President George W. Bush tours the Treasury Agency's Bureau of Public Debt, with Director Susan Chapman, in Parkersburg, W.Va., Tuesday, April 5, 2005. White House photo by Paul Morse

THE PRESIDENT: See, what's interesting is a lot of people believe that the Social Security trust is -- the government takes a person's money, invests it, and then pays it back to them upon retirement. It doesn't work that way.

MS. CHAPMAN: That's right, that's exactly right.

THE PRESIDENT: This is what exists. And it's very important, then, to make sure that in the future that there's real assets for retirees.

But I want to thank you all for having me come. I want to thank all the workers here for representing the mighty United States. I'm proud to work with you. I thank you for what you do. And my message here in town is that we have an obligation to take the system that Franklin Roosevelt created and make it work for a younger generation of Americans. I'm looking forward to working with Congress to do that. That's what the American people expect. They expect us to modernize the system.

Anyway, thanks for having us.

MS. CHAPMAN: Well, thank you for coming. We're proud to have you visit us.

THE PRESIDENT: Thanks.

END 10:52 A.M. EDT

President Participates in Social Security Conversation in West Virginia
West Virginia University at Parkersburg
Parkersburg, West Virginia
April 5, 2005

11:14 A.M. EDT

President George W. Bush delivers remarks after touring the Bureau of Public Debt in Parkesburg, W.Va., Tuesday, April 5, 2005. White House photo by Paul Morse

THE PRESIDENT: Thank you all. Thanks for coming. (Applause.) Thank you all. Please be seated. (Applause.) Thank you all. It is nice, nice to be back in Parkersburg. Thanks for having me. (Applause.) 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. (Applause.) I love to exercise. I'm doing -- 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. (Applause.)

Speaking about staying fit and healthy, that's what we need to make sure we do for our Social Security system, too. (Applause.) 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 two months, all 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. (Applause.)

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 -- will pay for either in 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. (Applause.)

I'm sorry that Laura is not traveling with me today. (Applause.) She's doing great. She and I will be taking off tomorrow morning to pay -- 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. (Applause.) 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. (Applause.)

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. (Applause.)

I want to thank -- 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. (Applause.) I want to thank Mayor Jimmy Colombo for joining us. Mr. Mayor -- there he is. Thank you, Jimmy. (Applause.) 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. (Applause.)

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 R.S.V.P. 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. (Applause.) 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. (Applause.)

So where is June? (Applause.) I think June is here somewhere. June, thank you for coming. Thank you for setting such a good example. (Applause.)

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. (Applause.) 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, 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 to 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.

And that's just only half of the equation. And here's the other half: Americans are living longer, and enjoying longer retirement. 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 in 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 applause.) 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 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 -- (applause.) 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, D.C. 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 30s. 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 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. (Applause.) 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. (Applause.)

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.

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 -- (applause.) 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. (Applause.)

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. (Applause.)

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 work 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. (Applause.)

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 -- 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 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 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. (Applause.)

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 it's putting in Social Security if he dies before he can collect.

Think about the system today. I met with widows whose husband pre-deceased 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 ever [sic] he wants. I think it's healthy for a society to have assets passed on from one generation to the next. (Applause.)

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. (Applause.)

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 -- 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. (Applause.) God bless. Thank you all. (Applause.)

END 11:46 A.M. EDT

President Participates in Social Security Roundtable in Ohio
Lakeland Community College
Kirtland, Ohio
April 15, 2005

1:03 P.M. EDT

President George W. Bush talks about Social Security during a visit to Kirtland, Ohio, April 15, 2005.White House photo by Paul Morse

THE PRESIDENT: Thank you all for coming. Please be seated. I appreciate you coming, Steve, thanks. Glad to give you a ride home on Air Force One. (Laughter.) I really do like working with Steve. He's a thoughtful fellow who cares about issues, and this is -- what we're going to talk about is an important issue, which is Social Security.

Before I do, I want to thank the community college for hosting us. I'm a big believer in community colleges. Community colleges have got the capacity to change curriculum to meet the needs of a local work force, for example. And one of the real challenges of the 21st century is to make sure people have got the skills necessary to fill the jobs of the 21st century. And a fabulous place to find those skills is our community colleges.

So, thanks for what you do; thanks for being a host; thanks for letting us come and have a -- what I think you'll find to be a really interesting educational experience about a vital issue confronting the country.

I want to thank Lt. Governor Bruce Johnson for joining us. I appreciate State Treasurer Jennette Bradley for joining us today. I want to thank the Mayor, Ed Podojil, who is here. I appreciate you, Mr. Mayor. And I want to thank Dave Anderson. The last time I saw Dave, I said to Dave, I said, "Dave, fill the potholes." (Laughter.) That's just a piece of advice. (Laughter.) And so I saw him in line coming in. He said, "I'm just here to report for duty Mr. President. I did fill the potholes." (Laughter.) You'd get reelected if you want to run again. (Laughter.)

Anyway, I want to thank Anita Isom, who's with us. Anita is a young lady I met when we landed there at the airport in Cleveland. She is a volunteer and she has helped, and been awarded because of her reading-related activities that benefit others. The reason I like to mention a soul like Anita is that, no matter what your age, no matter where you live, you can help this country by becoming a volunteer, by helping somebody who hurts, by teaching somebody to read, or feed somebody who's hungry, or put your arm around somebody who needs love.

I like to remind people that the greatest strength of this country is the heart and souls of our fellow citizens, and the great compassion of our people. And so if you're interested in serving America, do so by becoming a volunteer in the community in which you live, and help change this country one heart and one soul at a time.

So, Anita, thanks for coming. Thanks for meeting me at the airport.

Let me talk about Social Security. I could be talking about a lot of things -- peace and freedom. The world is changing right now because societies are becoming more free. And as societies become more free, more democratic, the world will become more peaceful.

Today I went to a little restaurant, and the owner happens to be Lebanese American. And he said, thank you, Mr. President, for staying focused on a country like Lebanon and insisting that Lebanon be allowed to have free elections. And I assured him, like I'll assure you, that when America speaks, we mean what we say; when we say free elections to the Syrians, we mean free elections. Get out of Lebanon and let this good country have a free election, as scheduled. When I say, get out of Lebanon, I mean out of Lebanon with all your troops and all your security services and all the people trying to influence that government. It is in the world's interest that Lebanon be allowed to have free elections, because a free society will help spread the peace. (Applause.)

We're dealing with a lot of issues, and in Washington, D.C. I've submitted a tough budget and expect the Congress to be wise about how you spend your money. I also know that Congress needs to stop debating and get an energy bill to my desk -- now, during this session. (Applause.)

Congress also needs to take serious this issue about Social Security. People say, well, why did you bring it up? I said, I brought it up because I see a serious problem that needs to be fixed now before it's too late. I also brought it up because the job of a President is to confront problems, and not pass them on. The easy route in politics is to say, well, we got us a problem, we'll just let the next person handle it. The easy route for a member of the United States Senate is to say, there is a problem, but it perhaps can wait. We'll just let another United States Senate fix it, or send it to the House. That's not the way I think. I think I got elected because people expect me, when I see a problem, to bring it to the fore and to work with people to get it solved.

And here's the problem in Social Security. There's a lot of people like me getting ready to retire. (Laughter.) As a matter of fact, I'm retiring in four years -- at least I hit retirement age in four years -- which is convenient -- (laughter) -- in my case. I turn 62 in 2008. And I'm not the only one turning 62 in 2008. As a matter of fact, there's a lot of us. We're called the baby boomer generation. And not only is my generation fixing to retire, we are living longer than previous generations. And not only are we living longer than previous generations, we have been promised greater benefits than the previous generation. In other words, people running for office say, put me in office and I'll increase your Social Security benefits for you. And guess what -- they did.

And so a lot of us are getting ready to retire. And the problem comes because there's not a lot of people paying into the system. See, in 1950, there were 16 workers for every beneficiary. So you can imagine the load was somewhat lighter than today, when there's now 3.3 workers for every beneficiary. And soon there's going to be two workers for every beneficiary. You've got fewer workers paying into a system that is going to require more and more out-flow, because a lot of us are retiring, living longer, and been promised greater benefits. And the math just doesn't work.

It's a pay-as-you-go system, by the way. That means, when the money goes in, it comes right out. It's not a trust. I mean, some people in America I suspect think that the federal government all these years has been collecting your payroll taxes and we're holding it for you. And then when you get ready to retire, we give it back to you. That's not the way it works. The way it works is, is that we collect your payroll taxes and we pay the current retirees their benefits, and then with leftover money we spend it on other things. That's the way the system works. It's pay-as-you-go.

And in 2017, the pay-as-you-go system is going to go negative. In other words, more money goes out than comes in through payroll taxes. And every year thereafter, if we don't do something, it gets worse and worse and worse and worse. To give you an example of how bad it gets, in 2027, the federal government is going to have to come up with $200 billion more a year just to make good on the payments. And it gets worse the next year, and the next year, and the next year.

I also want to assure those of you who are on Social Security, you will get your check. See, nothing changes for somebody born prior to 1950. And that's very important for people in Ohio to hear, because I fully understand a lot of people count on that Social Security check. That Social Security check means a lot to a lot of people in America, and they're counting on it. That's why, for example, in some political campaigns people try to say to seniors, you know, if so-and-so gets into office, he's going to take your check away from you. That's the old scare tactics. Sometimes during this debate it seems like people are resorting to those scare tactics. They're telling seniors, really what they're talking about is taking your check away. Let me just tell you, point-blank: If you're receiving a Social Security check in Ohio, this government of ours will continue to honor you, honor that commitment.

This issue isn't about you. This issue is about your grandchildren. The issue confronting the Social Security system is an issue for young workers, young people coming up. One time I was having a discussion and the person said, I saw a survey -- I said, oh, yeah, what did it say? It said young workers like me are more likely to see -- think we're more likely to see a UFO than get a Social Security check. (Laughter.) That may be pretty close to accurate.

I'll tell you this: If this federal government doesn't act, your bill, your payroll taxed are going to have to go up a lot in order to pay the promises made to me. Or the government is going to have to slash the benefits. Or the government is going to have to make dramatic cuts in other programs. And so I see a problem. I think the math is clear. And so now is the time to get something done.

And so I stood up in front of the United States at my State of the Union address and said to the Congress, here's the problem. And I'm going to put some ideas on the table, ideas that I didn't necessarily think of; ideas that President Clinton had thought of, or Senator Moynihan, a great member of the United States Senate from New York, who, unfortunately, has passed away -- or former congressman Tim Penny -- good ideas about different ways to permanently fix the problem. And that's what Congress must do; it must permanently fix the problem.

In 1983, one of my predecessors, President Ronald Reagan, got together with Speaker O'Neill from Massachusetts, and they said, we got a problem, let's fix it. See, the math wasn't working then either. It was called a 75-year fix. They signed a bill -- I love the spirit, by the way, of Republicans and Democrats setting aside their political parties and focusing on getting something done for the American people. And the President did that, the Speaker did that for the 75-year fix. The only problem is, 22 years later we're still talking about it. And so now is the time to bring people together from both parties to have a permanent fix. And all ideas are on the table. And I'm looking forward to discussing any good idea with a Democrat or a Republican.

I imagine there's some people fearful in Washington, D.C. about maybe laying out an interesting idea and that one of the political parties will get all over them for laying it out. If I had anything to do with it, it would be political amnesty for people bringing good ideas forward. Now is not the time to play political "gotcha" with a member of any political party, for stepping up and bringing forth ideas to do what they think is right to help solve this problem permanently for generations of Americans to come.

Now, one of the ideas that I think is important for the Congress to consider is to allow a younger worker to be able to set aside some of her, or his own money in a personal savings account, as a part of a Social Security solution. See, I think government ought to say, we'll give you an opportunity, if you want to -- your choice. We're not saying, you must set aside money. We're saying you ought to have the opportunity to, it ought to be voluntary to set aside some money so that you can earn a better rate of return on your money. People ought to be given a chance to invest in a conservative mix of bonds and stocks.

In other words, it's part of a permanent solution in order to make sure the younger worker gets a better deal. The younger worker ought to be allowed to set aside some of the payroll taxes. And this is a concept, by the way, that has been tried before. I haven't invented the idea. As a matter of fact, the federal -- Congress before has said, we ought to allow people working in the United States Congress, and congressman and United States senators to do just what I described. The Federal Employee Thrift Savings plan allows members of Congress and the United States Senate to take some of their money and set it aside in a personal savings account. Why? Because they know they'll get a better rate of return on their money than if the federal government held it. And it seems fair to me that if setting aside money in a personal savings account is good enough for a member of the United States Congress, it's good enough for workers all across America. (Applause.)

Okay, so I went to school with a guy who made all A's. It's probably recognized by now I didn't do all that well in college at times. (Laughter.) And I brought him with me. He's an expert. He's my National Economic Advisor. But I want you to notice, you students out there, who's the President and who's the advisor. (Laughter and applause.)

I've got a fabulous staff. People need to judge the President based upon who he listens to. And as you know in foreign policy matters, I listen to some really capable people -- Condi -- Condoleezza Rice, the Secretary of State; Secretary Rumsfeld. And on the domestic side, I've got great people working with me. One of them is Al Hubbard, a business guy out of Indiana, started businesses, ran businesses, entrepreneur. He's agreed the come and serve as the National Economic Advisor to the President. He briefs me on a regular basis. And one of the big issues that I've got him working on is Social Security.

I want to thank for coming, Al. And if you got something to say, now is your opportunity. (Laughter.) Please don't try to defend yourself because the President always has the last word. (Laughter.)

MR. HUBBARD: Yes, sir, I've learned that very quickly. Thanks for giving me this opportunity.

* * * * *

THE PRESIDENT: You're the guy who authored the bill?

MR. SINES: I had the first bill in 1994.

THE PRESIDENT: Really.

MR. SINES: Introduced it.

THE PRESIDENT: If you got any spare time, you might want to come up to Washington and work the issue with me. (Laughter.)

MR. SINES: Well, Mr. President -- I really like Lake County. (Laughter.)

* * * * *

MR. SINES: I have three daughters, and kind of in the same mode as you, we're in a special club when you raise daughters.

THE PRESIDENT: Yes. Your hair is about as white as mine. (Laughter.)

MR. SINES: Yes, it is and it's getting whiter. And it's getting whiter.

* * * * *

THE PRESIDENT: It must make you feel good to be able to sit here in front of all these TV cameras and say, I saw a problem, I worked with people from both sides of the aisle to fix it, and it's working. That's the spirit the people in the United States Congress must hear. It's not time to play politics, it's time to fix the problem. It's time to set aside all this business about, my party may look good, or so-and-so may look good, and so-and-so may look bad -- we've really got an opportunity, a need to fix it.

And secondly, I am -- I just want you to know that like you went through, there were some moments as to whether or not you thought the thing would pass. Yes, well, you know something -- I'm going to be relentless on the subject because I believe the American people, once they understand there's a problem, once they understand the math, and once seniors understand that nothing is going to change, the next question to members who have been elected is why aren't you doing something about it? See, if there's a problem, you saw the problem, and people begin to recognize the nature of the problem and the size of the problem and the cost of inactivity, and senior citizens understand that the propaganda they may have heard about somebody taking away their check simply isn't true, the next logical extension of the debate and the discussion is, say, if we got a problem, and I'm going to get my check, what are you going to do about my grandkids? It's a generational issue.

And we're just starting. So don't worry about me, Ray. I'm feeling pretty good about -- feeling pretty good about where we stand. The American people are wise. They just need to know the facts.

Part of the facts is understanding we have a problem, and part of the facts is what you're going to do about it. And today, this is an interesting opportunity for people to see a system that is -- I bet most people in America don't understand what happens here in Ohio when it comes to the retirement system. And so, thank you, for being an innovator, and thank you for being a leader.

Now, who's next, Hubs.

MR. HUBBARD: Mr. Scott Johnson, who is very involved with the Ohio Public Employees Retirement System. And he can describe this new innovation that Ray provided through the legislature.

THE PRESIDENT: Good, tell us what you do.

MR. JOHNSON: Thank you, Mr. President. I'm Scott Johnson, I'm Governor Taft's director of administrative services. That's a central services organization similar to your General Services Administration, only added human resources and personnel.

* * * * *

THE PRESIDENT: By the way, I went to West Virginia the other day and saw the asset base of the so-called Social Security trust: You know what, it was about four or five file cabinets full of paper. (Laughter.) It was the IOU left behind from one hand of government to the other hand of government.

MR. JOHNSON: We've been operating since 1935, but of course, society has changed a bit over that period of time.

* * * * *

THE PRESIDENT: Sorry to interrupt you. Presidents do that sometimes. (Laughter.) Portability -- so if somebody is listening and they're not exactly sure what that means and why that would be important to them --

MR. JOHNSON: University professors typically move around.

THE PRESIDENT: Right.

MR. JOHNSON: And in mid-career may move from one university to another. And so they've already gotten some sort of retirement system underway and would like to move that from where they are, to where they're going.

THE PRESIDENT: If they change jobs they could take their retirement account with them.

MR. JOHNSON: Exactly.

THE PRESIDENT: Yes. That's important for people to know. That's a concept that's an important part of any good plan, would be to recognize the needs of the person that is receiving a part of their retirement. They can move.

Go ahead.

* * * * *

THE PRESIDENT: I think that's a reasonable concept, don't you, folks? Government says to the people you have a choice to make, you know? (Applause.)

MR. JOHNSON: So what you, therefore, have with that combined program is a system where the portion that the employer -- the state, or the county, or the city -- contributes is administered by the professionals at the system. And the amount that the employee himself or herself contributes could be managed by that employee.

* * * * *

THE PRESIDENT: Yes, I guess, you can't take the money and put it in the lottery?

MR. JOHNSON: Well, even though we run a lottery --

THE PRESIDENT: Or on the trotting jockey -- trotters or whatever it is next door here.

MR. JOHNSON: No, sir, you can't do that.

THE PRESIDENT: The point is that there is a relatively conservative, or conservative mix of what's available for people to invest in. Is that an accurate assessment of the choices people have to make?

MR. JOHNSON: The choices are all responsible ones, Mr. President.

THE PRESIDENT: I don't know about the lottery being irresponsible -- (Laughter.)

MR. JOHNSON: But there is a great deal of variety and individual ability to be aggressive or not so aggressive as one chooses.

THE PRESIDENT: That's right. See, it's an interesting concept that the people of Ohio have put in place. And the government basically said, hey, why don't we trust people. After all it's their own money. Why don't we give them a chance to -- (applause.) But you just can't go -- there is a certain set of parameters, I presume, Scott, that -- just like there is for the federal employees, by the way. In other words, here's some options for you.

Some people think about whether or not people ought to be allowed to invest. They call it risky. I don't think it's risky to let people earn a better rate of return on their money, but obviously there's some parameters, there's some go-bys. And as you said I think there's eight different options -- nine different options.

MR. JOHNSON: Nine, yes.

THE PRESIDENT: In other words, the government says -- the government does play a role and says here's nine different opportunities for you to have a mix of stocks and bonds, or it can go totally bonds, totally stocks, or is it generally a mixture? How does it --

MR. JOHNSON: Mr. President, there are layers of choices you can make. You could if you wish choose one of three pre-mixed options.

THE PRESIDENT: Got it.

MR. JOHNSON: One would be conservative, one less conservative, and one, frankly, aggressive. Or you could if you wish develop your own asset mixture. You could have some bonds. You could have some equities. You could have TIPS. Conceivably, you could invest it all in bonds.

THE PRESIDENT: Yes.

MR. JOHNSON: You could do that if you wish to do so.

THE PRESIDENT: Okay, you got any average rate of return on these programs? Or is that impossible to do?

MR. JOHNSON: It's not impossible to do, but it's beyond my level of expertise. (Laughter.)

THE PRESIDENT: Okay. Well, I was talking with Senator McCain who told me that he thought his rate of return I think was over 7 percent, in his employee retirement Thrift Savings Plan, over time. In other words, a conservative mix of stocks and bonds that the government -- federal government allows federal employees to make, a rate of return over 7 percent. You see, if you're keeping you money in the Social Security system, it's about 1.8 percent. And the difference for a younger worker between 7 percent and 1.8 percent over time is a lot of money because interest compounds. It grows. Money grows over time.

And I think that's one of the reasons why the employees said if it's good enough for professors, why don't you let me have a taste of this, too? Why don't you give me a chance to watch my money grow and let me control it, and let me own it.

So, I appreciate you bringing that forward, Scott, thank you.

MR. JOHNSON: Yes, sir.

THE PRESIDENT: Very good job. (Applause.)

Betty Young, welcome. What do you do, Betty?

MS. YOUNG: Thank you, Mr. President, and it's an honor and a pleasure to be here. I'm the executive director of Human Resource Services for the University of Cincinnati.

* * * * *

THE PRESIDENT: First, you notice that Betty talked about 401(k)s and IRAs. I don't remember 401(k)s when I was growing up. In other words, there is a new culture in America when it comes to people managing their own assets -- 401(k)s encourage management of your own assets -- IRAs. In other words, more and more people in America are now becoming used to controlling their -- managing their own money.

I presume you find a certain reticence initially, when -- that says I'm not so sure I can do this.

MS. YOUNG: But you don't have to be a Wall Street wiz.

THE PRESIDENT: Right.

MS. YOUNG: For example, the university requires that the different providers that offer these programs, that they provide educational materials.

* * * * *

THE PRESIDENT: That's good. You know interesting thing that Betty talked about was encouraging people to open up a quarterly statement, or if you so choose, you can look at your wealth on a daily basis. I think that's an interesting concept. It seems like to me we'd like all of America doing that, watching their assets grow. Not just Wall Street wizzes, but everybody. I mean, if more people owned something -- (applause.) I like the idea of having a program in Ohio where it encourages ownership. Not just one type of person, but all people have got access to ownership.

It seems like to me a more hopeful America is going to be one in which people say, I'm watching my assets grow and I'm more -- let me just say, politicians will be -- their actions will be a lot more scrutinized when somebody is watching whether or not the decisions made in Washington is affecting their work, on a daily or quarterly basis. In other words, the more people paying attention to their assets, the more people will be paying attention to what happens in Washington, D.C., or in Columbus, Ohio.

So thanks for bringing that to my mind. Let me ask you this: Obviously, there's a certain role for the state, and that is the state has chosen the providers -- is that right -- screened and chosen the providers?

MS. YOUNG: Yes. The Ohio Department of Insurance screens and chooses the providers that participate in the Ohio Alternative Retirement Program.

THE PRESIDENT: So the charge that somehow a fly-by-night is going to get a hold of somebody's retirement account and fritter it away is frivolous.

MS. YOUNG: Correct, because if there's ever a problem, for example, with one of the providers, then as the person that manages the program at the University of Cincinnati, then I can contact the Department of Insurance, or go directly to that company about any issues that we may have.

THE PRESIDENT: One of the other things that Betty talked about was mixing risk. And people need to understand that you can constantly change the risk of your asset base -- that, for example, if you're 20 years old, you can take a little more risk. And when it comes time for fixing to retire, you switch from, perhaps, stocks -- mix up stocks and bonds to a greater mix of bonds to stocks, so that you're able to decide for yourself what kind of asset base you have, relative to where you are in the retirement -- how close you are to retirement age. And I presume people are doing that, constantly switching in and out all the time to manage their assets.

* * * * *

MS. YOUNG: I have funds in a portion that is guaranteed 6 percent -- that won't change during the life of the account.

THE PRESIDENT: About 6 percent. It's a lot better than 1.8 percent in the Social Security system. And the difference between the 6 percent and the 1.8 percent over Betty's lifetime is a significant amount of money. And that's important for people to understand. What we're trying to do is to learn lessons from a state like Ohio, apply it at the federal level, so workers get a better deal. And part of a better deal is a better rate of return. And part of a better deal, by the way, is saying, I own it.

You listen to Betty's language -- she's talking about her assets. She's not relying upon the government, she says, these are my assets and I own these assets. And that's important. The more people own an asset, and the more people are able to say, I'm going to pass it on to my son or daughter, whoever I choose, the better off America is. You see, being able to spread wealth. (Applause.)

Thank you, Betty. Good job.

Let me say one thing about the Social Security system before we get to Rick. Do you realize the system today is structured so that if you die early and you leave behind a spouse -- say, you started working and contributing to the system at age 21, and you died at 51, 30 years of work, and you leave behind a spouse, and the spouse works, like many families in America, there's two spouses working -- that the -- and the spouse is the same age as the husband or wife, there are no death benefits if you're younger than 62 years old. And secondly, when the surviving spouse retires, he or she will get to choose between the survivor benefits or the contributions that he or she has made -- is owed by the government, whichever is greater, but not both.

Now, think about that. That's a system in which the person who's worked for 30 years, put in the money and it's just gone. I don't think that makes sense for a good retirement system. The system here in Ohio essentially says that, if the principle were applied to the federal government, you have an asset. It grows. You watch it, you manage it, and if you pass away you can leave it to your spouse to help that person transition, then help that person live life. It's an asset. This asset doesn't exist in a file cabinet in West Virginia, it's yours. It's an asset that you call your own, that can help you.

Now, when people retire here, I presume you can't spend all your asset base at once.

MS. YOUNG: You could take a withdrawal on a lump-sum basis, but normally, again, your AARP provider is going to work with you to design how you should now start drawing down on your money to ensure a level of income throughout your remaining lifetime.

THE PRESIDENT: That's what the -- that's the vision at the federal level for a personal account, is that there will be a draw-down to help complement the check, however big it's going to be from the federal government. All I'm telling you is we made promises to younger workers we can't keep. In other words, we've said we can pay you; we can't. Do you realize that in order to make sure that the payments that we promised to retirees are kept, that a younger worker may have to pay upwards of an 18-percent payroll tax. Try that on if you're a small business owner. Try that on if you're struggling to get ahead. We need to fix it now, and one way to -- a part of making sure the retirement system works well is to listen to the example right here in the state of Ohio.

Rick, ready to roll?

MR. STENGER: I certainly am.

THE PRESIDENT: Okay. What do you do?

MR. STENGER: I'm currently one of the directors of the Lake Metropark System. We want to welcome you back to Lake County. The last time you were here --

THE PRESIDENT: Yes, I know -- thank you.

MR. STENGER: You and 20,000 friends came and had a good day. (Laughter.)

THE PRESIDENT: I hope LaTourette stayed behind to clean up. (Laughter.)

MR. STENGER: Steve got busy. He was there, but he was watching us. (Laughter.)

THE PRESIDENT: Okay. He was an executive. (Laughter.)

* * * * *

THE PRESIDENT: How did your money do in the Social Security system?

MR. STENGER: Yes, 1.8, I think, right?

THE PRESIDENT: Yes. You take a 6-percent differential, or 5.2 percent differential over a number of years, and you're going to see some serious money. And it ought to grow. The government ought to give opportunities to our fellow citizens to have their money grow in a conservative mix of stocks and bonds just like they did. It seems to make sense to me. (Applause.)

MR. STENGER: Mr. President, one of the things that I found very helpful and interesting is the system does a good job of educating, because you come in and you're not sure what to do, and many people are afraid of change -- they had a battery of questions to answer, I think 20-some questions, and it sort of guided you as to where you fit on the investment scale. If you answered the questions, it would give you a score, and the score would sort of catagorized you into you're okay to aggressively do it, conservatively do it, moderately do it. So people who are afraid of it don't know -- you answer this batter of questions and it gives you a pretty neat answer.

THE PRESIDENT: Yes. See, that's an interesting point. I think some people are fearful of the obligation, I guess is what it -- of investing their own money. They're not exactly sure what the words mean. It's kind of an interesting assumption here in America, the investor class is only a certain type of person. I don't buy into that. I think all people are capable of learning what investment means. People from all walks of life, all neighborhoods have got the capacity to manage their own money. And you say the system helps people learn the words and learn what all this means. I mean, it's kind of fancy -- rate of return, bonds and stocks.

MR. STENGER: And the nice thing about it, too, as Betty mentioned earlier, you can change. If you realize, well, I went real aggressive and your lifestyle changes for whatever reason and you want to change, you can get on-line. You can do it daily, if you so desire. You can take your quarterly statement, analyze it, make changes appropriately if you so desire. It's not like you're stuck with the choice you made.

THE PRESIDENT: How do you make sure like these firms don't gouge you when it comes to fee? They've got a captive audience, they've got you pretty well roped in once you make the decision. How does Ohio make sure that these fees aren't going up, that they're reasonable?

MR. STENGER: Scott would know more than I do, but if I read right, the fees are defined, depending on the plan you chose. I think the plan I chose they're about .24, if I'm not mistaken.

THE PRESIDENT: -- .24, sounds reasonable.

* * * * *

THE PRESIDENT: I appreciate that. Listen, thanks for sharing this with us.

I got on the airplane, I started paying attention to what I was going to hear today, and I was amazed at the willingness of the great state of Ohio to think differently on behalf of the people who live here. And it struck me about how relevant this conversation was going to be, for others to listen to what is possible for Social Security.

Now, look, we need to come together in Washington and we need to work on a permanent fix, all options are on the table. But part of that solution, in order to make it a better deal for younger workers, is for people of both parties to trust people with their own money, to devise a system that would work similar to the state of Ohio, that would say, we're going to let you earn a better rate of return for your money, that would enable a mom or a dad to pass on their assets to whomever they chose, that would encourage portability, but that makes sense. It makes sense. The more somebody owns something in America, the more they're going to have a vital stake in the future of this country.

The state of Ohio has incorporated a lot of really important principles in this bill, Ray, and I want to thank you for that. One of the key principles is government has got to trust people. The more government trust people, trust people with their own money, the more content, the more prosperous our society will be.

And so I want to thank you all for sharing with us. I hope you found it as educational as I have. I look forward -- (applause.) I look forward to continuing to take this message to the people of the United States of America. I have great faith in the wisdom of the people of this country, and I fully understand that when the people of this country understand the depth of the problem that a young generation of Americans is going to face, and when senior citizens understand that they're going to get their check, the question is going to start to be to members of Congress of both political parties, how come you're not fixing it. Because America is going to realize that every year we wait it's going to cost the young generation of Americans $600 billion to make this right.

And here's a fascinating idea, started right here in the great state of Ohio, sponsored by both Republicans and Democrats, that's working. And Congress needs to pay attention to things that work.

Thank you all for coming, and God bless. (Applause.)

END 1:55 P.M. EDT

Discusses Strengthening Social Security in South Carolina
South Carolina Statehouse
Columbia, South Carolina
April 18, 2005

12:17 P.M. EDT

THE PRESIDENT: Thank you all very much. Mr. Speaker, thank you for that kind and short introduction. (Laughter.) I appreciate Governor Sanford being here. I want to thank the Lt. Governor. I appreciate President Pro Tem McConnell, Majority Leader Leatherman, members of the South Carolina legislature. I appreciate my traveling party from Washington. Hope you appreciate them, too. That would be Senator Lindsey Graham, Senator DeMint, members of the United States House of Representatives from the great state of South Carolina. I appreciate the justices of the South Carolina Supreme Court being here. I thank those of you who have taken time to come and listen. I appreciate your warm welcome.

It is an honor to be speaking in this chamber. It is great to be back in the capital of South Carolina. The last time I came to this city I gave the commencement speech at USC. I was proud to have received an honorary degree. When I told Laura about it, she said, "I thought your first degree was honorary." (Laughter.) She sends her best and she sends her love. She's, by the way, a fabulous First Lady. She is -- (applause.)

I appreciate our escort committee. I told the members that this is the first time I have spoken to a legislative body, state legislative body since I was the governor of Texas. So thank you for having me. It's -- there's some differences, of course. There are a lot of cowboy hats back in Austin. (Laughter.) And I'll be honest with you, a lot of us didn't know anything about dancing the shag. (Laughter.) And I imagine we could have a pretty good debate about which of our states has the best barbecue. (Laughter.) Now is not the time. (Laughter.)

But one thing is, no matter whether you serve at the federal level or the state level, we share serious responsibilities. See, our constituents have put us into office to solve problems now. That's what they've done. They said, we've elected you to go to your statehouse, or in my case, Washington, D.C., to solve problems. The people expect us to confront problems without illusion. They expect us to lead with conviction and confidence, not by reading the latest poll or listening to the latest focus group. And above all, they expect us to deliver results.

And here in South Carolina, you've delivered results. You've faced serious challenges, especially in your economy. Listen, we've had a stock market decline, we've had a recession, we've had corporate scandals, we had a terrorist attack on September the 11th, 2001, we've had the demands of war. And all these have tested our nation's economy. And they hit particularly hard here in your state. South Carolina's economic growth slowed; small businesses moved out or shut down; workers lost their jobs; and state finances were headed toward a free fall.

The people of South Carolina look to you and they look to your Governor for leadership. And you delivered. You set clear priorities for your budget, and you made hard decisions when it came to spending. To rein in the rising costs of health care, you became one of the first states in the nation to offer health savings accounts to state employees. To reward hardworking families and job creators, you refused to raise taxes on the working people of South Carolina. You focused bipartisan actions; you've lifted your state out of fiscal crisis; you've erased a $155 million deficit, and you've done it two years ahead of schedule. Today South Carolina families are planning for the future with confidence.

I found this to be an interesting statistic about your state: More than 76 percent of the people in your state own their own home, one of the highest rates in the United States. Small businesses are investing and expanding, exports are on the rise. Thanks to your leadership, thanks to your hard work, thanks to your willingness to set aside partisan differences, jobs are coming back to the great state of South Carolina. (Applause.)

In Washington, we're moving forward with an ambitious agenda to keep this country safe, prosperous and free. The war on terror goes on. There are still ruthless enemies that would like to do harm to our people. We will continue to keep the pressure on these folks. We'll work with our friends and allies to be unrelenting in our search to bring them to justice. We will not rest until America is safe. (Applause.)

We'll continue to work to improve security here at home, but in the long-term, in the long run, the best way to protect America and to keep the peace is to change the conditions that give rise to hopelessness and extremism. And the best way to do that is to spread freedom around the world. (Applause.)

I don't believe freedom is America's gift to the world. I believe freedom is the Almighty God's gift to each man and woman in this world. (Applause.) My administration will continue to pursue pro-growth policies to ensure that America is the best place in the world to do business. To keep the economy growing and create jobs, we will keep the taxes low. (Applause.) We'll continue to confront the problems of junk lawsuits by pushing for meaningful asbestos and medical liability reform. We'll work with Congress to pass an energy bill that will make America less dependent on foreign sources of energy. (Applause.)

I sent to Congress a disciplined federal budget, and both the House and the Senate have passed budget resolutions. And now they need to work out their differences and send me a budget that meets America's priorities, that restrains federal spending, and that keeps us on track to cut the deficit in half by 2009. In Washington, and in Columbia, South Carolina, government needs to follow a straightforward principle, a taxpayer's dollar must be spent wisely, or not spent at all. (Applause.)

Strong leadership means rising to the challenges of the day. It also means looking down the road. There will always be problems that arise unexpectedly; yet problems -- some problems are completely predictable. And as leaders, you and I have a responsibility to confront those problems today, and not pass them on to future generations. (Applause.)

Over the past few weeks I've been traveling around the country talking about one of the most serious and most predictable challenges which face our nation, and that is the long-term fiscal health of Social Security. Social Security has been a great success. Franklin Roosevelt did a really smart thing in setting up the Social Security system. It has provided an important safety net for millions of Americans. Seniors in South Carolina and seniors across this country depend on their monthly checks as an important part of their lives, as an important source of income for their retirement.

And today I have a message for every senior in South Carolina, and every senior across this country: Do not pay attention to the propaganda and scare ads. If you're receiving a Social Security check this month, you will continue receiving a Social Security next month, and the month after that, and every month for the rest of your life. (Applause.)

There are other Americans who are now approaching retirement and have been paying into Social Security throughout their lives. These workers are counting on Social Security as part of their retirement plans, and there's money in the system for them. If you were born prior to 1950, America will honor the promise of Social Security for you. The problem is that the government is making promises for younger Americans that it cannot pay for. In other words, there's a hole in the safety net for younger Americans.

See, Social Security is a pay-as-you-go system -- you pay and we go ahead and spend here in Washington. (Laughter.) We spend on -- to provide benefits for current retirees, and with money left over, we have spent your payroll taxes on government programs. Some people think there's a Social Security trust, where the government is holding your money, in an account with your name on it. It just doesn't work that way. That's not the way the system works. There is no vault holding your cash, waiting for you to retire. Instead, because we spend Social Security taxes on current retirees and other government programs, all that is left over in the so-called security trust is a bunch of filing cabinets with IOUs in them.

As a matter of fact, I went to West Virginia the other day to look at the filing cabinets, to make sure the IOUs were there -- paper. And it's there. And it's, frankly, not a very encouraging sight. It's not encouraging especially when you consider that times are changing in America, that the math for Social Security is changing significantly. By the math I mean this: In 1950, there were about 16 workers paying taxes for every beneficiary -- 16 workers for beneficiary. And today, there's 3.3 workers for every beneficiary. By the time our children and grandchildren are ready to retire, there will only be 2 workers paying for every beneficiary in the system.

That's only part of the problem. To compound the problem, the first baby boomers will soon start retiring. I happen to be one of them. As a matter of fact, I'm eligible to start collecting benefits in 2008 -- which happens to be a convenient year for me. (Laughter.) The retirement of the baby boomer generation is going to have a huge impact on Social Security, because my generation is about 50-percent larger than my parents' generation. Today there are about 40 million retirees receiving benefits. By the time all the baby boomers have retired, there will be more than 72 million retirees receiving benefits. And thanks to advances in modern medicine, these retirees will live longer and collect benefits over longer retirements than the previous generation.

And to compound the problem even further, Congress has ensured that benefits to my generation will grow faster than our economy or the rate of inflation. In other words, people went around the country saying, vote for me, I'll make sure your benefits are higher. And so this sets up an enormous fiscal challenge facing Social Security. With each passing year, there will be fewer workers paying ever higher benefits to a larger number of retirees who are living longer.

And so here's the result: Three years from now, when the first baby boomers start collecting Social Security benefits, the system will start heading toward the red. Less than a decade later, in 2017, Social Security will go negative. And by that I mean it will be paying out more in benefits than it collects in payroll taxes. More money going out than coming in. And every year after that the shortfall will get worse.

In the year 2027, the government will somehow have to come up with an extra $200 billion to fund the system -- $200 billion more going out than coming in through payroll taxes. In 2034, the annual shortfall will be more than $300 billion a year. And by the year 2041, the entire system will be bankrupt. Now, think about that. If we don't do something to fix the system now, the students graduating this spring from the University of South Carolina, or, in deference to the Speaker, Clemson -- (laughter) -- will spend their entire careers paying Social Security taxes only to see the system go bankrupt a few years before they retire.

And I don't care if you're a Republican or Democrat, these are the facts. And the question is, do we have the will to do something about them. Now, in South Carolina, you know that once you're in the red, the options of getting out are never very appealing. If we allow Social Security to continue on its current path toward bankruptcy, we will leave our children and grandchildren with only a few drastic options to keep the system afloat. In other words, the longer you wait, the longer we don't do anything in Washington, the more drastic the solutions become.

For example, some estimate if we don't do anything, the payroll tax will get up to 18 percent. Is that a legacy we want to leave on younger generations of Americans? I don't think so. Or we're going to have to dramatically slash benefits, or cut other federal programs. The Social Security trust reported this: They said, every year we wait to fix the system will add an additional $600 billion to the cost of reform.

I understand why some in Washington don't want to take on this issue. I guess they calculate there's a political cost when dealing with a tough issue. I think there's a political cost for not dealing with the issue. And so I've been traveling this country of ours, making it absolutely clear what the problems are. See, my strategy is pretty simple: Take the message to the people and define the facts of the problem, and let the people draw their own conclusions. I've been to 22 states to explain the facts. I've been to those states to explain the urgent need for the United States Congress to work with the administration to get something done now. And more and more Americans are beginning to hear the message.

I'm just starting, I'm just warming up. As a matter of fact, I like getting out of Washington, D.C. I like coming to places like South Carolina, to put the facts on the table so the people can make their own mind about what's happening in Social Security.

I don't know if you've ever heard of Dutch Fork High School in Irmo. I met a very innovative teacher who assigned her students this assignment: Why don't you write letters to the editor about their impressions of Social Security? Here's what one of her students wrote: "By the time my generation gets to the age to draw Social Security, there will be no money left for us to draw on." This is a young high school student writing that. This isn't a professor in economics. This is a high school student. He said, "I don't know about other people, but I don't like the sound of that." People are beginning to get the message that there is a problem in Social Security.

Today I met an 80-year-old -- 80-year-old young woman from Silverstreet named Shirley. She said she's counting on Social Security. She gets a Social Security check every month, and she's confident she'll keep getting her checks. And there's no doubt in her mind she's going to get her checks, but there's a doubt in her mind as to whether or not her granddaughters are going to have comfort in their retirement, whether or not the safety net will be there for them. Here's what she said: She said, "I don't know what I would do without it. It's my granddaughters that I'm worried about, and I want to do whatever is possible to fix the system for them."

Folks, we're talking about a generational issue here in America. The grandfolks are going to get their checks, and the fundamental question is, do we have the will in Washington, D.C. to make sure the system works for the grandchildren of America. And that's what I'm here talking about.

I believe I have a duty to ask people to bring ideas forward. I brought a few myself, and I appreciate the response of Senator Lindsey Graham. He's brought some ideas forward, as has Senator Jim DeMint, as has your Governor. These men have been leaders in the debate. They've stepped up, and said, here are some ideas I'd like you to consider. But they're not the only ones who have set up good ideas. Former Congressman Tim Penny, a Democrat from Minnesota, has suggested tying Social Security benefits to prices rather than wages. My predecessor, Bill Clinton, had time -- had meetings all around the country on Social Security and he spoke of increasing the retirement age at one time.

I put together a commission of Republicans and Democrats, headed by the late Senator Daniel Patrick Moynihan of New York. And they did fine work. They recommended changing the way benefits are calculated. In other words, people are putting ideas on the table. An interesting idea was put forward by a Democrat Social Security expert named Robert Pozen, who has proposed a progressive way of structuring benefits that will be more generous to low-income workers. And that's an important idea.

In other words, all these ideas are on the table, but they have one thing in common -- they all require us to act now. Saving Social Security is not a Republican goal, it is not a Democrat goal; it is a vital goal to all our country. And people of both political parties need to get the job done now. (Applause.)

There are some basic principles that must guide our efforts to fix Social Security. We should not raise the payroll tax rate. That would hurt the economy and cost jobs. We must ensure that Social Security continues to provide dignity and peace of mind for Americans in retirement, and include extra protections for those with low incomes. We must reject temporary measures that put off Social Security problems for another day.

You need to be skeptical about any talk that talks about a 75-year fix. Back in 1983, Republicans and Democrats came together on what they thought was a 75-year fix. You know, I like the spirit of people of both parties coming together, and that was great. President Reagan and Speaker O'Neill said, we got a problem, let's come together to fix it. But they thought it was a 75-year fix; here we are, 22 years later. It's time to come up with a permanent solution. When people bring forth their ideas in Congress I will insist that we not have a band-aid approach to Social Security, that we have a permanent fix. And I'm optimistic about the chances for meaningful Social Security reform.

You know, a few weeks ago the United States Senate voted on a resolution guaranteeing that any Social Security fix must be permanent. The vote has the agreement of the two senators from South Carolina, the two senators from Texas, the two senators from Massachusetts. Anytime that happens you've got yourself a bipartisan agreement. (Laughter.) In fact, the vote in Congress was unanimous. Think about that. Every single United States senator is on the record supporting a permanent fix. Now those senators need to keep their word and make Social Security solvent once and for all. (Applause.)

Bringing permanent solvency to Social Security is an important start, but it's only part of our duty. Preserving Social Security should not mean preserving its problems. Today we have an opportunity to offer younger Americans a better deal than the current system. Today we can give every American the chance to tap into the power of compound interest, so they can get a higher rate of return on their money than the current system allows. You might notice I said, "their money." See, we're not spending the government's money. The payroll taxes are the people's money. It's coming from hardworking people.

We can build this opportunity into Social Security by giving younger workers the option to set aside some of their own money in a personal retirement account. The account would be a conservative mix of bonds and stocks that grows over time and can deliver a greater return than the Social Security system does. That would be a good deal for younger workers.

Since 1983, since that reform took place, stock investments have returned about 9 percent more than inflation per year, while the real return on Social Security is about 2 percent a year. That means that a dollar invested in the market in 1983 would be worth $11 today -- one dollar would grow to eleven -- while the same dollar would be worth about three if it had been put in Social Security. Every young American should have the opportunity to take advantage of the compounding rate of interest, to earn a better return on his or her own money.

Personal accounts would be completely voluntary; younger workers could choose to join or choose not to join. That seems to make sense for government to provide opportunities of choice for individual Americans. Workers opting to open an account would be able to put about a third of their payroll taxes in investments, instead of sending their money to Washington. For example, a younger worker earning an average of $35,000 a year over a career, because of the growth of money, would be able to retire with a nest egg of nearly a quarter-million dollars. That would be a nice addition to the other Social Security benefits.

These voluntary accounts would come with strict guidelines to make sure they're secure. You couldn't take -- put them in the lottery -- sorry to say, Speaker. (Laughter.) You could make sure the earnings aren't eaten up by hidden Wall Street fees. We'll make sure there are good options to protect investments from sudden market swings on the eve of retirement. You won't be able to withdraw all your money and take it to the racetrack. These accounts will offer straightforward investment choices that are easy to understand.

By the way, this concept isn't new. After all, in South Carolina, all state employees can choose to put part of their retirement savings in a traditional retirement plan, or in a conservative mix of bonds and stocks that can deliver a better rate of return. So when I talk about personal accounts available for younger workers, you know what I'm talking about right here in South Carolina. You've already made that decision for people who are serving the state.

I don't know if you know this or not, but federal employees have that same opportunity to watch their money grow, through a program called the Thrift Savings Plan. It's a plan that allows members of the United States Congress and the United States Senate to set aside some of their own money, if they so choose to do so, in a conservative mix of bonds and stocks. It seems fair to me that if setting up a personal savings account is good enough for a member of the United States Congress, it is good enough for workers all across America. (Applause.)

By giving younger workers an option to set up a personal savings account, we have an opportunity to modernize and strengthen a great American program. We have a chance to bring the Social Security system into the 21st century.

The reason I say that is, today young people are comfortable investing in bonds and stocks. Millions of workers now choose to plan for retirement with their own savings accounts, through programs like 401(k)s. I don't remember growing up hearing the word 401(k) -- I don't think you remember that. You're old enough to be around when they didn't have 401(k)s -- (laughter) -- or IRAs. We're not talking about a new culture, we're talking about a culture that's already taken hold in our society, where workers from all walks of life are watching their money grow and making decisions on behalf of their families with where they invest.

See, telling younger workers they have to save money in a 1930s retirement system is like telling them that they have to use a cell phone with a rotary dial. (Laughter.) If young people are confident they can improve their retirement by investing in a conservative mix of bonds and stocks, the government should not stand in their way.

Creating these accounts will also give our children and grandchildren a chance to replace a burden of uncertainty with a new opportunity. Instead of leaving their full retirement in the hands of future politicians, younger workers will be able to take part of their retirement into their own hands. Instead of sending all the payroll taxes to Washington, younger workers would be able to transfer part of their money directly into an account they own and that the government can never take away. Instead of forfeiting years of Social Security contributions if they die before retirement, younger workers would have peace of mind that their personal accounts could be passed on to a loved one.

Young people are learning more about the opportunity to own part of their retirement, and they're making their opinion pretty clear. I met Philip Meador today. He's a graduating senior from The Citadel. He told me he's going to be starting a new job in June. He knows he's going to start paying Social Security taxes. What he's not sure about is whether or not he'll ever be seeing a Social Security check. He certainly will be paying in; he's not so sure what's going to be coming out. He likes the idea of keeping part of his money in an account that he controls. He said, "I like the options. You choose what to put in, you choose the investments. It depends on what you're looking for. I think every individual should be able to choose a plan that fits them."

A lot of young people are beginning to say that. A lot of young people want this United States government to come together of young people want the government to give them the option of making choices with their own money.

And I know you all feel the same way in this chamber. That's why you passed resolutions calling the United States Congress to strengthen this important program, Social Security, and to give younger workers the option of voluntary personal retirement accounts. You recognize that a Social Security system that includes personal accounts will give all Americans -- not just a few, but all Americans -- a stake in the greatest creator of wealth the world has ever known. You recognize that personal accounts will bring the security and independence of ownership to millions of our citizens. And you recognize that personal accounts are critical to building an ownership society, a more optimistic and more hopeful America, in which more people own their own homes, more people own their own businesses, more people have a ownership in a retirement account, more people have an asset base they call their own that they can pass on to whomever they choose.

You see, owning assets ought not to be confined to a few people in our society. Owning an asset and being able to pass it on to your son or daughter ought not to be the purview of a few. In this great land, it ought to be spread -- ownership ought to be spread to everybody who is lucky enough to be an American. You recognize that when people own something, they have a vital stake in the future of our country, and that personal accounts will help give every citizen the chance, the opportunity to realize the dreams of this land.

The legislature of this great state of South Carolina has shown leadership on this important issue, and now the United States Congress needs to do the same. I understand that Social Security is a tough issue, but Congress has tackled tough issues before. We've seen in the past how leaders from both parties can rise above partisan politics to meet great responsibilities. And now is the time for them to do so again. (Applause.)

I am confident that members of Congress will come together to reach a permanent solution. And when they do, our children and grandchildren will one day look back and be grateful that our generation made the difficult choices and the necessary choices to renew the great promise of the Social Security system for the 21st century.

I want to thank you all for the invitation to come to your great state. I appreciate you giving me a chance to come and visit. It's an honor to talk about such an important topic with those who have been willing to serve. May God bless you in your efforts, and may God bless your families, and may God continue to bless the United States of America. (Applause.)

END 12:53 P.M. EDT

President Discusses Strengthening Social Security in Washington, D.C., April 21, 2005
Grand Hyatt Hotel
Washington, D.C.

9:24 A.M. EDT

THE PRESIDENT: Good morning. Thanks for the warm welcome. It's a little early for the Texas delegation. (Laughter.) I hope you're behaving yourselves. I know you are, since Billy Gammon isn't here. (Laughter.) I am pleased to be with the Independent Insurance Agents and Brokers of America. Thanks.

Laura told me on the way over to give you all her best. (Applause.) Generally what happens when I mention her name, most people say, well, I wish you'd have sent her. (Laughter.) She's doing great. She is a -- really a fine person; a great mother, great wife and a great First Lady for America. (Applause.) I'm a really lucky guy when she said, "yes," when I asked her to marry me.

I really appreciate your inviting me and I appreciate your work. I appreciate the way more than 300,000 of you around America help our fellow citizens, help our fellow citizens protect their property, help our fellow citizens provide for their families in case of calamity. Thanks for what you do. Thanks for being good stewards within the communities in which you live. I oftentimes tell people that the great strength of America is not our military -- although we'll keep it strong -- the great strength of America is not the size of our wallets. The great strength of America is the hearts and souls of our fellow citizens who work in the communities in which they live to feed the hungry, provide hope for the hopeless, provide shelter for the homeless, who love a neighbor just like they'd like to be loved themselves. I know that's what you all do on a daily basis in the community in which you live, and thank you for making America a better place. (Applause.)

I welcome to you the nation's capital, where sometimes politics gets in the way of doing the people's business. Take John Bolton -- he's a good man I nominated to represent our country at the United Nations. John's distinguished career and service to our nation demonstrates that he is the right man at the right time for this important assignment. I urge the Senate to put aside politics and confirm John Bolton to the United Nations. (Applause.)

Politics in Washington has also made it hard for some to put aside their differences to come to the table to strengthen Social Security. And that's what I'm here to talk about today. I want to spend some time with you talking about the fact that Social Security is headed for deep trouble, and that those of us who have been entrusted by the people to serve our country need to act now to make sure the Social Security system is there for our children and our grandchildren.

I want to thank Bob Rusbuldt for giving me a chance to come. I appreciate the invitation. I want to thank Tom Grau for his leadership role, as well. But most of all, thank you all for your interest.

The men and women of the "Big I" -- I think that's what you call yourselves -- (laughter) -- appreciate the principles that are important for a healthy and strong -- a healthy and strong America. And I appreciate the principles that you stand for, planning for the future and providing Americans with more choices, and working to get your friends and clients a better deal. I appreciate your commitment to standing with your clients until their claims are settled, to help people through the rough spots. You're ensuring the American Dream, and I appreciate that, as well.

By protecting homes and the savings of millions of families, you're helping this nation be more secure for a lot of folks. And that's what I'm interested in. I'm interested in a secure nation. I'm working to make sure this nation is a prosperous nation. And we're working hard to spread freedom and the peace we all want.

We have an ambitious agenda here in Washington. There's a lot to do. The war on terror goes on. We're still at war. There's still a ruthless enemy that would like to harm our country. They want to do us harm because of what we believe. We stand for freedom and liberty and human dignity and the rights of minorities, the right for people to worship freely. And we're not going to change. And they don't like it. But we're going to keep pressure on them. We'll work with friends and allies. We will be unrelenting in our efforts to bring the terrorists to justice, and we will not rest until America is safe. (Applause.)

In the long run, the best way to protect America is to change the conditions that give rise to hopelessness and extremism. That's the best way to protect generations of Americans to come. And the best way to change the conditions that give rise to hopelessness and extremism is to spread freedom.

I oftentimes tell audiences this -- and it's important for our fellow citizens and people around the world to hear this -- that freedom is not America's gift to the world, freedom is the Almighty God's gift to each man and woman in this world. (Applause.) I believe all people desire to be free. I believe moms in the Middle East want their children to grow up in a peaceful world so their children can have -- can realize their God-given potential. That's what I believe. And if you believe that, then you have an obligation to help spread that freedom. And freedom is on the march.

Incredibly exciting times to live in, when you think about what has taken place in a relatively quick period of time. The other day at the Lincoln Library opening in Springfield -- and if you're here from Springfield or Illinois, you've got yourself a heck of a library. (Applause.) You know what I'm talking about. Well, you don't know yet. Go see it, and then you'll know what I'm talking about. (Laughter.)

Just sometimes freedom moves slowly, like water cutting through a rock. I said, but sometimes, when people see the example of courage, freedom moves like a wildfire. Think about what's happened in a quick period of time. Afghanistan is free. Millions of people voted for a President, in spite of the fact that only a short time before that, they were under the brutal control of the Taliban. Or in Ukraine, when people went to the streets to demand free and fair elections. Or Kyrgyzstan, or in Lebanon. By the way, our message is very clear to Syria: Take out all your troops, take out all your intelligence services, and give the good people of Lebanon a chance to have free and fair elections. (Applause.)

The world saw the courage of those who have freedom etched in their souls in Iraq, courage of over 8 million citizens who are willing to defy terrorists and killers and car bombers, to say with a message that resonated around the world, we want to be free; we're willing to take risks to vote. A free Iraq is important to America's security, is important for generations of Americans to come to have an ally in the war on terror, like Iraq. Today, the people of Iraq decide the fate of their government, and not the other way around.

I look forward to working with the new government of Iraq. I look forward to working with those who have been chosen by the people to meet the challenges that this country faces. As Iraqis stand up for their freedom, this country will stand with the people of a free Iraq. As a new government assumes increasing responsibility for their country, security operations are entering into a new phase. Iraqi security forces are becoming more self-reliant, they're becoming better at what they do. They're taking on greater responsibilities, and that means America and its coalition partners are increasingly playing a more supportive role.

Today -- I don't know if you realize this or not -- over 150,000 Iraqi security forces have been trained or equipped; for the first time, the Iraqi army, police and security forces now outnumber U.S. forces in Iraq. We're working on establishing chains of command. We're working to make sure civilian government understands that there needs to be stability in the security forces. Like free people everywhere, Iraqis want to be defended and led by their own countrymen. That's easy to understand that thought and desire. And that's what we want. That's the strategy of the United States. And so we'll help them achieve this objective so they can secure their own nation. And when they're ready and equipped, our troops will come home with the honor they have earned. (Applause.)

We've got a lot of work to do to spread freedom abroad and we've got work to do to pursue pro-growth economic policies here at home. And our goal is pretty clear: We want America to be the best place in the world to do business. That's what we want. We want it to be the best place to risk capital. (Applause.) We've overcome a lot. We've overcome a recession and a terrorist attack and corporate scandals and war. But our economy is growing.

Let me tell you what I think we need to do to continue to grow our economy so people can realize their dreams. First, one of the heaviest burdens on business is the litigations costs in America. Recently I was -- (applause) -- I was proud to sign the Class Action Fairness Act, a good piece of legislation. It was a critical first step toward ending the lawsuit culture in our country. (Applause.) Class action reform succeeded because members of both parties saw a serious problem and joined together. That's a hopeful accomplishment in a town too often bitterly divided because of politics. And so my message to the Congress is, stay focused on what you can do. Now we can do more work on -- when it comes to legal reform.

We need to take action on asbestos legal reform. (Applause.) We need to make sure health care is available and affordable and one of the ways to make sure health care is available and affordable is to do something about the junk lawsuits that are running good doctors out of practice. (Applause.)

When I first came to Washington, I thought medical liability reform would -- could best be handled at the state level, until I realized what the cost of the defensive practice of medicine, the cost of settling lawsuits, the rising costs of premiums do to the federal budget. I mean, if you think about the cost in the federal budget and the cost of frivolous lawsuits in the federal budget, you begin to recognize why I think it's now a national problem.

Listen, we pay for Medicare, we pay for Medicaid, we pay for veterans' health benefits -- all those costs are affected by junk lawsuits. Medical liability reform is a national problem that requires a national solution, and now is the time for the United States Senate to listen to doctors and patients and concerned citizens -- not to the powerful trial lawyer lobby -- and get me a medical liability bill. (Applause.)

I also understand the importance of small business in creating jobs in our country. That's why I worked with Congress to help reinvigorate our economy, to help strengthen the entrepreneurial spirit by enacting the largest tax relief in a generation. (Applause.) It's important to have certainty in the tax code. Congress must understand that. And that's why I've been urging to make sure that Congress makes the tax relief we passed permanent. (Applause.)

Today, in large part to small businesses such as -- like yours, more than 3 million new jobs have been added to our economy since May of 2003. Today, more workers -- more Americans are working than ever before in our nation's history. I applaud the House of Representatives for taking the side of small businesses last week for voting to repeal the death tax. (Applause.) The death tax results in unfair double taxation. They tax your assets while you're alive, then they tax your assets when your dead. (Laughter.) I believe we ought to bury the death tax forever. (Applause.) By doing so, it will inject vital life into the small business community; it will increase fairness in the tax code; it will help promote economic security. The Senate -- the Senate needs to join the House in repealing the death tax forever. (Applause.)

I want to spend a little time with you on Social Security. You know, I know this is one of these issues that some wish I hadn't have brought up in Washington. It's one of these issues that I suspect some of them are really saying, gosh, I wish the President hadn't decided to take this issue on. I campaigned on the issue. I said to the American people, if you give me a chance to serve I will bring this issue to focus. That's what I said in campaign stop after campaign stop -- if you give me a chance, I'm going to talk about reforming the Social Security system. I'm confident members of Congress, when they really think about that, will say, gosh, it's good to have a President who does in office what he said he would do on the campaign trail. (Applause.)

I also believe it is my duty and my obligation as your President to confront problems now, and not pass them on to future Presidents and future generations. (Applause.) That's why I've traveled the last few weeks to over 22 -- to 22 states, talking about Social Security. I mean, I have a strategy. First I want to lay out to the American people we have a problem, because I believe once the American people hear the problem, they're going to then say to those of us who have been elected, what you going to do about it. So I'm going to spend a lot of time talking about this issue.

You see, I think it's -- and the reason why is because I know how important Social Security is to the country. Franklin Roosevelt did a good thing when he created the Social Security system in 1935. I'm sure you've got relatives who depend upon the Social Security check. I meet people all the time in our country who say, you got to understand, Mr. President, how important that check is to me. There's a lot of folks in this country who count upon that check when it arrives. In other words, the system has provided an important safety net for a lot of our fellow citizens.

And so the seniors who receive their checks must hear this loud and clear: Don't fall prey to the propaganda, those who are trying to scare you when there's talk about making sure the Social Security system is modern. If you're receiving a check from Social Security today, you'll receive a check next month and the next month after that and for every month you're alive. The federal government will keep its commitments to the seniors who are relying upon Social Security. (Applause.)

If you were born before 1950, you're in good shape with the system as it exists today. You're going to get your check. The problem is, our government has made promises to younger Americans that it cannot ke

Presidential Statements

George W. Bush - 2nd Quarter, 2005

George W. Bush -
2nd Quarter, 2005