    [Public Papers of the Presidents of the United States: George W. Bush (2005, Book I)]
    [April 29, 2005]
    [Pages 695-707]
    [From the U.S. Government Publishing Office www.gpo.gov]

    Remarks in a Discussion on Strengthening Social Security in Falls
    Church, Virginia
    April 29, 2005

        The President. Thank you all very much. Thanks for the warm welcome.
    Thanks for coming today. I want to thank the Northern Virginia
    Technology Council for hosting this event. Sudhakar Shenoy is the chairman. Thank you, Sudhakar, I appreciate
    it very much. Bobbie Kilberg is the
    president. Obviously, you've stacked the audience with--[laughter]--I
    appreciate you coming.
        We're here to talk about an important subject, and that's going to
    be the future of--what the future holds for younger Americans, you know,
    is whether or not we've got the will and courage to make

    [[Page 696]]

    sure the Social Security system works for a younger generation.
        Before we get there, I do want to say a couple of things. One, I'm
    sorry Laura is not with me. She is--she's doing a
    fabulous job as the First Lady. I'm proud of her. I love her dearly.
        I appreciate Bill Howell, who is the
    speaker of the house from the great Commonwealth of Virginia. Mr.
    Speaker, thank you for coming. I appreciate you being here. Where's the
    Speaker? There he is. Thanks for coming, Speaker. Appreciate you
    serving.
        I want to thank Tony Griffin, the
    Fairfax County executive. I'm honored you're here, Tony. Thank you for
    coming. I want to thank the local and State officials who are here. I
    appreciate you're willing to serve your community and your State. I want
    to thank the Department of Community and Recreation Services, Pat
    Franckewitz and Joyce White, for opening up this beautiful facility. And I want to
    thank our panelists for joining us here to have a discussion about
    Social Security.
        Look, I--a lot of people have said, ``Why did you bring this up, you
    know? Why do you want to talk about the issue of Social Security when
    you don't have to? After all, the problem is down the road.'' I think
    the job of a President is to recognize reality and, if a President sees
    a problem, have the willingness to step up in front of the American
    people and say, ``We have a problem,'' explain the problem, and then go
    to the United States Congress and say, ``Let's work together to fix the
    problem.'' The job of the President is to confront problems.
        I think the American people--I know the American people expect those
    of us who have been elected to hold office to have set aside party
    politics and focus on solutions to problems confronting our country.
    That's what I know they expect. And that's the spirit in which I enter
    this debate. On one hand, my job is to confront problems; on the other
    hand, it's to call people together to solve them. And here's the problem
    with Social Security.
        First, I want to praise one of my predecessors, Franklin Delano
    Roosevelt. He did a very smart thing when it came to creating a
    retirement system to help people have dignity in their final years of
    life. And Social Security has worked for a lot of folks.
        The problem is, the math is changing on Social Security, and the
    reason the math is changing is because there are a bunch of baby boomers
    like me getting ready to retire. I reach retirement age in 4 years.
    That's a convenient time. [Laughter] Do you realize today there are 40
    million retirees, and when the baby boomers fully retire, there's going
    to be 72 million retirees. In other words, there's a baby boomer bulge,
    and the group of folks here very soon, will be getting ready to count on
    a younger generation to pay its benefits that we've been promised.
        The problem is, the benefits we've been promised are greater than
    the benefits promised to a previous generation, and those benefits rise
    faster than the rate of inflation. And to compound the problem is, we're
    going to live longer. You got a lot of people, living longer, getting
    greater benefits.
        I'm sitting up here with some folks who are going to be paying into
    the system. What has changed about the payers into the system is that
    the number of payers are shrinking relative to those who are going to
    receive benefits. In 1950, 16 workers were paying into the system for
    every beneficiary. In other words, the load was pretty light. Today,
    there are 3.3 workers per beneficiary. Soon there's going to be two
    workers per beneficiary. Fewer workers paying greater benefits to more
    people living longer--that's the change in the math. That is what has
    changed from the time Franklin Roosevelt set up the program.
        And what it means in terms of budgetary terms is that in 2017, the
    pay-as-you-go system goes into the red. ``Pay as you go'' means, by the
    way, money comes in, and

    [[Page 697]]

    it goes out. You pay, and we go ahead and spend. And we spend not only
    on retiree benefits, but we spend on every other program. And all that's
    left is file cabinets full of IOUs. You know, the people think, well,
    the Government has collected our money, and they're going to hold it for
    us, and then when we retire, we'll give it back to you. That's just not
    the way it works. It is a pay-as-you-go system. And therefore, when you
    have a lot of baby boomers living longer, getting greater benefits, in a
    pay-as-you-go--and more and more of us are getting what the Government
    said, the system goes into the red because you've got fewer payers.
        In 2027, the obligations of the Federal Government to retirees will
    be $200 billion greater than the payroll tax receipts. See, starting in
    2017, the system goes into the red, and it gets worse every year--2027,
    200 billion. About 2030-something, it's 300 billion, and eventually,
    2041, it's broke.
        And the temptation, by the way, in Washington is to say, ``Well,
    gosh, that seems like a long way down the road.'' But 2017 is not very
    far down the road. And if you're a younger worker and you start paying
    into the payroll system today, and 2041 is about the time you start
    retiring, I'm telling you, the system is going to be bankrupt unless we
    do something about it. In other words, you're working all your life;
    you're putting money in; and by the time it comes for you to get ready
    to retire, there's nothing there. That's a problem, folks, and it
    requires a solution. It requires people coming together to make this
    work.
        And so my strategy has been, one, travel around the country, explain
    to the American people we have a problem. And they now understand we
    have a problem. The debate in Washington has shifted, by the way. Early
    on this year, people were saying, ``It's not really a problem. You know,
    we don't have a problem in America.'' I don't think you hear that
    anymore. Oh, there may be a few isolated voices saying, ``It's not a
    problem.'' Most people now understand we've got a problem.
        My other mission early on in this--in the debate was to make it
    clear to seniors, you're going to get your check. There are a lot of
    people in this country counting on their Social Security check. And a
    lot of people are saying--as a matter of fact, I went to the computer
    class and a lady said, ``You make sure I get my check.'' She's counting
    on it. And I recognize there's been a lot of propaganda. There's been
    propaganda in political campaigns saying, ``If old so-and-so is elected,
    you're not going to get your check.'' And I'm sure there's some
    propaganda out there working its way through the system now, trying to
    frighten seniors.
        But our seniors have got to understand the system is solvent for
    them. Nothing changes for people who were born prior to 1950. It's those
    born after 1950 that need to ask our elected Representatives, ``There is
    a problem, and what you going to do about it?''
        I want to tell you what I think we ought to do about it. I think we
    ought to come together in good faith and discuss good ideas. I laid out
    some ideas. I have been laying out ideas about what I think we ought to
    do. First, I know that we ought to be able to say in a new system, as we
    fix the safety net for future generations, that you must receive
    benefits equal to or greater than the benefits enjoyed by today's
    seniors. In other words, any reform has got to say that to those who are
    paying into the system.
        Secondly, I think the country needs to set this goal for future
    generations, that if you've worked all your life and paid in the Social
    Security system, you will not retire into poverty. And there's a way to
    make that happen, and that is to have the benefits for low-income
    workers in a future system grow faster than benefits for those who are
    better off. If Congress were to enact

    [[Page 698]]

    that, that would go a long way toward making the system solvent for a
    younger generation of Americans.
        I have a duty to put ideas on the table. I'm putting them on the
    table, and I expect Republicans and Democrats to do the same kind of
    thing, and so do the American people. The American people expect us in
    Washington, DC, to do our duty and not play politics as usual with an
    issue as important as Social Security. When Congress comes together to
    discuss this issue, it's important for us to permanently fix Social
    Security. The reason I say that is because some of us were around in
    1983 when Ronald Reagan called Tip O'Neill and said, ``We got a
    problem,'' and they came together and put together a 75-year fix. That's
    what they said, ``We got us a 75-year fix.''
        The problem is 25 years--or 22 years after 1983, we're still talking
    about it. The 75-year fix lasted about 22 years. And so now is the time
    to permanently fix Social Security. Any solution that comes forth out of
    Congress must permanently fix it.
        As we permanently fix it, we have a great opportunity to make the
    system a better deal for younger workers. And here's how: Younger
    workers should be allowed to take some of their own money, some of their
    own payroll taxes they pay into the system, and set it aside in a
    personal savings account. Now, this isn't the Government telling you
    what to do, the Government saying, ``You must set aside a personal
    savings account.'' This is the Government saying, ``You should have the
    option, if you so choose, to take some of your own money, some of the
    money that you've earned, and put it aside in a personal savings
    account.''
        And here's the benefit from such an idea. One, the Government does
    not--doesn't get a very good return on your money when we take it from
    you. If you were to put your money in a conservative mix of stocks and
    bonds, you would get a better rate of return. And that rate of return,
    over time, will make an enormous difference to somebody who wants to
    build a nest egg. Do you realize that stock investments have returned
    about 9 percent more than inflation per year since 1983, while the
    Social Security real return is only about 2 percent. That means if you
    were to invest a dollar in the market in '83, it would be worth $11
    today, while your dollar in Social Security is worth 3. Think about what
    that means if you put a fair amount of money aside over time. It means
    your own money would grow better than that which the Government can make
    it grow. And that's important.
        It's an important part of being a part of a vibrant--a retirement
    system. You're going to get a check from the Government. The question
    is, how big? If you're allowed to take some of your own money and watch
    it grow faster than the rate at which Government can grow it, it means
    you've got a bigger nest egg.
        Secondly, I like the idea of people owning something. We want more
    people owning their assets in America. You know, there's kind of a
    concept around that says maybe only a certain kind of people should own
    assets, an investor class, maybe only the rich. I firmly reject that
    idea. That's not how I view America. I want more people owning things,
    owning their own home, owning their own business, owning their own
    retirement account, owning assets that they can pass on from one
    generation to the next. The more people that are able to do that, the
    better off America is.
        Thirdly, the system today is patently unfair for families if a
    spouse is to die earlier than expected. Think about this kind of system
    we have today. You work all your life; your husband or wife works all
    their life, and one of you dies before 62 years old, or after 62. If
    they die before 62, you get no survivor benefits. You get a little
    stipend to help bury your spouse, period. All the money goes in, waits
    until you reach retirement age. When you reach retirement age, if you
    have worked as well, you get

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    either your spouse's benefits or your benefits, which are ever higher,
    but not both.
        So if one of the two of you have worked all your life--or worked
    your life and put money in, you don't get anything as result of your
    labor. I think it will make sense to allow people to set aside some of
    their own money in a personal account so they have their own assets, and
    if they happen to die early, they can pass it on to their wife or
    husband. In other words, your assets just don't disappear like the
    current system encourages.
        But you've got something you call your own, finally. I like an
    idea--remember, this is a pay-as-you-go system. People are going to be
    counting on future Congresses to make decisions what to do with your
    money. I like the idea of you being able to have an asset base that the
    Congress can't take away. The Congress doesn't get to spend on your
    behalf, because it's your asset. You own it. It is your nest egg.
        Personal savings accounts make a lot of sense to me. They also make
    a lot of sense to a generation of Americans that are used to investing.
    I was telling the folks up here that when I was in the twenties, I don't
    remember spending a lot of time thinking about my 401(k). It's because
    they didn't exist. Think about what's happened in our society. A lot of
    people are becoming accustomed to watching their money grow. There's a
    new and--a group of investors from all walks of life that are
    comfortable with watching their assets grow and expect to be able to
    manage their own assets. The culture has changed when it comes to
    investing.
        Now, people often ask me, you know, ``Can I--are there going to be
    wise ways to set up these savings accounts?'' Of course there will be.
    I'm not going to say, ``You can--we want you to have a retirement fund.
    You can take your money and put it in the lottery.'' In other words,
    there's a conservative mix of bonds and stocks that will be available.
    If you're risk-adverse, you can buy Treasury bonds, as far as I'm
    concerned.
        You know, people say, ``Well, you know, what happens if I'm getting
    close to retirement and there's a market swing?'' Well, when you get
    close to retirement, there are ways to diversify out of a mix of bonds
    and stocks and get into strictly bonds--Government-backed bonds. People
    can manage your money in smart ways. And the role of--it seems like to
    me, a proper role for the Government is to say, ``Here are the
    guidelines in which you can--should be allowed to invest,'' but there's
    a lot of flexibility so you can choose how best to manage your own
    assets.
        So this makes sense, and Congress needs to hear the voices of people
    who believe it is right and fair to give them the option to watch their
    own money grow. And we've got some people up here today that have got a
    pretty good idea about what they want to do with their own money.
        Oh, by the way, just as an aside, I think it'll interest you to know
    that this isn't a new idea I'm discussing. As a matter of fact, Congress
    has given themselves the same opportunity that I think ought to be
    available for younger workers. There's what they call a Thrift Savings
    Plan in Washington, DC. It's available for Federal workers. It says that
    if you're unhappy with the Government's rate of return, you ought to be
    able to set aside some of your own money--manage your own money in a
    retirement account. Seems like to me that if a Member of the United
    States Congress thinks it's okay to manage his or her money, that same
    privilege and opportunity ought to be extended to workers all across
    America. What's good for the Congress ought to be good for the working
    people in the United States.
        Doctor Olivia Mitchell is with us.
    She's an expert on the subject. Ph.D.?
        Olivia S. Mitchell. Yes, sir.
        The President. For those of you who are younger, I just want you to
    look at the examples being set here. Olivia is a Ph.D.

    [[Page 700]]

    I was a C student. [Laughter] Olivia is the expert. I'm the President.
    [Laughter] Anyway, thanks for coming. A couple of B's, a couple of B's,
    yes. [Laughter]
        Tell us what you do, Olivia.
        Dr. Mitchell. Yes, sir, thank you.
    It's a great pleasure to be here with you today. I teach pensions in
    Social Security at the Wharton School at the University of Pennsylvania.
    I've been teaching in this area for 25 years, and the one thing that
    I've noticed is this year, the students are paying attention, finally,
    and I thank you for that. You're a great educator.
        The President. They ought to be paying attention. The Social
    Security trustees estimate that for every year we wait, it costs another
    $600 billion. It is conceivable that if we do nothing, that the payroll
    tax will get up to 18 percent for younger Americans.
        Anyway, go ahead.
        Dr. Mitchell. So it's absolutely
    correct. The system is running into trouble. Within 13 years, the
    payroll tax coming in will not be sufficient to pay benefits.

    [At this point, Dr. Mitchell continued her remarks and concluded as
    follows.]

        Dr. Mitchell. As a former member of
    your Commission to Strengthen Social Security, I watched with great
    attention to the press conference last night, and I was very encouraged
    because I heard several things; One, that you're going to try to reduce
    the rate of growth of benefits to restore solvency--that's essential--
    two, that benefits will never fall below today's benefits--I think
    that's key--and third, the thing you've spent a lot of effort focusing
    on, personal retirement accounts. Those, to my mind, are a central
    element--diversified, low cost, and offer people the opportunity to
    manage their money. So I congratulate you for it.
        The President. Yes, I asked Olivia to
    join a council headed by Daniel Patrick Moynihan. Unfortunately, he has
    gone on. But he ran a bipartisan Commission in 2001.
        Dr. Mitchell. He and Dick Parsons.
        The President. Yes, Dick Parsons--and
    they took a look at this in a very sober way, in a nonpolitical way, and
    came up with some serious recommendations, many of which are now being
    discussed in Congress. And I want to thank you for serving on that.
        The Commission shows what is possible when people set aside partisan
    politics and focus on solving America's problems. And that's what we
    need to do in Washington. There's too much kind of ``gotcha'' politics,
    you know, ``We can't work here because somebody may look good.'' But
    eventually what's going to happen in this debate is that if--those who
    block meaningful reform are going to be held to account in the polls.
    See, the more people who understand the problem, the more young people
    who understand inaction by this Government is going to saddle them with
    enormous taxes--will be going to the polls. They're going to be saying
    to the people running for office, ``How come you didn't do anything
    about it? Where were you when it came time to come up with fair reform
    that take care of the poor, that make sure that younger workers have got
    a better deal?'' And so I want to thank you for your hard work on that
    issue, Olivia. And thank you for joining
    me again.
        Kristin Seitz is with us. Kristin welcome?
        Kristin Seitz. Thank you.
        The President. Do you make a living?
        Ms. Seitz. I do. My name is Kristin Seitz.
    I'm 23 years old, and I'm actually the executive coordinator at the
    Northern Virginia Technology Council.
        The President. Good.
        Ms. Seitz. I graduated in 2004 from the
    Ohio State University, and NVTC is my first job since graduating.
        The President. Great, yes. Are you concerned about the fact that the
    mighty Texas Longhorns will be playing at Ohio State this year?
    [Laughter]
        Ms. Seitz. I actually got my alumni
    tickets yesterday in the mail.

    [[Page 701]]

        The President. You did? Good.
        Ms. Seitz. And unfortunately, I will not
    be at the Texas game, which is a real shame.
        The President. Anyway--[laughter]--back to the subject at hand. You
    told me that you contribute to a 401(k)?
        Ms. Seitz. I do. I contribute up to 3
    percent. We get matched at NVTC----
        The President. Right.
        Ms. Seitz. ----for up to 3 percent. I
    actually invest up to 4 percent.
        The President. Good.
        Ms. Seitz. I'm also looking at----
        The President. Why are you doing that? Why did you decide to do
    more?
        Ms. Seitz. Because I like the idea that
    I'm able to grow my money. I can invest it, and the faster it grows, the
    more money I'm going to have, the better I'm going to be in the future.
        The President. Yes. And at age 23, that seems like an awfully young
    age for people to be investing. ``Investing'' is kind of a powerful word
    for a lot of people in America. They wonder, ``Can I possibly figure out
    how to invest?'' And I'm just curious, have you found it to be a
    burdensome experience----
        Ms. Seitz. I have not.
        The President. ----a nerve-wracking experience, an easy experience?
        Ms. Seitz. I very much enjoy it. I like
    being able to go through and see what is doing well, what is not. My
    boyfriend, George, who is actually from Texas----
        The President. Boyfriend, George?
        Ms. Seitz. My boyfriend, George, who is
    from Texas--[laughter].
        The President. Where is he? Big George? Where is George from Texas,
    do you know?
        Ms. Seitz. He's in San Antonio.
        The President. San Antonio. Awesome, George. You got a little
    notoriety here. [Laughter] Maybe the folks back home are watching C-
    SPAN, you never know. [Laughter]
        Ms. Seitz. He just started a career
    recently in personal finance and sells mutual funds, so I was looking
    into investing in a mutual fund as well.
        The President. Yes, good. But you're paying attention to it. It's a
    subject that is--you're comfortable in talking about investment, which
    is an important thing for people to understand. Sometimes you hear what
    these personal accounts--I mean, asking people to do something they're
    not capable of doing. Frankly, it's kind of an elitist point of view,
    isn't it? Plenty of people are capable of learning how to watch their
    money, particularly since it's their money.
        Give me your views on Social Security. Have you got any thoughts on
    that?
        Ms. Seitz. I have noticed, since this is
    my first full-time job out of college, how much money is taken out of my
    paycheck each pay period for Social Security that I may not see when it
    comes to my retirement.
        The President. Yes, see, it's interesting. It's the biggest tax a
    lot of people pay. And younger Americans are saying, ``I'm not so sure
    I'm going to see it.'' The benefits of putting into it--and I appreciate
    that. A lot of--I like to quote the--some youngster told me about the
    survey that said, many young people are--think it's more likely they're
    going to see a UFO than get a Social Security check. [Laughter] I don't
    know if you're one or not. [Laughter]
        But it's an interesting dynamic, isn't it? A lot of young people are
    beginning to say, ``It's taking a big bite out of my check, and I'm
    putting into a system I'm not sure I'm going to see anything back
    from,'' which says to me that people who have been elected to office
    better be wary of not taking care of the system, because when a lot of
    young people--see, when their grandparents realize they're going to get
    the check, nothing changes, and a lot of young people are starting to
    say, ``I'm putting something into the system that may not be around when
    I retire,'' it creates an interesting set of dynamics, doesn't it?

    [[Page 702]]

    A lot of young people are beginning to pay attention to the issue, a lot
    of young people are comfortable with investing.
        Do you get a--how do you pay attention to what you invest in?
        Ms. Seitz. I can go online and check my--what each of my investments
    are doing, and I can change them at that time if I feel it's necessary.
        The President. Yes. It's great, isn't it? It's an interesting
    system. It's an interesting cultural change, people going online to
    watch her investments grow. And if she doesn't like what's happening,
    she can change. And to me, I like the idea of Americans opening up a
    statement on a regular basis, watching their assets. It may make people
    pay attention closer to tax policy in Washington, DC, for example, or
    decisions made by elected officials.
        Thanks for coming. Well done. Good job on hanging out with a Texan.
    [Laughter]
        Yuctan Hodge.
        Yuctan Hodge. Good morning, Mr. President.
        The President. Yuctan--it's a really
    interesting first name.
        Mr. Hodge. Yes, it is. My dad is Anguillan.
    It's a small Virgin Island off the coast of St. Martin. And the name
    means ``forever young.''
        The President. Forever young? Yuctan, I've
    got bad news for you. [Laughter]
        Mr. Hodge. In spirit, sir, in spirit.
        The President. Yes, in spirit. That's good. If you can stay forever
    young, the Social Security issue wouldn't matter. [Laughter]
        Mr. Hodge. Not at all.
        The President. Someday, you're going to be counting on the check.
    Tell me what you do.
        Mr. Hodge. I started a web development
    company in 2000 while I was an undergrad at the University of Virginia,
    studying economics.
        The President. How about that? Entrepreneur, somebody who is taking
    risk, somebody in college--it's fantastic. How's it doing?
        Mr. Hodge. It's doing very well. I'm
    actually getting ready to actually close it down because in the fall,
    I'll be returning to UVA to attend the Darden MBA program.
        The President. Fabulous. Congratulations.
        Mr. Hodge. I'm very excited.
        The President. Yes, you ought to be. You ought to be. It says here,
    like, you're about to get married. You're going to go back to school and
    get married.
        Mr. Hodge. I have a very busy summer coming
    up. I'm getting married in July. My fiancee is here in the audience.
        The President. Oh, there she is. Fantastic. Congratulations. When--
    what's the date?
        Mr. Hodge. July 3d.
        The President. Tied up, but--[laughter].
        Mr. Hodge. Well, it's here in the city, if
    you can make it.
        The President. It is, well--[laughter]--send me an invitation. At
    least you'll get a gift. [Laughter]
        Give me your thoughts on investments. Obviously, you're a smart guy,
    started your own business prior to graduating from college. You've got
    ambitions, dreams, hopes.
        Mr. Hodge. Well, the same year I started my
    company, I also opened a Roth IRA with Fidelity and started capping it
    out each year because I realized----
        The President. Tell people what a Roth IRA is. Some people listening
    may not understand what a Roth IRA is.
        Mr. Hodge. It's basically another
    retirement account that you can set aside, I believe this year, it's
    3,500 a year tax-free. And you could return that money to you at around
    55, I believe.
        The President. Right. In other words, it's in a savings account.
    It's a way for an individual to set aside some of his own money in this
    case and watch it grow.
        Mr. Hodge. Definitely.
        The President. Yes.
        Mr. Hodge. And again, I check it online and
    get monthly statements so I always know what's going on with my money.

    [[Page 703]]

        The President. So you're paying attention. Sure.
        Mr. Hodge. I'm definitely paying attention.
        The President. Yes. Don't you like the idea of people paying
    attention to their assets and watching them grow? I think it's an
    incredibly fantastic opportunity to spread that opportunity throughout
    our entire society. So Social Security, yes, this is the subject here.
    [Laughter]
        Mr. Hodge. Well, I know that Social
    Security won't be around, and yet your plan for personalized accounts
    takes advantage of one of the principles I learned in economics, was
    compound interest and amortization, the fact that I could have an
    account that I have control over that makes--turns my money and allows
    it to make more money is far better than any alternative.
        The President. Yes, compound interest for some may be a concept
    they're not familiar with. Money grows exponentially?
        Mr. Hodge. That's correct.
        The President. How would you describe compound interest?
        Mr. Hodge. Your money grows depending on
    how you have it quarterly or yearly. And every year----
        The President. Tends to accumulate and get bigger and bigger and
    bigger.
        Mr. Hodge. Definitely.
        The President. Do you realize that if you're a person who's made
    $35,000 over your lifetime, and the Government allowed you to take a
    third of your payroll taxes over that period of time and set it aside in
    a conservative mix of stocks and bonds, that over time, when it came
    time to retire, that money you set aside would grow to be $250,000.
    That's the compounding rate--that's what, when you keep investing your
    money, keep reinvesting and interest--the compounding rate of interest
    allows for that kind of growth.
        Think about that. A person who has made $35,000 over their life,
    allowed to take a third of the payroll taxes, set it aside in the
    personal savings account they call their own. That person has got a nest
    egg, tangible assets that they can then pass on to whomever they choose.
    That's the power of compounding interest. We don't have that power if we
    hold your money in Government to the extent that you can have if you
    hold it yourself. And that's what--that's what Yuctan is talking about. He said--I think he's saying, ``Just
    give me the chance.'' He wants----
        Some people may not choose, by the way, to set aside their money.
    That's okay. The great thing about America is we ought to be giving
    people the opportunity to make that decision. Government ought not to
    make it for people, particularly since--the interesting thing is that,
    as I said earlier, Congress has already made that decision for
    themselves. [Laughter] Don't you find that ironic?
        Mr. Hodge. I do.
        The President. Yes. [Laughter] It's called leading the witness.
    [Laughter] Good luck on the wedding, July 3d. Gosh, you're awesome.
        Mr. Hodge. Thank you very much.
        The President. Yes. And I'm looking forward to meeting the fiancee
    after the event.
        Mr. Hodge. And the in-laws are here too--
    [laughter]--my mother-in-law and two sisters-in-law.
        The President. Yes, that's a smart move--[laughter]--a really smart
    move.
        Mr. Hodge. Thank you, Mr. President.
        The President. Didn't need an MBA to figure that out. That's good.
    [Laughter]
        Colleen and Justin Rummel, welcome.
        Colleen Rummel. Good morning.
        The President. Thanks for coming. What do you all do?
        Mrs. Rummel. My name is Colleen Rummel,
    and I graduated from Ball State in 2000. And we came out here, and we
    began working at Verizon right away, and I'm an analyst there.
        The President. You two work together?
        Mrs. Rummel. Yes, we do, two floors
    apart. [Laughter]
        The President. Really, interesting.

    [[Page 704]]

        Mrs. Rummel. Yes, it's interesting. It's
    fun, and it's, you know, it's nice to be able to see him all the time.
        The President. Yes. [Laughter]
        Mrs. Rummel. We do drive separately,
    though.
        The President. The definition of a newlywed. [Laughter] That's
    great. How is work?
        Mrs. Rummel. It's good. I have actually
    contributed to the 401(k) right away----
        The President. Got a 401(k)?
        Mrs. Rummel. Yes, yes, and they have a
    great matching program, so we took advantage of that because we wanted
    to make sure that we had something, because I've never felt that Social
    Security really would be available for us.
        The President. Isn't that interesting? A lot of people feel that
    way, your age?
        Mrs. Rummel. Seems like it.
        The President. Yes. Well, I'm going to keep talking about it. See, I
    think it's really important for people your age to understand the truth.
    The best thing the President can do is just out lay the truth. Just put
    the facts out there. People can make up their own mind about whether or
    not they feel comfortable about Social Security. You're--I guess, you're
    getting the message--401(k)s, again, so people fully understand what
    that is?
        Mrs. Rummel. We get to set aside up to a
    certain percentage of our paycheck pre-tax, per pay period. And some
    companies offer a matching program where they will match up to the next
    percentage to help affect your growth----
        The President. Right.
        Mrs. Rummel. ----and grow your
    investment.
        The President. You and old Justin there,
    figure out what you're going to invest in?
        Mrs. Rummel. Actually, our son. We have
    an almost 11-month-old son, and once he was born, we realized with all
    the costs that come with raising children, just child care and braces
    and college, and gosh, he just started almost walking, so now we're
    thinking, ``Oh my gosh, he's just going to get into everything in''----
        The President. ----she is, yes.
        Mrs. Rummel. We realized that we need
    the--we need to make sure we have some money set aside so that way, you
    know, if something happens to us, he's taken care of besides--especially
    if he's above the age of getting death benefits from the parents.
        The President. Yes, I appreciate that. Justin, you got anything to offer there? Mom's doing a heck of a job. [Laughter]
        Justin Rummel. She's talking for me, as
    usual. The program that is actually set aside is mainly for our son,
    Gavin. He's the main focus with that, the idea of being able to take
    money, set it aside, and also bring it back, is definitely a key factor,
    but along with that--alongside of that, the idea that Social Security
    won't be there for us when we retire, and we're taking the steps for it.
    What I'm really concerned about is what's going to happen to him and
    what he's going to have to deal with at the point where Social Security
    becomes bankrupt.
        The President. Yes. That's a great question. First of all, I've
    always said Social Security is a generational issue. Once the
    grandparents here in America understand they're going to get their
    check, then they start saying, ``What about my grandkids?'' Here you've
    got young parents
    wondering about their child--their child, Gavin. And it's a natural question for people from one
    generation to ask.
        You know, we--those of us who are baby boomers were very fortunate
    to have a generation before us make huge sacrifices for the country.
    They confronted problems. They confronted big problems. It's now our
    obligation to confront the same problems so that the next generation
    coming up will say, ``Thankfully--thankfully the generation ahead of us
    did the right thing.''
        There's a lot of parents, you know, beginning to--when they figure
    out what's going on, are beginning to say, ``Gosh, we've got

    [[Page 705]]

    a serious problem for my child, and I expect the Government to do
    something about it.''
        Here we've got a young couple used to managing their own money. Mom has said she's
    not sure Social Security is going to be there. Dad said, ``If it's not
    there for us, it's definitely going to be a burden for my kid.''
        See, the issue here is, once you see the problem, whether or not
    we've got the political will to deal with it. Otherwise we strap a--
    younger generations with enormous financial burdens. And I appreciate
    you worrying about your kid. You need to worry about yourself, too,
    because you're going to be paying into a system that is bankrupt in
    2041.
        Thanks for coming. Good luck.
        Mrs. Rummel. Thank you.
        The President. Good.
        Mr. Rummel. Thank you.
        The President. Yes. I appreciate you being here.
        Paul Sanchez.
        Paul Sanchez. How are you doing?
        The President. Pretty cool. [Laughter] So-so. [Laughter] Feeling
    great, thank you. How are you doing? [Laughter]
        Mr. Sanchez. I'm doing great.
        The President. You're looking good.
        Mr. Sanchez. This is fun. This is new for
    me, so----
        The President. Well, welcome. Are you employed?
        Mr. Sanchez. Yes, sir, I am. I'm a
    certified financial planner. I work for Sullivan, Bruyette, Speros &
    Blayney in Tysons Corner, Virginia.
        The President. Yes, here's your chance. Looking for some customers?
        Mr. Sanchez. Absolutely. [Laughter] Can
    never have too many of those, right?
        The President. That's right. Where were you raised?
        Mr. Sanchez. San Antonio, Texas. [Laughter]
        The President. Did you know George? [Laughter]
        Mr. Sanchez. No, I don't.
        The President. High school? Yes, where did you go to high school?
        Mr. Sanchez. John Jay High School in San
    Antonio.
        The President. John Jay, very good.
        Mr. Sanchez. You know that school?
        The President. Yes, of course. I was, remember, the Governor.
    [Laughter] How quickly they forget.
        Mr. Sanchez. I could really test you and
    ask if you know the mascot, but I won't do that.
        The President. No. [Laughter] So, like, why did you sign up for this
    panel, just out of curiosity?

    [Mr. Sanchez made further remarks.]

        The President. Yes. Isn't it interesting to hear people sit up here
    and say, ``I'm not so sure Social Security is going to be there for
    me.'' I don't remember saying that when I was 20 years old. As a matter
    of fact, I was pretty confident that--when I thought about it--the
    promise Government had made to me and others would be kept. And here,
    we've got citizens sitting up here saying, ``I don't think the system is
    going to be there for me.'' It's an interesting dynamic that people in
    Washington must pay attention to. In other words, they're saying,
    ``We've got a problem.''
        And the sad thing is, we've got folks who are just beginning to pay
    into the system. It must be a little discouraging to be paying into a
    system that you're not sure is going to be there.
        Mr. Sanchez. Well, I try to put a positive
    spin on it. My dad is 60, so he's counting down the days to where he
    gets it, so I figure, he'll get some of what I'm paying in.
        The President. No, that's--I appreciate that. And----
        Mr. Sanchez. He does too.
        The President. Yes, that's right. [Laughter] No, I'm supposed to be
    the funny guy. [Laughter]

    [[Page 706]]

        Mr. Sanchez. I figured I was from Texas; we
    could share a little bit. [Laughter]
        The President. Compadre. [Laughter] You know, you--first of all, you
    hear these stories about people saying, ``Gosh, well, if I were in the
    stock market and the market declined, I'd lose everything.'' Give people
    a sense, as a planner, of how you help people at the end of their life
    prepare for a different risk portfolio.
        Mr. Sanchez. When I started investing, it
    was in 1997, right out of college. So I've seen two extremes. I've seen
    a bull market that has just taken off, and I've seen a bear market just
    go way down. But what that brings you back to is fundamentals. When you
    see extremes, you've got to go back to fundamentals. When you look long
    term, we're always showing clients the power of investing over 20, 25,
    30 years, and there's a lot of power there. So you've just got to pick a
    strategy, be disciplined with it, understand your risk tolerance, and
    like you're saying, you can go to Treasury bonds if you're so risk-
    adverse. But if you're someone like myself, who is willing to take a
    little risk, put half or 70 percent in stocks, and watch it grow and
    work for you.
        The President. I suspect your risk portfolio will change as you get
    a little older, don't you?
        Mr. Sanchez. Absolutely, it will change.
    But for now, I'm still pretty----
        The President. And that's important for people to understand. In
    other words, there's flexibility, where you can decide to match your--
    you put your money where you're comfortable. As you get older, you can
    transfer from, say, a mix of bonds and stocks to only bonds, relatively
    risk-free bonds, so that there's more security the closer you come to
    retirement. You're not stuck in one type of investment vehicle.
        Secondly, one of the things that you hear about--well, you know,
    Wall Street is going to gouge these people. Do you realize, there's a
    lot of folks around the country who work for local governments that
    enable their--local governments enable their people to invest in private
    accounts, put their own money in a personal savings account. That
    happens a lot. I was in Galveston, Texas. That happens in Galveston.
    Yes, it's hard to believe--[laughter]--but it happens in Ohio. It
    happens in the State of Ohio. And people need to know that fees can be
    managed properly, so you're not gouged. The Government is going to make
    sure you're not gouged. If we're wise enough to create these accounts
    for people, there's going to be Government oversight to make sure that
    people are treated fairly. And that's what you've got to know.
        Mr. Sanchez. Index, index funds.
        The President. Yes, see, index funds. Whatever the heck that means.
    [Laughter] No, just kidding. [Laughter]
        I do want to thank you all for coming. I hope you have found this to
    be an interesting dialog. Most particularly, I hope you have--if you're
    a younger American, I hope you pay attention to this issue like these
    good folks have done. There's a lot at stake for you. It may not seem
    like it now--``22 years old, got a lot of life ahead of me.'' I'm
    telling you, if the Government doesn't act, you're going to be saddled
    with a big burden. When you get old enough, you're going to be saying,
    ``How come they didn't act? How come the United States Congress is so
    focused on their parties, political parties, that they didn't have the
    courage to make sure the system was solvent for me?'' The Social
    Security system is solvent for people who were born prior to 1950. You
    don't have a thing to worry about. But if you've got a child or a
    grandchild coming up and working hard, you'd better be worried about
    whether or not this Congress can do its duty.
        I'm confident we're going to get something done. I believe the more
    the people understand the nature of the problem, the more they're going
    to speak out to their elected Representatives. The more they understand
    the nature of the problem, the more they're going to be saying to those

    [[Page 707]]

    of us who are serving, ``Go get it fixed.'' And I'm fully prepared to
    help in the process. I put forth ideas to move the process along.
    Anybody who has got a good idea, bring it forward. And then we'll be
    able to say, when we solve it, ``We did our duty for a generation of
    Americans coming up.''
        Thanks for giving us a chance to visit with you. God bless.

    Note: The President spoke at 10:29 a.m. at the James Lee Community
    Center. In his remarks, he referred to Patricia D. Franckewitz,
    director, Fairfax County Department of Community and Recreation
    Services; Joyce White, director, James Lee Community Center; and Richard
    Parsons, Cochair, President's Commission to Strengthen Social Security.