions of citizens who are willing to do so. The true strength of
    America is we've got people of open hearts and great spirit who are
    willing to make society a better place as a result of volunteering. If
    you're interested in serving our country, feed the hungry, find shelter
    for the homeless, put your arm around somebody who hurts and say, ``I
    love you, Brother, or Sister.''

        Jim, thank you for setting such a good
    example, and welcome.

        The world is getting more free, and therefore, a future generation
    of Americans and kids around the world is more likely to live in peace.
    I hope you are as enthused as I am about what has happened recently in
    the course of world events. Think about the elections in Afghanistan.
    Millions of people voted for the first time in ages for a
    President. And the first voter was a woman. And
    that's miles away from a time when people were tormented by ideologues
    of hatred called the Taliban. And the world is better off when a part of
    the world that has longed for freedom sees a free society emerge in
    Afghanistan.

        And then there was an election in the Palestinian Territories. And
    I've been impressed by President Abbas's willingness to stand and say, ``We must defeat terror
    and establish a democracy in order to achieve peace with our friend
    Israel.'' And I look forward to working toward peace in that part of the
    world.

        And then we had the elections in the Ukraine, and--which are a
    beginning of a--a continuation of a democracy movement in a part of the
    world that hadn't known freedom for ages. And then of course, some--a
    week ago last Sunday, against all odds and defying all expectations,
    millions of Iraqi citizens said, ``We will not be terrorized. We want to
    be free,'' and they went to the polls.

    [[Page 201]]

        Freedom is on the march. And my job and the job of the United States
    of America, with our friends and allies, is to continue to promote free
    societies, because I understand freedom equals peace. And I believe we
    have an obligation, as we protect our homeland from terrorist thugs, to
    make the world a more peaceful place for generations to come. And I'm
    looking forward to the challenge. I'm looking forward to going to Europe
    in a couple of weeks to say, ``Listen, we share a lot of values. We
    believe in human dignity, human rights. Most of all, we believe that
    every soul should be free.''
        I laid out in my Inauguration Address what I think is a noble goal
    for generations to come, to end tyranny in our world. And the United
    States of America, working with friends and allies, over time has got
    the capacity to do so.
        One of the challenges we face is how to make sure this economy of
    ours continues to grow. The national unemployment rate is down to 5.2
    percent. The unemployment rate here in North Carolina is lower than the
    national unemployment rate. That's all good. But we must continue to
    make sure that we advance reasonable economic policy so the
    entrepreneurial spirit is strong, small businesses can flourish, and
    most importantly, people can find work.
        I'm looking forward to working with Congress to put reasonable plans
    in place to make that happen. One of the most important things that I've
    done in the new term is to submit a budget that says, ``Let's address
    the deficit.'' I've heard from business leaders, entrepreneurs, small-
    business owners, Republicans, Democrats, Congressmen, Senators--all say
    we got an issue with the deficit. I said, ``Fine. I have a
    responsibility to submit a budget.'' I did. It's lean. It's focused. It
    sets priorities, and it says if we've got programs that aren't working,
    let's get rid of them for the sake of the taxpayer.
        And I'm looking forward to the deliberations, and I'm looking
    forward to working with people on both sides of the aisle to get a lean
    budget out. That's what the American people expect, and that's what I'm
    going to sign.
        I'm looking forward to working with Congress to continue to make
    sure health care is available and affordable. One of the ways to do that
    is, we need medical liability reform out of the United States Senate.
    It's important for people to receive justice when they're harmed, but
    it's important for the scales of justice to be balanced. And the scales
    of justice are not balanced. Too many doctors are getting sued by
    frivolous lawsuits, which is running up the cost of medicine, which is
    costing taxpayers money, which is driving good doctors out of business.
    It is time for the United States Congress to pass national medical
    liability reform.
        I'm looking forward to working with Congress to get an energy bill
    out. We've been debating energy for 4 years. We don't need any more
    words on energy. It's time for them to get a bill to my desk. I have
    laid out a blueprint on how to get there. It encourages conservation. It
    encourages the use of renewable sources of energy. It says, ``Let's--why
    don't we be wise about the use of nuclear power.'' I believe we can
    expand safe nuclear energy. I know we ought to be exploring in
    environmentally friendly ways for natural gas here in the continental
    and in the State of Alaska. All of this is aimed to make us less
    dependent on foreign sources of energy. And Congress needs to act and
    get a bill to my desk.
        On taxes, I'm looking forward to getting the bipartisan commission's
    report to me on how to simplify the code. But in the meantime, I know
    this: We got to make the tax relief we passed permanent. We ought not to
    be running up taxes on entrepreneurs.
        I look forward to working with Congress on education matters. I will
    not let the United States Congress roll back the reforms of the No Child
    Left Behind Act.

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    The No Child Left Behind Act is challenging the soft bigotry of low
    expectations. We're raising standards. We believe every child can learn,
    and we expect every school to teach. And we want to know, in return for
    our money, whether or not schools are meeting expectations.
        And I know you've got a fantastic community college system here in
    North Carolina. And I intend to make sure that the workforce programs
    utilize this fantastic community college system so people are able to
    get the skills necessary to fill the jobs of the 21st century. And so
    we'll continue to work with Congress on education matters.
        But I'm here to talk about an issue that is going to be an
    interesting experience in dealing with the Congress. [Laughter] And that
    is Social Security, formerly known as the third rail of American
    politics. [Laughter] That meant if you touched it, there would be
    certain political death. I believe the job of a President is to confront
    problems and not pass them on to future Presidents and future
    generations. That's what I believe. [Applause] Thank you. Thank you all.
    Okay, thank you. Thank you for the warm welcome.
        I see a problem, and I want to discuss with you why I see a problem.
    For those who got to worry about the politics of Social Security, let me
    just give you my perspective. I ran on it twice. [Laughter] I said,
    ``Elect me, and I will do the best I can to work with Congress to
    strengthen the system for all. Give me a chance to be the President, and
    I will take the issue head on.'' I did so in the 2000 campaign.
    Obviously, the issue wasn't solved, and so I did it again in 2004. I
    believe candidates are rewarded, not punished, for taking on tough
    issues. I say that to give assurance to the Members of Congress who may
    feel somewhat fearful of taking on the issue.
        Secondly, I intend to campaign on this issue around the country.
    This is one of two stops today. Right after my State of the Union speech
    I went to five States, and I'm going to keep traveling the country
    talking about the problem of Social Security, assuring seniors that
    nothing changes and saying I'm willing to discuss all options with
    Members of the United States Congress. And I'm looking forward to it. I
    like to get out of Washington. I like to talk to people. But I also know
    that when the people speak, people in the Congress listen. So I'm kind
    of sharing with you a little bit of my strategy about how to move this
    issue forward.
        So what's the problem? The problem is, is that Social Security--the
    basic assumptions of Social Security are shifting dramatically from when
    Social Security was founded. In 1950, there were 16 workers per one
    putting money into the system, which means that when somebody retired,
    there's 16 workers contributing to that person's retirement. Today,
    there's 3.3 workers contributing for each beneficiary. And when
    youngsters retire, it's going to be 2.1--2 workers per beneficiary. In
    other words, the burden of paying for retirees is increasing on workers.
    That's part of the equation.
        The second thing that has changed is, is that life expectancy has
    changed. It used to be 60 years was life expectancy; today, it's 77. I
    suspect over the next decade, it will continue to increase. I certainly
    hope so. [Laughter] As well baby boomers are getting ready to retire.
    That's me and you. [Laughter] And do you realize, today, for example,
    there are 37 million people receiving Social Security benefits; in the
    year 2031, there will be 71 million people. Those are baby boomers. Baby
    boomers are living longer. And more people are retiring. So part of the
    equation is, more people will be receiving benefits longer than
    anticipated when the system was first set up.
        Thirdly, benefits promised to people like me are dramatically higher
    than benefits given to today's retirees. Politicians, over time, say,
    ``We'll just--elect me, I'll increase the benefits.''

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        So when you think about it, when you add up the equation, you've got
    more people living longer, receiving greater benefits, being supported
    by fewer people. And to me, that says we got a problem. And as a matter
    of fact, the numbers say that. There is a chart over here that says
    ``Cost of Inaction,'' because in 2018, the system goes red. That means
    there's more money going out of the system than coming into the system.
    The leading edge of baby boomers are retiring; they're living longer;
    benefit structures are bigger; fewer people paying in; the system goes
    negative.
        Now, some of you probably think there is a kind of--a bank, a Social
    Security trust bank. But that's not what's happened over time. Every
    dollar that goes into Social Security has been paid out, either to
    retirees or Government programs. It is a pay-as-you-go system. It is a
    flow-through system. There is no kind of--[inaudible]. There are empty
    promises, but there's no pile of money that you thought was there when
    you retired. That's not the way the system works.
        To make matters worse, as more baby boomers retire, as people live
    longer, as more benefits kick in, the cash deficit increases. So for
    example, in 2027, the Government is going to have to come up with $200
    billion more to meet the promises that we've made, above and beyond
    payroll taxes. Every year from 2018 to when the system goes broke in
    2042, the cash deficits required to meet promises increase. That says to
    me we've got a problem.
        Now, I know 13 years doesn't sound like a lot--2018--it may seem
    like a lot to people whose perspective is maybe 2 years. But as I told
    you, I think we've got to anticipate problems, particularly on this
    issue, because the longer we wait, the more difficult the solutions
    become. That's just a fact.
        And so step one of my strategy is to continue saying to the American
    people, ``We have got a serious problem.'' In other words, sometimes
    they say, ``Is it serious? Is it a crisis?'' Look, whatever you want to
    call it, just look at the chart, and you come up with the conclusions.
    It is serious because if Congress says no to the President, we're not
    going the move forward on this. Imagine what the solutions will be when
    the 200 billion hits, or the 210 billion a year, or the 300 billion. I
    mean, you're looking at either major tax increases, major cuts in
    benefits, major cuts in other Government programs, or massive debt. And
    so now is the time to move, and that's what I'm saying to the Congress.
        The second goal of mine is to make sure our people who have retired,
    our senior citizens, and people who were born before 1950 know that
    nothing changes. That's important for you to understand. I fully
    understand a lot of people are very dependent upon their Social Security
    check. And when they hear somebody like me saying we're going to
    strengthen the system, their immediate reaction in some cases is to go,
    ``Oh, that means I'm not going to get my check.'' You might remember
    those campaigns around, which I'm sure you've seen them in States where
    people say, ``Elect somebody, and he's going to take away your check.''
    That happened to me, for example. They said, ``Old George W. gets in;
    you're not going to get your check.'' Fortunately, they got their check
    after I got in, so they kind of rung hollow in 2004.
        You'll hear the same kind of thing being put out there, that seniors
    need to worry about this. And I'm going to spend a lot of time assuring
    people who've retired or near-retired that nothing changes. The system--
    when we talk about insolvency, the insolvency issue doesn't relate to
    you. It relates to your grandchildren. And that's the issue we're
    confronted with: What do we do about the retirees' grandchildren? As I
    said in my State of the Union, we have an obligation to do what others
    have done for my generation, and that's to leave a better world behind.
    And that's why I was willing to dedicate as many words as I did in the
    State of the Union to what

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    used to be the third rail of American politics, Social Security.
        Now, it's one thing to define the problem; it's another thing to be
    a part of the solution. And I have an obligation as the President not
    just to define the problem but to encourage dialog by putting out some
    ideas of my own. I stood up in front of the Congress and said, ``In
    order to truly fix it, in order to have a permanent solution, all
    options are on the table, except for running up payroll taxes.''
        And that means a lot of different things. Democrats, like Senator
    Moynihan, who Senator Helms served with, had
    some really constructive ideas as to how to address the root cause of
    a--of the problems with Social Security. President Clinton had some ideas; former Democrat Congressman Tim
    Penny. And the ideas range from raising the
    retirement age to delaying benefits to calculating benefits not based
    upon wage increase but price increase. A little esoteric here, but in
    other words, there's some serious ideas on the table to how to
    permanently fix Social Security.
        And that's why I said to the Congress, ``All ideas are on the table,
    and if you got a good idea, bring it forward.'' Now is the time for
    people from both sides of the aisle to address the problem. And I'm
    willing to listen to anybody's idea. And I'm looking forward to a good,
    constructive dialog about how to seriously address the problem, making
    sure that those who've retired have nothing to worry about and, at the
    same time, making sure there's a Social Security system for younger
    people coming up.
        I put out some ideas, and I want to talk about one of them that I
    hope you find interesting. I certainly did, otherwise I wouldn't have
    put it out. [Laughter] And that is, as a way to allow younger workers to
    more nearly--or come closer to the promises that have been made but
    can't be fulfilled, we should allow younger workers to take some of
    their own money, their own payroll taxes, and set it aside as a personal
    retirement account. This is a novel idea for Social Security, but it's
    not--it's a novel idea for Social Security. It is not a novel idea for
    Federal employees. There is such a thing that's called a Thrift Savings
    Plan, which allows Federal employees to take some of their own money and
    invest it in stocks and bonds so as to increase their retirement
    benefits.
        And why does that happen? Because when you're able to get a rate of
    return on money invested, over time that money grows, that money
    accumulates, that money expands. And so I believe younger workers ought
    to be allowed to set up a personal account and invest in stocks and
    bonds so that their money can increase faster, at a faster rate than
    that which their money increases in the Social Security system. That's
    what I believe ought to happen.
        And so--that's called the compounding rate of interest--just trying
    to show off a little bit, kind of--[laughter]--not bad for a history
    major. [Laughter] Let me give you an example of what I'm talking about.
    By the way, our plan is one where I believe we ought to phase in the
    accounts so they're more affordable, so that the transition costs are
    more manageable to get to such accounts. I believe ultimately a worker
    ought to be allowed to put 4 percent of the payroll tax aside as a--4
    percent of the 12--as a--in the personal account. So money stays in the
    system, but money also would be allowed to grow with interest. Your
    option, by the way. Younger workers shouldn't be forced to do this.
    Younger workers--if you're interested in this, you can do so.
        Now, if you're a worker who earns $35 [$35,000] * a year over your
    lifetime, and this system were in effect where you could put 4 percent
    of your payroll taxes in a personal account, and you start at age 20, by
    the time you retire, your personal account would grow to $250,000.
    That's compounding rate of interest.
    ---------------------------------------------------------------------------
        * White House correction.

    ---------------------------------------------------------------------------

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        A couple of guidelines that need to be--I mean, you just got to
    understand there will be guidelines, like there are for the employee
    thrift--Federal employee Thrift Savings Plan. There's got to be--you
    can't say, let's have a good retirement system, and let somebody take
    their money down to the lottery and invest it. That's not a wise
    investment, with all due respect to the lottery players. In other words,
    there's got to be a--certain guidelines, a conservative mix of stocks
    and bonds. We don't want people taking their money and investing in
    high-fliers. There's a way to manage risk and get a better return than
    that which is in the Social Security trust. I mean, there's all kinds of
    people that are expert at this.
        As a matter of fact, that's what the Thrift Savings Plan does, is
    says, ``Here are some options for you, easy-to-understand options,''
    which will defy those who say certain people aren't capable of
    investing--a concept which I totally reject, by the way. The person with
    the $250,000 account couldn't take it all out the moment he retires or
    she retires and spend it. In other words, there's a--there would be a--
    guidelines for a drawdown.
        You see, the money coming out of the personal account is to
    complement the Social Security money, however much is still available
    after the congressional reforms. So it's a complement to Social
    Security. It is to mirror. It's to help out. It's to enable you to
    retire.
        There's other benefits, however, to a personal account, besides
    growing faster than the money if it were to stay with the Federal
    Government. One, it's your money. And that's an interesting idea, isn't
    it? It's your money to begin with, and it's your money at the end. And
    you can do with it what you want. You can't take it to the lottery. You
    can't gamble. You can't try to increase it with silly investments, and
    you can't pull it all out at once. In other words, you have to use it
    for retirement. On the other hand, if you choose not to spend it, you
    can pass it on to somebody you choose.
        Obviously, I didn't listen to Laura.
    [Laughter] I've got some other things to say real quick.
        The current system today--think about this--if you work for 30 years
    and you start at age 20 and you're putting money in the Social Security
    system and you die, that money that you put in the system, if your
    survivors are over 18 years old, goes away. I think it makes sense to
    try to encourage people, particularly for the security of their
    families, to be able to have something to pass on beyond other things
    they're going to pass on.
        I like the idea of having an account where people say, ``I own
    this,'' and are able to look at a quarterly statement to watch their own
    asset base grow. And I like people being able to say, ``I've got an
    account that the Government cannot take away. It's mine.''
        Some people say, ``Well, you can't afford to do this.'' My answer
    is, you can't afford not to do it, if you look at the chart. And I'm
    looking forward to working with the Congress. I've done my part. I've
    laid it out there. I'm going to work hard. I'm going to spend a lot of
    time talking to the people about this issue. And I've put out some
    interesting ideas. And I'm looking forward to people assuming leadership
    in the House and the Senate on both sides of the aisle. And I'm willing
    to listen to their ideas. For the sake of the country, for the sake of a
    younger generation of Americans, we must act.
        Andrew Biggs. We are here with one
    Andrew Biggs, a fine lad, as you can see. [Laughter] What do you do?
    Work for me, of course. [Laughter] Tell them what you do, Andrew,
    please--Andrew and I have done this before, see, so I'm used to needling
    him. [Laughter]
        Andrew Biggs. My name is Andrew Biggs,
    and I'm Associate Commissioner for Retirement Policy at the Social
    Security Administration, which in short language

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    means I think about Social Security reform quite a bit. The good news on
    Social Security, even if it seems very complex----
        The President. Andrew has a Ph.D., by
    the way. [Laughter] Which--it's an interesting lesson for those of you
    who are worried about your college career. Andrew has a Ph.D., and I got
    a C. [Laughter] And look who's working for who. Anyway--[laughter]----
        Dr. Biggs. All those years of effort
    gone to waste, I guess.
        The President. It's a cheap shot, Andrew, I know. Do we have a problem with Social Security? You
    look at it; you analyze it.
        Dr. Biggs. Sure, we do. The good news
    is, you don't need a Ph.D. to understand how this works. [Laughter] The
    biggest misunderstanding people have----
        The President. I'll let it pass, Andrew.
    [Laughter]

    [At this point, Dr. Biggs made further remarks.]

        The President. Good job, didn't he? Fine
    job.
        All right, Noel--Noel Council. Where do you
    live, Noel?
        Noel Council. I live right here in Raleigh,
    born and raised right here in Raleigh.
        The President. There you go. Did you stay up late last night
    watching a little basketball? [Laughter]
        Mr. Council. No, but----
        The President. Never mind. Kind of old, us kind of baby boomers,
    isn't it, to stay up late. Anyway.
        Mr. Council. Yes. I did watch Karl Rove,
    though, on the FOX channel. [Laughter]

    [Mr. Council, retired senior citizen, Raleigh, NC, made further
    remarks.]

        The President. Well, I appreciate the spirit. Look, I mean, the key
    statement that I heard him say is it's not
    going to change for him. So, evidently, the message has gotten to some--
    [laughter]--and we got to keep getting it out. Senior citizens must hear
    the truth, which is that the Social Security system will take care of
    them, and they need not fear a discussion about how the children--a
    system that works for our children and grandchildren will cause them not
    to get the promises the Government made. And that's just important, and
    I appreciate you bringing that up.
        I also love the spirit of somebody saying, ``I'm not worried about
    me; I'm worried about somebody else.'' And we really need to be. We
    really need to be. I mean, it just would be, I think, a dereliction of
    duty not to take on the tough task now. Of course, some of them are
    saying, ``He's not going to be around but for 4 more years,'' but I can
    assure you of this: For the next 4 years, we're going to be taking on
    the tough problems like Social Security.
        Dawn Baldwin. Are you ready to go?
        Dawn Baldwin. I'm ready, Mr. President.
        The President. All right. Where do you live?
        Ms. Baldwin. I live in Merritt, North
    Carolina, down in eastern North Carolina.
        The President. Fabulous, yes. Wish I could say I knew where it was--
    I'll play like it is. [Laughter]
        Ms. Baldwin. We'll have you come down there
    sometime.
        The President. How far away from here is Merritt, roughly?
        Ms. Baldwin. About 2\1/2\ hours due east of
    here.
        The President. Well, fantastic. Thanks for coming.
        Ms. Baldwin. It's good to be here.
        The President. You're a mom.
        Ms. Baldwin. I am a single mom, and I do
    want to say quickly, though, that I thank you for mentioning the
    community college system, because I am a part of the community college
    system. I teach at Lenoir Community College in Kinston.
        The President. What's your subject matter?
        Ms. Baldwin. English.
        The President. English, yes. Some say I could use a little extra
    work. [Laughter]

    [[Page 207]]

    [Ms. Baldwin, teacher, Lenoir Community College, Merritt, NC, made
    further remarks.]

        The President. Is this your first home?
        Ms. Baldwin. This is my very first home.
        The President. Imagine, ``Welcome to my home.'' That's fantastic.
        You know, I was talking with Dawn, and she
    was talking about a 401(k). It's an interesting concept. Many of you
    know what a 401(k) is. Thirty years ago, no one would have known what a
    401(k)--maybe they would have. I don't think so. I think 401(k)s are a
    relatively new invention--401(k)--you've got one?
        Ms. Baldwin. I do. And I'll tell you, Mr.
    President, it was a kind of scary situation when I first started at a
    community college system and was asked whether I wanted a 401(k). I had
    never gotten involved with stocks, bonds, didn't really know what it was
    about, but I can tell you that it is very nice every quarter getting
    those reports to see how well my investment is doing.
        The President. So you get advice?
        Ms. Baldwin. I do.
        The President. Yes, see, she gets advice.
    In other words, it's a little nervous at first.
        Ms. Baldwin. But it pays off well.
        The President. Yes. [Laughter] And you get your--you see your
    statement quarterly?
        Ms. Baldwin. I do.
        The President. Watch your asset base grow, which----
        Ms. Baldwin. And it is another sense of
    ownership.
        The President. Yes.
        Ms. Baldwin. And it makes you proud to be
    an American.
        The President. Well, it's an interesting--I think one of the--I hope
    people take away--one of the things that I find so attractive about
    enabling people to save some of their own money is the sense of
    participation in the system, I guess is one way to say it. It's--as you
    said, it makes you proud, but it's your asset base. And your little guy,
    13-year-old son--some day, if you choose, it becomes a part of his asset
    base. And the capacity to pass property from one generation to the next
    is more than just passing a piece of land--which is a fabulous story, by
    the way. But there's other assets you can pass on. And I think it
    stabilizes society. I think it makes society more hopeful when people
    say, ``This is what I own, and I'm going to choose to pass it on to
    whomever I want.''
        And I--and it's got--by the way, that concept must spread throughout
    all society. It should not be confined to just one segment of society.
    This isn't a Wall Street phenomena anymore. This is a phenomena of
    people being able to own and manage their own money all throughout the
    country, and it seems like it makes sense for us to give a younger
    generation of Americans the same opportunity to do so through the Social
    Security system.
        You did a great job. Welcome.
        Cyndi Godfrey.
        Cyndi Godfrey. Yes, sir. [Laughter]
        The President. You live?
        Mrs. Godfrey. In Statesville, North
    Carolina. I have some friends here.
        The President. Half the town came. [Laughter] How many people in
    Statesville?
        Mrs. Godfrey. How many live in----
        The President. Yes, how many live there?
        Mrs. Godfrey. I think about 23,000----
        The President. That's good, yes. It's big, bigger than it sounds.
        Mrs. Godfrey. Might not want to quote me
    on that. [Laughter]
        The President. How many children you got?
        Mrs. Godfrey. I have two little girls. One
    is 4, and one is 6.
        The President. Fabulous.
        Mrs. Godfrey. We call them the Princess
    and the Bulldozer. [Laughter]
        The President. Sounds like kind of like my mother used to talk. Anyway--[laughter]--you're sitting up
    here on the stage.

    [[Page 208]]

    Here's your chance to tell me. First of all, you work?
        Mrs. Godfrey. I do work. I believe that
    the world is run by those who show up. So I showed up today on behalf of
    my friends and my family and about 80 employees at Godfrey Lumber. It's
    a small, family-owned business started by my late father-in-law, Woodrow
    Wilson Godfrey. You would have loved him. It's actually----
        The President. Woodrow Wilson?
        Mrs. Godfrey. Woodrow Wilson.
        The President. Yes.
        Mrs. Godfrey. His mother was a staunch
    Democrat.
        The President. Yes. [Laughter] Guy is a heck of a businessman,
    though. [Laughter] Anyway, Godfrey Lumber.

    [Mrs. Godfrey made further remarks.]

        The President. I kind of took your regulation statement there--I'm
    kind of trying to read between the lines. Are you saying to me that
    you're worried about the system I'm talking about will cause you to have
    more regulations on you, a little bit? Maybe, in other words, small
    businesses are burdened by regulations, and there's a concern I've
    heard.
        Mrs. Godfrey. I would very much like to
    know if this is going--if your plan, if your proposed plan is going to
    help the small business, because we need all the help we can get.
        The President. She doesn't want to be
    managing the personal accounts, is what she's saying; she doesn't need
    any more Government telling her what to do. And the answer is absolutely
    not. It will not burden small businesses. And that's important for
    small-business owners to understand. This is not an added regulation on
    top.
        By the way, my suggestion is what needs to be part of an overall
    plan. I just want to make sure that I disabuse people of the notion,
    personal accounts alone won't permanently solve the problem. That's what
    people have got to understand. It's a part of an overall solution. It
    just will mean that the younger workers will get a better deal when the
    solution is finally decided upon.
        Go ahead. Here's your chance to get people to buy a little lumber.
    [Laughter]

    [Mrs. Godfrey made further remarks.]

        The President. That's good. I appreciate you saying that. The
    concept of people managing their own money has changed dramatically. I
    promise you, when I was most of the panelists' age, we weren't sitting
    around wondering whether or not Social Security would be there. When I
    was 30 years old--is that what you----
        Mrs. Godfrey. Twenty-nine.
        The President. Yes, when I was 29--[laughter]--we didn't have forums
    where people came and said, ``Gosh, I wonder if Social Security is going
    to be around when I retire.'' That never entered a baby boomer's mind.
    Nor did the concept of people--more and more people being able to manage
    their own money in the different kinds of retirement systems, Roth IRAs
    and all the different retirement funds that are now available for people
    to invest in. The world has changed; Social Security hasn't yet.
        And so I find it incredibly interesting to hear younger folks talk
    about life the way it is, workers being able to manage their own
    account, saving something for my son.
        Skip Long, he's here. He's got
    some ideas and thoughts. You can see he's a young-looking guy----
        Matthew ``Skip'' Long. Actually,
    young chronologically, too.
        The President. You live in Raleigh?
        Mr. Long. I live here in Raleigh.
    Most of my time has been spent in southeast Raleigh.
        The President. Good.
        Mr. Long. And I want to say my
    wife and son--my wife is there, and my 10-year-old son----

    [[Page 209]]

        The President. Oh, yes, looking forward to seeing you afterwards.
    What do you do? Thanks for coming.

    [Mr. Long, president and chief executive officer, National Jobs
    Partnership, Raleigh, NC, made brief remarks.]

        The President. Before we get to Social Security, I think one of the
    most important initiatives of this administration is to encourage faith-
    based and community-based organizations to help find people help they
    need. You're a faith-based man.
        Mr. Long. Thank you.
        The President. I can't think of a better organization than one
    founded on the principle, you shall love your neighbor just like you
    love yourself, in order to help somebody coming out of the prison system
    find proper job training and get the skills and comfort necessary to
    know that he or she can take on life's tough problems.
        All right. So I'm going to keep pushing the faith-based initiative,
    is my point. Back to Social Security.

    [Mr. Long made further remarks.]

        The President. There you go. How about that? Great job.
        The system can be designed so that people can learn what it means to
    invest. And that's important for people to know. I've heard some people
    say, ``Well, you know, there are certain people in society that just
    aren't capable.'' Forget it. Why do we want that kind of attitude in
    America, ``Certain people can, and certain people can't?'' We've got to
    believe everybody--everybody--should be allowed to take their own money
    and, under certain guidelines, make wise choices. And that's going to
    happen. There's a cultural change that needs to take place, obviously,
    in some quarters of society.
        And I love the spirit you're talking about. Because if you own
    something, you have a vital stake in the future of your country. And
    that's exactly one of the key points behind this notion about allowing
    people to take some of their own money and investing it.
        I think the panelists did one heck of a job up here. I want to thank
    you all. I'm getting kind of old, so I need to stand up. Let me take
    some questions, a few questions. And then I've got to head on over to
    Pennsylvania to continue the dialog.
        Yes, sir.

    Extending the Age for Benefits/Citizens' Influence on the Process

        Q. My main concern is, you said during your State of the Union that
    all options was on the table. And I support your plan to strengthen
    Social Security, but one thing I'm concerned about is extending the age
    in order to be able to fund it. I would like to receive my benefits--my
    money that I paid into it, into my own personal account as soon as
    possible.
        The President. Well, I appreciate you saying that. One way to make
    sure people affect policy, with all options on the table is to--first of
    all, let me say, I'm not taking options off the table until Congress
    comes to the table and starts discussing. And secondly, if a lot of
    people, younger workers are concerned about that option, you ought to
    let the people know. And you're just letting me know, and I appreciate
    it. Yes, I'll sign that book too. It's a fine book. If you're interested
    in getting some sleep, read Chapter Five. [Laughter]
        Q. Mr. President, on behalf of northeastern North Carolina, thank
    you, thank you, thank you for what you do for our country.
        The President. Thank you, sir.
        Q. God bless George W. and Laura Bush.
        The President. Thank you, sir.

    Expanding Benefits

        Q. Here's my question: In your effort to strengthen Social Security
    for the 21st century, will you be able to use your bully pulpit in
    perhaps persuading our own Congress, who does a great job but also has

    [[Page 210]]

    a generous retirement system, take a look at that system, itself, in an
    effort to make, possibly, the retirement system for everyone in this
    room and throughout the country a little more generous?
        The President. Yes, I appreciate that. See, what he's saying is, is
    that there is a go-by. In other words, this is a--I haven't invented
    this; it's already happened. Federal employees get to do this. I said in
    my State of the Union, younger workers ought to have the same option of
    ownership, decisionmaking, better rate of return, that the Federal
    employees have. And you bet I will.
        You're right. I mean, this is--again, I repeat to you, this is going
    to be an issue that's going to require good, close cooperation. And it's
    not going to happen unless people of good will come forward and say,
    ``Let's get in this--get after this issue together.'' It used to be that
    people would feel like they were lured out on the issue and then all of
    a sudden had to pay a political price. What I'm saying to the Members of
    Congress, ``We're all in this deal together.'' We're all going to--we're
    going to be blamed together, or we're going to be praised together.
        But I will do my part--I will do my part, initially, of not only
    putting the issue out there for people to hear, which I did in the State
    of the Union, but I'm going to travel our country, State after State
    after State, conducting discussions just like we had here, as open and
    frank as we can be, talking about the problems, talking about the
    assurances, and assuring Congress it is now time to act. That is my
    duty. I look forward to doing that. It also gets me out of Washington.

    Preserving Current Benefits

        Q. [Inaudible]
        The President. Yes, sir.
        Q. [Inaudible]
        The President. We're not going to take away your Social Security
    check, for starters. Go ahead.
        Q. [Inaudible]
        The President. Absolutely. [Laughter] I tell you what, that guy
    right there I'm delegating. [Laughter]
        Q. God bless you, Mr. President!
        Q. Unfortunately, I don't have a letter for you to read, Mr.
    President, but I just want to say it's such an honor to be speaking with
    you. I'm very happy to be here.
        The President. Thank you.

    Benefits for Younger Americans

        Q. I just wanted to let you know that as a young person, I think
    it's very inspiring and encouraging to see how much confidence you have
    in my generation's ability to make decisions. And I think that your plan
    to strengthen Social Security is just another reflection of your high
    level of trust and respect for the American people, and I wanted to
    thank you for that.
        The President. Thank you very much. You know, it's interesting--I
    appreciate you saying that. Somebody was telling me the other day--I
    also had Congress men and women come into the White House, the Oval
    Office there--actually, the Cabinet Room, in this case--and I'm sitting
    down with them individually and talking about, just like we're talking
    here. And a person said--he read an interesting poll; he said that a lot
    of younger workers felt like they're more likely to see a UFO than get a
    Social Security check. [Laughter] It's an interesting dynamic, isn't it,
    when you think about it. There are a lot of young people, when they
    analyze Social Security and think about it, that they just don't think
    the Government can fulfill the promise, which is a powerful--it's
    powerful leverage for Members of Congress to listen to.
        In other words, the dynamic has shifted. The reason people are
    comfortable about taking on the Social Security issue, in the political
    sense--I believe it must be done. That's the nature of the job; that's
    the nature of the Presidency. But in a political sense, it's because
    people are beginning to

    [[Page 211]]

    realize that once seniors understand nothing changes, there's a lot of
    folks out there who are demanding change for their sake. They're saying,
    ``What are you going to do about saving the system for me? I'm coming
    up. I have a better chance of seeing a UFO than getting a check from the
    Government. What are you and the Government going to do to make sure I
    get my check?'' That's the dynamic that's happening.
        And that's why I'm optimistic something is going to get done,
    because people are beginning to speak out. Younger Americans who
    understand the math and know the reality are beginning to say to those
    of us who have been elected, ``What are you going to do about it? You're
    up there in Washington, DC. Do more than just occupy the office. Solve
    problems, and do your job.''

    Survivor Benefits

        Q. Thank you, Mr. President. First of all, I just wanted to thank
    you for your service to our country.
        The President. Thank you, sir.
        Q. Thank you. I have a question about Social Security benefits that
    relate to things other than retirement, which is what you've put a lot
    of focus on. In 2001, I lost my father, and he left behind my mother to
    raise three kids, all under 18, and pay for everything that they needed
    and support them financially. By the year 2042, this pay-as-you-go
    situation is going to be pretty much exhausted. If that happens to
    someone after that point, they're going to pretty much be depending upon
    this small percentage that the Government is allowing them to put into
    their nest egg fund. At that point they have to pull out of funds early.
    Their index funds they'll have to pull out of early, which won't get to
    grow very much, and their long-term bonds won't mature. So how does your
    plan really----
        The President. On survivor benefits? Are you talking about survivor
    benefits under the current system?
        Q. Yes. Yes, sir.
        The President. First of all, the plan is only addressed to the
    retirees, not to the disabled and survivor benefits. In other words,
    we're focused on the retirement aspect of Social Security. Secondly, the
    notion that a personal account--frankly, we haven't got to the emergency
    withdrawal aspects of the personal account. The idea, though, is not to
    let people--the main principle is not to let people withdraw money,
    who've retired, from the personal account because it needs to be used
    for retirement. In other words, you can't just lump-sum it out. This is
    a complement to Social Security.
        As to whether or not you, a young worker--I mean, a survivor of a
    worker that passes on an account, whether you can draw it all out at
    once, that's something we just got to work out with Congress. But
    remember this, is that a plan that says you've been able to inherit
    something other than survivor benefits, a chunk of assets, is I think
    better--will be better than the current system.
        Q. Yes, sir, I completely agree. From what I've seen of the system,
    I absolutely love it so far. I just hadn't heard you talk to that point
    yet.
        The President. No, I appreciate that.
        Q. Thank you.
        The President. So you lived on--your mom and you lived on the
    survivor benefits of your dad?
        Q. We didn't live on it completely.
        The President. I mean, it helped you--helped you.
        Q. Helped make ends meet, absolutely.
        The President. Yes, well, there's survivor benefits in the current
    system if you are younger than 18 or your siblings are younger than 18
    years old. If you're over 18, there are no survivor benefits for the
    kids. There will be a permanent survivor benefit if there's an asset
    that's been accumulated to be able to pass on. Whether or not you can
    take it out or not to solve a family

    [[Page 212]]

    emergency after the person who accumulated the assets moves on, is
    something we just got to work out with the Congress.
        Q. Yes, sir. One more thing, I just wanted to introduce myself so
    that I can say that I met you. My name is Bart Thornberg.
        The President. Good job.
        Yes, sir.
        Q. Mr. President, Thomas Stith, Durham city councilman----
        The President. Welcome.
        Q. Good to be here.
        The President. Thanks for serving.
        Q. Thank you. More importantly, I'm a husband and a father of three
    young daughters. And first of all, I want to say thank you for bringing
    faith back to the White House.
        The President. Thank you. Appreciate that. Thank you.

    Addressing the Problem

        Q. My question is simple. Certainly, we are very energized here
    today, supportive. The system is clearly broken. What can we do once you
    leave here today to ensure----
        The President. Yes.
        Q. ----that we can assist you in helping to fix this system?
        The President. No, I appreciate you saying that. And part of my
    reason to travel the country is to explain to people that there is a
    problem. The Honorable got it--there is a problem. What we can do to
    help you fix it? First step is to make it clear to people there is a
    problem, because if the people in Congress say, ``There's not a big
    enough problem. Let's just move it on,'' nothing will happen. In other
    words, there has to be a sense of--in your voice, as you pointed out--
    urgency. And it's going to take me a while to convince people of the
    urgency to act.
        I believe that once Members of Congress--and therefore, step one is
    to convince people there's a problem, of both political parties. And
    once people--once it gets in their mind that there is a problem, the
    followup question is, ``Okay, now you see the problem. Now what are you
    going to do about it?'' And we haven't got quite to the ``What are you
    going do to about it'' stage yet.
        We're going to continue--and I want to thank you for that. When--
    write, talk--when you see people who say, ``Well, there's really not a
    problem,'' just--the facts speak for themselves. Again, this is not a
    political issue. This is policy at its most pure, I think. And the facts
    are clear. And the facts say it's time to get something done. But I
    readily concede there's a--we need a little more--I need to spend more
    time convincing people that we're going to--we got the problem.
        And then once we get to there, sir, it is--and I try to stimulate
    discussion or at least prepare the way for a good discussion by saying,
    ``I'm willing to listen.'' And if you put an idea on the table, you
    won't get--it won't be used to club you over the head politically with
    it. In other words, there needs to be an honest, open dialog. You deal
    with problems at your level, and the best way to deal with it is for
    there to be an honest discussion about different solutions without fear
    of political reprisal. And that's my--one of my pledges to the Members
    of the United States Congress and the Senate.
        And that--and so, but when the time comes, the other thing you can
    do is assure people that nothing changes. Again, I just know--there are
    people out there who rely upon Social Security who are very worried when
    they hear political people like me talking about reform. They--the
    concept of reform means, ``I'm not going to get my check,'' or ``I'm not
    going to get all my check,'' or ``I'm not going to get enough of my
    check.'' And we just have to continue to assure older citizens in
    Durham, North Carolina, and around the country that nothing will
    change--nothing will change. And once that assurance is fully
    understood, then I'm confident the dynamic of younger workers saying--or
    younger folks saying,

    [[Page 213]]

    ``What are you going to do about me,'' becomes a much more viable--
    becomes a driving force for reform of the Social Security system.
        I'm probably talking too much strategy and tactics, but I think
    it's--people who are interested in the subject, you got to know how I
    think this issue is going to unfold. And--so thanks for your great
    comment.
        One thing about faith: It's very important for this country to
    always remember that our strength, as opposed to some of these
    ideologues of hate that we deal with, our strength is the fact that you
    can worship or not worship and be equally patriotic. And if you choose
    to worship, you're equally patriotic if you're a Christian or a Jew or a
    Muslim or a Hindu. That is the wonderful thing about the United States
    of America. And regardless of what you believe and your beliefs, we must
    always jealously guard that great freedom of ours.
        Yes, ma'am. I hate to tell you--we could be here all day--but I am
    headed toward Pennsylvania. Last question. I know you're disappointed.

    Age for Opting Into a New Social Security System

        Q. Mr. President, an honor, sir. I thank you for your perfect segue
    into my question to you. I think the constituency most skeptical about
    reform appears to be those 55 and older. And I think the part of your
    program that's most appealing to that skepticism is that part that talks
    about opting in. Can you address more specifically the age in which you
    are allowed to opt in or not?
        The President. People born from--after 1950. That's a pretty easy
    question to answer. [Laughter] And that would not be me.
        Listen, I am so honored you all came. What a fantastic setting. I
    appreciate your time. I want to thank our panelists again for coming.
        God bless you all. Thank you.

    Note: The President spoke at 11:12 a.m. at the BTI Center for the
    Performing Arts. In his remarks, he referred to former Senator Jesse
    Helms of North Carolina; President Hamid Karzai of Afghanistan;
    President Mahmoud Abbas (Abu Mazen) of the Palestinian Authority; and
    former Representative Timothy J. Penny of Minnesota.