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



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

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

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

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

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

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

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

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

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

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

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