Social Security Reform
March 18, 2005
Thank you, Governor. Please be seated. Thanks for
coming. I am glad to be back, under better circumstances. It was my
honor to come and represent our government during what was a terrible
tragedy, and that was Hurricane Ivan. I want to thank the mayors of
the communities here; I want to thank the base commanders; I want to
thank people responsible for helping people get their lives back in
I still saw a lot of blue roofs flying in. So I know there's still
a lot of work to do. But I -- it was such an honor to work with Jeb
and Congressman Miller and members of the delegation and the mayors to
try to do our duty to get resources to people who need help. And so I
want to congratulate the stalwart citizens of this part of the world.
I was struck by the devastation; I was pleased by the sense of spirit
when we came down here, a spirit that has been manifested in what is
obviously an ongoing recovery. But we're still paying attention to
you. And, again, I want to thank you for your courage. (Applause.)
Before I talk about a big issue, I've got some other things to
say. They used to say, well, you know, he's got his daddy's eyes, but
his mother's mouth. (Laughter.) Which means I'm about to talk a lot.
No -- (laughter.) I do want to thank our panelists, including my
mother. What a great honor that Mom is here. (Applause.) We're going
on from here to Orlando; I'm going on to Crawford, and Mom is headed
over to work with Jeb on raising money for literacy. And it's --
(applause.) I'm sorry Laura is not with me.
AUDIENCE: Awww --
THE PRESIDENT: Yes, I know. I used to oftentimes -- all the time
-- say she was the country's greatest First Lady. (Applause.) Wait a
minute. At least make it a tie. (Laughter.) I love her dearly.
She's a fabulous mom, great wife, and she really is a spectacular First
Lady. She sends her best and love to Mom and to the great Governor of
the great state of Florida, Jeb -- (applause) -- and to you all. She's
sorry she couldn't be here.
Speaking about brothers and great governors, he's doing a fabulous
job for Florida. (Applause.) He's straightforward, he's plainspoken,
he does what he says he's going to do. And I think that's important,
and it's a good lesson for people who are paying attention to public
servants, people who are wondering whether or not it makes sense to run
for office. He came into office with his integrity, and he's going to
leave with his integrity. (Applause.)
I appreciate Gerald McKenzie and David Sam, from Pensacola Junior
College. We call them community colleges in Florida and Texas. I
can't tell you how important the community college system is to make
sure that workers, both old and young, gain the skills necessary to
fill the jobs of the 21st century. I am a big supporter of community
colleges, as is Jeb, because we understand the community college system
is available, it is affordable, and it is flexible. If there needs to
be a curriculum change to help people, help employers find workers,
help hospitals find nurses, community colleges are able to do so.
I want to thank the members of Congress for making sure that my
community college initiative is funded, not for only the sake of
community colleges, but more importantly, for the sake of people who
need a skill set to fill the jobs of the 21st century. So I want to
thank the Pensacola Junior College folks for being so generous in the
I'm traveling with some pretty good company. Besides Mother and
Jeb, Senator Mel Martinez is with us today. Senator, thank you.
(Applause.) I mentioned him once, I get to mention him twice, since
this is his district -- Congressman Jeff Miller, doing a fine job,
thanks for being here. (Applause.) And then we've got some folks down
from the central part of the state, starting with Congressman Tom
Feeney. Congressman, I'm proud you're coming. Thanks for being here.
(Applause.) Congressman Adam Putnam -- (applause) -- last time I was
with Adam was in the middle of an orange grove after one of the other
hurricanes hit. As you can see, that orange grove did something to the
color of his hair. (Laughter.)
And finally, we're here with Congressman Rick -- Rick Keller.
Appreciate you coming, Congressman. (Applause.) You don't know this,
but you're about to find out that he is marrying Dee Dee Michel
tomorrow. Congratulations and good luck on the wedding. (Applause.)
I'm a little surprised you're here with us. (Laughter.) But we won't
tell Dee Dee. We'll tell her you're planning for the wedding.
I want to thank -- oh, Congressman Dave Weldon is with us. Dave
thanks for coming, a great man -- Dr. Dave Weldon. Appreciate you
coming, Dave. (Applause.)
I am proud to be here with the Pensacola Mayor, John Fogg. Mr.
Mayor, thank you, sir. (Applause.) A lot of the state and local
officials -- I'm working my way through a list here.
There's one other fellow I wanted to introduce you to. His name is
Bob Woodard. Bob, stand up for a minute, please. You don't know, Bob
-- some of you don't -- but he was at the base of Air Force One when I
landed, because every time I come to a community, I like to herald a
soldier in the army of compassion, a volunteer, somebody who has taken
time out of his or her life to make somebody else's life better. He is
doing something which I think is an important contribution to the
future of our country. He is a mentor. He is one of those souls who
says -- puts his arm around somebody who hurts, somebody who needs
love, somebody who needs comfort and says, I love you, and what can I
do to help you.
I want to thank you for your contribution to the country. I want
to remind you, if you want to serve America, feed the hungry, find
shelter for the homeless, find somebody whose heart is broken, and help
them with the love that God has given you. Thank you for -- thank you
for what you do. (Applause.)
Before we get to Social Security, I want to say a couple of other
points. I want to thank the members of the United States military and
those who support the military for not only -- (applause) -- for not
only making this country more secure in the short-term, but helping
make this country secure for generations to come. You see, the more
free the world becomes, the more peaceful the world becomes for our
children and our grandchildren. And we took some tough decisions in
order to protect this country. And by doing so, we have laid the
foundation for freedom.
You know, I hope it heartens those who have served, and the
families of those who have served, to have seen the millions of people
vote in Afghanistan. Think about what has happened -- (applause) --
think about what's happened in that society in a brief period of time.
Young girls couldn't go to school under the Taliban because these
people were so backward and so barbaric that their view of the vision
of the world was dim and dark. We acted in our own self-interest,
admittedly. We said, If you harbor a terrorist, you're equally as
guilty as the terrorist. When the President says something, he better
mean it. I meant it. Our military responded; the Taliban is out. But
as importantly, the people of Afghanistan are free.
I just talked to Condoleezza Rice on the phone. She just came back
from a -- she was in Afghanistan, I think, yesterday. She said, you're
not going to believe it, Mr. President. You're not going to believe
how hopeful this free society is. You're not going to believe the
optimism that these people have, all because they're free. A free
Afghanistan is in the interest of the United States of America.
A free Lebanon is in the interest of the United States of America.
(Applause.) It's a good sign when millions are -- feel comfortable
going to the street without government reprisal to express their
opinion. In order for there to be a free Lebanon, Syria must remove
all the troops and all the intelligence services -- (applause) -- in
order to let these people vote in free society, in freedom, without
I believe there will be a Palestinian state based upon democratic
institutions, and I know it's in Israel's interest and in the
Palestinians' interest for there to be two states, two democracies,
living side-by-side in peace.
And then, of course, one of the most amazing events -- at least as
far as I was concerned, from my perspective -- is when over 8 million
Iraqis, in complete defiance of people who were trying to prevent them
from going to the polls by creating incredible fear -- they said,
you're not going to stop us, we long to be free. And they went to the
polls sending a clear signal, not only the terrorists in Iraq, but to
freedom-lovers around the world, that freedom is a powerful force, and
when unleashed, it will continue its march.
Over the next four years, this administration will work to free
people -- will work with our friends and allies to promote freedom,
because I understand free societies will be peaceful societies, and the
more free the world is, the more peaceful the world will become. And
people will look back at this moment of history and say, this
generation, those of us given the honor of service will have done our
duty to spread freedom and peace around the world. Freedom is on the
march, and I want to thank the military folks and their families for
helping make it happen. (Applause.)
Our economy is recovering, it's doing well. I'm proud of the fact
that the great state of Florida has got a 4.3 percent unemployment
rate. It says something about your Governor. (Applause.) No, he's
right -- he just -- he just waved me off, kind of like trying to hit a
carrier. (Laughter.) He's right. Not because of him, not because of
me; because of the entrepreneurs of Florida, people who are willing to
take risk, be wise about spending capital and employing people.
No, the economy is fine. There are some dark clouds on the horizon
that we've got to address. We got too many lawsuits. I want to thank
Congress for getting a class-action bill to my suit -- my desk. We
need to get medical liability done in the United States Congress in
order to keep good doctors practicing medicine. (Applause.)
There's a lot of things we can do, and will do. I'm looking
forward to getting a final budget to my desk that's wise about how we
spend your money, that's also wise about making sure you got money in
your pocket. And you're going to need it, because, unfortunately,
energy prices are going up. And I know you're concerned about it. And
I'm concerned about it, too. I was concerned about it in 2001, when we
put together a strategy, an energy strategy, part of which required
action by the United States Congress that would encourage conservation,
encourage the use of renewable sources of energy like ethanol and
biodiesel, that encouraged research and development to figure out
better ways to use energy in the long run -- because one of these days
we're going to have to change the nature of the automobile by driving
hydrogen-powered automobiles, to become less dependent on sources of
energy. In other words, there's a lot of things we need to be doing
I know we need to be building LNG -- liquified natural gas
terminals. We need to do more on nuclear power. Congress needs to get
an energy bill. We've been debating whether or not there ought to be
an energy bill to my desk now for four years. And that's too much
talk, given the fact that consumers are beginning to hurt; too much
talk given the fact that the -- we're too dependent on foreign sources
of energy. I'm concerned about the energy, and Congress needs to be
concerned. These members are concerned. I talked to them on Air Force
One about it. I can be a plainspoken fellow if I need to be.
(Laughter.) And they're good listeners; they're ready to go.
(Applause.) But Congress needs to get a bill to my desk so we can
start becoming less dependent on foreign sources of energy.
Let me talk about Social Security. Jeb is right, we don't need to
talk about it. Some people say you shouldn't have talked about it. I
think the job of a President is to confront problems and not pass them
on to future Presidents. (Applause.) And I'm pleased to report
members from the United States Congress that are traveling with me
agree that Congress needs to confront problems and not pass them on to
future Congresses. (Applause.)
And we got a problem in Social Security. Let me first tell you,
Franklin Roosevelt did a good thing by setting up a safety net for
seniors. And I applaud him for that. And a lot of seniors who are now
getting their checks understand why I'm applauding him, because the
Social Security check you receive is really important for you. And --
but things have changed since Franklin Roosevelt was the President.
Before I tell you what's changed, I'm going to say this once, I may
say it five times before this is over: If you're getting a check,
nothing is going to change. I don't care what the propaganda says; I
don't care about the political rhetoric; you're going to get your
check. For those of you born prior to 1950, you're going to get your
check. The government -- nothing will change in the system. We're
here to talk about not you -- we're here to talk about your children
and your grandchildren. That's who we're here to talk about.
And I'll tell you why we've got a problem. First of all, Social
Security is a pay-as-you-go system, money comes in and it goes out.
Now, some of you might think that Social Security is a trust -- in
other words, the government takes your government and holds it for you,
and then when it comes time to retire, you get your money back. That's
not the way it works. The government takes your payroll taxes and pays
out to the people who have now retired; and if they got any money left
over, it goes to pay other parts of government. And all that's left is
an IOU from one -- from one part of government to the next. In other
words, it's pay-as-you-go.
And that system works well when you got a bunch of workers paying
for a few beneficiaries. That's the way it was when Franklin Roosevelt
designed the system. In 1950, there were 16 workers paying into the
system for every beneficiary. So obviously, the load per worker is
pretty light. What's changed is there is a bulge of people fixing to
retire called the baby boomers. Both of us are --
GOVERNOR BUSH: That's us.
THE PRESIDENT: Yes. (Laughter.) We are baby boomers. I happen
to be turning eligible at -- obviously, at 62 in 2008. It's quite
convenient. (Laughter and applause.) You plan it that way? Well,
thank you. And there's a lot of us. There is a bulge in the
population. And not only there's a lot of us, we're living longer than
during the time when Social Security was first fixed. And we're living
longer than the generation preceding us. So you got a lot of people
getting ready to retire who will be living longer, and not only that,
we've been promised more benefits than the previous generation; people
have run for office saying, vote for me, I'm going to make sure the
benefits increase. And so you've got a lot of people living longer,
getting greater benefits, and yet, we're not having as many children in
this society. In other words, you got fewer people paying into the
system. The math doesn't work.
It works for those who've retired. Second time I've said it; If
you're getting your check, you have nothing to worry about it. It
doesn't work for people who are going to have to pay for the baby
boomers like me who will be living longer, getting more money. And so
the fundamental question is: If you see that problem, what are you
going to do about it? And so the first thing I want to tell you is, we
have got a problem.
And the extent of the problem can be seen on this chart. In 2018,
there's more money going out than coming in. Right now, because the
baby boomers haven't started retiring -- who will be living longer,
receiving more money -- there's more money coming in than going out,
which is being spent. Pretty soon, there's going to be more money
coming out than going in. In the year 2027, there will be $200 billion
beyond the payroll taxes necessary to pay for the promises the
government has made. It increases every year, see. In 2018, it starts
going negative -- increases, increases, increases -- to give you an
extent -- by how much -- by 2027, it's $200 billion; greater than $200
billion the next year; greater than the next -- you know.
And so it starts to accumulate, which says to me that we have a
problem that we need to address now. Because if you wait later, a
younger worker is either going to have pay massive payroll taxes in
order to make sure the government pays the benefits; they're going to
have to cut my benefits; they're going to have do -- borrow a ton of
money. In other words, now is the time to act. We do -- have no
problem for those of you who are receiving your check. We have a
problem for your children and your grandchildren. And the problem is
right there in the cash deficits in a pay-as-you-go system.
And so I've taken it on. I think this is my 16th state. I'm
traveling all around the country, which I like to do -- it's a
convenient excuse to get out of the Nation's Capital --(laughter and
applause) -- and I'm explaining to people, you're going to get your
check, and we've got a problem.
And I think there's some logic to the strategy -- strategy,
because, listen to this: If you're a member of Congress, and all of a
sudden the constituents start to say, we've got a problem, Mr.
Congressman, or Madam Congressman, the next thing they're going to say
is, what you going to do about it? And once we can convince the
seniors they have nothing to worry about -- which they don't -- the
fundamental question for them becomes-- from a lot of younger
Americans, I'm glad you're taking care of my grandparents, or my dad,
or my mom, but what are you going to do for me? And that's the dynamic
that's going to get people coming to the table.
In order to help them come to the table, in my State of the Union
address, I said, I really want people to bring ideas forward. Please
bring your ideas forward. There will be no political retribution if
you bring good ideas forward, because I understand this is going to
require Republicans and Democrats coming to the table -- precisely what
the American people want, by the way. They want people to fix it, not
to play politics with it. (Applause.)
So all options are on the table. The other day, I was with a
former Democrat Congressman named Tim Penny -- Tim Penny, who had some
interesting ideas. My predecessor, President Clinton, recognized we
had a problem; he put some ideas on the table. And so I'm looking
forward to people from both parties coming up and saying, Mr.
President, here are some of my ideas. And my answer will be, welcome;
thanks for bringing them forward. Let's just see if we can't work
together to get something done.
I've got some ideas, and I want to share one of them with you,
which I think -- I hope you find interesting. And, first of all, by
the way, as Congress brings ideas, I'm not interested in a temporary
fix, and neither should you be. I want you to remember 1983 -- it was
a -- President Ronald Reagan and Leader Dole and Speaker Tip O'Neill
realized we had a problem, got Republicans and Democrats together and
came together and said, we'll put together a temporary fix. This is
the so-called 75-year option. And I like the spirit of people coming
together; I like the idea of people saying, we've got a problem, why
don't we fix it in a bipartisan way. The only problem is, the 75-year
option wasn't exactly right, because today is a lot less than 75 years
from 1983. And so when you hear the word, don't worry, we'll just fix
it for 75 years, the way the demographics are, the math just won't let
that happen. So now is the time to have a permanent solution.
And as they do the permanent solution, we also have got to work, in
my judgment, to make sure individual workers get a better deal from
Social Security. And the better deal would be allowing -- in my
judgment, again -- to allow younger workers to take part of their own
money. So when you hear payroll taxes, that kind of sounds like it's
the government's money. It's not, it's your money. And I want you to
know I understand that -- that you ought to take some of your own money
and be able to save it in bonds and stocks.
And the reason why I think you ought to be able to do that is
because a mix of conservative bonds and stocks will get you a better
rate of return on your money than that which you're going to get inside
the government. And that's important, because if you're a young
worker, interest compounds -- or an old worker -- interest compounds.
But the longer you hold money, compounding, the more you'll end up
with. It grows. And the greater return you get on your money, the
more you'll have when it comes time to retire.
So the idea is, as a part of a Social Security system, allow you to
take some of your money so you can build a nest egg of your own. I
like the idea of people building nest eggs. I think if you own
something, you're likely to have a more vital stake in the future of
the country. One of the most heartening statistics, I think, in
today's world is more and more people are owning their own home. More
minority families own a home today than ever before. That's
heartening, I think. I tell people, I love the idea of somebody
opening up the door and say, welcome to my home, thank you for coming
to my piece of property.
I think the fact that more and more people are owning their own
small business is helpful. I know it's going to be helpful to have
more people owning a piece of their own retirement account and managing
Now, a couple of things about personal accounts. One, I've told
you about the compounding rate of return. Just to give you an
example: If a person were allowed to take 4 percent of their payroll
taxes, or a third of the payroll taxes, and set it aside in a personal
account, starting at age 21, and that person earned $35,000 over her --
his or her lifetime, that by the time she can retire, that money set
aside would be worth $250,000 as a nest egg. In other words, that
compounding rate of interest will do that. Obviously, if you make
$70,000 over your lifetime, it's double that. Then you have a
half-a-million dollars that you can call your own.
So what can you do with that? Well, first, I know some people get
nervous about investments. We're going to talk about investments
here. You can't take your money and put it in the lottery, let me put
it to you that way. In other words, a personal account doesn't give
you latitude to -- you know, you still got Jai-Lai here? Yes. Okay,
you can't go a Jai-Lai deal. (Laughter.) You've got to invest it in a
conservative mix of bonds and stocks, just like federal employees do
Any federal employees understand what I'm talking about -- the
thrift savings plan? It works. We're going to talk to somebody who's
got a piece of the thrift savings plan. This is -- this is
happening. This isn't -- I didn't sit here and invent this. This is
taking place already at the federal level. People who work for the
federal government get to take some of their own money and set it aside
in a conservative mix of bonds and stocks because the government
realizes you get a better rate of return on your money. If it's good
enough for federal employees, it seems like to me it ought to be good
enough for people who are working, you know, who aren't working for the
federal government. (Laughter and applause.) That was not a cheap
shot at people like me working at the federal government. (Laughter.)
Secondly, you will get the check from the federal government in the
Social Security system if you're a younger worker. I just can't
guarantee how big it's going to be. You know, there's not enough money
to pay the promises, I'll just tell you that. I think that's part of
the -- part of the dialogue is to make sure everybody understands.
It's not a trust, and we're not going to be able to keep the promises
unless we're willing to have extraordinarily high taxes on the people
coming up, or significant benefit cuts.
And so one way to help you do a better job of coming closer to what
the government has promised is to allow you to earn this money, and
then use it as a part of a retirement plan. In other words, the
government is going to get you a check, and then you're also going to
be able to take money out of your own personal account to help you when
you retire. That's important for you to know.
The system is not fair for people, oftentimes. Somebody --
somebody dies early, been working 30 years, dies at 55 years old, money
goes in the system, the spouse doesn't get a dime until he or she turns
62. That doesn't seem fair to me; does it to you? And a personal
account, if you had one of those, and your assets were growing, and you
passed away, you could leave it to whomever you want. There would be
some comfort for the spouse. Two people working, a husband and a
spouse, husband predeceases the spouse, she continues to work -- she's
either going to get, at 62 years old, her own Social Security check or
survivor benefits, which is ever larger, but not both. That doesn't
seem fair, does it? Somebody is working all their life, the money they
put inside Social Security is not available for somebody he or she
loves. If you have your personal account, it grows. You die, your
wife or your husband is going to get your personal account -- or your
I like the idea of encouraging savings. For those of you who
studied macroeconomics -- it's a fancy word for how to make sure the
economy grows -- the more you save the more capital there is; the more
capital there is, the more money is available for small business
expansion so people can work.
So that we need to encourage savings. I like the idea. I'm
telling you, I like the idea. I'm going to talk a lot about it. I'm
going to talk to others about the idea, too. It needs to be a part of
the dialogue. And it's interesting, you know, we're not talking about
a big cultural shift here. When I was coming up, I don't remember my
mother telling me to be careful about my 401(k) plan. They didn't
exist, I don't think. There wasn't a lot of focus on encouraging
people to manage their own money. Today, that has changed. There's a
lot of young Americans, Americans from all walks of life, Americans
from all income levels, Americans from all neighborhoods who understand
what it means to have a 401(k), an IRA, a defined contribution plan.
And they like it, and they're used to it, and they're comfortable with
And so I want Congress to consider making this same kind of culture
available for workers to the Social Security system, to strengthen the
system; to say to younger workers, it's a better deal for you; to be
able to assure grandparents that when it comes to their grandchildren,
the safety net that was available for them will be available for the
new generation coming up.
And so now I'm going to talk with some other people about it,
starting with my mother. I promise not to tell you her age, but she's
eligible for Social Security. (Laughter.)
MRS. BUSH: How old are you? (Laughter.)
THE PRESIDENT: Fifty-eight. How about that?
MRS. BUSH: Add 22 years. (Laughter.)
THE PRESIDENT: Yes.
MRS. BUSH: You're supposed to ask me why I'm here.
THE PRESIDENT: Okay. First of all, I now know why I'm getting
white hair. (Laughter.)
MRS. BUSH: I'm here because when else can I see my two oldest
boys? (Laughter and applause.)
THE PRESIDENT: How about a little better answer than that, will
MRS. BUSH: That's reason number one.
THE PRESIDENT: Now, wait, it's not, how can I see my two better
boys, it's how can I tell my two better boys in person what to do, is
what you're really trying to say. (Laughter.)
MRS. BUSH: Right, right. If you would listen, I'd tell you more.
(Laughter and applause.) But that's really not why I'm here. I'm here
because your father and I have 17 grandchildren, all born after --
we're doing our part, incidentally, on the labor -- (laughter) -- but
all born after 1950. And we want to know, is someone going to do
something about it. That's the whole reason -- other than seeing my
THE PRESIDENT: Well, I'm glad you're here, Mom. And, yes, I hope
you can tell -- I think you will be able to tell -- and I think others
like Mom, who are worried about whether or not government even cares
about taking on a tough enough issue to address the issue for
grandchildren, whether or not -- whether or not there's a will. You'll
see. I think you'll see by the time this over that there is an
interest and a desire, a willingness to take on a tough issue, just
like you taught me. Not to shirk my duty, but to step up and lead and
to do -- do the hard work.
And it is. Listen, I concede, Mom, that members of Congress, some
would rather not be talking about it. (Applause.) But we're going to
talk about it, and I'm going to assure you -- I've got your
stubbornness -- that I'm going to -- in a good way -- I'm going to --
I'm going to keep talking about it until something gets done. I'm
going to keep traveling the country saying to people, we've got a
problem; if you're a senior, you're going to get your check; and I'm
willing to work with Congress. And I'm going to tell you, I -- the
people of this country are tired of partisan bickering on big issues.
They don't want people -- (applause) -- they just want the problem
We've got Lee Abdnor with us. She is -- she's from Boulder,
Colorado. Is that true still?
MS. ABDNOR: Yes, sir.
THE PRESIDENT: Listen, I want you to know, I formed a committee in
2001 of Republicans and Democrats to look at Social Security. And
Patrick Moynihan, a former Senator from New York, headed it. Isn't
MS. ABDNOR: That's right.
THE PRESIDENT: And Lee's on it. Okay, let her go. She studied
* * * * *
THE PRESIDENT: Thanks for coming, Lee. Thanks for serving. It
MS. ABDNOR: My pleasure.
THE PRESIDENT: Let me ask you. I think it's important for you to
understand that those who served on the committee were good thinkers,
all walks of life, and represented both political parties, and they
came together with some ideas. I think there was a couple of ideas
that I think are very interesting. We've sent them up to Congress, of
course. One of the interesting points that came out of there -- and
it's very important for people to understand -- is that you can design
a system to make sure that low-income Americans -- that the system is
progressive, which is a good idea. Posen is the man that you served
with, I think.
MS. ABDNOR: Yes, he was one of the ones.
THE PRESIDENT: He floated a really interesting idea that I hope
Congress takes a look at, which is to make sure that the lower-income
Americans are treated in a way so that -- that when people retire
they're as taken care of as well as can be, that the safety net is
truly a safety net. It makes sense.
And so you can structure a system so that we're -- make sure that
we're taking care of the low-income people better. And my only point
is Lee's committee had a lot of really good ideas out there. I like
the spirit of how they met. They didn't show up and say, I'm not going
to listen to your idea. They showed up and said, bring your ideas
forward. And as I said, Senator Daniel Patrick Moynihan, who was a
fine, fine United States senator from New York, a Democrat, was able to
coax good ideas out. So thanks for the spirit.
MS. ABDNOR: Exactly, and, Mr. President, I think one of the things
that was most gratifying was that even in private, we never talked
about politics -- not once in all of those months. All we talked about
was policy, what's the best way to go forward, how would certain people
be helped, how would certain people be harmed by different ideas, or by
THE PRESIDENT: Well, I appreciate you.
Andrew Brown is with us.
MR. BROWN: Yes, sir.
THE PRESIDENT: Where you from, Andrew?
MR. BROWN: I'm from Bay, Arkansas. It's a small town, about 2,000
people, in northeast Arkansas.
THE PRESIDENT: That's three times more than Crawford. (Laughter.)
MR. BROWN: Yes, sir.
THE PRESIDENT: Good. Did you -- are you educated?
MR. BROWN: Well, I graduated from the Naval Academy last year,
THE PRESIDENT: Awesome, yes. (Applause.) Figured that would get
a nice round of applause here in Pensacola.
MR. BROWN: Yes, sir, and I came down here last summer to begin
flight school at Pensacola.
THE PRESIDENT: Good, yes. How is it going?
MR. BROWN: It's going really well.
THE PRESIDENT: No crashes?
MR. BROWN: No crashes, yet. (Laughter.)
THE PRESIDENT: That's good. It sounds positive. (Laughter.)
MR. BROWN: Yes, sir. And I'm just really enjoying that, and
looking forward to getting my wings in a couple of months and getting
out and doing it for real.
THE PRESIDENT: Congratulations. Thanks for serving. (Applause.)
Other than making sure the Commander-in-Chief knows you're about to get
your wings, why are you here? (Laughter.)
MR. BROWN: Yes, sir. Social Security kind of concerns me a little
bit. I don't really foresee that it will be around for my generation.
THE PRESIDENT: Let me stop you. This is not -- this is not the
first time I have heard this, I don't think it's going to be around for
my generation. Congress needs to hear this.
MR. BROWN: Right. So I invest my money mostly in a Roth IRA. I
think that's a great way to invest money. And I applaud Congress for
upping the limits there, letting people do more with their money. And
I also invest in a thrift savings plan.
THE PRESIDENT: Explain to people what that means, invest in a
thrift savings plan. I think some out there listening may not be sure
what a thrift savings plan is. It sounds sophisticated. It sounds
* * * * *
THE PRESIDENT: Who decides where the money goes?
MR. BROWN: I decide where the money goes. The percentile
breakdown, I decide.
THE PRESIDENT: The people who are running the thrift savings say,
here's five different options for you, kind of a different mix and risk
and return, I guess.
MR. BROWN: Yes, sir, ranging from international --
THE PRESIDENT: Which one of them is not the lottery I want you to
MR. BROWN: Yes, sir. And so I've enjoyed being able to put more
money aside and grow tax-free through the thrift savings program that
wouldn't be covered under the Roth.
THE PRESIDENT: And how often do you get a statement?
MR. BROWN: I check on mine online, sir.
THE PRESIDENT: Oh, you do? (Laughter and applause.) Don't worry
about making the Commander-in-Chief look technologically incompetent.
(Laughter and applause.) Private. Anyway -- (Laughter.)
Think about this. I just want you to listen to what he said, he
checks about it online. He watches his money grow. Some people get
monthly statements. They watch their money. There's nothing better in
a society than to have people concerned about their assets. That's
what ownership does. It's yours. Nobody can take it away.
The other thing is that when you hold money over a long period of
time, there is a predictable rate of return depending upon the risks
you take. And there's ways to design programs so that the closer you
get to retirement, if the markets were to happen to go down, you're
able to get your money, see? That's what's important for people to
understand. And obviously, you feel comfortable doing it.
MR. BROWN: Yes, sir, I'm very pleased with the thrift savings
THE PRESIDENT: Good. See, he's a Navy pilot, risk-taker, and
manages his own money. (Laughter.) Thanks for coming, Andrew. I
appreciate your concern.
MR. BROWN: Thank you, sir, it's an honor. (Applause.)
THE PRESIDENT: Thanks for serving. By the way, somebody one time
told me they saw a survey that said people like Andrew, people Andrew's
age think it's a lot more likely they'll see a UFO than to get a Social
Security check. (Laughter.) May be right.
With us is Dr. Ron Guy, age 58 years old.
DR. GUY: Yes, sir, same age.
THE PRESIDENT: Welcome.
DR. GUY: Thank you, sir.
THE PRESIDENT: Leading edge of baby boomers.
DR. GUY: Yes, sir.
THE PRESIDENT: What do you do?
DR. GUY: Presently, sir, I do financial strategies, working with a
great group of partners at Guernsey and Associates. There are 15 of us
that help people plan their life, from wherever they are to age 100.
And we look very closely, sir, at Social Security.
THE PRESIDENT: What happens if they're 101?
DR. GUY: Okay, we can do that, too, sir.
THE PRESIDENT: So give me -- this is his field, right? You
understand pay-as-you-go, you understand all the terms we're using, you
understand thrift savings plans, internal rate of returns -- let her
* * * * *
THE PRESIDENT: Thank you, sir. Appreciate you. (Applause.) One
of the interesting things about investing -- when you think of
investors, you think of a certain kind of person, and I don't view that
-- I'm sure you don't either. You work with people from all walks of
life. I mean, everybody has got a chance -- should have a chance to be
an investor. Investing is not limited to a certain class of person
That doesn't make any sense. And yet, I think the attitude of some,
you know, we can't let certain people maybe invest their own money.
Maybe they don't know how to do it.
I'm kind of leading you on here, but give me a sense for how hard
it is for people to figure out how to invest their money in a
prescribed set of bonds and stocks.
* * * * *
THE PRESIDENT: Well, good. See, financial literacy. By the way,
one of the interesting things we've done is we've encouraged the
faith-based community to take on the idea of educating people in
financial literacy, so that we can make sure financial literacy is able
to permeate all neighborhoods in our society. People will be
comfortable with this. This is something that is happening, by the
way, already without government, of course. Defined contribution plans
exist throughout all society right now: thrift savings accounts, IRAs,
The reason I keep emphasizing that is when I talk about a savings
plan for individuals, it's happening. And the question is, do we have
the wisdom to extend this kind of savings plan to the Social Security
system to allow younger workers -- this isn't going to -- you don't
have to worry about me and -- we just don't have to worry about it.
The system is fixed if you're born before 1950. It's not going to
change one iota. The question is, do we listen to younger workers? Do
we fit the plan in to meet the current culture and do we give them a
better deal? Do we try to make the system on an individual basis?
I told the -- that these accounts do not permanently fix Social
Security. We're going to have to do other things. They are part of a
Social Security fix that will help the individual worker.
Now, I'm going to talk to Myrtle Campbell. Myrtle, put that mic
MRS. CAMPBELL: Yes, Mr. President.
THE PRESIDENT: Thanks for coming. I came all the way to wish you
a happy birthday for your birthday next Sunday -- isn't that right?
MRS. CAMPBELL: Yes. Thank you, Mr. President.
THE PRESIDENT: Myrtle Campbell is here and she brought somebody
with her. Who did you bring with you?
MRS. CAMPBELL: I brought my granddaughter, Mary Beth Roberts.
THE PRESIDENT: Very good. Will start with you, if that's all
MRS. CAMPBELL: With me?
THE PRESIDENT: Yes. Do you receive a Social Security check?
MRS. CAMPBELL: Yes. And for 82 years, that amounts to a lot of
checks. And it has come in real handy, and I would hate to part with
THE PRESIDENT: Yes, you count on it.
MRS. CAMPBELL: Yes.
THE PRESIDENT: I want you to know, Myrtle, I understand a lot of
people count on their Social Security check. I mean, it's a really
important part of a lot of people's lives. Some people count only on
their Social Security check, and therefore, one of the issues in
talking about this is to make sure we don't frighten you. Seriously.
We don't want people to feel like the government is fixing to make sure
that the check she counts on is diminished or goes away. And I
understand that. I fully understand that. And that's why I'm spending
a lot of time talking about it, because I understand that sometimes
there's another message getting out there.
I can remember in 2000, they said, if old George W. gets elected,
he's going to take away your check. I got elected, so in the 2004
campaign it didn't quite work because people did get their checks.
Keep going. Are you worried about it?
MRS. CAMPBELL: I'm not worried about it, no. I am concerned,
however, for my grandchildren and what's coming up for them and how
their livelihood will be, what's due for them.
THE PRESIDENT: How many have you got, how many grandchildren?
MRS. CAMPBELL: I have nine grandchildren, and I have a whole slew
of students throughout the United States that I'm concerned about, as
THE PRESIDENT: You're a teacher?
MRS. CAMPBELL: I'm a Bible teacher.
THE PRESIDENT: Great, thanks.
MRS. CAMPBELL: I'm a volunteer.
THE PRESIDENT: Volunteer, very good. (Applause.) That's
MRS. CAMPBELL: I was concerned with children, like your mother.
THE PRESIDENT: Yes.
* * * * *
THE PRESIDENT: Well, I appreciate you. Thank you for sharing that
with us, Myrtle. And I -- I want you to introduce your granddaughter
MS. CAMPBELL: Well, this is Mary Beth Roberts. She's the daughter
-- one of the daughters of my daughter.
THE PRESIDENT: One of the daughters of your daughter.
MS. CAMPBELL: Wanda Roberts.
THE PRESIDENT: That's good. Three daughters?
MS. CAMPBELL: Three.
MS. ROBERTS: They're over there.
MS. CAMPBELL: She has five.
THE PRESIDENT: You got all the sisters here?
MS. CAMPBELL: Yes.
THE PRESIDENT: Fantastic. Oh yes, I see them over there.
MS. ROBERTS: My little brother right there, too.
THE PRESIDENT: Brother? Fine-looking lad. (Laughter.)
MS. ROBERTS: Right next to him.
THE PRESIDENT: Yes, got it. (Laughter.) I picked him out.
Didn't mean to embarrass you.
MS. ROBERTS: It's okay.
THE PRESIDENT: Although, Mary Beth, before we came on, said, make
sure you introduce my boyfriend. (Laughter.) Just kidding.
MS. ROBERTS: That's all right.
THE PRESIDENT: So what do you do?
MS. ROBERTS: I am currently a college student at the University of
West Florida majoring in public relations.
THE PRESIDENT: Fantastic. Good. Good. (Applause.) How's it
MS. ROBERTS: I'm sorry?
THE PRESIDENT: How's it going?
MS. ROBERTS: It's going wonderful. I'm having a great time.
THE PRESIDENT: Actually, you took some classes here, right?
MS. ROBERTS: I did. I attended Pensacola Junior College and got
my general education here.
THE PRESIDENT: Good. Good job.
MS. ROBERTS: Love it, too. (Applause.)
THE PRESIDENT: Major?
MS. ROBERTS: Public relations and advertising.
THE PRESIDENT: Here's your chance. (Laughter.)
MS. ROBERTS: Appreciate that.
THE PRESIDENT: Yes, no problem. (Laughter.) So your grandmother
says she's worried about her grandchildren -- a safety net for her
grandchildren when they retire. Do you share that same concern?
MS. ROBERTS: I am extremely concerned. I'm pretty young, I'm 21,
and I have a feeling that --
THE PRESIDENT: Pretty young? (Laughter.) You're really young.
Younger and younger every year. (Laughter.) Go ahead.
MS. ROBERTS: So by the time that I am a senior citizen, I'm sure
Social Security will have been long gone, so I'm very concerned.
THE PRESIDENT: Yes, it's important for 21-year-old people to pay
attention to this issue. If it doesn't get fixed, the bill is going to
be huge. That's what you've got to understand if you're 21 years old.
You know, they always say, 21-year-olders don't pay attention to
politics or issues. I don't know if that's the case.
MS. ROBERTS: I pay attention, Mr. President.
THE PRESIDENT: Good. (Laughter.) Give me a chance -- and by the
way, personal accounts are voluntary. In other words, I'm not going to
say -- the government isn't going to say, you have to do this. I
believe in saying to somebody, if you choose to do this, you can do
it. You don't have to do it. If given that opportunity -- I'm maybe a
little premature, but if things go right, you may be given that
opportunity pretty quickly.
MS. ROBERTS: I hope so. (Applause.)
THE PRESIDENT: So what would you -- do you have any sense for
whether or not you would opt to decide to take some of your money aside
and put it inside an account?
MS. ROBERTS: I would definitely take that option.
THE PRESIDENT: Really? It doesn't frighten you?
MS. ROBERTS: Not at all. It actually would be encouraging to know
that I will definitely get that when I do retire so I have something to
THE PRESIDENT: Yes. A nest egg.
MS. ROBERTS: That's right.
THE PRESIDENT: The other thing I think is important is to be able
to pass -- for Mary Beth to be able to pass her money on to whomever
she chooses. I think that would be beneficial for society, to have
more assets accumulate and to be able to have kind of a generational
transfer of assets. I think it would be beneficial for people from all
walks of life. I really do. I think it's -- I think it's a concept
that's an important concept, the idea of passing property on to
whomever you choose, the idea of accumulating property.
If she starts, by the way, she's going to do quite well. It sounds
like she's going to make quite a good living and set aside money and
put it away, conservative bonds and stocks. And it grows. It
I want to repeat another point. The money she'll get in her
account, the return -- rate of return on a conservative mix of bonds
and stocks will be greater than her money will be earning in the
federal government. And that's an important difference, particularly
for a 21-year-old investor, over a period of 41 years. That money
And so I'm glad you're interested.
MS. ROBERTS: Yes, sir.
THE PRESIDENT: My -- then my advice to you, everybody else, people
watching, is write your senators and write your congress people. Let
them know you're concerned, let them know you're interested, and people
coming together to solve this problem to save Social Security for
generations to come. (Applause.)
Thanks for coming, thanks for your interest. God bless.
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