[Weekly Compilation of Presidential Documents Volume 41, Number 14 (Monday, April 11, 2005)]
[Pages 560-566]
[Online from the Government Publishing Office, www.gpo.gov]

<R04>
Remarks on Strengthening Social Security in Parkersburg

April 5, 2005

    Thank you all. Please be seated. Thank you all. It is nice to be 
back in Parkersburg. Thanks for having me. It just seems like yesterday 
that I was here. [Laughter] It's great to be back in West Virginia as 
well. I'm struck by the--every time I come here I'm struck by the beauty 
of this State. And of course, you put on a beautiful day, for which I'm 
grateful.
    One of these days I'm going to bring my mountain bike. I love to 
exercise. I'm doing it to make sure that I do the job you expect me to 
do, and I'm doing it to set an example as well. I think people need to 
get out all around our country, walk every day or ride your mountain 
bike every day, get a little exercise every day, stay fit and healthy.
    Speaking about staying fit and healthy, that's what we need to make 
sure we do for our Social Security system too. I'm here to remind the 
good folks of West Virginia that we have a problem, and we have a duty 
to renew one of great--America's great institutions, and that's the 
Social Security system.
    I've now traveled to 20 States to talk about Social Security, 20 
States in 2 months, all

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aimed at making sure that the American people understand the situation 
with Social Security. And more and more Americans understand there is a 
problem, and I hear from more and more Americans that they expect those 
of us who are honored to serve in Washington to fix the problem.
    I have just come from the Bureau of Public Debt. I want to thank Van 
Zeck, Keith Rake, and Susan Chapman. Susan was the tour guide there at 
the Bureau of Public Debt. I went there because I'm trying to make a 
point about the Social Security trust. You see, a lot of people in 
America think there's a trust, in this sense, that we take your money 
through payroll taxes, and then we hold it for you, and then when you 
retire, we give it back to you. But that's not the way it works.
    There is no trust fund, just IOUs that I saw firsthand, that future 
generations will pay. They will pay for them in either higher taxes or 
reduced benefits or cuts to other critical Government programs.
    The office here in Parkersburg stores those IOUs. They're stacked in 
a filing cabinet. Imagine, the retirement security for future 
generations is sitting in a filing cabinet. It's time to strengthen and 
modernize Social Security for future generations with growing assets 
that you can control, that you call your own, assets that the Government 
cannot take away.
    I'm sorry that Laura is not traveling with me today. She's doing 
great. She and I will be taking off tomorrow morning to pay our 
country's respects to a great world leader in His Holiness. He shows 
that one man can make an enormous difference. And I look forward to 
honoring the memory of Pope John Paul II. So she's packing her bags. 
[Laughter]
    I want to thank the President of West Virginia University at 
Parkersburg. Madam President, I'm sorry I missed your inauguration. 
[Laughter] But thank you for serving. Dr. Marie Gnage is with us. I 
appreciate you letting us use this facility.
    Before coming out here, I had the honor of saying hello to a lot of 
folks who are involved with the community college system of West 
Virginia. I'm a strong believer in the community college system around 
our country, because I understand that the community college system is 
a--provides a great opportunity for many of our young and for many of 
our workers to gain the skills necessary to fill the jobs of the 21st 
century. The community college system provides a wonderful opportunity 
for States and communities to say to potential employers, we have got a 
fantastic asset in our midst to make sure that the workers can fill the 
jobs that you desire. And so for those of you involved in the community 
college system around the State of West Virginia, thanks for being here 
and thanks for what you're doing.
    I want to thank the secretary of State, Betty Ireland, for joining 
us. I'm proud you're here, Madam Secretary. Thanks for taking time. I 
want to thank Mayor Jimmy Colombo for joining us. Mr. Mayor--there he 
is. Thank you, Jimmy. I appreciate the way the mayor approaches his 
office. He doesn't care whether I'm a Republican or Democrat or 
independent; he just--he's a hospitable fellow. [Laughter] Every time I 
come to this part of the world, he says, ``Welcome.'' And I appreciate 
you, Mr. Mayor, and I appreciate you being here today. Thanks for 
coming.
    I want to thank all the State and local officials for joining us 
today. When I landed, I met June Roberts. She's a volunteer with the 
Retired and Senior Volunteer Program. We call it RSVP. They exist all 
around the country. In 2001, she founded Senior Stitchers. Listen to 
what these good folks do: They prepare sewing and craft projects, 
including wheelchair pads, blankets for local child service agencies, 
senior centers, and hospitals. These are good folks. They're taking time 
out of their lives. June and her buddies--I think she said there's eight 
or nine of them--take time out of their day to volunteer to help make 
somebody's life better.
    Let met tell you one way you can help the good folks in Parkersburg. 
A way to serve our country is to find somebody who hurts, take time out 
of your life, surround them with love, feed the hungry, find shelter for 
the homeless, listen to that universal call to love a neighbor just like 
you'd like to be loved yourself, and you'll be serving America.
    So where is June? I think June is here somewhere. June, thanks for 
coming. Thank you for setting such a good example.

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    On my trips around this country, I have made it as clear as I 
possibly can that the Government will keep its promise to those who have 
retired or near retirement, and that's very important for a lot of 
people to hear. I understand how important the Social Security check is 
to a lot of our citizens. A lot of people depend on that Social Security 
check. And therefore, I understand that when it comes time to talking 
about making sure the system is strong for a younger generation, 
sometimes the message can get confused. In other words, when a senior 
hears the President talking about Social Security, he or she may be 
concerned about whether or not that check that they're getting today is 
going to continue to come tomorrow. I understand that.
    And I can understand why people are sometimes confused because 
there's a lot of propaganda in the mix. In other words, people are 
saying things that simply aren't true. They're saying, ``Well, if you 
try to reform the system for a younger generation of Americans, then you 
may not get your check.''
    I'm here to tell you, those who've retired are going to get their 
check. Those who are near retirement are going to get their check. The 
system will not change in any way for people who have been born prior to 
1950. And I'm going to keep saying it over and over again.
    The problem is that the Government is making promises to younger 
Americans that it cannot keep, and that's important for folks to hear. 
You see, Social Security was designed as a pay-as-you-go system, not as 
a trust system. Pay-as-you-go, the--you know, the workers will pay into 
Social Security through the payroll taxes, and then it immediately gets 
paid out. It gets paid out to pay for benefits, and if there's any money 
left over, it pays for a lot of other Government programs. What goes in, 
goes out. Right now, more money is coming into the Social Security 
system than going out. And that's how we help fund the programs. A lot 
of people in West Virginia don't understand that, that the system is a 
pay-as-you-go system. And this works fine, so long as you got enough 
workers paying for the benefits of those who've retired.
    In 1950, there were 16 workers paying into the system for every 
beneficiary. In other words, the Government promised you your retirement 
check, and there's 16 people paying for that check. That kind of keeps 
the load relatively light. Today, there are three workers paying for 
each beneficiary. In other words, one of the things that's happened for 
the Social Security system that people must understand is that there are 
fewer people paying into the system per beneficiary. In a relatively 
short order, there will be two workers paying into the system for every 
beneficiary.
    Now, that's just only half of the equation. And here's the other 
half: Americans are living longer and enjoying longer retirements. Life 
expectancy has increased. They're collecting benefits for longer periods 
of time. In other words, if you've retired and you're living longer, the 
system must pay your benefits longer--fewer people paying into the 
system, and people are living longer, collecting their benefits longer. 
So you're beginning to get a sense to where the bind is coming.
    And not only that, there's a lot of us who are getting ready to 
retire. We are called the baby boomers. There's a big bulge of baby 
boomers, when you look at the charts. I know; I'm one. As a matter of 
fact, my retirement age--or when I become eligible for retirement 
benefits is 2008. That's when I turn 62. It's quite a convenient date in 
my case. [Laughter] And to compound the issue even further, a lot of 
people running for office in the past have said, ``Vote for me; I will 
increase your Social Security benefits.'' And so my generation has been 
promised greater benefits than the previous generation. So you've got a 
lot of people living longer, getting greater benefits, with fewer people 
paying into the system.
    And when I start drawing out and when my generation starts drawing 
out of the system instead of paying in the system, the stresses on the 
system will really begin to grow. And that's important for you to 
understand. In other words, when you start thinking about whether or not 
the system is solvent for younger Americans, think about this: In each 
passing year, we'll have fewer workers paying even higher benefits to a 
larger

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number of retirees, and therein lies the problem.
    Social Security is going to be fine for those of you who have 
received your check. It's going to be fine for people who have retired 
or who will retire and your birth date is prior to 1950. You're--nothing 
is going to change. The system is in good shape for you. It is not going 
to be fine for younger workers coming up. In 2017, the Social Security 
system will go into the red. That means more money will be going out of 
the system than coming in. In other words, baby boomers will be 
retiring, start to living longer, greater benefits promised to us, and 
the pay-as-you-go system goes negative. More money will be going out 
than coming in through payroll taxes. And every year after that, the 
shortfall gets worse. In other words, it's an accelerating problem.
    As a matter of fact, according to the Social Security trustees, 
waiting just one year adds $600 billion to the cost of fixing Social 
Security. The longer we wait, the more the problem becomes severe. In 
2027, there will be $200 billion going out more than coming in. Somebody 
is going to have to pay for that. Somewhere there's got to be a give in 
the system. We have a real problem.
    The good news is more and more Americans are beginning to understand 
we have a real problem. And more and more Americans who are receiving a 
Social Security check are being reassured that nothing will change. And 
when that happens, there's a fundamental question that's being asked. A 
lot of grandparents are now starting to ask, ``What are you going to do 
for my grandchildren?'' I believe this is a generational issue. This is 
an issue where, once folks understand nothing is going to change and 
they understand we have a problem, the logical question to people like 
me and others in Washington, DC, is, ``How are you going to take care of 
my grandchildren?'' It's a natural inclination for grandparents to start 
worrying about their grandchildren. And it's a legitimate concern.
    I met with Betty Earl coming in. She's lived in Parkersburg for 
about 40 years--or the area for 40 years. She has two daughters in their 
thirties. She doesn't think the Social Security system will be there 
when they retire. She represents the attitude of a lot of folks, now 
that this issue is becoming clarified. She said, ``It doesn't take an 
Einstein to see where Social Security is headed.'' And she doesn't want 
Congress to wait until Social Security goes bust before starting to fix 
it.
    I appreciate that understanding. I appreciate Betty Earl. I doubt 
she's got a Ph.D. in economics. Maybe she does. But it doesn't retire--
doesn't require much education and brilliance to figure out we've got a 
serious problem, when you think about the math: More people living 
longer, with greater benefits, and fewer people paying into the system.
    And so Betty wants to know, like a lot of other people want to know, 
``What are you going to do about it?'' And I'm here to tell you, I'm 
willing to listen to any idea. This isn't a Republican problem or a 
Democrat problem; this is a problem for the United States of America. 
And I think now is the time for people in Congress to stop playing 
politics with the issue and come to the table with how they think it 
ought to be fixed.
    I recently traveled the country on some stops with former Democrat 
Congressman Tim Penny, a Democrat from Minnesota, who has some good 
ideas. As a matter of fact, I mentioned his name, I think, in my State 
of the Union Address. I mentioned former President Clinton's name in the 
State of the Union Address, because when he was President, he put 
forward some interesting ideas as what we ought to consider as to how to 
fix this issue permanently. He spoke of increasing the retirement age. 
Then he talked about tying Social Security benefits to prices rather 
than wages.
    In 2001, I put together a Commission in anticipation of Social 
Security becoming a greater issue. As a matter of fact, I campaigned on 
the issue in 2000. And I asked the Democratic--former Democrat Senator 
Daniel Patrick Moynihan of New York to chair the Commission. He's a 
thoughtful fellow. He--I put Republicans and Democrats on the 
Commission. I said, ``Why don't you all come together and make some 
recommendations,'' which they did, all aimed at strengthening Social 
Security for a younger generation and permanently fixing the problem.

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    And there's some basic principles that ought to guide our efforts. 
First, we should not raise the payroll tax rates, in order to make sure 
that--the reason I say that is that it would cost our economy jobs. One 
of the things, when we put policy in place, we ought to make sure that 
policy encourages economic vitality and growth and that we're 
stimulating the small-business sector of our economy. We must make sure 
that Social Security continues to provide dignity and peace of mind for 
low-income Americans. In other words, the system ought to be structured 
so low-income Americans are--have got dignity in retirement.
    Americans must reject temporary measures. In other words, you'll 
hear people in Washington say, ``Well, we got a 75-year fix, for 
example.'' You know, in 1983, the issue came to focus, and President 
Reagan and Speaker Foley as well as other Republicans and Democrats set 
aside their partisan differences and said, ``Look, we have an obligation 
to act on behalf of the country.'' And they came together and put what 
they thought was a 75-year fix to the problem. The problem is that the 
75-year fix wasn't a 75-year fix, because here we are, 22 years later, 
talking about it again. See, that's a misnomer.
    What was--I like the spirit of them coming together, trying to work 
it out. But they didn't permanently solve the problem. See, the job of 
the President is to fix problems, not pass them on to future Presidents 
and future Congresses.
    And so I'm going to continue to call upon Congress and say, ``One, 
I'm going to work with you. I'm interested in your ideas, and when we 
get together, let's permanently fix the problem. Let's do our duty. 
Let's do that which the American people expect of us.''
    The Senate, I thought, passed an interesting resolution the other 
day. On a 100-to-nothing vote, they called for a permanent fix. That was 
constructive. [Laughter] That was step one. [Laughter] Step two is, now 
let's just follow through and deliver one.
    As we make Social Security permanently solvent for a younger 
generation--senior citizens are receiving their check today, going to 
get their check, nothing will change. People, baby boomers, like me, 
are--born prior to 1950, the system is strong enough to take care of us. 
We must worry about a younger generation of Americans. And as we work to 
make the system permanently reformed, we need to make it a better deal 
for our younger workers too. And here's an idea that I think people 
ought to consider.
    I think people ought to have a--given an opportunity to have more 
control over their own retirement funds, the chance to tap into the 
power of compound interest, the ability, if they so choose, to watch 
their money grow in an account, a savings account of bonds and stocks. 
That's why I proposed that Congress consider allowing younger workers to 
set aside part of their Social Security contributions in a voluntary 
personal retirement account.
    A voluntary account--you notice I keep saying ``voluntary.'' I mean, 
doesn't it make sense for Government to say to a younger worker, ``If 
you so choose, you should be allowed to take this option''? Nobody is 
saying, ``You must take the option,'' or ``you can't take the option.'' 
What we're saying is, ``If you decide to, you should be allowed the 
opportunity to invest about a third of your payroll taxes in a 
conservative mix of bonds and stocks.'' The money would grow over time. 
It could provide a better rate of return than anything the current 
Social Security system can provide. And that's important. It's that 
difference between what the current system provides and what you can 
earn in a conservative mix that makes a big difference about what you 
have when it comes time for you to retire.
    A younger worker earning an average of $35,000 a year over a career 
could retire with a nest egg, under this plan, of nearly a quarter 
million dollars, a nice addition to that worker's Social Security check. 
You see, the savings account is in addition to, a part of the retirement 
plan, not the retirement plan; it's a part of a Social Security 
retirement plan.
    Since 1983, the last time Congress tried to reform stock 
investments--tried to reform, the stock investments on average have 
returned more than a thousand percent. That's how your money grows. 
Notice I said ``conservative mix.'' You can't take your money and put it 
in the lottery or take it to the track. I mean, there's a conservative 
mix. When I say ``conservative mix,'' I mean

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conservative mix. But a conservative mix will get you a better return on 
your money than the current system. And it's that differential, that 
rate differential which grows over time to enable a younger worker who 
only makes 35,000 over his or her lifetime to end up with a nest egg of 
$250,000 as part of a retirement package. And that's your money.
    Again, I repeat, younger workers can choose to join this if they 
want to. You know, a lot of folks say, ``Well, you know, the investment 
may be too difficult.'' But just think about what's changing in America 
today. Mayor, when you and I were coming up, they didn't talk much about 
401(k)s. The 401(k) now is available for a lot of workers. A lot of 
workers are watching their own money grow through a 401(k) account. They 
understand what the investment world is like. I don't remember, when I 
was growing up, worrying about the solvency of the Social Security 
system. I hear from a lot of younger folks; a lot of your grandchildren 
are saying, ``What are you going to do about it, Mr. President,'' and, 
``By the way, just give me a chance to make decisions for myself. Give 
me a chance to build up hard assets, instead of paper assets in a file 
cabinet.''
    We've got to make sure that there are strict guidelines. We've got 
to make sure the earnings aren't eaten up by hidden Wall Street fees. 
We'll make sure the good options to protect investment from market 
swings on the eve of retirement. There are ways to make sure the system 
works. You're not going to be able to empty all your account out when 
you retire; it's going to be a part of a retirement plan.
    But this concept isn't new, and this is what people must understand. 
You see, we've had what's called the Thrift Savings Plan for Federal 
employees and Members of Congress for a long period of time. And you 
know what the Thrift Savings Plan says? It says Members of Congress, 
United States Senators, people who work in Washington or elsewhere for 
the Federal Government can set aside some of their own money as part of 
their retirement plan in a conservative mix of bonds and stocks.
    I found that to be really interesting. You see, it's pretty 
interesting that Congress a while ago thought this was a good idea, to 
allow their money to grow at a decent rate of return in a conservative 
mix of bonds and stocks. And it seems to make sense to me that if it's 
all right for the United States Congress and the United States Senate to 
give people the option of watching their own money grow, then it ought 
to be good enough for workers all across the United States.
    I just talked to Drew Kefeli. He's a single dad. He became 
interested in Social Security reform because of his 16-month-old 
daughter. Interestingly enough, he named his daughter Jenna. [Laughter] 
The guy has got great taste. [Laughter] He likes the idea of personal 
accounts because he wants to build, to leave something to Jenna. Under 
the present system, the Government will keep the money he's put into 
Social Security if he dies before he can collect.
    Think about the system today. I met with widows whose husband 
predeceased them, and he might not have been 62 years old when he died, 
and there she is, with maybe family members and nothing but a small 
amount of money for burial. Yet, all the money that the person put in 
the system is just kind of--it's not around. Or you take a spouse who's 
been working all his or her life, and both spouses worked, which is very 
common in America today, both contributing to the Social Security 
system. One dies early, and then the remaining spouse gets to keep their 
survivor benefits or his or her own retirement benefits but not both. In 
other words, one of the two have been contributing to the system, and 
they get nothing for the contribution.
    See, if you're allowed to set aside some of your money, like Drew 
wants to do, into your own asset base, if a tragedy strikes early it 
will give you an asset to leave to somebody you love. It's your money. 
You get to decide what to do with it. As Drew said, he said the personal 
account would give him greater peace of mind about Jenna's future. I 
like that idea. I like the idea of making sure inheritance is not just a 
privilege limited to the wealthy. I like the idea of encouraging an 
ownership society where a mother or father, as a result of hard work, 
can set aside money, if he or she chooses, in a personal account that he 
or she can leave to whomever she wants or whomever he wants. I think 
it's

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healthy for a society to have assets passed on from one generation to 
the next.
    The American Dream is built on the independence and dignity that 
come from ownership. Ownership shouldn't be restricted in America. We 
want more people owning their own home, and that's happening all across 
our country. Do you realize more minority families own a home today than 
ever before in our Nation's history? And that's important. I want more 
people owning their own business. I love the idea of people saying to 
me, ``Mr. President, I'm proud of my business. I started my own 
business.'' And I think it makes sense to have people being able to own 
and manage their own money, a part of their own money in the Social 
Security system. After all, the payroll taxes are contributed. That's 
not Government money. That's your money. And the Government ought to 
give you--be wise enough to let you manage some of it.
    I'm going to continue to discuss this issue around the country. It's 
an important issue. Once the grandmoms and granddads understand that 
they're going the get their check, a lot of them are going to start 
saying to the elected officials, ``What are you going to do about my 
grandchildren?''
    Franklin Roosevelt did a good thing when he created the Social 
Security system. It's worked. But the math has changed. A lot of people 
are getting ready to retire. They're going to live longer, receive 
greater benefits, and fewer people paying in the system. The longer we 
wait, the more costly it's going to be to a future generation of 
Americans. And now is the time to act, because your retirement security 
is a lot more important than partisan politics.
    Thanks for letting me come by. God bless. Thank you all.

Note: The President spoke at 11:14 a.m. at West Virginia University at 
Parkersburg. In his remarks, he referred to Van Zeck, Commissioner, D. 
Keith Rake, Deputy Assistant Commissioner for Public Debt, and Susan 
Chapman, Director of the Division of Federal Investments, Bureau of the 
Public Debt; West Virginia Secretary of State Betty Ireland; and Mayor 
Jimmy Colombo of Parkersburg, WV.