[Weekly Compilation of Presidential Documents Volume 41, Number 13 (Monday, April 4, 2005)]
[Pages 527-537]
[Online from the Government Publishing Office, www.gpo.gov]
<R04>
Remarks in a Discussion on Strengthening Social Security in Cedar Rapids
March 30, 2005
The President. Thank you, Mr. Chairman. Thank you all for coming. I
want to thank our panelists here. We're about to discuss Social
Security. Before we do, I've got some things I want to say.
First, I want to thank the good folks here at Kirkwood Community
College for letting us come by. It's a fantastic facility you got here.
I want to thank Mick and Steve and all the faculty here. I believe the
community college system is an important part of making sure that our
economy continues to grow. And the reason why is, one of the bottlenecks
for economic growth is to whether or not we've got a workforce that is
trained for the jobs of the 21st century. There is no better place to
train people for the jobs of the 21st century than the community college
system in America. And so I want to thank you for letting us come by.
I want to thank Chuck Grassley. He and I just came from the Spring
House. Yes, it was nice. We had a cup of coffee. I hope you paid,
Senator. [Laughter] Well, I forgot your reputation. [Laughter] I guess I
had to pick up the check, probably. [Laughter] But I'm proud of the
Senator's leadership on the Finance Committee. This will be the
committee in the United States Senate that will start a piece of
legislation that will modernize Social Security. He's committed, as am
I, to taking on this big issue. And as I told them at the Spring House,
he's stubborn. I'm going to be stubborn on the issue, and we're going to
keep working this until we get something done. We need to. Now is the
time to address tough problems, before it becomes acute for younger
generations of Americans. Thank you for understanding that, Chuck.
Appreciate you coming.
I want to thank Congressman Jim Leach, the Congressman from this
district. I'm looking forward to--Leach is flying back with me. I'm
always a better person after having sat down to listen to his wisdom.
[Laughter] He's a good, strong guy, and I'm proud that you're here.
[[Page 528]]
As well as Jim Nussle, chairman of the Budget Committee for the
House of Representatives. Thank you for coming, Jim. I appreciate
working with Chairman Nussle. He's done a very good job on the budget.
Now this is the year in which we're going to set priorities again--we
did it last time; we're going to do it this time--set clear priorities.
And we're not going to fund programs that don't work. It seems like to
make a lot of sense to me that we're wise about how we spend your money.
And there's no better partner in being wise about how we spend the
people's money than Jim Nussle. I'm proud of your leadership and proud
to call you friend.
And your parents are here. Yes, you brought mom--mom and dad--good,
yes. You still telling him what to do? [Laughter] So is my mother.
[Laughter] The difference is, Nussle is listening. [Laughter]
I want to say something about Senator Chuck Larson. I appreciate you
being here, Chuck. I want to thank you for your service to our country.
State Auditor Dave Vaudt is with us. Mr. Auditor, thanks for coming. Mr.
Mayor, thank you for coming. I appreciate Paul Pate joining us. I want
to thank all the State and local officials for coming. Particularly, I
want to thank you all for taking time out of your busy lives to become
educated on a very important subject.
Before I do get there, I do want to say something about Al Smith.
Al--I don't know if you know Al Smith. He's been involved with the Cedar
Rapids Kernels Baseball Club. He organizes a program for children with
special needs around baseball. He's also been a mentor. He told me that
over his last, I think he said 40 years--didn't you say, Al? I think
it's 40--you dealt with a million children. I want you to stand up. The
reason why I wanted to introduce Al, he is a soldier in the army of
compassion. He's a soul who understands that you can make a difference
in a person's life, and I want to thank you for being here. Appreciate
your service.
For those of you here interested in serving your Nation, find
somebody who hurts and love them or feed the hungry or find shelter for
those who are looking for housing. Al has done the same thing through a
mentoring program, and I appreciate--he also told me that he was in the
Cleveland Indians organization and knew Rocky Colavito. Yes, pretty
good. Obviously, we've got some baby boomers here. [Laughter]
A couple of things before we get to Social Security. One, I just
talked to Laura this morning, and she sends her best. She knew I was
coming to Cedar Rapids. She said to say hello to everybody there. She
was calling from Afghanistan. She'd just gone over there, and she was
explaining to me how hopeful it was to have gone to a dormitory for
women at a teacher's college. We helped build that dormitory--we, the
people of America.
Think about a society that has gone from a Taliban-dominated society
where, if you were a women and spoke your mind, you were taken to the
public square and whipped, to a free society in which women are now
being trained to be able to follow their hearts and teach. That's the
difference between tyranny and freedom. And free societies--it's
important for people to know, free societies will be peaceful societies.
Free societies in the part of the world that's desperate for freedom
sets a clear example to others that it's possible to be free. And it's--
I've been impressed by the protests in Beirut, Lebanon, where people are
saying to Syria, ``Get out of our country so we can be a free country
and a democracy.''
I was impressed by the people of Iraq, who, in the face of car
bombings and suiciders, said, ``We're going to defy these folks because
we want to be free.'' And they voted in overwhelming numbers for the
first Assembly, democratically elected Assembly in years. Freedom is on
the march, which means peace is on the march. And we shouldn't be
surprised, because in America we understand freedom, and we know freedom
is not our gift to the world. Freedom is the Almighty God's gift to each
man and woman in this world.
And flying in, I saw a lot of people on tractors. It's a good sign.
[Laughter] But it reminded me about what is possible when it comes to
reasonable energy policy. See, one day I hope that those tractors are
planting fuel so we become less reliant on foreign sources of energy. We
have got a significant problem. We're too dependent on energy sources
from overseas, and it's beginning to
[[Page 529]]
show up at your gas pump. We need to think differently about energy. And
now is the time for Congress to pass an energy bill which encourages
conservation, encourages research and development so that biodiesel or
ethanol can work--more likely work in our automobiles, encourages the
research and development on hydrogen-powered automobiles. We've got
research and development going to FutureGen plants so that we can burn
coal in a zero-emissions way.
In other words, now is the time to get a bill passed to not only
make us less dependent on foreign sources of energy but to encourage new
ways of using energy here in America. Now is the time for Congress to
act and get the bill to my desk.
I could go on. Laura warned me, don't--she said, ``Sometimes you
talk too much, and so make sure you keep it relatively short here.'' And
I said, ``Okay, I'll try and give it my best shot.'' Obviously, I
haven't done a very good job.
Let me talk about Social Security. I'm talking about Social Security
because I see a problem, and I believe the job of the President is to
confront problems and not pass them on to future Presidents or a future
Congress. That's what I think you elected me for.
First, I agree with Chuck when he said that Franklin Roosevelt did a
good thing in creating the Social Security system. Social Security has
worked for a lot of people. It has provided a safety net for a lot of
citizens. The problem is, there's a hole in the safety net for a
generation which is coming up, and let me tell you why.
Let me--I'll just put it in personal terms. There's a lot of people
like me getting ready to retire. We're called baby boomers. I turn 62 in
2008. It's a convenient year for me to retire, by the way. [Laughter] We
are living longer than the previous generation. We have been promised
more benefits than the previous generation. See, people ran for office
saying, ``Vote for me. I'm going to give you more benefits if you put me
in.'' So you've got a lot of baby boomers getting ready to retire who
will be living longer years and promised more benefits. That's part of
the math.
The other part of the math is that there are fewer workers paying
for people like me. In 1950, there were 16 workers paying into the
system for every beneficiary, so you can see the load wasn't that heavy.
Today, it's 3.3 workers for every beneficiary. Soon, it's going to be 2
workers. If you're a younger person going to community college here,
you're going to have to pay a lot of money out of your pocket to make
sure I get the benefits I'm promised, unless we do something different.
So the math has changed. The system is an important system, but it's
got a hole in the safety net. I say the hole in the safety net for the
younger workers because if you're somebody who's retired or near
retired, somebody born prior to 1950, you don't have a thing to worry
about. The promise will be kept. I don't care what the politics--
politicians say. I don't care what the propaganda says. The truth is,
this Government will keep its promise to those people who are receiving
their check today and the promise to those who were born prior to 1950.
When the math has changed like it is, the system starts going in the
red pretty quickly. In 2017, there's going to be more money going out
than coming in for Social Security. By the way, we don't have a trust in
Social Security. It's called pay-as-you-go. See, some people think
there's a Social Security trust where we've taken your money, and we've
held it for you, and then when you retire, we give it back to you. No,
what happens is we take your money; we pay money out for the promises
for those people who have retired; and if we've got anything left over,
we spend it on things other than Social Security. That's just the way it
works. It's been working that way for a long period of time, and what's
left are a pile of IOUs, paper.
Now, as a pay-as-you-go system, when you've got a lot of people like
me retiring, getting bigger benefits, living longer, with fewer people
paying in, pretty soon the system goes into the red. And it does in
2017. And every year thereafter, the situation gets worse and worse and
worse. To give you an example, in 2027, the Government is going to have
to come up with $200 billion more than that which is coming in in
payroll taxes just to make the promises.
So you can see from that chart there, the situation in 2017 gets
bad, and it gets worse.
[[Page 530]]
Don't take my word for it. Take the word of the Social Security
Trustees. They issued a report recently. It said the situation is worse
than we thought. In 2017, the system starts to go into the red, worse
every year after. And the longer we wait, the harder it's going to be
for a--younger workers to make up the difference.
So this is a generational issue. It's an issue that affects not
those of you who have retired, but it affects your children and your
grandchildren. And the fundamental question is, do we have the will in
Washington, DC, to take on the tough problems?
I went in front of the Congress and I said, ``Look, now is the time
to act.'' And I fully understand, I'm telling you, the longer we wait,
the tougher it's going to be on younger workers. And so I said, ``All
ideas are on the table.'' I said, ``If you've got a good idea, bring it
forward.'' I don't think there's a Democrat idea. I don't think it's a
Republican idea. I think these are just ideas that need to be on the
table. I think I'm the first President ever to have stood up and said,
``Bring all your ideas forward.'' And that's an important message for
members of both political parties to hear, that if you've got a good
idea, we expect you to be at the table; we expect you to bring it
forward. We--I expect you to bring it forward, but more importantly, the
American people expect you to bring it forward. There's a lot of people
who know we've got a problem when it comes to this issue, and now is the
time for people to act.
And I think when they bring ideas forward, they've got to be with
one thing in mind, fixing this issue permanently. In 1983, Tip O'Neill,
Ronald Reagan, Bob Dole said, ``We've got a problem. Let's see if we
can't fix it.'' And they put together a 75-year fix, they said. First of
all, I appreciate the spirit of Republicans and Democrats coming
together. But it wasn't a 75-year fix. This was 1953 [1983] *. We're
only in 2005. It wasn't a 75-year fix. If it was a 75-year fix, I
wouldn't be sitting here talking about it. Now is the time, if we're
going to come to the table, to do so and fix it permanently.
* White House correction.
Mr. Chairman understands that, and he's told both Republicans and
Democrats, ``If you think you've got a good idea, bring them forward.''
And people need to understand that, that we want to listen to good
ideas. President Clinton had some ideas when he was the President.
Senator Daniel Patrick Moynihan had some good ideas. As a matter of
fact, in 2001, he was the Democrat Senator from New York. He'd retired.
I asked him to serve on a Commission to look at Social Security.
Republicans and Democrats came together and they came up with some very
interesting ideas to fix the problem permanently. They didn't sit around
the table and say, ``I'm not going to listen to your idea because you
happen to be a Democrat,'' and ``I'm not going to listen to your idea
because you happen to be a Republican.'' They said, ``We have a duty and
an obligation to come together and make recommendations to the President
and the Congress, not based upon parties but based upon what will
work.''
And one of the ideas they brought forward, both Republicans and
Democrats brought forward, is in order to make the system work for
younger workers, that they ought to--we ought to allow younger workers
to set aside some of their own money in a personal savings account as
part of the Social Security; in other words, a voluntary program that
says you should be allowed to take some of your own money--after all, it
is your payroll tax--and put it aside in an account of bonds and stocks.
That's what you ought to be allowed to do.
Now, this doesn't fix the system permanently, but it makes the
system a better deal for younger workers. And I'll tell you why. First,
a conservative mix of bonds and stocks earns a better rate of return on
your money than the money that's being held in the Social Security--by
the Government. And that's important for people to understand.
And as that money earns, it is a compounding rate of interest; it
grows. For example, you take a worker making $35,000 over his or her
lifetime, and say, for example, a third of the payroll taxes, or 4
percent, were allowed to go into a personal savings account, that the
nest egg that person would own over time in a conservative mix of bonds
and stocks would grow to $250,000, see. That
[[Page 531]]
would be a nice part of a retirement package. There will be a Social
Security system that the Government is going to pay you benefits. I
can't tell you how much until we get people together to the table, but
it will be augmented. Your Social Security plan, your benefits will be
augmented by the money coming out of your own account. In other words,
money grows if you hold it over time. It's not growing right now at a
significant enough rate. It will grow if you're able to save it.
Secondly, I like the idea of people owning something. I want more
people owning something, not fewer people. There's this kind of notion
that this investor class in America only applies to a certain group of
people. That's not what I think. I think the more investors we have, the
more owners we have in America, the better off America is. And I want to
see ownership spread throughout all our society.
I like the idea of someone working their lifetime building a nest
egg they call their own and passing it on to whomever they want. That
ought to be--that idea ought to be available to people from all walks of
life. I like the idea of having a plan to help somebody whose spouse may
have died prior to retirement. Think about the Social Security system
today. If you're a--been working 30 years, started at age 21, and you're
51 years old and you pass away and you still--and you've got a wife or a
husband, the money in the system--the wife or husband doesn't get any of
the money until he or she retires. And then, if he or she happens to be
working, he or she only gets--only gets--the higher of that which the
Social Security will pay for him or her or the spouse but not both. So
you've got somebody who's worked their life, contributed to the Social
Security system, died early, didn't get one dime of retirement, and the
money just goes away.
Doesn't it make sense to allow somebody to set aside some of their
own money, if they so choose, in an account they call their own, and if
they predecease or die early, there's an asset base to be able to pass
on to a loved one, to help that loved one transition.
And finally, I don't know if you know this or not, but we have, at
the Federal level, what's called a Thrift Savings Plan. In other words,
this idea has already been used by Federal employees. Members of
Congress, Members of the Senate are allowed to set aside some of their
own money in a conservative mix of bonds and stocks so they get a better
rate of return. Now, in other words, this is--we're not inventing
something new. For example, Federal employees can't take their money and
put it in the lottery, or you can't take it to the racetrack. In other
words, there's a prescribed way--a mix of bonds and stocks that is--that
will allow you to get a better rate of return than your money in the
system, without taking extraordinary risks.
In other words, there's go-bys; there's guidelines. And it's already
happening. Doesn't it make sense for Members of Congress to give younger
workers the opportunity to do the same thing with their money that they
get to do in their retirement system? Frankly, if it's good enough for
Federal workers and elected officials, putting aside some of your own
money in a personal retirement account, it ought to be good enough for
all workers in America.
So that's my thinking on the subject. I've got some other people up
here who've been thinking about it too, and I'm going to start with Jeff
Brown, Dr. Jeff Brown, Ph.D. Isn't that right?
Dr. Jeffrey R. Brown. That is correct, sir.
The President. So you are now a----
Dr. Brown. Professor. I'm a professor at the University of Illinois.
[Applause] All right. Wouldn't think I was in Hawkeye country here.
[Laughter]
The President. Big Ten country. [Laughter] Certain kind of loyalty
throughout the conference.
Dr. Brown. And I've been studying Social Security now for about 10
years.
The President. I like to remind people, by the way, he's one of my--
he's an adviser. So for the students here, take heart in this concept.
He gets a Ph.D. I get Cs. [Laughter] I'm the President, and he's the
adviser.
Dr. Brown. All those years of education.
The President. That's right. Keep rolling. You studied the issue.
Dr. Brown. Yes, so, you're absolutely right that Social Security
faces very severe financial problems, and they start very soon, just
about 12 years from now. Really they start earlier, 3 years from now
when the baby
[[Page 532]]
boomers start to retire and those surpluses that we're running start to
dwindle down. Then they turn to deficits a few years later.
[At this point, Dr. Brown, assistant professor, Department of Finance,
University of Illinois at Urbana-Champaign, Champaign, IL, made further
remarks.]
The President. Yes, it's estimated, for example--if you're a younger
person, listen carefully--that if nothing happens, if we wait and delay,
if it's kind of the typical political response, just wait to the--you
know, wait until 2017 to call people together, that in order to make
sure that the system works, that your payroll taxes are going from 12.4
to 18 percent. Try that on, if you're working. That's not--by the way,
that doesn't include Federal income taxes, State taxes, and local taxes.
And so now is the time--I think what Jeff is saying, now is the time
for us to deal with this problem.
Now, again, I want to repeat, there's a couple of things about
personal accounts that I think is important. One, it's just an optional
plan. Shouldn't we give people the option of making the decision
themselves? That seems like a reasonable approach for Government.
Doesn't it say--doesn't it make sense for Government, people of both
political parties to say, ``If you think you can do a better job than we
can with your money, here's an opportunity to do so.'' It's voluntary. I
happen to be a person who actually trusts people. It's your money. I
trust you with your own money. To me that's an attitude that Congress
ought to take: We trust you with your own money.
Is that it, Professor? You did a fine job, as usual.
Q. Joe Studer and Jinny Adams. Been married for how long? You got to
speak in the mike.
Joe Studer. Sixteen years.
Jinny Adams. Going on 16 years.
The President. Sixteen years--great. Got any kids?
Mr. Studer. Nine between us.
The President. Fantastic. Any of them here?
Mr. Studer. Yes, yes, Angela is right over there.
The President. Oh, there's Angela. Good.
Mr. Studer. My daughter-in-law is with her.
The President. I understand you're adoptive parents.
Mrs. Adams. Yes.
The President. Thanks for adopting. It is one of the greatest acts
of love that a person can do. I appreciate you doing that.
Mrs. Adams. Can I mention that it's her 23d birthday today?
The President. Whose birthday?
Mrs. Adams. Angela's.
The President. Angela, would you like a little notoriety here?
[Laughter] Mom just gave you some. Happy 23d birthday. And by the way,
at the age of 23, you better hope that we permanently fix the Social
Security system. [Laughter]
Anyway, thank you all for coming. Joe, you got some retirement
income?
Mr. Studer. We both have retirement income, much thanks to the
Federal Government. I was a Federal employee.
The President. Good, yes.
Mr. Studer. Started that career when I was 40 years old, did a
career change--kind of like you. [Laughter] And I was able to, first of
all, get an excellent retirement plan from my employer, which I'm now
taking advantage of. And secondly, in the early eighties, we had two
opportunities to put money aside. One was the IRA that I was able to
contribute a total of $6,000 to and watch it grow, and then lastly, the
Thrift Savings Plan you're talking about is the option that we all had
as Federal employees at that time--three choices. I contributed one
third of my contribution, 12 percent of my wages, to each choice:
conservative, semi-conservative, and the ever-risky stocks and bonds,
the stocks in the stock market.
The President. Right, and how did you do over time?
Mr. Studer. My Thrift Savings Plan is approaching $100,000.
The President. No, I'm not asking about that.
Mr. Studer. Oh.
The President. You're giving too much information here.
Mr. Studer. Oh, okay, okay. [Laughter]
[[Page 533]]
The President. That's like asking a farmer--or a rancher how many
cattle he's got. [Laughter] Was the rate of return decent on the money?
Mr. Studer. Excellent. And--but we've had our down years. It goes up
and down.
The President. Sure. But over time----
Mr. Studer. It's been far better than Social Security----
The President. Yes.
Mr. Studer. ----and far better than doing nothing.
The President. Yes. I talked to a person today who showed me her
thrift savings account return at the restaurant there, and they had
averaged about 6\1/2\ percent over time. There's a big difference
between 6\1/2\ percent growing over time and the 1.8 percent the
Government gets on your money over time. And that difference compounds a
lot if you're a younger person. You start saving now at a 6\1/2\ percent
rate, it grows, doesn't it?
Mr. Studer. Yes, it does.
The President. 100,000, that's--you brought it up, not me.
Mr. Studer. That's right. [Laughter] But I'm proud of it. It was one
of the better decisions I made in my life. This was the----
The President. And let me ask you, for some people out there saying,
``I don't think I've got the capacity to make an investment, to figure
out what to do,'' was it a difficult, complex assignment?
Mr. Studer. Initially, it was kind of scary.
The President. Yes.
Mr. Studer. Yes, but--and I was----
The President. Looks like you've adjusted quite well.
Mr. Studer. Yes, we have. Yes, we have. [Laughter] And then very
comfortable with the assignment. And people that didn't join at that
time did join 2 years later when they discovered how beneficial it was.
The President. Yes. And Jinny, you're a--been in the school system.
Thank you for teaching.
Mrs. Adams. Yes, I have. I've been a counselor in the Cedar Rapids
School District for 29 years, and--[applause]. Thank you. Thank you.
The President. Are you getting Social Security at all?
Mrs. Adams. Yes, I am.
The President. Yes. Any doubt you're going to get the check?
Mrs. Adams. None. I'm over 55. I'm in that 55-plus-something group,
and so I'm not worried.
The President. So am I. [Laughter]
Mrs. Adams. But I now have a retirement through the IPERS retirement
system. And we're doing fine.
The President. Yes, the key is, is that people who are getting a
Social Security check just got to understand, it's coming. It--you will
get your check. The question is whether or not your children will.
Mrs. Adams. Yes, and that's why we're here, to help the situation
for the young people. I think of the young teachers who are taking the
places of those of us that have graduated from work, and so basically,
we are here for them. We're here for our children, and we have 13
grandchildren.
The President. Thirteen grandchildren? Great.
Mrs. Adams. Yes, they are great.
The President. Yes, well, that's good. Grandchildren are great. You
can always just pass them back to the parents if things get a little
rough.
Mrs. Adams. That's right.
Mr. Studer. [Inaudible]
The President. Come by the house?
Mrs. Adams. Yes.
Mr. Studer. Come to the baptism Sunday.
The President. Oh, really, you've got a baptism Sunday.
Congratulations. I won't be making it, however. [Laughter]
Mr. Studer. Just thought I'd ask.
The President. I don't think you want people going through
magnetometers to the building. [Laughter] Anyway, I'm glad you all are
here. Thank you.
Joe and Jinny are here as--to say loud and clear to the people of
Iowa, ``You're going to get your check if you're 55 and older.'' I know
I've said that once, and I've said it--I'm going to keep saying it a
lot. And it's important for people to hear it, because I understand how
important the Social Security check is to a lot of people, a lot of
people. The system has worked. Franklin Roosevelt was wise about setting
up a safety net for retirement. The question is, do we have the will in
the United States Congress to make
[[Page 534]]
sure that safety net is available not for this generation, my
generation, but for the generations coming up?
And we've got some of the generations coming up sitting right here,
starting with Dennis Bogaards.
Dennis Bogaards. Mr. President.
The President. Dennis, welcome. What do you do for a living?
Mr. Bogaards. I'm a 33-year-old farmer from Pella.
The President. Farmer, that's good.
Mr. Bogaards. I've been farming since 1992 with my dad, and--
[applause]. Thank you.
The President. Seems like there's a lot of farmers around this
State.
Mr. Bogaards. Well, I would hope so.
The President. At least that's my experience.
[Mr. Bogaards made further remarks.]
The President. Yes, see, it's very interesting. You see a small-
business man who talks about the fact that he is contributing into the
system, wondering whether or not that which he's contributing into
exists--will exist. He's--I presume you've heard of the shortfall that's
coming your way.
Mr. Bogaards. Yes, and I want that money to be available to my son
and daughter sitting over here with my wife. And that's very important
in the farming operation, to be able to have that money if I pass away,
like you said, to have that money, that it doesn't go away, that it's
there for them if they want to continue that family farm on. That's very
important.
The President. Right. We've got to get rid of the death tax, by the
way, to make sure that the farm can go from one generation to the next.
Right, Mr. Chairman? Yes.
Good. You making a living, by the way? Making a living on the farm?
Mr. Bogaards. You know, we're working as hard as we can, and this
year doesn't look to be quite as good as last year was, but anything you
can do for $10 beans or $5 corn would be great.
The President. I'll tell you what we can do. I'll tell you what we
can do. We can sell those soybeans around the world, is what we can do.
We can make sure that others get these good Iowa soybeans.
I appreciate you coming. Isn't it interesting, here's a guy who
farms the land, sitting up here with the President talking about his
worries about a Social Security solvency. I mean, this issue is
beginning to permeate. People, whether they've been on a tractor or
anywhere else in society, are beginning to hear the message: We have a
problem. And part of the strategy, by the way, is to spend a lot of
time, and I'm--over the 60-day period when I got started, we're going to
spend the time saying to people, ``We have a problem,'' because guess
what happens after that, once people figure out the problem. They start
asking the questions to people like me and Grassley and Democrats in the
Senate and the House, ``What are you going to do about it?'' See, once
people understand there's a problem, the next question is, ``How come
you're not solving the problem?'' And so here we've got a soybean farmer
from Iowa sitting on the stage wondering whether or not there's the will
to solve the problem.
Mr. Bogaards. Exactly. That's a big concern.
The President. Well, I appreciate you being here to lend your voice
to this issue.
Mr. Bogaards. Thank you. And I just want to back up what Charles--
what Senator Grassley said about you taking the leadership to do this.
I--so many times we feel like the tough issues aren't addressed, and we
just thank you so much for your leadership in this issue and many
others.
The President. Well, thanks a lot. I appreciate you coming. Good
luck on the farm.
Mr. Bogaards. Thank you.
The President. Lisa Loesch.
Lisa Loesch. Hello.
The President. Yes, ma'am. Hi. What do you do for a living?
Mrs. Loesch. I'm an RN.
The President. Good. By the way, this community college system has
got a program to help--yes. Listen, there's fantastic programs in the
community college system around America to take willing workers, people
with good hearts, and train them to become RNs. Thanks for being an RN,
and you're working at the hospital?
[[Page 535]]
Mrs. Loesch. I'm working at St. Luke's Hospital, which was recently
voted one of the top 100 hospitals in the Nation.
The President. Really?
Mrs. Loesch. Yes.
The President. Probably because of the nurses.
Mrs. Loesch. Probably. Very likely.
The President. That's good. Thanks. It's interesting that you would
be sitting up here. Explain to me why--what's on your mind?
[Mrs. Loesch made further remarks.]
The President. Yes, it's interesting--I'm not going to tell you
Lisa's age, but she's, like, not quite baby boomer but a little older
than the man here. [Laughter] And people are beginning to understand
that the promises that have been made to my generation may not be able
to be kept. I think that's what you're saying. And your husband is an
investment guy?
Mrs. Loesch. He owns his own financial firm, yes.
The President. Right. So he's used to stocks and bonds and all that?
Mrs. Loesch. He understands it all, yes.
The President. Yes. And the reason I bring that up is that--I
mentioned this before, but there's this notion about only certain kind
of people maybe have got the capacity to invest, watch their own money
grow. I presume he works with people from all walks of life.
Mrs. Loesch. He does. And we have six children, and three of them
are already investing. As soon as they start a job, they start
investing.
The President. Really? That's smart, because it compounds. People
understand compounding rate of interest. It grows. I mentioned the
person making $35,000, which if you allow that person to put a third of
their payroll taxes--not all that much money to begin with, but because
money grows and compounds over time, he ends up or she ends up with a
$250,000 nest egg. In other words, that's what the power of compounding
rate of interest does. And it's something that we ought to afford
younger workers. It makes a lot of sense to encourage people to save
their own money.
You know what else I like? I presume your husband's business clients
get the quarterly statements.
Mrs. Loesch. Yes.
The President. Doesn't that make sense, that in a retirement system
that somebody opens up their quarterly statement to see how their own
money is growing? It's your money to begin with. It might make people
pay more attention to the decisions made in Washington, DC, about what
we do with your money. But I like the idea of encouraging more people to
become investors. And it's not all that difficult. Again, I repeat,
these systems aren't going to allow you to go in the lottery. You can't
take flyers. There's a prescribed group of bonds and stocks you can
invest in, and you can tailor-make it to your own circumstances.
But I want to thank you for the philosophy you just outlined that
says, ``Why doesn't Government trust you with your own money? It's yours
to begin with.''
Mrs. Loesch. Thank you.
The President. Appreciate you coming, Lisa. You only got six kids?
Mrs. Loesch. Only.
The President. Wow. Any teenagers?
Mrs. Loesch. Five of them are teenagers; four of them are driving.
The President. Yes. So how come your hair isn't white like mine?
[Laughter] Never mind.
Mrs. Loesch. Because it's dyed.
The President. Yes. [Laughter]
And we're going to end up here with Chuck Knudsen. Welcome.
Chris Knudsen. My name is Chris Knudsen.
The President. Yes--I was thinking about your brother, Chuck.
[Laughter]
Mr. Knudsen. That's my dad, Chuck, actually.
The President. Chuck.
Mr. Knudsen. And he's over here with----
The President. Where is Chuck? Where are you? Oh, you had a terrible
seat.
Mr. Knudsen. He's over there somewhere.
The President. I'm actually here with Chuck's son, Chris.
[[Page 536]]
Mr. Knudsen. It's a pleasure to be here today.
The President. You're a student here?
Mr. Knudsen. I am a student here. I'm 20 years old. I'm a sophomore
here at Kirkwood Community College----
The President. Great. Thank you.
Mr. Knudsen. ----one of the finest community colleges in the Nation.
The President. There's a man looking for an A, right there. Good.
Twenty years old?
Mr. Knudsen. Twenty years old.
The President. Yes, and so here you are talking to the President
about Social Security.
Mr. Knudsen. I am.
The President. Why?
Mr. Knudsen. Why? Because my time outside of school is pretty much
split between church and Scouts. I'm an elder in the First Presbyterian
Church of Marion.
The President. Fabulous.
Mr. Knudsen. And the rest of my time is generally spent towards the
Boy Scouts of America. I'm an Eagle Scout.
The President. Are you? Congratulations.
Mr. Knudsen. Thank you.
The President. Setting a good example. What's that got to do with
Social Security?
Mr. Knudsen. Well, the last six summers I've worked at a Scout camp.
I get a small check; it's not very large, but I do see the Social
Security and the taxes taken off the top of those checks. And when I get
those checks back, as I make more money each year, I continue to see
more and more taken. And I tend to wonder where exactly it's going.
The President. Yes. Interesting question, isn't it? When you start
seeing money taken out of your check and you start to hear we got a
problem, and you start to wondering where the money is going. I'll tell
you where it's going. See that red right there? That's where it's going,
unless we do something about it right now.
Mr. Knudsen. Exactly.
The President. It's interesting, you know, when I was 20 years old,
I wasn't worried about Social Security. I think of anybody else born
around 1946, '47, '48--I don't remember being 20 years old wondering
whether or not the Social Security system was solvent, because we
thought it was, didn't we?
Mr. Knudsen. Exactly.
The President. You didn't know. You weren't there. [Laughter]
Mr. Knudsen. Well, I see what the future of Social Security is, and
I start to wonder if, when I become 62, if the money is going to be
there for me. The way the system is set up now, it's not going to be.
The President. Well, I appreciate that. You know, there's a survey
of people Chris' age--not Chuck's age, Chris' age--that said they are
more likely to see a UFO than get a Social Security check. [Laughter]
Mr. Knudsen. The way the system is set up, I tend to believe that.
The President. Yes. You know what's interesting about this younger
generation of folks is that the investment culture has changed. If you
think about it--401(k), IRAs, those didn't exist when we were growing
up. People weren't used to have incentives to invest their own money.
But it's changed. All through society, people are learning to invest
their money. The system is designed for plans where people can watch and
manage their own money. That's what's changed in our society, hasn't it?
Mr. Knudsen. I'd like to have the option to spend my money the way I
would like to invest it.
The President. Yes.
Mr. Knudsen. I've been able to, through my dad, he showed me--kept
me up to date on the family finances and things like that. And I feel
that if I had some options with my own money, I could spend it wiser for
myself than the Government has with Social Security.
The President. Yes, invest it wiser. So you won't be spending it
until you retire.
Mr. Knudsen. Exactly.
The President. In other words, it's very important for people to
understand, the nest egg you own is for--is to be a part of a retirement
system. In other words, the Government is going to be able to afford
something, and on top of that will be your own nest egg. It's a part of
the retirement system. And that asset base that you build will not only
help you in retirement, but if you so choose, you can leave it to
whomever you want, which is, I think, a vital part of having a vibrant
[[Page 537]]
society, that assets are passed from one generation to the next.
Good job.
Mr. Knudsen. Thank you.
The President. You want to have the final word, or you want me to?
Mr. Knudsen. I can go ahead and talk a little more if you would
like. [Laughter] I think the other key thing that most people are
forgetting is the fact that if I felt that I wasn't wise enough to
invest my money and I wasn't confident in myself, I have the option not
to accept the personal account and leave the system as it is and take
the system. So I have the option of doing it if I care to or not.
The President. Precisely right. I appreciate you understanding that.
I got the final word. [Laughter]
Mr. Knudsen. Okay.
The President. First of all, I want to thank our panelists for
joining us. I hope you found this to be an educational discussion about
a problem that we need to solve now. If you're over 55 years old, you'll
get your check. I don't care what the propaganda says. I don't care what
the pamphleteers say. I don't care what the ads say. You're going to get
your check. Now, if you're a younger person here at this fine community
college, you need to be asking the people in the United--you don't have
to worry about your Senator and Congressman, but you need to be a part
of people saying, ``We have a problem. You all got elected for a reason.
Now, what are you going to do about it to make sure the Social Security
system is permanently solved.''
Thanks for coming today. I appreciate your time. God bless.
Note: The President spoke at 12:23 p.m. at Kirkwood Community College.
In his remarks, he referred to Mick Starcevich, president, and Steve
Ovel, executive director of governmental relations, Kirkwood Community
College; Iowa State Senator Chuck Larson; Mayor Paul D. Pate of Cedar
Rapids, IA; and former professional baseball player Rocky Colavito.