Presidential Conversation on Social Security
Raleigh, North Carolina
February 10, 2005
Thank you all for coming. (Applause.) Thanks for
coming. Okay. Thanks for the warm welcome. We got a lot of work to
do here. (Laughter.)
AUDIENCE MEMBER: -- (inaudible) -- (applause.)
THE PRESIDENT: Okay. Listen, we're here to talk about an
important subject. And I want to thank some of our fellow citizens for
agreeing to join me up here on the stage. It's not easy, frankly, to
go from kind of a quiet civilian life to agree to sit up here with the
President and all the cameras. (Laughter.) But I think you're going
to find this to be a very interesting dialogue about Social Security.
I've got some things I want to say before we talk about Social
Security. First, I send greetings from Laura. (Applause.) On the way
out she said, when you get down to North Carolina, tell everybody
hello, and make sure that the panelists get to talk. (Laughter.) She
knows me well. (Laughter.)
I know that Elizabeth Dole helped set up this event. I am -- she
is staying back in Washington because there are crucial votes coming
up. I believe that one of our -- an important initiative, and that is
to bring reasonable legal reform on class-action lawsuits, will pass.
(Applause.) So she and Senator Burr are staying back to vote. I hope
you excuse them -- I certainly did. (Laughter.)
I'm also pleased that a person who set an example of what it means
to be a person who sticks to his principles and is a fine United States
Senator has joined us, Senator Jesse Helms. Thank you for coming.
Proud you're here. (Applause.) It sounds like to me they still
remember you. (Laughter.)
I want to thank the statewide officials who are here. They were
bravely standing at the base of Air Force One when I arrived, and the
wind was blowing hard, but they, nevertheless, stuck it out and greeted
me. I want to thank you for being there. I want to thank the local
folks who are here.
I met a fellow named Jim Van Strien. He's what I call a USA
Freedom Corps volunteer. He works for the RSVP program. He's been
helping to welcome U.S. servicemen and women home. He's the kind of
fellow who -- (applause.) Let me finish, and then you can thank him.
He's the kind of fellow who's taken time out of his day to volunteer to
make somebody else's life better.
Now, the strength of this country is the fact that we've got
millions of citizens who are willing to do so. The true strength of
America is we've got people of open hearts and great spirit who are
willing to make society a better place as a result of volunteering. If
you're interested in serving our country, feed the hungry, find shelter
for the homeless, put your arm around somebody who hurts and say, I
love you, brother or sister.
Jim, thank you for setting such a good example, and welcome.
The world is getting more free and, therefore, a future generation
of Americans and kids around the world is more likely to live in
peace. (Applause.) I hope you are as enthused as I am about what has
happened recently in the course of world events. Think about the
elections in Afghanistan. Millions of people voted for the first time
in ages for a President. And the first voter was a woman.
(Applause.) And that's miles away from a time when people were
tormented by idealogues of hatred called the Taliban.
And the world is better off when a part of the world that has
longed for freedom sees a free society emerge in Afghanistan. And then
there was an election in the Palestinian Territories. And I've been
impressed by President Abbas's willingness to stand and say we must
defeat terror and establish a democracy in order to achieve peace with
our friend Israel. And I look forward to working -- I look forward to
working toward peace in that part of the world.
And then we had the elections in the Ukraine, and -- which are a
beginning of a -- a continuing of a democracy movement in a part of the
world that hadn't known freedom for ages. And then of course, some --
a week ago last Sunday, against all odds and defying all expectations,
millions of Iraqi citizens said we will not be terrorized, we want to
be free. And they went to the polls. (Applause.)
Freedom is on the march. And my job and the job of the United
States of America, with our friends and allies, is to continue to
promote free societies, because I understand freedom equals peace. And
I believe we have an obligation, as we protect our homeland from
terrorist thugs, to make the world a more peaceful place for
generations to come. And I'm looking forward to the challenge. I'm
looking forward to going to Europe in a couple of weeks to say, listen,
we share a lot of values. We believe in human dignity, human rights.
Most of all, we believe that every soul should be free.
I laid out in my inauguration address what I think is a noble goal
for generations to come, to end tyranny in our world, and the United
States of America, working with friends and allies, over time has got
the capacity to do so. (Applause.)
One of the challenges we face is how to make sure this economy of
ours continues to grow. The national unemployment rate is down to 5.2
percent; the unemployment rate here in North Carolina is lower than the
national unemployment rate. That's all good. But we must continue to
make sure that we advance reasonable economic policy so the
entrepreneurial spirit is strong, small businesses can flourish, and
most importantly, people can find work.
I'm looking forward to working with Congress to put reasonable
plans in place to make that happen. One of the most important things
that I've done in the new term is to submit a budget that says, let's
address the deficit. I've heard from business leaders, entrepreneurs,
small business owners, Republicans, Democrats, congressmen, senators,
all say we got an issue with the deficit. I said, fine. I have a
responsibility to submit a budget; I did. It's lean, it's focused, it
sets priorities, and it says if we've got programs that aren't working,
let's get rid of them, for the sake of the taxpayer. (Applause.)
And I'm looking forward to the deliberations, and I'm looking
forward to working with people on both sides of the aisle to get a lean
budget out. That's what the American people expect, and that's what
I'm going to sign.
I'm looking forward to working with Congress to continue to make
sure health care is available and affordable. One of the ways to do
that is we need medical liability reform out of the United States
Senate. (Applause.) It's important for people to receive justice when
they're harmed, but it's important for the scales of justice to be
balanced. And the scales of justice are not balanced. Too many
doctors are getting sued by frivolous lawsuits, which is running up the
cost of medicine, which is costing taxpayers money, which is driving
good doctors out of business. It is time for the United States
Congress to pass national medical liability reform. (Applause.)
I'm looking forward to working with Congress to get an energy bill
out. We've been debating energy for four years. We don't need any
more words on energy. It's time for them to get a bill to my desk. I
have laid out a blueprint on how to get there. It encourages
conservation; it encourages the use of renewable sources of energy. It
says, let's -- why don't we be wise about the use of nuclear power. I
believe we can expand safe nuclear energy. I know we ought to be
exploring in environmentally friendly ways for natural gas here in the
continental and in the state of Alaska. All of this is aimed to make
us less dependent on foreign sources of energy. And Congress needs to
act and get a bill to my desk. (Applause.)
On taxes, I'm looking forward to getting the bipartisan
commission's report to me on how to simplify the code. But in the
meantime, I know this: We got to make the tax relief we passed
permanent. We ought not to be running up taxes on entrepreneurs.
I look forward to working with Congress on education matters. I
will not let the United States Congress roll back the reforms of the No
Child Left Behind Act. The No Child Left Behind Act is challenging the
soft bigotry of low expectations. We're raising standards. We believe
every child can learn, and we expect every school to teach. And we
want to know, in return for our money, whether or not schools are
meeting expectations. (Applause.)
And I know you've got a fantastic community college system here in
North Carolina. And I intend to make sure that the work force programs
utilize this fantastic community college system so people are able to
get the skills necessary to fill the jobs of the 21st century. And so
we'll continue to work with Congress on education matters.
But I'm here to talk about an issue that is going to be an
interesting experience in dealing with the Congress. (Laughter.) And
that is Social Security -- formerly known as the third rail of American
politics. (Laughter.) That meant, if you touched it, there would be
certain political death. I believe the job of a President is to
confront problems and not pass them on to future Presidents and future
generations. That's what I believe. (Applause.) Thank you. Thank
you, all. Okay, thank you. Thank you for the warm welcome.
I see a problem and I want to discuss with you why I see a
problem. For those who got to worry about the politics of Social
Security, let me just give you my perspective. I ran on it, twice.
(Laughter.) I said, elect me and I will do the best I can to work with
Congress to strengthen the system for all; give me a chance to be the
President and I will take the issue head on. I did so in the 2000
campaign. Obviously, the issue wasn't solved, and so I did it again in
2004. I believe candidates are rewarded, not punished, for taking on
tough issues. I say that to give assurance to the members of Congress
who may feel somewhat fearful of taking on the issue.
Secondly, I intend to campaign on this issue around the country.
This is one of two stops today. Right after my State of the Union
speech I went to five states, and I'm going to keep traveling the
country talking about the problem of Social Security, assuring seniors
that nothing changes, and saying I'm willing to discuss all options
with members of the United States Congress. And I'm looking forward to
it. I like to get out of Washington. I like to talk to people. But I
also know that when the people speak, people in the Congress listen.
So I'm kind of sharing with you a little bit of my strategy about how
to move this issue forward.
So what's the problem? The problem is, is that Social Security --
the basic assumptions of Social Security are shifting dramatically from
when Social Security was founded. In 1950, there were 16 workers per
one putting money into the system -- which means that when somebody
retired, there's 16 workers contributing to that person's retirement.
Today there's 3.3 workers contributing for each beneficiary. And when
youngsters retire, it's going to be 2.1 -- two workers per
beneficiary. In other words, the burden of paying for retirees is
increasing on workers. That's part of the equation.
The second thing that has changed is -- is that life expectancy has
changed. It used to be 60 years was life expectancy; today it's 77. I
suspect over the next decade, it will continue to increase. I
certainly hope so. (Laughter.) As well, baby boomers are getting
ready to retire. That's me -- and you. (Laughter.) And do you
realize today, for example, there are 37 million people receiving
Social Security benefits. In the year 2031, there will be 71 million
people. Those are baby boomers. Baby boomers are living longer. And
more people are retiring. So part of the equation is more people will
be receiving benefits longer than anticipated when the system was first
Thirdly, benefits promised to people like me are dramatically
higher than benefits given to today's retirees. Politicians, over
time, say, we'll just -- elect me, I'll increase the benefits.
So when you think about it, when you add up the equation, you've
got more people living longer, receiving greater benefits, being
supported by fewer people. And to me, that says, we got a problem.
And as a matter of fact, the numbers say that. There is a chart over
here that says "Cost of Inaction," because in 2018, the system goes
red. That means there's more money going out of the system than coming
into the system. The leading edge of baby boomers are retiring;
they're living longer; benefit structures are bigger; fewer people
paying in -- the system goes negative.
Now, some of you probably think there is a kind of -- a bank, a
Social Security trust bank. But that's not what's happened over time.
Every dollar that goes into Social Security has been paid out, either
to retirees or government programs. It is a pay-as-you-go system; it
is a flow-through system. There is no kind of -- there are empty
promises, but there's no pile of money that you thought was there when
you retired. That's not the way the system works.
To make matters worse, as more baby boomers retire, as people live
longer, as more benefits kick in, the cash deficit increases. So, for
example, in 2027, the government is going to have to come up $200
billion more to meet the promises that we've made, above and beyond
payroll taxes. Every year from 2018 to when the system goes broke in
2042, the cash deficits required to meet promises increase. That says
to me we've got a problem.
Now, I know 13 years doesn't sound like a lot -- 2018 -- it may
seem like a lot to people whose perspective is maybe two years. But as
I told you, I think we've got to anticipate problems, particularly on
this issue, because the longer we wait, the more difficult the
solutions become. That's just a fact.
And so step one of my strategy is to continue saying to the
American people, we have got a serious problem. In other words,
sometimes they say, is it serious, is it a crisis -- look, whatever you
want to call it, just look at the chart and you come up with the
conclusions. It is serious because if Congress says no to the
President, we're not going the move forward on this, imagine what the
solutions will be when the $200 billion hits, or the $210 billion a
year, or the $300 billion. I mean, you're looking at either major tax
increases, major cuts in benefits, major cuts in other government
programs or massive debt. And so now is the time to move. And that's
what I'm saying to the Congress.
The second -- second goal of mine is to make sure our people who
have retired, our senior citizens, and people who were born before 1950
know that nothing changes. That's important for you to understand. I
fully understand a lot of people are very dependent upon their Social
Security check. And when they hear somebody like me saying we're going
to strengthen the system, their immediate reaction in some cases is to
go, oh, that means I'm not going to get my check. You might remember
those campaigns around, which I'm sure you've seen them in states where
people say, elect somebody and he's going to take away your check.
That happened to me, for example. They said, old George W. gets in,
you're not going to get your check. Fortunately, they got their check
after I got in, so they kind of rung hollow in 2004.
You'll hear the same kind of thing being put out there, that
seniors need to worry about this. And I'm going to spend a lot of time
assuring people who've retired or are near retired, that nothing
changes. The system when we talk about insolvency, the insolvency
issue doesn't relate to you. It relates to your grandchildren. And
that's the issue we're confronted with: What do we do about the
retirees' grandchildren? As I said in my State of the Union, we have
an obligation to do what others have done for my generation and that's
to leave a -- leave a better world behind. And that's why I was
willing to dedicate as many words as I did in the State of the Union to
what used to be the third rail of American politics, Social Security.
Now, it's one thing to define the problem; it's another thing to be
a part of the solution. And I have an obligation as the President not
just to define the problem, but to encourage dialogue by putting out
some ideas of my own. I stood up in front of the Congress and said, in
order to truly fix it, in order to have a permanent solution, all
options are on the table, except for running up payroll taxes.
And that means a lot of different things. Democrats, like Senator
Moynihan, who Senator Helms served with, had some really constructive
ideas as to how to address the root cause of a -- of the problems with
Social Security. President Clinton had some ideas; former Democrat
Congressman Tim Penny. And the ideas range from raising the retirement
age, to delaying benefits, to calculating benefits not based upon wage
increase, but price increase. A little esoteric here, but, in other
words, there's some serious ideas on the table to how to permanently
fix Social Security.
And that's why I said to the Congress, all ideas are on the table,
and if you got a good idea, bring it forward. Now is the time for
people from both sides of the aisle to address the problem. And I'm
willing to listen to anybody's idea. And I'm looking forward to a
good, constructive dialogue about how to seriously address the problem,
making sure that those who've retired have nothing to worry about and,
at the same time, making sure there's a Social Security system for
younger people coming up.
I put out some ideas and I want to talk about one of them that I
hope you find interesting. I certainly did; otherwise I wouldn't have
put it out. (Laughter.) And that is as a way to allow younger workers
to more nearly -- or come closer to the promises that have been made,
but can't be fulfilled, we should allow younger workers to take some of
their own money -- their own payroll taxes -- and set it aside as a
personal retirement account. This is a novel idea for Social
Security. But it's not -- (applause.) It's a novel idea for Social
Security; it is not a novel idea for federal employees. There is such
a thing that's called a thrift savings plan, which allows federal
employees to take some of their own money and invest it in stocks and
bonds, so as to increase their retirement benefits.
And why does that happen? Because when you're able to get a rate
of return on money invested, over time that money grows, that money
accumulates, that money expands. And so I believe younger workers
ought to be allowed to set up a personal account and invest in stocks
and bonds so that their money can increase faster, at a faster rate
than that which their money increases in the Social Security system.
That's what I believe ought to happen. (Applause.)
And so -- that's called the compounding rate of interest. Just
trying to show off a little bit, kind of -- (laughter.) Not bad for a
history major. (Laughter.) Let me give you an example of what I'm
talking about. By the way, our plan is one where I believe we ought to
phase in the accounts so they're more affordable, so that the
transition costs are more manageable to get to such accounts. I
believe ultimately a worker ought to be allowed to put 4 percent of the
payroll tax aside as a -- 4 percent of the 12 -- as a -- in the
personal account. So money stays in the system, but money also would
be allowed to grow with interest. Your option, by the way. Younger
workers shouldn't be forced to do this. Younger workers -- if you're
interested in this, you can do so.
Now, if you're a worker who earns $35 [sic] a year over your
lifetime, and this system were in effect where you could put 4 percent
of your payroll taxes in a personal account, and you start at age 20,
by the time you retire, your personal account would grow to $250,000.
That's compounding rate of interest.
A couple of guidelines that need to be -- I mean, you just got to
understand there will be guidelines, like there are for the employee
thrift -- federal employee thrift savings plan. There's got to be --
you can't say, let's have a good retirement system, and let somebody
take their money down to the lottery and invest it. That's not a wise
investment, with all due respect to the lottery players. In other
words, there's got to be a -- certain guidelines, a conservative mix of
stocks and bonds. We don't want people taking their money and
investing in high flyers. There's a way to manage risk and get a
better return than that which is in the Social Security trust. I mean,
there's all kinds of people that are expert at this.
As a matter of fact, that's what the thrift savings plan does -- is
says, here are some options for you, easy to understand options, which
will defy those who say certain people aren't capable of investing -- a
concept which I totally reject, by the way. (Applause.) The person
with the $250,000 account couldn't take it all out the moment he
retires, or she retires, and spend it. In other words, there's a --
there would be a -- guidelines for a draw-down.
You see, the money coming out of the personal account is to
complement the Social Security money, however much is still available
after the congressional reforms. So it's a complement to Social
Security. It is to mirror, it's to help out, it's to enable you to
There's other benefits, however, to a personal account, besides
growing faster than the money if it were to stay with the federal
government. One, it's your money. And that's an interesting idea,
isn't it? It's your money to begin with, and it's your money at the
end. And you can do with it what you want. You can't take it to the
lottery, you can't gamble, you can't try to increase it with silly
investments, and you can't pull it all out at once. In other words,
you have to use it for retirement. On the other hand, if you choose
not to spend it, you can pass it on to somebody you choose.
Obviously, I didn't listen to Laura. (Laughter.) I've got some
other things to say real quick.
The current system today -- think about this -- if you work for 30
years and you start at age 20, and you're putting money in the Social
Security system, and you die, that money that you put in the system, if
your survivors are over 18 years old, goes away. I think it makes
sense to try to encourage people, particularly for the security of
their families, to be able to have something to pass on, beyond other
things they're going to pass on.
I like the idea of having an account where people say, I own this,
and are able to look at a quarterly statement to watch their own asset
base grow. And I like people being able to say, I've got an account
that the government cannot take away; it's mine. (Applause.)
Some people say, well, you can't afford to do this. My answer is
you can't afford not to do it -- if you look at the chart. (Applause.)
And I'm looking forward to working with the Congress. I've done my
part, I've laid it out there. I'm going to work hard, I'm going to
spend a lot of time talking to the people about this issue. And I've
put out some interesting ideas. And I'm looking forward to people
assuming leadership in the House and the Senate, on both sides of the
aisle. And I'm willing to listen to their ideas. For the sake of the
country, for the sake of a younger generation of Americans, we must
Andrew Biggs. We are here with one Andrew Biggs, a fine lad, as
you can see. (Laughter.) What do you do? Work for me, of course.
(Laughter.) Tell them what you do, Andrew, please -- Andrew and I have
done this before, see, so I'm used to needling him. (Laughter.)
DR. BIGGS: My name is Andrew Biggs, and I'm Associate Commissioner
for Retirement Policy at the Social Security Administration, which in
short language means I think about Social Security reform quite a bit.
The good news on Social Security, even it seems very complex --
THE PRESIDENT: Andrew has a PhD, by the way. (Laughter.) Which
-- it's an interesting lesson for those of you who are worried about
your college career. Andrew has a PhD, and I got a C. (Laughter and
applause.) And look who's working for who. Anyway -- (laughter.)
DR. BIGGS: All those years of effort gone to waste, I guess.
THE PRESIDENT: It's a cheap shot, Andrew, I know. Do we have a
problem with Social Security? You look at it, you analyze it.
DR. BIGGS: Sure, we do. The good news is you don't need a PhD to
understand how this works. (Laughter and applause.) The biggest
misunderstanding people have --
THE PRESIDENT: I'll let it pass, Andrew. (Laughter.)
* * * * *
THE PRESIDENT: Noel Council. Where do you live, Noel?
MR. COUNCIL: I live right here in Raleigh; born and raised right
here in Raleigh.
THE PRESIDENT: There you go. Did you stay up late last night
watching a little basketball? (Laughter and applause.)
MR. COUNCIL: No, but --
THE PRESIDENT: Never mind. Kind of old, us kind of baby boomers,
isn't it, to stay up late. Anyway.
MR. COUNCIL: Yes. I did watch Karl Rove, though, on the Fox
* * * * *
THE PRESIDENT: Well, I appreciate the spirit. Look, I mean, the
key statement that I heard him say is, it's not going to change for
him. So, evidently, the message has gotten to some -- (laughter) --
and we got to keep getting it out. Senior citizens must hear the
truth, which is that the Social Security system will take care of them,
and they need not fear a discussion about how the children -- a system
that works for our children and grandchildren will cause them not to
get the promises the government made. And that's just important, and I
appreciate you bringing that up.
I also love the spirit of somebody saying, I'm not worried about
me, I'm worried about somebody else. And we really need to be. We
really need to be. I mean, it just would be I think a dereliction of
duty not to take on the tough task now. Of course, some of them are
saying, he's not going to be around but for four more years -- but I
can assure you this; for the next four years, we're going to be taking
on the tough problems like Social Security. (Applause.)
Dawn Baldwin. Are you ready to go?
MS. BALDWIN: I'm ready, Mr. President.
THE PRESIDENT: All right. Where do you live?
MS. BALDWIN: I live in Merritt, North Carolina, down in eastern
THE PRESIDENT: Fabulous, yes. Wish I could say I knew where it
was -- I'll play like it is. (Laughter.)
MS. BALDWIN: We'll have you come down there sometime.
THE PRESIDENT: How far away from here is Merritt, roughly?
MS. BALDWIN: About two-and-a-half hours due east of here.
THE PRESIDENT: Well, fantastic. Thanks for coming.
MS. BALDWIN: It's good to be here.
THE PRESIDENT: You're a mom.
MS. BALDWIN: I am a single mom and I do want to say quickly,
though, that I thank you for mentioning the community college system,
because I am a part of the community college system. I teach at Lenoir
Community College in Kinston. (Applause.)
THE PRESIDENT: What's your subject matter?
MS. BALDWIN: English.
THE PRESIDENT: English, yes. Some say I could use a little extra
* * * * *
THE PRESIDENT: Is this your first home?
MS. BALDWIN: This is my very first home.
THE PRESIDENT: Imagine, "Welcome to my home." (Applause.) That's
You know, I was talking with Dawn and she was talking about a
401(k). It's an interesting concept; many of you know what a
401(k)is. Thirty years ago, no one would have known what a 401(k)--
maybe they would have. I don't think so. I think 401(k)s are a
relatively new invention -- 401(k)-- you've got one?
MS. BALDWIN: I do. And I'll tell you, Mr. President, it was a
kind of scary situation when I first started at a community college
system and was asked whether I wanted a 401(k). I had never gotten
involved with stocks, bonds, didn't really know what it was about, but
I can tell you that it is very nice every quarter getting those reports
to see how well my investment is doing.
THE PRESIDENT: So you get advice?
MS. BALDWIN: I do.
THE PRESIDENT: Yes, see, she gets advice. In other words, it's a
little nervous at first.
MS. BALDWIN: But it pays off well.
THE PRESIDENT: Yes. (Laughter.) And you get your -- and you get
your -- you see your statement quarterly.
MS. BALDWIN: I do.
THE PRESIDENT: Watch your asset base grow, which --
MS. BALDWIN: And it is another sense of ownership.
THE PRESIDENT: Yes.
MS. BALDWIN: And it makes you proud to be an American.
THE PRESIDENT: Well, it's an interesting -- I think one of the --
I hope people take away -- (applause.) One of the things that I find
so attractive about enabling people to save some of their own money is
the sense of participation in the system, I guess is one way to say
it. It's -- as you said, it makes you proud. But it's your asset
base. And your little guy, 13-year-old son -- some day, if you choose,
it becomes a part of his asset base. And the capacity to pass property
from one generation to the next is more than just passing a piece of
land -- which is a fabulous story, by the way. But there's other
assets you can pass on. And I think it stabilizes society. I think it
makes society more hopeful when people say, this is what I own, and I'm
going to choose to pass it on to whomever I want.
And I -- and it's got -- by the way, that concept must spread
throughout all society. It should not be confined to just one segment
of society. This isn't a Wall Street phenomena anymore. This is a --
this is a phenomena of people being able to own and manage their own
money all throughout the country, and it seems like it makes sense for
us to give a younger generation of Americans the same opportunity to do
so through the Social Security system.
You did a great job. Welcome. (Applause.)
MRS. GODFREY: Yes, sir. (Laughter.)
THE PRESIDENT: You live?
MRS. GODFREY: In Statesville, North Carolina. (Applause.) I have
some friends here.
THE PRESIDENT: Half the town came. (Laughter.) How many people
MRS. GODFREY: How many live in --
THE PRESIDENT: Yes, how many live there?
MRS. GODFREY: I think about 23,000 --
THE PRESIDENT: That's good, yes, it's big. Bigger than it
MRS. GODFREY: Might not want to quote me on that. (Laughter.)
THE PRESIDENT: How many children you got?
MRS. GODFREY: I have two little girls -- one is four and one is
THE PRESIDENT: Fabulous.
MRS. GODFREY: We call them the "Princess" and the "Bulldozer." (Laughter.)
THE PRESIDENT: Sounds like kind of like my mother used to talk.
Anyway -- (laughter) -- you're sitting up here on the stage, here's
your chance to tell me. First of all, you work?
MRS. GODFREY: I do work. I believe that the world is run by those
who show up. So I showed up today on behalf of my friends and my
family, and about 80 employees at Godfrey Lumber. It's a small,
family-owned business started by my late father-in-law, Woodrow Wilson
Godfrey. You would have loved him. It's actually --
THE PRESIDENT: Woodrow Wilson?
MRS. GODFREY: Woodrow Wilson.
THE PRESIDENT: Yes.
MRS. GODFREY: His mother was a staunch Democrat.
THE PRESIDENT: Yes. (Laughter.) Guy is a heck of a businessman,
though. (Laughter.) Anyway, Godfrey Lumber.
* * * * *
THE PRESIDENT: I kind of took your regulation statement there --
I'm kind of trying to read between the lines. Are you saying to me
that you're worried about the system I'm talking about will cause you
to have more regulations on you, a little bit? Maybe, in other words,
small businesses are burdened by regulations, and there's a concern
MRS. GODFREY: I would very much like to know if this is going --
if your plan, if your proposed plan is going to help the small
business, because we need all the help we can get.
THE PRESIDENT: She doesn't want to be managing the personal
accounts, is what she's saying; she doesn't need any more government
telling her what to do. And the answer is, absolutely not; it will not
burden small businesses. And that's important for small business
owners to understand. This is not an added regulation on top.
By the way, my suggestion is what needs to be part of an overall
plan. I just want to make sure that I disabuse people of the notion,
personal accounts alone won't permanently solve the problem. That's
what people have got to understand. It's a part of an overall
solution. It just will mean that the younger workers will get a better
deal when the solution is finally decided upon.
Go ahead. Here's your chance to get people to buy a little
* * * * *
THE PRESIDENT: That's good. I appreciate you saying that. The
concept of people managing their own money has changed dramatically. I
promise you, when I was most of the panelists' age, we weren't sitting
around wondering whether or not Social Security would be there. When I
was 30 years old -- is that what you --
MRS. GODFREY: Twenty-nine.
THE PRESIDENT: Yes, when I was 29 -- (laughter) -- we didn't have
forums where people came and said, gosh, I wonder if Social Security is
going to be around when I retire. That never entered a baby boomer's
mind. Nor did the concept of people -- more and more people being able
to manage their own money in the different kind of retirement systems
-- Roth IRAs and all the different retirement funds that are now
available for people to invest in. The world has changed. Social
Security hasn't yet.
And so I find it incredibly interesting to hear younger folks talk
about life the way it is, workers being able to manage their own
account, saving something for my son.
Skip Long, he's here, he's got some ideas and thoughts. You can
see he's a young-looking guy -- actually young chronologically, too.
You live in Raleigh?
MR. LONG: I live here in Raleigh. Most of my time has been spent
in southeast Raleigh.
THE PRESIDENT: Good.
MR. LONG: And I want to say my wife and son -- my wife is there,
and my 10-year old son --
THE PRESIDENT: Oh, yes; looking forward to seeing you afterwards.
(Applause.) What do you do? Thanks for coming.
* * * * *
THE PRESIDENT: Before we get to Social Security, I think one of
the most important initiatives of this administration is to encourage
faith-based and community based organizations to help find people help
they need. (Applause.) You're a faith-based man.
MR. LONG: Thank you.
THE PRESIDENT: I can't think of a better organization than one
founded on the principle, you shall love your neighbor just like you
love yourself, in order to help somebody coming out of the prison
system find proper job training and get the skills and comfort
necessary to know that he or she can take on life's tough problems.
All right. So I'm going to keep pushing the faith-based
initiative, is my point. Back to Social Security.
* * * * *
THE PRESIDENT: There you go. How about that? Great job.
The system can be designed so that people can learn what it means
to invest. And that's important for people to know. I've heard some
people say, well, you know, there are certain people in society that
just aren't capable. Forget it. Why do we want that kind of attitude
in America -- certain people can and certain people can't? We've got
to believe everybody -- everybody -- should be allowed to take their
own money and, under certain guidelines, make wise choices. And that's
going to happen. There's a cultural change that needs to take place,
obviously, in some quarters of society.
And I love the spirit you're talking about. Because if you own
something, you have a vital stake in the future of your country. And
that's exactly one of the key points behind this notion about allowing
people to take some of their own money and investing it.
I think the panelists did one heck of a job up here. I want to
thank you all. (Applause.) I'm getting kind of old, so I need to
stand up. Let me take some questions, a few questions. And then I've
got to head on over to Pennsylvania to continue the dialogue.
Q My main concern is you said during your State of the Union
that all option was on the table. And I support your plan to
strengthen Social Security, but one thing I'm concerned about is
extending the age in order to be able to fund it. I would like to
receive my benefits -- my money that I paid into it, into my own
personal account -- as soon as possible.
THE PRESIDENT: Well, I appreciate you saying that. One way to
make sure people effect policy with all options on the table is to --
first of all, let me say, I'm not taking options off the table until
Congress comes to the table and starts discussing. (Applause.) And,
secondly, if a lot of people, younger workers are concerned about that
option, you ought to let the people know. And you're just letting me
know, and I appreciate it. Yes, I'll sign that book, too. It's a fine
book. If you're interested in getting some sleep, read Chapter Five.
Q Mr. President, on behalf of north eastern North Carolina,
thank you, thank you, thank you for what you do for our country.
THE PRESIDENT: Thank you, sir.
Q God bless George W. and Laura Bush. (Applause.)
THE PRESIDENT: Thank you, sir.
Q Here's my question: In your effort to strengthen Social
Security for the 21st century, will you be able to use your bully
pulpit in, perhaps, persuading our own Congress -- who does a great
job, but also has a generous retirement system -- take a look at that
system, itself, in an effort to make, possibly, the retirement system
for everyone in this room and throughout the country a little more
THE PRESIDENT: Yes, I appreciate that. See, what he's saying is,
is that there is a go-by. In other words, this is a -- I haven't
invented this, it's already happened. Federal employees get to do
this. I said in my State of the Union, younger workers ought to have
the same option of ownership, decision-making, better rate of return,
that the federal employees have. And you bet I will.
You're right. I mean, this is -- again, I repeat to you, this is
going to be an issue that's going to require good, close cooperation.
And it's not going to happen unless people of goodwill come forward and
say, let's get in this -- get after this issue together. It used to be
that people would feel like they were lured out on the issue and then
all of a sudden had to pay a political price. What I'm saying to the
members of Congress, we're all in this deal together. We're all going
to -- we're going to be blamed together or we're going to be praised
But I will do my part -- I will do my part, initially, of not only
putting the issue out there for people to hear, which I did in the
State of the Union, but I'm going to travel our country, state after
state after state, conducting discussions just like we had here, as
open and frank as we can be, talking about the problems, talking about
the assurances, and assuring Congress it is now time to act. That is
my duty. I look forward to doing that. It also gets me out of
THE PRESIDENT: Yes, sir.
THE PRESIDENT: We're not going to take away your Social Security
check, for starters. Go ahead.
THE PRESIDENT: Absolutely. (Laughter and applause.) I tell you
what, that guy right there I'm delegating. (Laughter.)
Q Thank you, Mr. President! (Applause.)
Q Unfortunately, I don't have a letter for you to read, Mr.
President, but I just want to say it's such an honor to be speaking
with you. I'm very happy to be here.
THE PRESIDENT: Thank you.
Q I just wanted to let you know that as a young person, I think
it's very inspiring and encouraging to see how much confidence you have
in my generation's ability to make decisions. (Applause.) And I think
that your plan to strengthen Social Security is just another reflection
of your high level of trust and respect for the American people, and I
wanted to thank you for that. (Applause.)
THE PRESIDENT: Thank you very much. You know, it's interesting --
I appreciate you saying that. Somebody was telling me the other day --
I also had congressmen and women come into the White House, the Oval
Office there -- actually, the Cabinet Room, in this case -- and I'm
sitting down with them individually and talking about, just like we're
talking here. And a person said -- he read an interesting poll; he
said that a lot of younger workers felt like they're more likely to see
a UFO than get a Social Security check. (Laughter.) It's an
interesting dynamic, isn't it, when you think about it? There are a
lot of young people, when they analyze Social Security and think about
it, that they just don't think the government can fulfill the promise,
which is a powerful -- it's powerful leverage for members of Congress
to listen to.
In other words, the dynamic has shifted. The reason people are
comfortable about taking on the Social Security issue, in the political
sense -- I believe it must be done -- that's the nature of the job,
that's the nature of the presidency -- but in a political sense, it's
because people are beginning to realize that once seniors understand
nothing changes, there's a lot of folks out there who are demanding
change -- for their sake. They're saying, what are you going to do
about saving the system for me? I'm coming up; I have a better chance
of seeing a UFO than getting a check from the government. What are you
and the government going to do to make sure I get my check? That's the
dynamic that's happening.
And that's why I'm optimistic something is going to get done,
because people are beginning to speak out. Younger Americans who
understand the math and know the reality are beginning to say to those
of us who have been elected, what are you going to do about it? You're
up there in Washington, D.C. -- do more than just occupy the office,
solve problems and do your job. (Applause.)
Q Thank you, Mr. President. First of all, I just wanted to
thank you for your service to our country.
THE PRESIDENT: Thank you, sir.
Q Thank you. I have a question about Social Security benefits
that are related to things other than retirement, which is what you've
put a lot of focus on. In 2001, I lost my father, and he left behind
my mother to raise three kids, all under 18, and pay for everything
that they needed and support them financially. By the year 2042, this
pay-as-you-go situation is going to be pretty much exhausted. If that
happens to someone after that point, they're going to pretty much be
depending upon this small percentage that the government is allowing
them to put into their nest egg fund. At that point they have to pull
out of funds early. Their index funds they'll have to pull out of
early, which won't get to grow very much; and their long-term bonds
won't mature. So how does your plan really --
THE PRESIDENT: On survivor benefits? Are you talking about
survivor benefits under the current system?
Q Yes. Yes, sir.
THE PRESIDENT: First of all, the plan is only addressed to the
retirees, not to the disabled and survivor benefits. In other words,
we're focused on the retirement aspect of Social Security. Secondly,
the notion that a personal account -- frankly, we haven't got to the
emergency withdrawal aspects of the personal account. The idea,
though, is not to let people -- the main principle is not to let people
withdraw money, who've retired, from the personal account because it
needs to be used for retirement. In other words, you can't just
lump-sum it out. This is a complement to Social Security.
As to whether or not you, a young worker -- I mean, a survivor of a
worker that passes on an account, whether you can draw it all out at
once, that's something we just got to work out with Congress. But
remember this, is that a plan that says you've been able to inherit
something other than survivor benefits, a chunk of assets, is I think
better -- will be better than the current system.
Q Yes, sir, I completely agree. From what I've seen of the
system, I absolutely love it so far. I just hadn't heard you talk to
that point yet.
THE PRESIDENT: No, I appreciate that.
Q Thank you.
THE PRESIDENT: So you lived on -- your mom and you lived on the
survivor benefits of your dad?
Q We didn't live on it completely.
THE PRESIDENT: I mean, it helped you, helped you.
Q -- helped make ends meet. Absolutely.
THE PRESIDENT: Yes, well, there's survivor benefits in the current
system if you're -- if you are younger than 18, or your siblings are
younger than 18 years old. If you're over 18, there are no survivor
benefits for the kids. There will be a permanent survivor benefit if
there's an asset that's been accumulated to be able to pass on.
Whether or not you can take it out or not to solve a family emergency
after the person who accumulated the assets moves on, is something we
just got to work out with the Congress.
Q Yes, sir. One more thing, I just wanted to introduce myself
so that I can say that I met you. My name is Bart Thornberg --
THE PRESIDENT: Good job. (Applause.)
Q Mr. President, Durham city councilman --
THE PRESIDENT: Welcome.
Q Good to be here.
THE PRESIDENT: Thanks for serving.
Q Thank you. More importantly, I'm a husband and a father of
three young daughters. And first of all, I want to say thank you for
bringing faith back to the White House. (Applause.)
THE PRESIDENT: Thank you. Appreciate that. (Applause.) Thank
Q My question is simple. Certainly, we are very energized here
today, supportive. The system is clearly broken. What can we do once
you leave here today to ensure --
THE PRESIDENT: Yes.
Q -- that we can assist you in helping to fix this system?
THE PRESIDENT: No, I appreciate you saying that. And part of my
reason to travel the country is to explain to people that there is a
problem. The Honorable got it -- there is a problem, what we can do to
help you fix it. First step is to make it clear to people there is a
problem. because if the people in Congress say there's not a big enough
problem, let's just move it on, nothing will happen. In other words,
there has to be a sense of -- in your voice, as you pointed out --
urgency. And it's going to take me a while to convince people of the
urgency to act.
I believe that once members of Congress -- and, therefore, step one
is to convince people there's a problem, of both political parties.
And once people -- once it gets in their mind that there is a problem,
the follow-up question is, okay, now you see the problem, now what are
you going to do about it? And we haven't got quite to the "what are
you going do to about it" stage yet.
We're going to continue -- and I want to thank you for that. When
-- write, talk -- when you see people who say, well, there's really not
a problem, just -- the facts speak for themselves. Again, this is not
a political issue. This is policy at its most pure, I think. And the
facts are clear. And the facts say, it's time to get something done.
But I readily concede there's a -- we need a little more -- I need to
spend more time convincing people that we're going to -- we got the
And then once we get to there, sir, it is -- and I try to stimulate
discussion, or at least prepare the way for a good discussion by
saying, I'm willing to listen. And if you put an idea on the table,
you won't get -- it won't be used to club you over the head politically
with it. In other words, there needs to be an honest, open dialogue.
You deal with problems at your level, and the best way to deal with it
is for there to be an honest discussion about different solutions
without fear of political reprisal. And that's my -- one of my pledges
to the members of the United States Congress and the Senate.
And that -- and so, but when the time comes, the other thing you
can do is assure people that nothing changes. Again, I just know --
there are people out there who rely upon Social Security who are very
worried when they hear political people like me talking about reform.
They -- the concept of reform means, I'm not going to get my check, or
I'm not going to get all my check, or I'm not going to get enough of my
check. And we just have to continue to assure older citizens in
Durham, North Carolina, and around the country, that nothing will
change. Nothing will change. And once that assurance is fully
understood, then I'm confident the dynamic of younger workers saying --
or younger folks saying, what are you going to do about me, becomes a
much more viable -- becomes a driving force for reform of the Social
I'm probably talking too much strategy and tactics, but I think
it's -- people who are interested in the subject, you got to know how I
think this issue is going to unfold. And -- so thanks for your great
One thing about faith. It's very important for this country to
always remember that our strength, as opposed to some of these
ideologues of hate that we deal with, our strength is the fact that you
can worship or not worship and be equally patriotic. And if you
choose, if you choose to worship, you're equally patriotic if you're a
Christian or a Jew or a Muslim or a Hindu. That is the wonderful thing
about the United States of America. And regardless of what you believe
and your beliefs, we must always jealously guard that great freedom of
Yes, ma'am. I hate to tell you -- we could be here all day -- but
I am headed toward Pennsylvania. Last question. I know you're
Q Mr. President, an honor, sir. I thank you for your perfect
segue into my question to you. I think the constituency most skeptical
about reform appears to be those 55 and older. And I think the part of
your program that's most appealing to that skepticism is that part that
talks about opting in. Can you address more specifically the age in
which you are allowed to opt in or not?
THE PRESIDENT: People born from -- after 1950. That's a pretty
easy question to answer. (Laughter.) And that would not be me.
Listen, I am so honored you all came. What a fantastic setting. I
appreciate your time. I want to thank our panelists again for coming.
God bless you all. Thank you. (Applause.)
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