[Weekly Compilation of Presidential Documents Volume 41, Number 3 (Monday, January 24, 2005)]
[Pages 67-68]
[Online from the Government Publishing Office, www.gpo.gov]

<R04>
The President's Radio Address

January 15, 2005

    Good morning. This week, I met with some of our fellow citizens from 
across the country to discuss one of the great responsibilities of our 
Nation, strengthening Social Security for our children and 
grandchildren.
    For 70 years, the Social Security system has fulfilled the promise 
made by President Franklin Roosevelt, keeping our elderly citizens out 
of poverty while assuring younger Americans a more secure future. Along 
with employer-funded pensions and personal savings, Social Security is 
for millions of Americans a critical element to their plans for a stable 
retirement. And for today's senior citizens and those nearing 
retirement, the system is sound. But for younger workers, Social 
Security is on the road to bankruptcy. And if we do not fix it now, the 
system will not be able to pay the benefits promised to our children and 
grandchildren.
    When President Roosevelt signed the Social Security Act in 1935, the 
average life expectancy was about 60 years, which meant that most 
Americans would not live to become eligible for benefits, then set at 
age 65.
    Today, most Americans enjoy longer lives and longer retirements. And 
that presents a looming challenge. Because Social Security was created 
as a pay-as-you-go system, current retirees are supported by the taxes 
paid by current workers. Unfortunately, the ratio of workers to retirees 
is falling steadily. In the 1950s, there were about 16 workers paying in 
for each person drawing out. Today, it's about three workers for every 
beneficiary. And by the time today's workers in their mid-twenties begin 
to retire, there will be just over two.
    What this means is that in the year 2018, the system will go into 
the red, paying out more in benefits each year than it receives in 
payroll taxes. After that, the shortfalls will grow larger until 2042, 
when the whole system will be bankrupt. The total projected shortfall is 
$10.4 trillion. To put that number in perspective, $10.4 trillion is 
nearly twice the combined wages of every single working American in 
2004.
    Every year we put off the coming crisis, the higher the price our 
children and grandchildren will have to pay. According to the Social 
Security Trustees, waiting just 1 year adds $600 billion to the cost of 
fixing Social Security. If we do not act now, Government will eventually 
be left with two choices, dramatically reduce benefits or impose a 
massive, economically ruinous tax increase. Leaving our children with 
such a mess would be a generational betrayal.
    We owe it to the American worker to fix Social Security now, and our 
reforms begin with three essential commitments. First, if you're 
receiving your Social Security check or nearing retirement, nothing will 
change for you. Your benefits are secure. Second, we must not increase 
payroll taxes on American workers because raising taxes will slow 
economic growth. Third, we must give younger workers, on a voluntary 
basis, the option to save some of their payroll taxes in a personal 
retirement account.
    Unlike Social Security benefits, which can be taken away by 
politicians, the money in a personal account would be yours. And unlike 
the money you put into Social Security today, the money in personal 
accounts would grow. A child born today can expect less than a 2 percent 
return after inflation on the money they pay into Social Security. A 
conservative mix of bonds and stocks would over time produce a larger 
return. Personal accounts would give every younger worker, regardless of 
income, the chance to save a nest egg for their later years and pass 
something on to their children.
    Saving Social Security is an economic challenge, but it is also a 
profound moral obligation. Today's young Americans deserve the same 
security their parents and grandparents

[[Page 68]]

enjoyed. Because the system is broken and promises are being made that 
Social Security cannot keep, we need to act now to strengthen and 
preserve Social Security.
    I look forward to working with Members of Congress from both parties 
to keep the promise of Social Security.
    Thank you for listening.

Note: The address was recorded at 7:25 a.m. on January 14 in the Cabinet 
Room at the White House for broadcast at 10:06 a.m. on January 15. The 
transcript was made available by the Office of the Press Secretary on 
January 14 but was embargoed for release until the broadcast. The Office 
of the Press Secretary also released a Spanish language transcript of 
this address.