[Weekly Compilation of Presidential Documents Volume 40, Number 51 (Monday, December 20, 2004)]
[Pages 2964-2978]
[Online from the Government Publishing Office, www.gpo.gov]

<R04>
Remarks in a Panel Discussion on Financial Challenges for Today and 
Tomorrow at the White House Conference on the Economy

December 16, 2004

    The President. Thank you all. Yes, Joshua. Thank you all for coming. 
Last night I had the honor of attending a reception for those who have 
participated in these series of panels, and I had a chance to thank 
them. I said something I think is true, which is, citizens can actually 
affect policy in Washington. In other words, I think people who end up 
writing laws listen to the voices of the people who--and can be affected 
by citizen participation. So I want to thank you all for doing this.
    We're talking about significant issues over the course of these 
couple of days. We'll talk about an important issue today, which is how 
do we keep the economy growing, how do we deal with deficits. And I want 
to thank you all for sharing your wisdom about how to do so.
    One thing is for certain: In all we do, we've got to make sure the 
economy grows. One of the reasons why we have a deficit is because the 
economy stopped growing. And as you can tell from the previous 4 years, 
I strongly believe that the role of Government is to create an 
environment that encourages capital flows and job creation through wise 
fiscal policy. And as a result of the tax relief we passed, the economy 
is growing. And one of the things that I know we need to do is to make 
sure there's certainty in the Tax Code, not only simplification of the 
Tax Code but certainty in the Tax Code. So I'll be talking to Congress 
about--that we need to make sure there is permanency in the tax relief 
we passed so people can plan.
    If the deficit is an issue--which it is--therefore, it's going to 
require some tough choices on the spending side. In other words, the 
strategy is going to be to grow the economy through reasonable tax 
policy but to make sure the deficit is dealt with by being wise about 
how we spend money. That's where Josh comes in. He's the--as the 
Director of the OMB, he gets to help us decide where the tough choices 
will be made. I look forward to working with Congress on fiscal

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restraint, and it's not going to be easy. It turns out appropriators 
take their titles seriously. [Laughter]
    Our job is to work with them, which we will, to bring some fiscal 
restraint--continue to bring fiscal restraint--after all, non-defense 
discretionary spending--non-defense, non-homeland discretionary spending 
has declined from 15 percent in 2001 to less than 1 percent in the 
appropriations bill I just signed, which is good progress. What I'm 
saying is we're going to submit a tough budget, and I look forward to 
working with Congress on the tough budget.
    Secondly, I fully recognize and this administration recognizes 
there--we have a deficit when it comes to entitlement programs, unfunded 
liabilities. And I want to thank the experts and the folks here who 
understand that. The first issue is to explain to Congress and the 
American people the size of the problem--and I suspect Congressman Penny 
will do that as well as Dr. Roper--and the problems in both Social 
Security and Medicare.
    The issues of baby boomers like us retiring, relative to the number 
of payers into the system, should say to Congress and the American 
people, ``We have a problem.'' And the fundamental question that faces 
Government, are we willing to confront the problem now or pass it on to 
future Congresses and future generations. I made a declaration to the 
American people that now is the time to confront Social Security. And so 
I am looking forward to working with Members of both Chambers and both 
parties to confront this issue today before it becomes more acute.
    And by doing so, we will send a message not only to the American 
people that we're here for the right reason, but we'll send a message to 
the financial markets that we recognize we have an issue with both 
short-term deficits and the long-term deficits of unfunded liabilities 
to the entitlement programs.
    And I want to thank the panelists here for helping to create 
awareness, which is the first step toward solving a problem. The first 
step in Washington, if you're interested in helping, is to convince 
people that there is a problem that needs to be addressed. And once we 
have achieved that objective, then there will be an interesting dialog 
about how to solve the problem.
    I've got some principles that I've laid out. And first, on Social 
Security, it's very important for seniors to understand nothing will 
change. In other words, nobody is going to take away your check. You'll 
receive that which has been promised. Secondly, I do not believe we 
ought to be raising payroll taxes to achieve the objective of a sound 
Social Security system. Thirdly, I believe younger workers ought to be 
able to take some of their own payroll taxes and set them up in a 
personal savings account, which will earn a better rate of return, 
encourage ownership and savings, and provide a new way of, let me just 
say, reforming, modernizing the system to reflect what many workers are 
already experiencing in America, the capacity to manage your own asset 
base that Government cannot take away.
    So with those principles in mind, I'm openminded--[laughter]--with 
the Members of Congress. [Laughter]
    Anyway, thank you all for coming. I'm looking forward to the 
discussion.
    Joshua B. Bolten. Mr. President, thank you. Thank you for convening 
us. It warms my budget heart--[laughter]--that you've taken the time to 
come and talk about fiscal responsibility, which is so important, 
especially at this time. We've come through some tough years, Mr. 
President, during your tenure.
    As you entered office, the economy was entering recession. We had 
the attacks of 9/11. We've had the war on terror. We've had corporate 
scandals that undermined confidence in the business community. All of 
those together took a great toll on our economy and especially on our 
budget situation, as you mentioned. And we've started to turn it around. 
The economy is well out of recession. It's growing strongly, as I think 
our panelists will talk about. And as a result of that, we are seeing a 
dramatically improving budget situation.
    We originally projected our 2004 deficit to be about 4.5 percent of 
GDP, and when we got the final numbers just a few weeks ago it was down 
to 3.6 percent of GDP, a dramatic improvement. Now, that's still too

[[Page 2966]]

large, but it's headed in the right direction. You mentioned, Mr. 
President, the 2005 spending bills that you just signed last week. I 
think those have to be regarded as a fiscal success, because you called 
on the Congress almost a year ago to pass those spending bills with 
growth of less than 4 percent overall and especially to keep the non-
national-security-related portion of that spending below 1 percent, and 
they delivered. And that's the bill that you signed just last week. 
We're working now, Mr. President, as you know, on the 2006 budget. And 
I'm hopeful that we will keep that momentum of spending restraint going.
    What I think we will be able to show, when we present your budget 
about 6 or 7 weeks from now, is that we are ahead of pace to meet your 
goal of cutting the deficit in half over the next 5 years. And I think 
that's very important. And I think our panelists will talk a little bit 
about why that is.
    So let's step back a little bit from the Budget Director's 
preoccupations and talk more broadly about the economy. Our first 
panelist is Jim Glassman, who is senior U.S. economist at J.P. Morgan 
Chase. He's a frequent commentator in the financial press, I think well-
known in the financial community.
    And Jim, let me open it with you and ask you to talk about how the 
budget situation is related to the economy overall, because that's 
really what people care about.
    James Glassman. All right. Thanks, Josh. Thanks, President Bush, for 
inviting us here to participate in this discussion. It's a privilege.
    The Federal budget is tied very closely to the fortunes of the 
economy. When the economy is down, revenues are down. When the economy 
comes back, revenues come back. In the last several years, we've seen 
that link very closely: The economy slowed down; revenues dried up; the 
budget deficit widened. It's happened many times before. And in Wall 
Street, Wall Street understands this link between the economy and the 
budget, and that's why--we anticipate that these circumstances are going 
to be temporary, and that's why long-term interest rates today are at 
the lowest level in our lifetime, even though we have a budget deficit 
that's widened. And in fact, now, with the economy on the mend, the 
revenues are coming back, and the budget deficit appears to us to be 
turning the corner. So I think the prospects are looking quite good for 
the budgets going in the next several years.
    Now, to me, the link between the economy and the budget tells you 
there's an important message here, and that is: Policies that enhance 
our growth potential are just as important for our long-run fiscal 
health as are policies to reform Social Security and health care reform. 
We know how to do this, because over the last several decades we've been 
reforming our economy, deregulating many businesses, breaking down the 
barriers to trade. And it's no surprise that countries all around the 
world are embracing free market principles. Free markets is the formula 
that has built the U.S. economy to be the economic powerhouse that it 
is.
    Now, I realize the last several years have been challenging for a 
lot of folks, and it's hard for folks to step back and appreciate the 
amazing things that are going on in the U.S. economy when they're 
struggling with this, with the current circumstances. But I have to tell 
you, what we are watching around the U.S. economy is quite 
extraordinary, and I would like to highlight two things in particular 
that are important features of what's going on in the U.S. economy, 
because it tells us--that basic message is, it tells us that we're on 
the right paths, and number two, it tells us how we might build on the 
policies that are helping to encourage growth.
    The first important observation: Productivity. Productivity in the 
U.S. economy is growing almost 3 times as fast as the experts 
anticipated several years ago, a decade ago. Now, we know why that's 
happening: Economic reform has strengthened competition; the competition 
has unleashed innovation; that innovation is driving down the cost of 
technology; and businesses are investing in tools that allow us to do 
our jobs more efficiently. Why that's important? Because most of us 
believe that what's driving this productivity is information technology.
    Now, in my mind, when we're at an extraordinary moment like this 
with rapid changes in technology, it opens up a lot of frontiers. Who is 
it that brings that technology and creates growth? Who is it that

[[Page 2967]]

drives the economy? It's small businesses. That's where the dynamic part 
of the economy is. And so policies that focus on making the business 
environment user-friendly for small businesses, like the tax reform, are 
an important element of building on this productivity performance that's 
going on and building on the information technology.
    Second important aspect of what's going on in the U.S. economy--
everybody knows we faced an incredible number of shocks in the last 
several years. These shocks, which, by the way, destroyed almost half of 
the stock's market value in a short period of time, for a moment, were 
potentially as devastating as the shocks that triggered the Great 
Depression. And yet, the experts tell us the recession we just suffered 
in the last several years was the mildest recession in modern times. 
That tells you something about the resilience of the U.S. economy. It 
tells you that we have a very flexible economy to absorb these kinds of 
shocks. And I personally think that this is the result of a lot of the 
reforms that we've been putting in place in the last several decades. It 
has made us much more resilient.
    I find this an even more incredible event because when you think 
about it, we had very little help around the world. The U.S. economy was 
carrying most of the load during this time. Japan, the number two 
economy, was trapped by deflation. Many of our new partners in East Asia 
have linked to the U.S. economy, and they're depending on their linkage 
with the U.S. economy to bring--in hopes of a better future. The 
European region has been very slow-growing. They've been consumed by 
their own problems. So, frankly, we've been in a very delicate place in 
the last several years; the U.S. economy was the main engine that was 
driving this. And yet, we had this incredible performance. I think it's 
quite important.
    Now, when you ask economists to think about the future, where we're 
likely to go, it's very natural--the natural tendency is to believe that 
we're going to be slowing down eventually. And we can give you all kinds 
of reasons why this is going to happen, demographics, productivity slows 
down. My guess is we would have told you this story 10 years ago, 20 
years ago, 100 years ago.
    And I think what's quite incredible--I'm, frankly, somewhat 
skeptical of this vision that we all have, because, if you think about 
it, we've been growing 3.5 percent to 4 percent per year since the Civil 
War. If we can match that performance in the next 50 years--and I don't 
see why that's so hard to do, given the kinds of things we are 
discovering about our economy and the kinds of benefits we see from all 
this reform--then I think the fiscal challenge that we see in our mind's 
eye will be a lot less daunting than is commonly understood.
    So, of course, I don't want to say that growth can solve all our 
problems. It won't. There clearly are challenges on the fiscal side, and 
it's important that we strengthen the link between personal effort and 
reward. And that's why it's right this forum should be focusing on 
Social Security reform and health care reform.
    Thank you.
    The President. May I say something?
    Director Bolten. Mr. President. [Laughter]
    The President. Thank you. [Laughter] Who says my Cabinet does 
everything I tell them to? [Laughter]
    You know, it's interesting, you talked about the Great Depression, 
and if I might toot our horn a little bit, one of my predecessors raised 
taxes and implemented protectionist policies in the face of an economic 
downturn, and as a result, there was 10 years of depression. We chose a 
different path, given a recession. We cut taxes and worked to open up 
markets. And as you said, the recession was one of the shallowest.
    And the reason I bring that up is that wise fiscal policy is vital 
in order to keep confidence in our markets and economic vitality 
growing. And that's one of the subjects we'll be talking to Congress 
about, which is wise fiscal policy. And that is the direct connection 
between the budget and spending and confidence by people who are willing 
to risk capital and therefore provide monies necessary to grow our job 
base.
    Director Bolten. Mr. President, let's talk a little bit about how 
investors see those issues that you and Jim Glassman have just been 
talking about. Liz Ann Sonders is chief investment strategist to Charles 
Schwab &

[[Page 2968]]

Company. She's a regular contributor to TV and print media on the market 
issues that investors care about.
    And Liz Ann, let me just open it to you and ask you, how do 
investors see those broad macroeconomic issues that Jim was just talking 
about?
    Liz Ann Sonders. Thanks, Josh. Thanks, Mr. President. I do spend a 
lot of time out on the road talking to individual investors. And I will 
say that the deficit issue is probably, if not the number one, certainly 
in the top three questions I get. I think there is a terrific amount of 
misunderstanding, though, about the nature of deficits, how you get 
there, how do you get out of a deficit situation, the cause and effect 
aspects of it, and I'll talk about that in a moment.
    And we know that higher deficits are a burden on future taxpayers, 
but I think what, in particular, the market would like to see is the 
process by which we go about fixing this problem. And I think the 
markets are less concerned about the number itself and don't have some 
grand vision of an immediate surplus but the process by which we solve 
that problem.
    There's a lot of ways to do that. It is all about choice. And 
certainly, there's one theory that the only way to solve it is to raise 
taxes. I don't happen to be in that camp, and I would absolutely agree 
with Jim and certainly with this administration that the policies 
absolutely have to be progrowth.
    And I think the other benefit that we have right now--and Marty 
Feldstein talked about this yesterday--the difference between the Waco 
Summit and this conference today as representing a very strong economy 
right now versus a couple of years ago. And what that allows you to do 
is have this much stronger platform from which you can make a sometimes 
tougher decision. And I think that's a very important set of 
circumstances right now. I would agree with Jim, also, at the bond 
markets' perception of this, the fact that long-term interest rates are 
low, so we have at least have that camp of investors telling you that 
maybe the risks aren't quite high as some of the pessimists might 
suggest.
    Forecasting is also difficult. I know your administration suggested 
that going beyond 5 years is a tough task, and it is. The market, 
however, builds itself on making forecasts for the future and oftentimes 
will develop a consensus about something, and I will say that I think 
the consensus is one maybe of a little bit--maybe not pessimism but not 
a lot of optimism from a budget deficit perspective. So, I think the 
opportunity comes with showing some effort. And you can really turn the 
psychology of the market very, very quickly under a circumstance where 
maybe market participants are actually pleasantly surprised by the turn 
of events.
    Typically, when you look back in history and you look at processes 
by which we've improved a deficit situation, those that have been 
accompanied by better economic growth have typically been those where 
the focus has been on spending restraint, entitlement reform. Those 
times where we have improved the deficit but it's been in conjunction 
with weaker economic growth are typically those periods where tax 
increases have been the process by which we have gotten there.
    And I also think that many investors misunderstand the relationship 
between deficits and interest rates, and there is a theory building now 
that higher deficits automatically mean higher interest rates. Well, 
case in point, it's just the most recent experience, but we can even go 
back to the late nineties--the reason why we went from deficit to 
surplus was because the economy was so strong. Because the economy was 
strong, the Federal Reserve was raising interest rates. The reason why 
we went into deficit was because the economy got weak, which is the 
reason why the Federal Reserve had to lower interest rates. So you have 
to understand, again, the cause and effect here.
    The path of least resistance, of course, is to make everybody happy. 
But something has to give. You've all talked about this, the ``no free 
lunch'' idea. But I'm just a strong believer that entitlement reform and 
long-term priorities take precedence right now over short-term fixes, 
certainly if it required tax increases. And I think that--Mr. President, 
you talked about having political capital--I'll go back to this idea 
that we now have economic capital that allows us to not disregard the 
short-term fixes for the deficit here but

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really take this opportunity for long-term structural reform.
    I'm a big believer in personal accounts, empowering investors. My 
firm, built by ``the Man,'' Chuck Schwab, is all about empowering 
individual investors. And I think these long-term adjustments that need 
to be made, which is really a part of this whole conference, are so 
important right now. And I think that's absolutely what the market wants 
to see.
    Thanks.
    The President. Good job. You're not suggesting that economic 
forecasts are as reliable as exit polling, are you? [Laughter]
    Ms. Sonders. I'm not going there. [Laughter]
    Director Bolten. Mr. President, I'm going to move on. [Laughter] I'm 
glad that Liz Ann raised the distinction, as you did in your opening 
remarks, between our short-term picture and our long-term picture. Our 
short-term picture is, indeed, looking a lot better. I think we'll be 
able to show a very clear path toward your goal of cutting the deficit 
in half over the next 5 years. But the long-term picture is very 
challenging.
    We're very honored to have with us Tim Penny, who is a professor and 
co-director of the Hubert Humphrey Institute of Public Affairs. He's 
also a former Democratic Congressman and an expert on a lot of the long-
term issues we're talking about.
    And Congressman, let me turn it over to you and ask you to talk a 
little bit about what are these entitlement programs, and why are they 
important for our long-term budget picture.
    Tim Penny. Well, I think--thanks, Josh, and Mr. President. I think 
the first thing to note is that the long-term picture is rather bleak, 
that the status quo is unsustainable. And when you talk about the 
difference between discretionary and entitlement spending, that tells 
the story.
    Discretionary spending, as you referenced earlier, is the part of 
the budget that we control annually. It comes out of the general fund. 
It's education. It's agriculture. It's defense. It's a whole lot of 
stuff that we think about as the Government.
    But the entitlement programs are those that are on automatic pilot. 
They're spelled out in law, and the checks go out year in and year out, 
based on the definitions in law. So if you're a veteran, you're entitled 
to certain health care benefits under this system. If you're a farmer 
and you grow certain crops, you're entitled to subsidies. There are some 
that are means-tested, in terms--we give them to you only if you need 
them, and that's where our welfare programs and much of our Medicaid 
spending comes into play. And then there are the non-means-tested 
entitlement programs, and among those are Medicare for the senior 
citizens and Social Security for senior citizens. So, they're age-based 
programs.
    And those entitlement programs are the biggest chunk of the Federal 
budget. I think it's constructive to look back over history. In 1964, 
all of these entitlement programs plus interest on the debt, which is 
also a payment we can't avoid, consumed about 33 percent of the Federal 
budget. By 1984, shortly after I arrived in Congress, they consumed 57 
percent of the Federal budget, and today, they consume 61 percent of the 
Federal budget.
    Now, let's look forward a few decades and see where we're going to 
be with entitlement spending. By the year 2040, just three--well, 
actually four of these sort of mandatory programs are going to eat up 
every dime, income taxes, payroll taxes, all other revenues that we 
collect for the Federal Government. Medicaid, Medicare, Social Security, 
and interest on the debt will eat up everything. There won't be a dollar 
left in the budget for anything else by the year 2040. That tells you 
the long-term picture, and it is bleak. So something has to give. Doing 
nothing is not an option.
    Let's look at Social Security alone. And this is something that my 
colleague, Mr. Parsons, will speak to in a few minutes. There are huge 
unfunded liabilities here. We haven't honestly saved the current Social 
Security trust fund. Even though extra payroll tax dollars are coming in 
each year, they're not honestly being set aside for this program. Just 
by the year 2040, there's about $5 trillion of unfunded liability in 
that program. Now, we've got to come up with the money somehow to 
replace those promised dollars, and it's no easy task. And I know that a 
million, a billion, a trillion sort of gets lost on the

[[Page 2970]]

average listener, so I always like to explain that if you're looking at 
a trillion dollars, just imagine spending a dollar every second, and it 
would take you 32,000 years to spend a trillion dollars. So even in 
Washington, that's big money. [Laughter] Or as we say in farm country, 
it's not chicken feed. [Laughter]
    So the other way you can look at this is, your Social Security 
statement comes in the mail every year, and it gives you some sense of 
your promised benefits in the Social Security system. But on page two of 
this statement, there's an interesting asterisk. And the asterisk says, 
``By about the year 2040, we're not going to be able to pay you all of 
the benefits that we're promising you. We're going to be about 25 
percent short of what we need to pay those benefits.'' So, what does 
that mean we would have to do if we wait until the last minute to fix 
this program? We'd either have to cut benefits dramatically, or we'd 
have to impose the equivalent of a 50 percent payroll tax increase on 
workers to get the money into the system to honor the promised benefits.
    So huge benefits cuts or a huge tax increase--I don't think that's 
where we want to go, especially since 80 percent of Americans now pay 
more in payroll taxes than income taxes. I don't think that's a solution 
that they're going to applaud. But frankly, it is the kind of solution 
we're left with if we wait too long to fix the mess. We waited too long 
20 years ago. When I first arrived in Congress in 1983, we had a Social 
Security shortfall. We were borrowing money out of the Medicare fund to 
pay monthly Social Security checks. So what did we do, because we were 
already in a crisis? We cut benefits by delaying cost-of-living 
adjustments. We cut benefits by raising the retirement age, first to 67 
and--66 and ultimately to 67, and we increased payroll taxes 
significantly during the 1980s. And so we basically said to future 
workers, based on that legislation in 1983, ``You're going to pay more 
and get less.''
    I mean, to me, that's the problem with waiting until the last minute 
to fix this, is that you give people a worse deal. So my view on this is 
that, for the long term, we can't wait until the crisis hits to address 
the issue. We have to look at these challenges now and give the next 
generation a better deal. And if we plan ahead and plan appropriately, 
we can do that.
    So we need to act before it's too late. And then I think we send all 
the right signals, and we do a better deal for younger workers than sort 
of the same old, ``cut benefits, raise taxes,'' a solution that's been 
imposed in the past.
    The President. I appreciate that. I think the issue has shifted. I 
think there are more people now who believe they'll never see a check 
than people who are worried that they'll have their check taken away. 
And I think it's important for Congress to understand that. And my 
attitude is exactly like Congressman's, and that is is that now is the 
time to deal with it. And it's going to be very important that we 
reassure our seniors who depend upon Social Security that nothing will 
change as--and that's been part of the political problem. And any time 
anybody mentioned the word Social Security, the next thing that followed 
was, ``Yes, he's saying that because he's going to take away your 
check.'' And really what we're talking about is the new generation. I 
appreciate you pointing that out, Tim.
    Representative Penny. If I can just add this one point, if we had 
saved these surpluses honestly in personal accounts over the last 20 
years, we'd be well on the way to fixing this problem by now. And so we 
may be a little late in getting this done, but it's still important to 
move in that direction.
    The President. Thank you.
    Director Bolten. Somebody who's been directly involved in and a 
leader in trying to formulate a solution for the Social Security problem 
is Dick Parsons, who is CEO and chairman of Time Warner. And he was 
Chairman of the President's commission on Social Security, cochair with 
the late Senator Patrick Moynihan, whom I know we all miss at this time.
    Mr. Parsons, we're grateful that you're here, and I wonder if you 
would follow on Congressman Penny's remarks and talk a little more 
specifically about your Commission's work, what problems you saw, what 
solutions you saw.
    Richard D. Parsons. Thank you, Josh, Mr. President. The President 
said earlier that we have to recognize that we have a problem

[[Page 2971]]

with Social Security. I think everybody does. And I don't know that they 
share the urgency that Tim just spoke to and the President just spoke to 
or really understand the nature of the problem. So, let me take a step 
back and talk about--approach it from a slightly different angle, talk 
about what is the problem with the Social Security system, which was 
created in 1935 as what they call a pay-as-you-go system.
    Now, most people here know that, but it was amazing to me, when we 
had our Social Security Commission, we went all around the country, we 
had a number of public hearings, and the people would come and say, 
``Well, what are they doing with my money?'' Well, what most people 
didn't know is they were taking your money that you pay in every day or 
every week when you get a paycheck, and within a very short period of 
time it's going out the other door to pay benefits, pay-as-you-go: Money 
comes in; it goes out to pay the benefits.
    Now, that system was created at a time when for every person who is 
eligible to participate--retirees, let's call them--there were 40 people 
in the workforce. There were 40 people working to support one. It was 
also created at a time when the average life expectancy for males was 
such that the average man would not live to see the day that he could 
qualify for Social Security. So, you would pay in, and the system was 
built in part--this is not cynical; it's just fact--on the notion that 
half the people who paid in would never get anything out because they 
would be dead.
    So, where are we today? Today, there are three people in the 
workforce for everybody who's eligible for Social Security. Today life 
expectancy is expanded anywhere from 5 to 7 years, depending on gender, 
since the time the system was created, so that the great majority of the 
people who participate will live to see benefits. The fastest growing 
part of our population is 85 and up. So, we have a totally different set 
of circumstances that we're dealing with. And it's only going to get 
worse in the sense of--or more distant from the way--the situation that 
existed when the system was created. By the year 2020, you'll have two 
people in the workforce for every person eligible to receive benefits. 
And life expectancies will be even greater then.
    So the whole factual basis that underlies this pay-as-you-go system 
has changed. And what's happened is--Tim mentioned that we have huge 
underfunded shortfalls in the system. If you--they usually do this on an 
actuarial basis out 75 years. If you look out 75 years and say, ``How 
much does the system promise it will pay,'' and you look out 75 years 
and say, ``Under the existing tax scheme, how much money are we going to 
be able to have to pay it,'' in current dollars, in actual dollars, it's 
about an $11 trillion to $12 trillion shortfall over 75 years. If you 
roll that back into the current dollars and you say, ``What would it 
take today to close that,'' it's about $4 trillion. So that's the 
problem.
    The problem is, we've promised more than the revenues that we have 
or that we can look to, to pay. So what's the solution? The traditional 
solutions are, as Tim just indicated, either we increase the taxes so 
you get more revenues in or you decrease the benefits so you get less 
money out. The problem with that is it's a bandaid. And given these 
demographic shifts that we're talking about and that we see, it simply 
can't last. You might be able to put one more bandaid on the wound and 
patch us over for another 5 or 6 years.
    But for example, some people say, ``Why don't you just lift the wage 
cap?'' Only the first $90,000, as of the beginning of the year, is 
subject to Social Security taxes. Well, even if you eliminated the wage 
cap, that only buys you 4, 5, 6 more years, and then you're back in the 
same problem. We have to face up to the fact that the country is in a 
different place than it was when this system was created. And the fix 
needs to be structural. It needs to be fundamental. We need to change 
the architecture of Social Security.
    And what I mean by that is we gradually have to move from a system 
that is based on a pay-as-you-go basis when you had 40 people in the 
workforce for everyone not, to a system that is on a fund-as-you-go 
basis, where people can begin to start to fund and put away the money 
that they will look to in their later years for their support and 
sustenance.

[[Page 2972]]

    Now, this is not unprecedented. This is exactly what's happened in 
the business world. Every corporation in America, mine included, has 
been engaged over the last 20, 25 years in a migration from pay-as-you-
go kind of pension arrangements to funded arrangements. Now, nobody has 
gotten there--very few have gotten there--probably Charles Schwab has 
gotten there, in terms of fully funded arrangements right now--but 
putting the money away now to pay liabilities in the future. This is 
what private accounts is all about. And that's why the Commission came 
down recommending, in all of the options that we put forward, private 
accounts. It's the beginning of shifting from complete pay-as-you-go to 
starting to fund some of our future liabilities now.
    And that's--at the end of the day, while the Government is, in law 
and in sort of a forced social reality, a different entity than the 
business community, economically, it's not. Economically, it's going to 
have to step up to the same reality that business had to step up to, 
that we can't continue a system that puts a huge burden on future 
generations that they're not going to be able to meet. We're going to 
have to start saving and funding our responsibility to ourselves on a 
current basis.
    And that's why we made private accounts as a beginning step--this is 
not privatization of Social Security. What it really is, is--and again, 
this isn't unprecedented; this is what business has done--it's beginning 
to have a hybrid system where you have a floor, a base, below which no 
one can go that is funded on what they call a ``defined benefit'' 
basis--that you will get this money, this minimum amount of money, no 
matter what. But then you have an ability above that to enhance that on 
a defined contribution basis--i.e., you put money away now, invest it 
wisely, and it will come back to you and give you an even better 
standard of living in a future time.
    So that's essentially the nature of the problem and why we thought 
that it was time for structural, architectural change to Social 
Security, not just tinkering. You can't--you know, tinkering can't work 
anymore. The demographics--this was Pat Moynihan's point. He would say, 
``Demography is your destiny. We just can't do what we've done in the 
past any longer. We've got to do something different.'' And this was an 
idea that made sense.
    Director Bolten. Mr. President, you mentioned that for current 
seniors, this is not a debate for them, that those at or near 
retirement, this discussion that's going on now should not affect what 
they've been promised and what they can expect to get. It's the next 
generations that this is debate--that this debate is about and who 
should be concerned about it. You mentioned, Mr. President, that a lot 
of the next generation doesn't think that there will be benefits there 
for them.
    Sandy Jaques is somebody, obviously, from that younger generation. 
She's a single mom from West Des Moines, Iowa, and she's active in a 
group called Women for Social Security Choice. And Sandy, let me ask you 
to speak for the--speak for regular folks and younger regular folks--
[laughter]--and tell us why you got involved in this organization, why 
are you active on Social Security issues.
    Sandy Jaques. Sure, Josh. Well, I think the President stated it the 
best when he said most people in my generation believe that we're more 
likely to never get a benefit than to have our check taken away from us. 
I guess it would be nice to get to the point where we had a check, and 
then we're worried about it being taken away.
    So I guess I'm here because I want to make sure that we do get to 
the point where my generation retires and we do have Social Security 
around and intact for us. But more importantly, as you mentioned, I have 
a daughter at home. Her name is Winter. She's 10 years old, and I want 
to make sure that she has Social Security when she retires as well.
    And I believe that the only way to really get to that point is with 
personal retirement accounts. They're really the only way to update or 
modernize Social Security in a real way without tinkering it, as Mr. 
Parsons talked about and as Congressman Penny did when they were in 
Congress, because then you only resort to a tax increase or benefit 
cuts. With personal retirement accounts, you have money in an account, 
and that money is allowed to grow, and it's that growth that

[[Page 2973]]

actually will help to fix Social Security for future generations.
    Without that, if we wait, we will have to resort to raising payroll 
taxes or cutting benefits like they did in the eighties. To speak to 
raising payroll taxes on a personal level, I can't afford a payroll tax 
increase. In fact, I think I definitely pay more than enough right now, 
and that's another reason why I support Social Security reform. I am not 
one of these young people that is willing to give up on that money I'm 
already paying into the system. I want to see the system fixed so that I 
can get that money back when I retire.
    And as Tim mentioned, by 2040--I actually retire in 2044 unless the 
retirement age is raised again--but in 2044, we're already at the point 
if we do nothing, I will get 25 percent less than what I should get 
under the current system right now. So, that is why this issue is very, 
very important to me.
    But I also want to talk about current seniors right now. My grandma 
is already retired. My dad actually plans to retire next year and my mom 
a couple years after that. It's very important to me to make sure that 
their benefits remain intact for them. They--it's too late for them to 
invest in a personal retirement account. But because of that we need to 
make sure that we guarantee their benefits through their retirement, 
because it's something that they've been relying on. And it's, I think, 
our duty to make sure that we make sure that happens.
    But at the same time, I also think it's the country's duty to make 
sure that we fix Social Security now so that it's around for when future 
generations retire because personal accounts are really the only way to 
give us retirement security in the future for me and, more importantly, 
my daughter. Because if I am faced with a 25 percent benefit cut when I 
retire, they may be looking at raising payroll taxes on my daughter and 
younger generations at that time. So really, that's why this is very 
important to me, Josh.
    The President. You know, one of the interesting visions of personal 
savings accounts is that Sandy will be able to pass her account on to 
Winter as part of Winter's capacity to retire as well. It is a novel 
concept, clearly different from the current system where you don't pass 
anything on.
    Ms. Jaques. That's a great point. That's also very important to me 
because if you do get to the point where you're raising payroll taxes or 
cutting benefits to make Social Security solvent at that time, you still 
don't own your benefits. With a personal account, you own the money 
that's in that account. And I'm sure Winter will be hoping that I have a 
very modest retirement so that there is some left for her--[laughter]--
when I die. But that's a very important aspect as well.
    The President. One of the things on personal accounts that listeners 
must understand is that you cannot take--if a personal account, in fact, 
exists, you can't take it to the racetrack and hope to really increase 
the returns. [Laughter] It's not there for the lottery.
    In other words, there will be reasonable guidelines that already 
exist in other thrift programs that will enable people to have choice 
about where they invest their own money, but they're not going to be 
able to do it in a frivolous fashion, which will mean two things. One, 
it's more likely there will be a rate of return higher than that which 
is in the Social Security trust and, secondly, more likely to be actual 
money available when you retire.
    Director Bolten. Mr. President, we've been focused on--principally 
so far on the retirement security of today's and future seniors. It's 
also very important that seniors have some security about their health 
care situation. And so we're privileged to have with us Dr. Bill Roper, 
who is dean of the School of Medicine at the University of North 
Carolina in Chapel Hill. And he's also head of the UNC health care 
system. Dr. Roper also served in a previous Bush administration as--
among other things, as the head of the Medicare system. So he knows a 
lot about this stuff. And let me just ask Dr. Roper to bring us out of 
the retirement system and into the health care system and tell us what 
are the challenges we face there and what do they mean for our budget 
situation.
    Dr. William Roper. Thanks, Josh. And thank you, Mr. President. I 
think that is my role on this panel, is to say: Remember health care; 
remember Medicare. Surely, the focus

[[Page 2974]]

on Social Security is important, but there's this other large and, 
indeed, faster growing entitlement program called Medicare. Just a few 
numbers to make the point: This year, the Medicare program is one-eighth 
of the entire Federal budget. Ten years from now, that's projected to be 
one-fifth of the Federal budget. And by 20 years from now, Medicare will 
be larger than Social Security, so it will be the largest Federal 
entitlement under current growth rates.
    Another point: This year, 2004, the trust fund that our payroll 
taxes go into that pays for hospital and related benefits in Medicare--
more money is going out of that trust fund to pay for current needs 
right now for seniors and others in the Medicare program than payroll 
taxes are going into it. So the balance in the trust fund is beginning 
to go down, and it's projected to be entirely exhausted, under current 
spending patterns, by the year 2019.
    All of that is driven by changing demographics. We're aging as a 
society, and we have a more expensive health care system. Now, a lot of 
times we in the health policy community beat up on ourselves, saying 
that's a terrible thing that we're devoting so much to health care. I 
think it's important to point out that health care is something that we 
value tremendously as a society. The ability to spend so much on health 
care is part of our being a very healthy economy and a society that says 
we want to invest in our health, especially the health of seniors.
    And many good things result from health care. A very careful study a 
few years ago by some economists showed that if you look carefully and 
count the costs and count the benefits, that technology--technological 
advances in health care are worth the cost. The benefits far outweigh 
the costs. And so we ought to continue to feel good about that, 
especially those investments in prevention that end up paying rich 
dividends down the line.
    Projections about how much we're going to spend in Medicare is more 
difficult than the projections for Social Security. Everybody who is 
going to be a senior citizen 50 years from now has already been born, so 
we know how to project Social Security numbers. But we don't know what 
medical advances are going to occur, what new technologies, new 
treatments, new drugs, whatever, are going to be there. We don't know 
how much they're going to cost. Some will surely save money; some will 
cost more. The benefits there are substantial. But the simple point is, 
the growth rate for Medicare is unsustainable. We just can't devote the 
entire Federal budget to health care.
    So the question becomes, how do we constrain that growth? What do we 
do about it? And broadly speaking, we face two options. One is to do 
what Medicare has done over the last several decades. And I was there in 
the eighties and the nineties, and we put in place what are called 
administered price systems, which is the Government deciding how much to 
pay hospitals and how much to pay doctors and running those systems so 
that we try to restrain the rate of growth to the extent possible.
    The alternative, which many people, myself included, and you, sir, 
are advocating is a much greater reliance on individuals and empowering 
them to make choices, helping them see the value of investing in 
preventive behavior, better health for themselves long-term, providing 
information on who are the quality health care providers so that people 
can make choices about where to go for themselves, and moving us towards 
a time when we will see head-to-head competition between alternatives to 
Medicare and the traditional Medicare program. The Medicare 
Modernization Act of last year took us important steps in that 
direction. But we have much more to do.
    In general, we need to see that the philosophy of private accounts 
applies to Medicare, just as we've been talking about Social Security. 
So we need to move towards more choices for individuals, more 
competition in market forces and health care, and more organized 
integrated care, especially for people with chronic illnesses, because 
they're the ones who end up costing so much. If we can intervene early 
with preventive techniques, as I said, we can lower that rate of growth 
in spending and end up with a program that we value just as much as the 
one that we value today but doesn't cost as much.
    The President. Thanks for mentioning the Medicare bill. One of the 
reasons I was

[[Page 2975]]

strongly for it was because it did begin to interject a sense of choice 
for seniors into the marketplace. And secondly, it recognized that 
medicine has changed. And when you have a kind of a static system where 
Government makes the decisions, it's hard sometimes to get bureaucracies 
to adjust to the reality. And the reason why I believe the prescription 
drug benefit was a vital component of a new and modern Medicare system 
was so that we could prevent hospital stays, for example, by the 
judicious use of prescription drugs. And Medicare--I've said this a 
hundred times around the country--Medicare would pay for hospitalization 
for a heart attack but wouldn't pay for the prescription drugs the could 
prevent the heart attack from occurring in the first place, which didn't 
seem like a very cost-effective way to try to provide good health care.
    And the reforms in the modernization program that we've got there 
has begun, I think, to address the inadequacies of Medicare as a result 
of decisions being made at the Federal level. But you're right, we've 
got more to do.
    Dr. Roper. A lot more to do, but it's a step in the right direction.
    The President. Thank you.
    Director Bolten. Mr. President, I want to bring our economists back 
in now, because we've heard about some daunting challenges in the Social 
Security system, in the health care system--and let me ask Liz Ann 
first, what are markets and investors looking to the Federal Government 
to do at this point?
    Ms. Sonders. Let me stay on Social Security reform for a minute. 
NBC/Wall Street Journal just had an interesting poll out this morning 
that was reported showing about 50 percent of the surveyed population 
was not for private accounts. What I found more interesting was a little 
bit later in the report, there were more questions asked than just that, 
and there was another more general question asked about, if these same 
folks had the opportunity to put more money in the stock market, would 
they? And 80 percent said yes.
    So I think this goes back to this idea of a lot of misunderstanding, 
I think. One of the problems that we're dealing with now is because many 
in the Wall Street community very much believe in private accounts, 
there's this natural assumption that it must only be because Wall Street 
is going to be a huge beneficiary of these private accounts. And 
certainly what I think makes the most sense and the person for whom I 
work, Chuck Schwab, thinks makes most sense, is that you are very 
controlled. As you said, Mr. President, a thrift savings plan kind of 
program where your options are very limited; it's very index in nature. 
The fees are structured to be so minimal that in fact even the studies 
have shown that under any set of proposals Wall Street probably doesn't 
make any money on this for another 7 or 8 years. So I think there is 
this natural assumption that if Wall Street is for it, it must mean that 
they are going to be big financial beneficiaries of it.
    I just think, again, it goes back to what I know you're a big 
supporter of, which is the democratization of the markets for 
individuals, putting more control in people's hands. And I think this, 
much like 401(k)s did as we moved from a benefit part of the non-Social 
Security retirement to more of a contribution style--it's really been 
one of the reasons why net worth has gone up. And I think Sandy made 
some wonderful points about the power that that puts in your own hands. 
And the fact that you can actually pass it on to future generations 
makes all the sense in the world to me.
    Director Bolten. Liz Ann has focused on those personal accounts in 
particular. Let me ask Dick Parsons to say a little more in detail about 
what your Commission concluded about personal accounts and what's the 
right way to do this kind of thing.
    Mr. Parsons. Fair enough. The point I was making earlier is that 
we've got to migrate from an unfunded plan, right, that assumes there 
are always going to be enough people in the workforce to take care of 
those who are not, to a funded plan where folks who are out of the 
workforce have had a chance, over the course of their working lives, to 
take care of themselves.
    Now, that can be done one of two ways. The Government could do it. 
In other words, the Government could hang on to the money and actually 
save it instead of spend it, or you could give people the power to do it 
on

[[Page 2976]]

their own behalf. And after--we went around the country, we talked to 
literally scores of people representing scores and scores and scores 
more. And clearly, I think, the sense of our fellow Americans and our 
sense as a Commission was, the better of those two choices is to begin 
to let people fund their own programs so that they, A, had a sense of 
ownership, of wealth creation. The object ought to be, at the end of the 
day, to put everybody in America in a place where, while the Government 
is the place of last resort when everything goes wrong, there are fewer 
and fewer of them because more and more of us can take care of 
ourselves, right? So that's the objective; that's the direction the 
Commission felt that this migration to a funded world should go.
    Now, there are lots of examples of how you can do that. Sure, the 
President just said you don't want to say to everybody, ``Well you 
just--you can hang on to 2 or 3 percent of your money and just put it in 
your pocket, do what you want with it.'' There's some people who would 
go to the track. People aren't ready for that just yet. But there are 
lots of examples of ways in which this can be done cost effectively. The 
Federal Thrift Savings Plan which the President referred to and which 
Liz Ann just talked about is a great example. That is a program that 
exists for people who work for the Federal Government now who have this 
right. And it's been run for a number of years. Its results are 
superior, particularly compared to the returns you would get leaving 
that money with the Government. And the beneficiaries of that are the 
people who participate in that plan.
    So we think that there ought to be, at least initially, limitations 
on how much discretion you have in terms of investing the funds and 
creating some kind of trust arrangement where there are people who are 
investment professionals who help structure and manage the costs of the 
initial options. But clearly, people ought to be able to start to save 
on their own behalf to create wealth for themselves so that they have 
that wealth to look to in their later years, as opposed to a Government 
promise only, which at some point in time is going to have to come up 
empty because you won't have a big enough revenue base to draw from to 
satisfy the problems.
    Director Bolten. Congressman Penny, the--one of the critiques I've 
heard about taking some of the steps that Dick Parsons is talking about 
is that, look, this isn't a problem for decades to come. It may be a 
problem by the time Sandy retires but certainly not a problem now. Why 
do we have to wrestle with this tough political issue now? How do you 
answer that?
    Representative Penny. You can pay me now or pay me later. Wasn't 
there a commercial on TV once where--and the purpose of the commercial 
was to say that you can spend a little bit now and fix this thing 
permanently, or you can just pay me forever. It's sort of like a credit 
card where you can pay it off now and be done with it, or you can pay 
the minimum payment forever. And that's sort of the choice we're facing 
here.
    And if we choose not to address Social Security reform now and we 
let this thing drag along until we do get to a point of crisis, then 
we're going to be cutting and pasting and cutting and pasting, year 
after year after year, well into the future. It's going to unsettle the 
markets, because they're going to look at a fiscal house that is not in 
order. So that's the reason it's important to address this now.
    I gave an example during my initial remarks about what did happen 
when we waited until the crisis was already upon us. We've now got a 
window of opportunity to address this issue, and I think we ought to 
take it.
    And I do want to just add one point about polling data, because 
depending upon how you word the question, you get widely disparate 
responses. But I've seen polling data that indicates that for younger 
people like Sandy, support for Social Security reform that includes 
personal accounts is about 80 percent.
    The President. That's right.
    Representative Penny. So it's huge. And frankly, the support for 
personal accounts as part of the solution--and it has to be part of a 
package. And that's what we tried to address in the Commissions: How do 
you put this all together in order to make it work for the long term, in 
order to pre-fund as much of this as we can while retaining a basic 
safety net under the traditional system. It has got to be a package. But 
when you talk about reform that includes personal accounts, it's

[[Page 2977]]

strongly favored by everyone that currently is ineligible to join the 
AARP. [Laughter]
    And it seems to me this is really who we're talking about, because, 
as you've said, we're not talking about any changes in the near term. 
People who are eligible to join the AARP today are going to be protected 
under the traditional system. But we ought to, on a voluntary basis, 
give people working today the option of pre-funding part of their 
retirement and then owning that retirement in a way that the Government 
can't take it away from them.
    Director Bolten. Tim, the other thing I've heard--and I'm going to 
ask Jim Glassman to come in here--the other thing I've heard is, ``Well, 
maybe you do have to deal with the problem now because it just gets 
harder to deal with it later. But we can deal with this Social Security 
problem, and in fact, we can deal with most of our fiscal problems by 
raising taxes.'' How do you react to that as an economist? And how do 
you think markets would react to that kind of solution?
    Mr. Glassman. Well, I think markets would worry about that. Because 
markets would worry about, what does that do to growth incentives and 
investment incentives and savings incentives? And I think, in the 
markets, we're interested in--we know it's a structural problem and we 
know that if you come up with structural changes and structural reforms, 
we're going to be much more impressed by that, because we don't need 
promises to cut this and that. What we need is to see that the reform 
that's taking place will be changing behavior and will be bringing 
market discipline into the process. And I think people would be pretty 
disappointed if the only solution you could think of was raising taxes.
    The President. Why do markets matter to the person out there looking 
for work?
    Mr. Glassman. You know, the markets are a barometer of this--this is 
where we, collectively, think about the future. And the markets are a 
taste test of what people, collectively, think is going to be happening 
in the future. So it's--for one thing, it's a barometer of what we think 
of your policies. And for another thing, it affects us when we go to 
take out a mortgage loan. Interest rates go up, because we don't like 
what's happening, or we're worried about a policy that's not going to be 
fixing the problem, then we homeowners pay a price.
    Director Bolten. Sandy, what--there has been talk about personal 
accounts here, and you've been around Iowa, I guess, campaigning for 
them. Tell me a little more specifically what it is that attracts you 
about them, what you would do with it, and whether you have any concerns 
about the safety of that, of making an investment in a personal account 
rather than letting the Government keep your money.
    Ms. Jaques. Well, Tim already mentioned earlier, by the time I 
retire I should expect a 25 percent reduction in what I should expect to 
get. So I have a hard time thinking that I could do worse in a personal 
account than I could with the current system. So I guess I'm not worried 
at all about the security of my investments in a personal account. 
Because, as others have mentioned, the choices would be limited. I'm not 
going to be able to invest the money at the racetrack or invest it--you 
know, open up the paper and pick one stock and cross my fingers and hope 
that it does well. I will be given limited options for how to invest 
that in very diversified funds. So I'm not worried one bit that I would 
do better in a personal account than I would do under the current Social 
Security program because of the demographic changes that will take place 
before I retire.
    But on a more broader sense, why personal accounts are important to 
me--it's very important to me because I think they're the only way to 
give me security in my retirement and my daughter's retirement without 
raising payroll taxes. I can look at paying the same percentage in 
payroll taxes until I retire but have a bigger account when I retire, 
because of the growth that will take place over the next 40 years that I 
work. I have 40 more years to work before I retire.
    And if you raise payroll taxes, you're just going to be asking me to 
pay more but give me less when I retire. But with a personal account, I 
can pay the same amount in payroll taxes and use a portion of that to go 
to--into my personal account, so I can pay the same and get back more. 
Now, paying the same and getting back more when I retire--I don't know 
why anyone else is considering

[[Page 2978]]

any other option than that because I can't think of a better deal than 
that.
    Director Bolten. Dick Parsons.
    Mr. Parsons. Yes, just--the other thing that I think people need to 
consider when Tim talks about a window of time to operate is, the 
statistics we saw in the Commission say by about the year 2020, you're 
going to have about two people working for every person retired. But 
that's still two to one. And where I come from, that's a majority. And 
you've got to ask yourself, are those two going to let the Congress tax 
them sort of into oblivion to pay for the one that's not in the 
workforce. I don't think so.
    I think the limit--there is a limit to how much you can tax, which 
means that either benefits will have to come down--that's inevitable, 
and people who have been promised something and who believe that they're 
entitled to something and who've planned on getting it aren't going to 
get it--or essentially, you sort of monetize it that you just issue more 
money to pay those promises. But by doing that, a dollar buys 50 cents 
of what it used to buy, so that we're on a collision or a train wreck 
course. And Tim is 100 percent right when he says that the time to start 
to deal with that--you can't fix this problem with no pain, without 
making some sacrifices. But the time to start making those sacrifices is 
now, so that they're manageable, so that the markets can have confidence 
that we're on a course that is going to avoid the train wreck. Because 
if we wait until later, it will be a huge train wreck for our whole 
economy.
    Director Bolten. Mr. President, we're reaching the end of our time, 
and I'm going to do the smart thing and give you the last word. 
[Laughter]
    The President. Thank you, Ambassador. [Laughter]
    I love the idea of people being able to own something. You know, one 
of the most hopeful statistics in America is the fact that more and more 
people are owning their own home. It is a--it's just--I met a lot of 
people on the campaign trail that said, ``I just bought my first home.'' 
And there's just such joy in their voice, that they were able to say, 
``This is my home.''
    I love the fact that more and more people are starting their own 
business. I think one of the unique things about America is that the 
entrepreneurial spirit is so strong that people are willing to take 
risks. People from all walks of life, all income levels are willing to 
take risks to start their own company. And it's a fantastic experience 
to meet people who say, ``My business is doing well. I'm trying to do 
the best I can with my business.''
    And I like the idea of people being able to say, ``I'm in charge of 
my own health care.'' In other words, ``If I make a wise decision about 
how I live, I end up with more money in my pocket when it comes to a 
health care savings account.'' I particularly like the idea of a Social 
Security system that recognizes the importance and value of ownership. 
People who own something have a stake in the future of their country, 
and they have a vital interest in the policies of their Government.
    And so I want to thank the panelists who are here for helping to 
illuminate the need to fix problems but, at the same time, recognizing 
the inherent optimism about promoting an ownership society in America. 
And I want to appreciate you helping advance this issue--these issues, 
so that when we begin the session after the new year, these will be 
foremost and forefront issues for the Congress to consider. Now is the 
time to solve problems and not pass them on. This is my message today. 
It'll be my message to Members of the United States Congress. We have 
come to Washington to serve, to solve problems and do the hard work so 
that when it's all said and done, they'll look back and say, well done, 
you did your job.
    Thank you all for coming.

Note: The panel discussion began at 9:32 a.m. at the Ronald Reagan 
Building and International Trade Center. In her remarks, Ms. Sonders 
referred to Martin Feldstein, professor, Harvard University.