[Public Papers of the Presidents of the United States: George W. Bush (2005, Book I)]
[February 3, 2005]
[Pages 133-146]
[From the U.S. Government Publishing Office www.gpo.gov]



Remarks in a Discussion on Strengthening Social Security and a Question-
and-Answer Session in Great Falls, Montana
February 3, 2005

    The President. Thank you all for coming. Thank you all for being 
here. Go ahead and have a seat. Thank you. Nice to be in the part of the 
world where the cowboy hats outnumber the ties. Thanks for coming. Gosh, 
it's wonderful to be back in Montana. What a fabulous State, full of 
really decent, honorable people.
    Conrad, thanks for introducing me. I'm glad 
you didn't auction me off. [Laughter] Doing a fine job in the United 
States Senate, and I'm proud to call you friend. Thank you very much, 
sir.
    And I want to thank Max Baucus for being 
here. We have worked a lot together in 4 years. You know, we've 
confronted a lot of things in this country. We've confronted a recession 
and confronted the need to get this economy growing. And Max worked hard 
with the administration to cut taxes and open up markets. And I 
appreciate working with you, Max. It's been a lot of fun. We got more 
work to do.
    We're here to talk about an issue, after a while, that's going to 
remind us we got a lot of work to do if we're going to do our duties as 
public servants. But Max, thank you. Denny 
Rehberg, thank you, friend, for coming. 
I'm honored you're here--proud of the United States Congressman from the 
great State of Montana--and Jan.
    The Governor met me at the airport. The 
Governor is here. Governor, thank you for coming. I'm proud you're here. 
One of these days you're going to join the same club as me and 
Judy and Marc 
Racicot--that's the ex-Governors club. But right now, you may have the 
best job in America, being the Governor of a great State. So I'm proud 
you're here. Lieutenant Governor is with 
us today. We got a lot of other officials--secretary of State--thanks 
for coming.
    You know, we're flying over on Air Force One, and guess what 
Burns and 
Rehberg--all they wanted to talk about was cattle--

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[laughter]--Montana beef. And that's an important subject because it's 
part of how to make sure our economy continues to grow. They kept 
asking, ``Are you talking to markets overseas to get the Montana beef 
into those markets?'' I said, ``You bet I am.'' And we'll continue to do 
so.
    One of the reasons I worked with Max on free trade is because I 
believe when we open up markets for products, U.S. products, Montana 
products, people are going to more likely be able to find a job. We want 
to be selling stuff you grow here and stuff you produce here all around 
the world. And so I want to tell Max and 
Denny and Conrad, 
we're going to still be opening up markets.
    They also had a few other things on their mind. They wanted to talk 
about energy. Last night I said to the United States Congress--I said we 
have been debating energy long enough. It is time to get a sound energy 
plan to my desk so we can become less dependent on foreign sources of 
energy. People in Montana know something about energy. I know that.
    They said also, ``Make sure you keep in mind the needs of the rural 
health--hospitals and docs.'' You've got some rural issues here in 
Montana because you've got a lot of land--[laughter]--and not a lot of 
people. [Laughter] That's the way a lot of folks probably want to keep 
it too, I suspect.
    If you want to have health care available and affordable, we've got 
to do something about these lawsuits that are running good doctors out 
of practice. We've got a problem in that these lawsuits are making it 
costly for docs to stay in business and are hurting the Federal budget 
too. When you're afraid of getting sued, you practice defensive 
medicine. In other words, you prescribe more than you need to, just in 
case you have to go to a court of law. And that runs up the cost of 
Medicare, Medicaid, veterans benefits. So I've come to the conclusion 
that the medical liability issue is a national problem that requires a 
national solution, and I call upon Congress to pass real, meaningful 
medical liability reform.
    Before we talk about Social Security, I do want to talk a little bit 
about the amazing times we're living in. Just think about what has 
happened in the last 4 months. There was an election in Afghanistan. 
Millions--millions--of people voted for a leader, voted for a 
President for the first time in 5,000 years. I 
don't know who's counting, but that's a lot, you know. I mean, it's an 
amazing story, when you think about it. It wasn't all that long ago that 
the Taliban was providing safe haven to Al Qaida in Afghanistan, and 
that's where they plotted and trained. That's why we went in, to rout 
them out.
    We said if you harbor a terrorist, you're equally as guilty as a 
terrorist. The doctrine still stands. And the reason the doctrine still 
stands is because there's an enemy that still hates what we stand for. 
We will stay on the offense. No matter where they hide, where they run, 
the United States of America and coalition forces will be after them to 
keep us safe.
    That is our duty. That's the responsibility of the Federal 
Government. And I want to thank those who wear our uniform for serving 
this great country of ours. But the lesson of Afghanistan should remind 
us we've got a greater force at our disposal than just our military, and 
that is our belief in the ability of freedom to change societies.
    And we saw it. The high school students and college students here 
are watching some amazing history unfold. Think about what you've seen. 
You saw people vote in Afghanistan to elect a President. You saw people vote in the Ukraine to elect a 
President. You saw people vote in the 
Palestinian Territories to elect Abu Abbas [Abu Mazen].* And you saw last Sunday some incredibly 
brave people in Iraq defy the

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terrorists and cast their ballots by the millions, because of freedom.
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    * White House correction.
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    Freedom is powerful. Freedom is incredibly powerful. I believe that 
freedom is embedded in everybody's soul. That's what I believe. I 
believe that given a chance, people will vote, and people will adhere to 
the rules of self-government. It's not easy in parts of the world, 
though, where there's terrorists and tyrants trying to stop the march of 
freedom. And the reason they are, and the reason they're trying to stop 
the march of freedom is because they think the exact opposite. They 
believe in control of people's lives. They don't believe in freedom of 
religion. They don't believe in freedom of speech. They don't believe in 
freedom of the press. They don't believe in freedom, period. And we do. 
That's why we're still a target, but that's why we'll prevail in the 
long run, because deep in everybody's soul is that deep desire. And you 
know why I believe it's deep in everybody's soul? Because I believe it's 
the Almighty God's gift to every soul on the face of the Earth.
    You about ready, Leo? Let me say one other 
thing. They asked me--you know, I've been asked, and they say, ``Is 
there a timetable of withdrawal from Iraq?'' Here's the answer to that. 
You don't set timetables. You don't want the enemy to say, ``Okay, we'll 
just wait them out.'' The timetable is, as soon as possible. And it's 
going to be based upon the willingness and the capacity of the Iraqi 
troops to fight the enemy. And so our mission--our mission is to provide 
training and command structure and officer training to the Iraqis so 
they can defend their own freedom. That's what they want to do. I talk 
to their leadership all the time. And like any independent free country, 
they want to defend themselves, and our job is to help them defend 
themselves. And when they do, and when they're ready, our troops will 
come home with the honor they have earned.
    And as freedom spreads in parts of the world that have not known 
freedom, our children and grandchildren will more likely grow up in 
peace. And that's what we want. We want to spread the peace.
    Let me talk about Social Security. You know, people say, ``Gosh, 
that's a pretty tough issue to be bringing up. We've got a war to fight. 
Why are you bringing up Social Security?'' Here's why: The job of the 
President is to confront problems, not to pass them on to future 
generations or future Presidents. That's the way Montana people think: 
If you see a problem, go fix it. Don't theorize, don't pontificate, but 
fix it. And so the question is, do we have a problem?
    First of all, let me explain why I think we--I know we have a 
problem. When Social Security was designed, there were 16 workers for 
every beneficiary in 1950--actually, designed in the thirties. In 1950, 
there were 16 workers for every beneficiary. That meant it was a lot 
easier to afford that which the Government promised. When you've got 16 
people paying in for one person, it--you can see why the system was 
solvent.
    What's happened since the design of the system, however, is that 
people are living longer, thankfully. [Laughter] That's good news. 
[Laughter] What else is happening since the system was designed is we 
had what's called the baby boomers. That would be me, Baucus, others, 
you know--[laughter]--people whose hair is getting grayer on a regular 
basis. And we're fixing to retire in big numbers. So you're living 
longer and you've got bigger--you've got big numbers retiring and fewer 
workers paying into the system, 3.3 workers per beneficiary. Plus, 
Congress over the years has promised an increase of benefits. So think 
about the math: Fewer people paying into the system, more people living 
longer, more people retiring, for greater benefits.
    Now, that is--and because Social Security is a pay-as-you-go system, 
there's not a great big trust of money. The money that goes in from your 
paycheck goes out to the beneficiaries. That's how it works.

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And so, obviously, as the demand for money increases as a result of more 
people retiring and people living longer and benefits going up, more has 
to come in.
    Now, if you look at this chart up there, in 2018 the Social Security 
system goes negative. That means more money is going out than is coming 
into the system. And every year after that, as you can see, the cash 
deficit--that is, the money going out is greater than the money coming 
in--increases. In 2027, it's about $200 billion a year. That's above and 
beyond the payroll taxes we're collecting. Ten years later, it's about 
$300 billion. Every year, the situation gets worse.
    So you can imagine what will be happening if we don't do anything. 
You know, Congress is going to show up, and somebody says, ``We're $200 
billion short. Where are you going to get the money?'' Well, you can tax 
somebody to get the money; you can get rid of the benefits that you 
promised; you can cut other programs; or you can keep borrowing debt. 
That's why I think we've got a problem.
    Now, before I start talking about what I intend to do about it, I've 
got to make some things just as plain as I can. If you're a senior 
citizen today on Social Security, you don't have to worry about it. The 
trust has got plenty of money to take care of you. I understand how this 
issue works. Everybody says, ``He's talking about Social Security; there 
goes my check.'' That's what happens all the time when they're talking 
about Social Security. You're in good shape. And if you're near 
retirement, 55 years or above, you're in good shape. Nothing changes. 
Those are the facts.
    The problem is, is that the younger workers have got a problem. And 
I think we have a duty to worry about our children and our 
grandchildren. You know, 2018 may not--may seem like a long way down the 
road for people who are running for office every 2 years. It's not that 
far down the road. If you've got a 5-year-old child, that child will be 
18 years old before you know it, and the Social Security system starts 
losing money. In 2042, the system will be broke. Again, for some of us 
in politics, that may seem like ages. You know, ``Don't worry about it; 
2042 seems like forever.'' And in my case, of course, I'm not going to 
be around in politics. I'm moving on after 4 years. But nevertheless, 
it's not that far. And the longer you wait, the harder it is to fix the 
problem.
    So my judgment is--and that's why I went in front of Congress 
yesterday and said, ``Okay, let's fix the problem.'' And I put all ideas 
on the table, except for running up payroll taxes. If you've got a good 
idea, bring it. No President, I don't think, has ever said that when it 
comes to Social Security. Some of you veterans may remind me whether 
that's the case or not. I don't think so. I'm willing to stand up with 
the Congress. I don't care if it's a Republican idea, Democrat idea, 
independent idea; bring them forward. Let's work together and fix the 
system.
    There are a lot of ideas out there--[applause]--thank you all. 
There's a lot of ideas out there. I mentioned some of the authors of the 
ideas last night. I've got one myself that I think is a very interesting 
idea, along with others. What I'm about to tell you will not permanently 
fix Social Security. By the way, there's no need just to put a Band-Aid 
on the deal. If we're going to get after it, let's fix it permanently. 
Let's let people look back generations from now and say, ``I appreciate 
the way the Congress and the President worked together to do what was 
right on Social Security.''
    Let me give you an idea that I think is worth considering. I thought 
it was worth considering so much, I put about five paragraphs in my 
speech into it, you know. [Laughter] And it's this: I believe you ought 
to be allowed to take some of your own money, payroll taxes, and set up 
a personal retirement account on a voluntary basis. And the reason why I 
believe that is because the rate of return in your account

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will be greater than the rate of return on the money you're getting in 
Social Security. And that's important because, if you're a younger 
worker and set aside some of your money that would normally be going 
into the trust into a personal account, over time that rate of return 
grows and accumulates. And you end up with a nest egg, I guess is the 
best way to put it, a nest egg that will then complement your Social 
Security checks when you finally retire.
    Now, there's a lot of questions about this, of course. Can you take 
it to the lottery? Is that considered an investment? Can you take your 
payroll taxes and set up a fund and go to the lottery or the track or 
shoot some dice? The answer is no--[laughter]--obviously. You have to 
have a conservative mix of stocks and bonds. And there are a lot of 
funds that are conservatively tailored so you can get a reasonable rate 
of return. Obviously, the lower the risk, the lower the rate of return. 
But it's going to be a rate of return greater than that which you're 
earning in the Social Security trust, and that's important over time.
    Secondly, you just can't, once you retire, pull it all out. In other 
words, there will be a phased withdrawal in order to make sure that the 
Social Security benefits you get, coupled with the money coming out of 
your own personal account, is done in such a way as to help you retire.
    Third, there are ways to make sure your fund can avoid swings in the 
market at the very end of--right before you retire. So there's some wise 
things we can do, just like we do for the Federal Government employees, 
see? They've got this plan; it's called the Thrift Savings Plan. My 
attitude is, if it's good enough for people working in the Federal 
Government, it ought to be good enough for people working elsewhere in 
America.
    I like the idea of you owning something. I love an ownership 
society. We want more people owning their own home. We want people 
owning their own business. We want people owning their own farm. We want 
people owning and managing their own health care accounts. And I think 
it makes sense to have people owning and managing their own retirement 
accounts.
    So we're going to talk about Social Security. And by the way, this 
will be phased in. I know they're throwing out all kinds of numbers--1 
trillion, 2 trillion, 3 trillion. When you get to the Federal 
Government, we--it's no longer millions or billions; it's trillions at 
the Federal Government. It's amazing, isn't it? Anyway, we're going to 
phase it in. This doesn't all happen at once. I think it's important to 
gradually phase in the idea of personal accounts so younger workers can 
get used to it and so that the plan is more affordable, so it's more 
fiscally sound, fiscally responsible to fade it in. And we put out such 
a plan that will help people understand that we can do this without 
busting the budgets. And that's important for people to understand as 
well. No, this is doable. It's just going to take some political will.
    Now, I want to talk to somebody who professes to be an expert. 
Actually, he is an expert. We were in Fargo earlier, and he handled 
himself brilliantly for a professor--no. [Laughter] Jeff Brown from the University of Illinois knows the subject 
well. He is obviously a good sport. He takes a pretty good needle. But 
tell us--just give us--back me up. You've studied the issue. [Laughter] 
Now, I've come here, and they say, ``What do you expect the President to 
say?'' Put some expertise out there.
    Jeffrey R. Brown. Happy to do so, Mr. 
President. And thank you very much.

[At this point, Dr. Brown, assistant professor, Department of Finance, 
University of Illinois at Urbana-Champaign, Champaign, IL, made brief 
remarks.]

    The President. What was the life expectancy when Franklin Roosevelt 
designed the program--or Congress--60, maybe? I think it was 60.

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    Dr. Brown. Back in the mid-1930s, a 
person born in the United States could expect to live, on average, 
around 60, low 60 years old.
    The President. See, that's how the system was designed: pay-and-you-
go as you work, people not living very long. It's changed. The world has 
changed. The system hasn't changed with it. And that's what we're 
talking about.
    You got any other thoughts, Professor?
    Dr. Brown. Sure, I'll go on as long as 
you let me. [Laughter]
    The President. Reminds me of my college days. [Laughter]
    Dr. Brown. I'm used to having an hour 
and 20 minutes with an audience that can't leave.
    The President. When I was awake. [Laughter]
    Dr. Brown. The other thing, I just----
    The President. Talk about the personal accounts. I know--it 
obviously makes some people nervous. It's a new idea. It's a new 
concept. People--all of a sudden, when you take a system like Social 
Security that's been around so long and it has done a lot of really--
made a big difference in people's lives, and you throw out a new idea--
it's the world in which the status quo sometimes is the easy default 
position. And--give us some thoughts on that.

[Dr. Brown made further remarks.]

    The President. So Leo Keller is with us. He 
said, ``Do you mind if I wear my hat?'' I said, ``Not at all, Leo.'' 
It's a fine-looking hat. Thanks for wearing it. I'm glad you're here. 
Welcome. Leo, you're here to talk about Social Security. Give us some 
wisdom.

[Leo Keller, retiree, Bozeman, MT, made brief remarks.]

    The President. Yes, that's a really interesting idea. What 
he just said is very important. Once people get 
into the habit of savings, it encourages other savings. This society has 
changed. Leo, first of all, a couple points. One, you made my point on 
life expectancy. [Laughter] You're looking strong at 79, headed to 80. 
You're doing great.
    Mr. Keller. Thank you.
    The President. Secondly, it is important for Leo to know that nothing changes. There are a lot of people 
out there saying they've heard the Social Security debate--``I wonder 
really if this means I'm not going to get my check.'' I cannot--I'm just 
going to say it again and again and again. Matter of fact, this is stop 
two of five where I'm traveling around the country; I know I've got a 
lot of explaining to do. And one of the most important explanations of 
all is Leo is going to get his check. Nothing changes. The system is 
sound. Any discussion about younger workers does not mean that Leo and 
anybody like Leo is not going to have this promise that the Government 
made. That's just really important to know.
    And thirdly, you're right about your grandkids. See, I like a 
guy who says, ``My grandkids are capable of 
owning and managing something.'' It's a different mindset. The 401(k)s, 
for example, have changed the attitude toward investment, hasn't it? I 
mean, a 401(k), when you were coming up, Leo, was just three numbers and 
a letter in the alphabet. [Laughter] And now it's an idea, where people 
manage their own retirement and they own something. They see it; it's 
visible. It's an important part of our society today, and it seems like 
to me, as we modernize the system of Social Security, we incorporate a 
portion of that new system into the concept of somebody owning 
something.
    So thanks for coming, Leo. You did a fabulous 
job. And the hat--listen, I'm telling you----
    Mr. Keller. My pleasure.
    The President. Those women look at that hat and that club, and 
they're going wild.
    Kelly Kost--Kelly, thanks for coming. What do 
you do?

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    Kelly Kost. I am in sales and administration. 
I work for Mission Mountain Les Schwab Tires in Ronan, Montana.
    The President. Ronan?
    Ms. Kost. Ronan, yes.
    The President. How many people live there?
    Ms. Kost. I have no idea. [Laughter]
    The President. Either do I. [Laughter]
    Ms. Kost. Not a clue.
    The President. At least you know where it is. [Laughter] Talk talk 
about Social Security. First of all, Kelly has 
got the hardest job in America. She's a single mom.
    Ms. Kost. I've been a single mom since 1989. 
My twins are 18 years old, Jade and Jordan.
    The President. Where are they? Yes.
    Ms. Kost. Jordan is a member of the Army 
National Guard.
    The President. There you go.
    Ms. Kost. Jade will be the valedictorian of 
her class----
    The President. There you go. Your mom is 
humiliating you, but it's good to know. Very good.
    Ms. Kost. Yes. And they will both be entering 
college this fall.
    The President. Fabulous, Mom. You're doing 
your job.
    Ms. Kost. Thank you--thank you.
    The President. Listen to your mother. 
[Laughter] I'm still listening to mine. 
[Laughter] Let's talk about Social Security.

[Ms. Kost made brief remarks, concluding as follows.]

    Ms. Kost. I'm just wondering how user-
friendly these will be.
    The President. Yes, that's a fabulous question. There are a lot of 
people who are comfortable with making investments; there are some 
people who are just worried about it--you know, is it hard? And the 
answer to the question is, it will be incredibly user-friendly. It's got 
to be, because the options will be limited. The key is to allow people 
to have their own account that gets a better rate of return than the 
money in the current system. And over time, that will inure to your 
benefit.
    And you can do that with a very conservative mix of stocks and 
bonds. The professor talked about--doctor 
or professor, which one--either one? Yes, okay. How about ``Jeff''? 
Anyway--[laughter]--he talked about the Thrift Savings Plan for Federal 
employees. There are five options, and it spelled out what the options 
are. In other words, you're not going to have to go in and pick stocks. 
You'll pick a group of stocks or a group of bonds or a mixture of them. 
And they'll be described to you. So yes, it's very user-friendly. And 
that's a very good question.
    The other questions I get are, can you just jerk your money out at 
any time? No, this is a retirement fund. It's meant to help you after 
you retire. The benefits of this idea is, one, it gets a better rate of 
return. It just will. Over time, you'll hear, ``Well, the stock market 
will crash and therefore I'll lose all my money.'' Well, first of all, 
if you study the history of investments over a 15- or 16-year period of 
time, there's always been a positive return. Now, there may be a down 
year, but over time, we're talking about, you get a positive return. And 
there are investment vehicles that would help deal with any market 
decline. But we're talking about a mix, a conservative mix of stocks and 
bonds. And that's an important question.
    Now, the other benefit, of course, is that it's yours. Your Social 
Security benefit is simply a promise. You don't own it; the Government 
will decide. If the Government can't pay for it, the Government says, 
``Well, we're going to reduce your benefits.'' When you have your own 
personal account, it's yours. The Government cannot take it away.
    And you can give it to whatever child you decide--unless you get mad 
at them and then give it to somebody else. [Laughter] But it's--and 
that's an important concept about--when you talk about ownership. We're 
talking about a better rate of

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return on your money, something you own that cannot be taken away, and 
something you can pass on from one generation to the next. And that's an 
important concept. Young families ought to be thinking about, obviously, 
saving to pass on from one generation to the next. I don't see why we 
can't incorporate that into the Social Security system because I know it 
can work financially. As a matter of fact, it makes the system more 
sound. It makes it more likely a younger worker is going to end up with 
that which the Government has promised. And that's important.
    Speaking about young couples, Amy and Mike 
Borger are with us. Welcome.
    Amy Borger. Thank you.
    The President. Where do you both live?
    Mrs. Borger. We live in Great Falls.
    The President. Yes, right here, a beautiful town full of great 
people. I was touched by the number of people who came out and waved, 
and I thank them for that.
    Do you have children?
    Mrs. Borger. We do. We have our daughter, 
Jordan, is 12, right down in the front. And our son, Shane----
    The President. There she is, Jordan, 
waving. That's good.
    Mrs. Borger. ----is 2. And we're expecting 
our third baby in April.
    The President. Awesome, yes. Georgia--you're going to name it 
Georgia? No. [Laughter]
    Mrs. Borger. No.
    The President. I don't blame you. [Laughter] Tell me about your 
ideas on Social Security. Thoughts, worries, concerns?
    Mrs. Borger. I guess we're in a unique 
position in our life. I'm fortunate enough to still have my four 
grandparents living. It's very important to me that the system that has 
been promised to them continues to be the same for them. Looking for 
our--my husband and myself, we want to make sure that when we're ready 
to retire, the system is what has been promised to us as well as for our 
children. And we appreciate the chance to be given an opportunity to 
have a hand in that with the personal accounts.
    The President. Yes, thanks. If you look over your shoulder, which 
you've already done--you can actually look right there--you'll see it's 
not going to be around unless we do something now. These good folks are 
in the danger zone unless Congress acts, because the cash deficits 
increase every year starting in 2018. That's an important date for 
people to remember. They may argue in Washington--it may be 2019, or 
2018 and a half. It's happening, is the point. And it gets worse every 
year. I repeat to you--in 2027, we're looking for 200 billion extra 
dollars to pay what has been promised. I don't know how Congress is 
going to deal with that in 2027 unless we act now.
    And we need to think about young families. You're a high school 
librarian?
    Mrs. Borger. I am.
    The President. You lucked out, buddy. I 
married a school librarian too. [Laughter]
    Mike Borger. It can be hard at times, 
can't it?
    The President. No, not at all. [Laughter] Well, if it has, I'm not 
confessing publicly. [Laughter]
    What do you do?
    Mr. Borger. I'm a supervisor at 
Poulsen's. It's a home improvement center here in Great Falls.
    The President. Great, good, good. [Applause] Some of your fellow 
employees are here. That's good. They probably want a personal account 
as well.
    Mr. Borger. A good friend of mine that I 
work with, his son is serving in Iraq right now.
    The President. Where's he--where is--where's Dad? Appreciate it. E-
mail your son, we're proud of him. It had to make you feel good, Dad, 
last night when the Iraqi lady hugged the mom of the fallen marine. I 
know it made her feel good. It was a show of gratitude from the Iraqi 
people that said, ``Thank you for our freedom.

[[Page 141]]

Thank you for the sacrifice.'' Your son is serving a noble cause, sir--
security of America and peace to the world.
    I'll tell you something really interesting that Amy is doing, by the way. We'll get to Social Security in a 
minute--kind of meandering around. [Laughter] Amy is into distance 
learning. Where do you go?
    Mrs. Borger. Boise State University.
    The President. From your living room?
    Mrs. Borger. From my living room.
    The President. Interesting thought, isn't it? The reason I bring 
that up is, obviously education is vital for the future of the country. 
No Child Left Behind is working. We're going to keep it strong; we will 
not undermine it. On the other hand, we've got to be wise about how we 
use technology. Think about that: The education system has changed; 
Social Security hasn't. Anyway, education--here she is going to get a----
    Mrs. Borger. Master's in educational 
technology.
    The President. Yes, from your living room. Pretty cool, isn't it? 
We've got to keep those kind of--keep these ideas moving. And Boise 
State has done a good thing to allow you to do that.
    All right, Mike, back to Social Security. 
Do you think you'll ever see anything?
    Mr. Borger. I hope to.
    The President. Yes. It's an interesting question--I just want to 
stop you--I promise you're going to get more than two words in here. 
[Laughter] It may be hard to tell. [Laughter] Doesn't that kind of worry 
you when the young guy says, ``I hope to?'' [Laughter] When old 
Leo was his age, he 
said, ``No question.'' Are you going to see a Social Security check? 
``No doubt.'' Now we've got youngsters saying, ``I hope so,'' as if 
there is doubt, and there should be doubt.
    Mr. Borger. My wife and I work very hard 
for what we earn. And we have a lot of bills and--daycare and two 
children and a third on the way--and it's hard to set money aside to 
start our own IRA and that stuff. So we're very dependent on what Social 
Security or the personal accounts can offer. So it's real important to 
us that something gets reformed and things change so that there is a 
guarantee for us and our children. And also, it's a concern to me that 
people like Leo and my in-laws and my parents and friends of mine that 
are coming upon the age that they retire, that their Social Security 
that they worked very hard for won't be touched----
    The President. Right.
    Mr. Borger. ----and that that will be 
there for them.
    The President. It will be. And I can't guarantee for you; that's 
what we're here to discuss.
    See, I'm traveling around because, first of all, I believe in the 
will of the people. I believe that people can influence policy. And so 
the next couple of months, I'm going to be traveling the country, 
telling people I think we've got a problem and asking people to get 
involved. Nothing changes for Leo, but this couple that's about to be 
raising three kids is--they're going to have a system that's just not 
going to work unless this United States Congress and the President act 
together.
    I believe it's going to happen. I really do. Oh, the pundits will 
say it looks too tough, and this--somebody said it's not going to 
happen, and somebody opined it's not going to happen. But when the 
people really figure we've got a problem, they're going to demand a 
solution. They're going to say to members of both political parties, 
``What the heck are you doing in Washington, DC, if you're not willing 
to settle down and solve the problems facing this generation?''
    I'd like to answer a few questions if you've got any. I'm sure 
somebody has got a few. Yes, sir, with that shirt on. Fine-looking shirt 
you got there. Thank you all for coming out, by the way. It's a joy to 
be here.

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Retirement Age

    Q. Mr. President, do you foresee that if we fix this program, we can 
move the retirement age back to 65? For some people it's 66, 67, 68, and 
on and on.
    The President. Yes. Well, there's a lot of discussions about whether 
we ought to move it back or move it forward, and that idea is on the 
table. Again, this is one of those ideas where, in the past, if you 
talked about it, somebody would club you over the head with it in a 
political race. And I think we ought to debate whether or not the age 
ought to be 65, 66, 67. These are for younger workers now--nothing 
changes for older workers. And that's on the table; that's what I said 
last night. I reminded people that my predecessor, President 
Clinton, suggested that that might be 
part of a solution, to raise the retirement age. But I don't think you 
can end up making that decision now until you look at all the other 
options. And we're just going to have to take the hard look at all the 
different options on the table. And people are living longer--but this 
all, again, pertains to younger workers. And it's--it will be part of 
the debate that goes on in Washington, DC. And I'm willing to have it.
    Yes, ma'am. Just can barely stand it. [Laughter]

Benefits for the Disabled/Prayer/Religious Freedom

    Q. Sir, you are a blessing, and our family prays for you every day.
    The President. Thank you. Thank you for saying that.
    Q. My husband and I are privileged to have a 35-year-old daughter 
who is mentally disabled, and she works hard in a supportive living 
center in Helena, Montana. And many people against your proposal are 
trying to scare the disabled by saying they will lose their Social 
Security----
    The President. Not true. Nothing changes.
    Q. ----which she needs. So is she okay?
    The President. Nothing changes when it comes to the disabled--the 
disability aspect of Social Security. This is all aimed--all discussions 
about the retirement aspects of Social Security. I'm glad you asked 
that.
    Thank you for your prayer.
    I tell people this: I don't see how a President can do the job 
without the prayers of the people. I know other Presidents probably 
wouldn't agree with that, necessarily. I quoted Abraham Lincoln today. 
He said, ``I would be,''--I think--I kind of paraphrased him. We 
actually had the National Prayer Breakfast this morning. Started off by 
saying the State of the Union was kind of like a prayerful session: They 
were praying I'd hurry up and finish the speech. But it's--[laughter]. 
Anyway, I quoted Abraham Lincoln, who said, ``I don't see how you can be 
President without prayer,'' is what he said. And I agree with that 
assessment. One of the most powerful--[inaudible]--of the Presidency is 
to know that people are praying for me and Laura. 
And I want to thank you for that.
    Having said that, I also want to--I know there's a lot of talk about 
religion and politics. It is essential that whoever the President is and 
whoever is in Congress always honor the fact that in this country, you 
can pray or not pray and be equally American. You can be a religious 
person or not a religious person and be equally viewed as a patriot. And 
if you're religious, you're equally American if you're a Jew, Christian, 
Muslim, Hindu. That's the greatest thing about our country. That's what 
distinguishes us from the Taliban, is the freedom to be--the freedom to 
choose what you want to choose.
    You've got a question? All right, thank you.

Personal Retirement Accounts

    Q. Mr. President, I was reading in a liberal newspaper today--
[laughter]----
    The President. Sounds like a loaded question to me. [Laughter]

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    Q. ----an opinion was that, on the average, individuals would make 
about 6\1/2\ percent on the market over time and that that was less than 
what is being made in the Social Security system.
    The President. No, that's--I don't want to ascribe a political 
label--I would describe as somebody who doesn't know what they're 
talking about. [Laughter] That's just not the truth. Professor?
    Dr. Brown. That's what I'm here for, is 
to find the truth.
    The President. Thank you, sir. Thank you. Thanks for coming.
    Dr. Brown. Yes, historically, over the 
last 80 years, the stock market has returned about 7\1/2\ percent over 
inflation, and that's far higher than you get from Government bonds or 
on the return from the current system.
    The President. No, but he's not talking about the return within the 
Social Security system, and it's, like, near zero.
    Dr. Brown. It's about 1 to 2 percent 
for----
    The President. And the difference between a 1-percent return on your 
money and 4-percent return on your money over time is significant?
    Dr. Brown. Yes. Just to give you an 
idea of the difference between--suppose you invested $1,000 a year from 
the time you're in your early twenties until you retire. Suppose you get 
a 3 percent rate of return, you might have about $65,000. Get a 7 
percent rate of return, you're going to have over $200,000. So it's a 
very big difference.
    The President. That's how money grows. And that's an important 
concept that we need to incorporate if we want the Social Security 
system to be available for younger families and younger workers. It's a 
really important part of a reform package.
    Okay, any more questions? I'm kind of winding down here because I've 
got to head on to Nebraska. Yes, ma'am? The red shirt.

Livingston, Montana

    Q. I have one--[inaudible]--I'm from Livingston, Montana. I kind of 
have one question for you.
    The President. Sure.
    Q. Can you quote Proverbs 17:17 for me?
    The President. Do what?
    Q. Can you quote Proverbs 17:17 for me?
    The President. No. [Laughter] That's an easy one. Can you? Quote it.
    Q. ``A friend loves at all times, and a brother is born for 
adversity.''
    The President. Thank you. Very good. I thought you were going to ask 
me if I knew how to get to Livingston. [Laughter] It's like that guy 
said, ``What color''--he said, ``To get to Livingston, you've got to go 
down the highway, and you go through the cattle guard, and you''--
[laughter]--``turn left, and you go through another cattle guard.'' And 
a fellow comes back and says, ``Hey, what color uniforms do those cattle 
guards have on?'' [Laughter] That never happens in Montana.
    Yes, sir.

Exercise/Personal Retirement Accounts

    Q. Thank you, Mr. President, for coming to Montana.
    The President. Nice to be back. Big Sky.
    Q. When my wife and I continue to pay into the system, what 
percentage of that will we have the opportunity----
    The President. Yes.
    Q. ----to invest in? And what kind of mountain bike do you ride? 
[Laughter]
    The President. I'm not supposed to endorse products, but it's called 
a Trek. [Laughter] Are you a mountain bike guy?
    Q. Yes, I am.
    The President. Oh, listen, let me--I'll get to the--I'll try to 
remember what--the real question you asked. [Laughter] First of all, I 
hope people exercise on a regular basis. It's--I can't tell you how 
important it is for you. Unfortunately, I exercised too hard for a while 
and can't run anymore, but

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I did discover mountain biking. This has got to be fabulous mountain 
bike country, right?
    Q. It is.
    The President. Yes. Unlike, you however, I'm a safe mountain biker. 
I'm looking at--you look like a risktaker, you know? [Laughter] Like 
ride those little tiny trails--that's not me. [Laughter]
    Now, I really--the best health care plan--one of the aspects of the 
best health care--any good health care plan is to encourage right 
choices. What you put into your body matters, and how you treat your 
body matters. And so I--thank you for bringing up--giving me a chance to 
segue into exercise. As a matter of fact, prayer and exercise are what 
keeps me going as--[laughter]--as the President--and family and friends, 
especially Laura.
    The way the system works--in order to make it work fiscally, is that 
you can start off with $1,000 into your account, growing $100 a year up 
to 4 percent of your income. That's the answer to your question. The 
idea is ultimately there will be--if you're making 90,000, you can put 
3,600 a year into your personal account. That's how you keep it more 
affordable than the numbers that have been being tossed about.
    Yes, ma'am. Good to see you again.

Medical Liability Reform

    Q. Hi, how are you? As usual our prayers and love are with you. But 
I could have several questions. One of them, though, going----
    The President. Just ask an easy one.
    Q. It is. [Laughter]
    The President. Kind of getting late in the day.
    Q. The medical--it's a medical issue.
    The President. Yes.
    Q. With the frivolous lawsuits, one of the problems, too, is that 
attorneys charge so much to bring even a fair lawsuit to the court 
system that the victim, the patient winds up with nothing and the 
attorney winds up with all the money.
    The President. Right.
    Q. And the doctor is being run out of business. Can that somehow be 
worked in there?
    The President. I don't believe that--no, I'm--I just--I guess I 
could give you a political answer and say I'll think about it. I 
actually don't think the Government should regulate legal fees. I think 
that ought to be set by the market, so to speak. I don't think 
Government ought to set price. I do think Government, though, can set 
limits for lawsuits that--that are filed.
    And the thing in medical liability reform that I think will make a 
big difference is to have a hard cap on noneconomic damages. In other 
words, you're allowed to get economic damages, but the noneconomic 
damages need to have a hard cap, which will reduce the desire for people 
to keep filing lawsuits as if the medical liability system were a 
lottery. But in terms of whether or not the Government ought to be 
setting legal fees, I don't think so. I don't think so.
    Let's see, a couple of more, then I've got to hop. Yes, ma'am. Boom. 
[Laughter]

Personal Retirement Accounts

    Q. Thank you, Mr. President. We're excited to have you for another 4 
years, and we stayed up half the night waiting for the election results.
    The President. Yes, thank you. [Laughter] Thanks. Well--[laughter].
    Q. My question is, as this privatization of Social Security comes 
into effect, who will manage that? Has that been talked about at this 
point?
    The President. I would call it personal retirement accounts, is the 
proper terminology, because it basically means you own it. See, 
privatization says the whole thing changes--not true. A portion, as I 
said, 4 percent ultimately, of the money that you earn can go into a 
personal account that you call your own. Who manages it? You

[[Page 145]]

do. You make the decisions. You make the--on that aspect. The Social 
Security Administration will still exist for the other aspect of Social 
Security. It's a mixture. It's a blend. In other words, part of your 
money goes into the system and the Government will pay out benefits. 
Part of your money goes into your own personal account, which you will 
manage. You will get, on a quarterly basis, your statement about how 
much of your money has grown over--and how has it grown over a period of 
time. But the other portion of the Social Security will continue to be 
managed by the Federal Government, the Social Security trust.
    How about the little guy in the hat? Number seven.

Request for Handshake

    Q. Can me and my friend shake your hand?
    The President. Yes. Move on over here. Okay, last question. Have you 
got a question? You don't have a question. You want to shake my hand, 
stay right there. I'm coming down.
    Yes, ma'am.

Personal Retirement Accounts/Small Business

    Q. As an employer of a small business, I have to express a concern. 
How will employers handle these deposits for our employees?
    The President. The Federal Government will be the administrator to 
make sure that the accounts are properly set up.
    Q. Wonderful.
    The President. This is--this can be done without a lot of additional 
paperwork. Again, this is a--the purpose is not to create excess 
bureaucracy--quite the opposite. The purpose is to empower individuals 
and that the employer won't be charged with making sure that the 
paperwork is managed properly.
    Let me talk about small businesses real quick. The tax cut that 
Max and I and Conrad and 
Dennis--Denny worked on is really 
important for small businesses. That's why it's really important we not 
allow taxes to go up. Seventy percent of new jobs are created by small 
businesses in America. And I'm proud to report the small-business sector 
of our country is strong and vibrant and doing well, and we need to keep 
it that way.
    Thanks for being an entrepreneur. Are you staying in business? 
That's good.
    Listen, let me conclude by thanking you all very much for your 
hospitality, your generosity of your time, and your strong love for our 
country. We are lucky people to live in the greatest country on the face 
of the Earth.
    May God bless you all, and may God continue to bless our land.

Note: The President spoke at 3:55 p.m. in the Four Seasons Arena at the 
Montana ExpoPark. In his remarks, he referred to Senator Conrad Burns of 
Montana; Janice Rehberg, wife of Representative Dennis R. Rehberg; Gov. 
Brian Schweitzer, Lt. Gov. John Bohlinger, and Secretary of State Brad 
Johnson of Montana; former Governors Judy Martz and Marc Racicot of 
Montana; President Hamid Karzai of Afghanistan; President Viktor 
Yushchenko of Ukraine; President Mahmoud Abbas (Abu Mazen) of the 
Palestinian Authority; Keith Reeves, whose son Spec. Jedidiah Reeves, 
MARNG, is serving in Iraq; and Janet Norwood, mother of Sgt. Byron 
Norwood, USMC, who was killed in Iraq on November 13, 2004, and Iraqi 
citizen and political activist Safia Taleb al-Suhail, both of whom were 
guests of the First Lady at the President's State of the Union Address 
on February 2. A portion of these remarks could not be verified because 
the tape was incomplete.

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