Text 315, 255 rader
Skriven 2005-01-13 23:33:16 av Whitehouse Press (1:3634/12.0)
Ärende: Press Release (0501135) for Thu, 2005 Jan 13
====================================================
===========================================================================
Vice President Discusses Social Security Reform
===========================================================================

For Immediate Release
Office of the Vice President
January 13, 2005

Vice President Discusses Social Security Reform
Caldwell Hall
the Catholic University of America
Washington, D.C.



1:00 P.M. EST

THE VICE PRESIDENT: Thank you. (Applause.) Thank you, very much. It's good
to be with you this afternoon, and I want to especially thank Father
O'Connell for hosting this event and for his introduction. I appreciate the
chance to visit one of America's great universities, and a fine center of
scholarship here in our Nation's Capital.

Your kind invitation brings me to Catholic University at the start of an
academic term, and on the threshold of another new beginning here in the
Nation's Capital. One week from today, George W. Bush will be sworn in for
his second term as President of the United States.

The President and I enter this new term with great hopes for our nation's
future. Over the past four years, the United States has faced terrorist
attacks, military conflict abroad, and a series of tough challenges to our
economy, beginning with the recession of 2001. Americans have confronted
all of these challenges directly -? and because we have done so, all of us
in the year 2005 are living in a safer, more prosperous nation.

In President Bush's second term, the United States will continue fighting
the war against terror and bringing America's enemies to account by
countering the proliferation of deadly weapons and by aiding the rise of
democracy in the broader Middle East so that region will no longer be a
breeding ground for the ideologies of hatred and murder.

And here at home, to continue our economic progress, we have a
responsibility to reform systems that were created to meet the needs of an
earlier era. We are going to work with the new Congress to make health care
more accessible and affordable, to reform the legal system, and to raise
standards of achievement in public schools -- in particular, our high
schools. And we're going to make sure that the federal government keeps a
fundamental commitment to senior citizens long into the future: We will
save and strengthen Social Security for our children and our grandchildren.

The time has come for an honest, straightforward, and realistic discussion
about the future of the Social Security system. The system has been in
steady service, uninterrupted, for nearly 70 years. It has fulfilled the
promise announced by President Franklin Roosevelt -? providing vital income
to millions of seniors, and assuring generations of working people that
their retirement years would have some decent measure of security. For
today's generation of senior citizens, the system is strong and fiscally
sound. But younger workers are understandably concerned about whether
Social Security will be around for them when they need it. The problem is
simple to state: With an aging population, and a steadily falling ratio of
workers to retirees, the system is on a course to eventual bankruptcy.

Social Security was designed in 1935 for a different world than the one we
live in today. It is a "pay-as-you-go" system, in which the benefits that
go to current retirees come directly from the payroll taxes of current
workers. It is also worth noting that in 1935, the average life expectancy
in America was about 60 years -? meaning that many people would not live
long enough to become eligible for retirement benefits. So when the program
was still new, in the 1940s, there were 41 workers paying into the system
for every retiree drawing benefits. Over time, as more and more retirees
entered the system and stayed in the system for a longer period, the number
of workers per beneficiary continued to decline. By the 1950s, about 16
workers paid in for every person drawing out. Today, it's about three
workers for each beneficiary. And by the time our youngest workers -- those
just entering the work force today -- turn 65, the ratio will be down to
two workers for each beneficiary.

At present, Social Security operates with a substantial cash surplus. But
very soon, the greatest test of the Social Security system will be upon us.
The first members of the baby boom generation are reaching age of 60, and
they look forward to long, active, and healthy lives. In just a few years,
their generation will begin retiring and collecting benefits, and the
surpluses will begin to decline. By 2018, Social Security will begin paying
out more than it receives in payroll taxes. From then on, the shortfalls
will grow larger every year, until 2042, when the Social Security trustees
estimate the system will reach fiscal collapse. By that point, with a
projected shortfall in the trillions of dollars, the government would have
no option other than to suddenly and dramatically reduce benefit payments
by over 25 percent, or to impose a massive, economically ruinous tax
increase on all American workers.

Now, the year 2018 may seem like a long way off, and in politics there is
always a temptation to kick the can down the road -- hoping that long-term
problems might simply disappear, or leaving them for someone else to worry
about. That is not how President Bush views his job. As he's said many
times, he ran for the presidency to confront big challenges, not to pass
them along to future Presidents and future Congresses. That's the kind of
approach Americans expect from our leaders, especially when it comes to a
defining national purpose like Social Security. The President knows that
the longer we wait to address the coming crisis, the more excuses that are
made for inaction, the more difficult and expensive the job will be down
the line. So in this new term, under his leadership, we will save Social
Security, and put it on a path to permanent solvency and stability.

Real Social Security reform requires us to move beyond quick fixes and
short-term schemes, and that's exactly what we intend to do. To build a
strong, workable, bipartisan reform, President Bush has outlined several
principles that should guide the effort.

First, out of basic fairness, there must be no changes in Social Security
for those now receiving benefits, or for those who are close to retirement.
Today's seniors can be certain nobody is going to touch their Social
Security. Americans who are at or near the end of their working years have
already made their plans, and we must keep faith with them. No one is going
to take away benefits of today's retirees, and the program as they know it
will stay the same for them.

Second, we must not increase payroll taxes on American workers. Over the
program's lifetime, the government has increased Social Security payroll
taxes more than 20 times -- and failed to fix the system permanently. If we
turn to higher taxes to meet the projected shortfall, the payroll tax would
eventually have to be nearly 10 times higher than the original rate when
the program was set up. We need to remember that raising taxes will not fix
the current system as long as the costs continue to rise relative to the
size of income that could be taxed. Trying to fix the system by raising
taxes would only buy time, and then future generations would need to come
back and raise taxes again and again. Combined with a federal income tax
burden that is already too high, endless increases in the payroll tax would
take a heavy toll on American workers and their families. If we were to
increase taxes this year to fix Social Security, a family of four with an
income of $40,000 a year would see $1,400 disappear from their paychecks.

We also have to remember that every new dollar in federal taxation
increases the cost of hiring new workers and puts direct downward pressure
on the economy's ability to grow. And a slower rate of growth means fewer
new jobs in the economy, fewer new workers paying into the system, and an
even tougher challenge in the long run. We cannot tax our way out of this
problem.

Our third principle is to permit younger workers to voluntarily save some
of their payroll taxes in a personal account for their retirement. Each
personal account would be under the individual worker's ownership and
control. He or she would make regular investments in bonds or stocks
throughout their working life ?- and then either use those investments to
meet expenses in retirement, or leave them as an inheritance for their
children or grandchildren if they so wish.

Here is where Social Security's future should be seen as more than a
problem to be solved, it is also a tremendous opportunity for all of our
citizens. Personal accounts would not merely help the nation resolve the
long-term challenges to Social Security. They would continue a great
American tradition of upward mobility and individual independence. Many
low-income workers who have nothing to spare after taxes would have a
chance to begin saving for their later years. In this way, personal
accounts hold the promise of turning every American worker into an owner ?-
giving them a retirement fund they control themselves and can call their
own.

President Bush and I believe strongly in voluntary personal accounts as
part of our commitment to building an ownership society in the United
States. One of the great goals of our administration is to help more
Americans find the opportunity to own a home, a small business, a health
care plan, or a retirement plan. In all of these areas, ownership is a path
to greater opportunity, more freedom, and more control over your own life.
And this is a goal worthy of a great nation. Everyone deserves a chance to
live the American Dream, to build up savings and wealth, and to have a nest
egg for retirement that no one can ever take away.

Much of the discussion on Social Security in the months ahead will focus on
personal accounts, and some will argue against taking this next logical
step in retirement security. I've heard some of those arguments, and I'd
like to address them today.

The primary argument against personal accounts is that somehow they are too
risky. It's been suggested that many people would spend their retirement in
poverty, because the investments they choose will be along the lines of
lottery tickets, dice games, and the race tracks. The answer to this
concern, of course, is simply to set guidelines, basic standards of safety
and soundness when it comes to investment choices. For example, federal
employees save for their retirement nest eggs through an investment program
called the Thrift Savings Plan, which invests billions of dollars in worker
contributions within clear guidelines, with low-cost options, and acts in
ways that no one would consider unreasonable or shortsighted. Under similar
guidelines, voluntary personal accounts would represent an entirely prudent
risk.

Others have made the broader argument that any kind of stock market
investing is unwise when it comes to personal retirement. Real-world
experience suggests otherwise. In fact, young workers who elect personal
accounts can expect to receive a far higher rate of return on their money
than the current system could ever afford to pay them. For example, if a
25-year-old invested $1,000 per year over 40 years at Social Security's 2
percent rate of return, in 40 years she would have over $61,000. But if she
invested the money in the stock market, earning even its lowest historical
rate of return, she would earn more than double that amount -- $160,000. If
the individual earned the average historical stock market rate of return,
she would have more than $225,000 -- or nearly four times the amount to be
expected from Social Security. Over time, the securities markets are the
best, safest way to build substantial personal savings.

The charge has also been made that President Bush wants to push everyone
into personal accounts. That is not the case. Under our reform principles,
having an account of your own under Social Security is purely a voluntary
option. We are confident, however, that millions of Americans will find
this option attractive. Much of it comes down to a matter of trust ?-
whether a citizen would prefer to rely on the federal government to control
every aspect of his or her retirement; or would choose instead to be the
owner, free and clear, of their own retirement nest egg. Our position is
very clear: No one should be required to open a personal account, and no
one should be denied that right.

Another argument against Social Security reform with voluntary personal
accounts is that the so-called transition costs would be too high. Yet
focusing merely on transition costs is to overlook the greater cost of
doing nothing. Again, the projected shortfall in Social Security exceeds
$10 trillion; that figure is nearly twice the combined wages and salaries
of every single working American last year. There will be no -- there will
be costs no matter what we decide. But if we neglect the responsibility to
act, it will be all the more difficult to preserve Social Security for
generations to come.

The latest Social Security trustees' report shows that each year that we
wait will add roughly $600 billion to the cost of fixing Social Security
for good. That cost is far in excess of any of the so-called transition
costs that have been projected for any of the plans put forward by members
of Congress. Clearly, inaction imposes the greatest cost of all.

For all the adjustments that are needed to stabilize Social Security system
for our children and grandchildren, the most expensive option of all is to
deny the obvious problems that keep the system on its current unsustainable
path. This we cannot do -? not only because we are facing an economic
challenge, but because we are the heirs of a great moral obligation.

As a nation we recognize, as Pope John Paul II has written, that a fully
human civilization shows respect and love for the elderly. And a just
society ensures that elderly people can grow old with dignity. For that
reason our nation established the Social Security system. And that is why,
after 70 years, Social Security remains a fundamental commitment of both
our political parties.

We will need that bipartisan commitment in the months ahead -- and I
believe we will find it. There are strong views on both sides of the aisle,
and we should not expect the work to be easy. Yet if we all go forward in
good faith, we will uphold a great duty -- keeping the promise of Social
Security far into the future and giving millions of seniors, today and
tomorrow, the dignity, security, and peace of mind they deserve.

Thank you very much.

END 1:15 P.M. EST
===========================================================================
Return to this article at:
http://www.whitehouse.gov/news/releases/2005/01/20050113-5.html

 * Origin: (1:3634/12)