George W. Bush on Social Security
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GEORGE W. BUSH: Today, I want to talk with and about the elderly – about the challenges they face and the contributions they make. About the policies of our government and the values of our society.
Senior Americans are not one more interest group, one more voting bloc to be polled, pandered to, or written off.
They are our parents and grandparents, our neighbors, coworkers and friends, passing through a stage of life that awaits each of us. How we treat them reflects the deepest commitments of our society. How we treat them reflects something about ourselves – whether we honor and appreciate life in all its seasons.
Meeting our commitment to the elderly begins with economic security.
America made this commitment almost exactly 65 years ago – in August of 1935. A person born the year social security came into being is now eligible for its benefits.
Life before social security could be harsh. A woman who grew up in rural Alabama described the fate of senior citizens this way: “They sent them over the hill to the poorhouse. I was a little girl but I can remember. All they did was lay up there and die.”
Sixty-five years later, we can declare: Social security is the single most successful government program in American history. Without it, more than half of all seniors would live in poverty. For millions – for parents and grandparents with little or no savings – it is the difference between destitution and dignity.
Social security is a defining American promise, and we will not turn back.
This issue is a test of government’s capacity to give its word and keep it, to act in good faith and to pursue the common good.
And social security is also a test of presidential candidates – a measure of seriousness and resolve. Too many times, social security has been demogogued to frighten the elderly for political advantage. Too many candidates have traded on the problems of the system instead of correcting them, shoving them off for others to handle – to some future generation, some other president and some other Congress.
I am here with a message for America, and to put my opponent on notice. The days of spreading fear and panic are over. The days of delaying, dividing and demagoging are over. When I am elected, this generation and this president will save social security.
We are nearing social security’s greatest test. Eight years from now, the massive baby-boomer generation will begin drawing benefits. Their lives will be long and healthy. And within two decades, there simply won’t be enough younger workers to pay the benefits earned by the old.
If we do nothing to reform the system, the year 2037 will be the moment of financial collapse. The system will be insolvent, with deficits in the trillions of dollars, requiring either a massive cut in benefits or a massive increase in taxes.
At a time for leadership – for long-term thinking – my opponent proposes a band-aid approach. He says: “If it ain’t broke, don’t fix it.” But in the lifetime of some people in this room, it will be broke, and we must fix it. With every day of delay this becomes more difficult. For eight years, the Clinton/Gore administration has failed to act. And now Al Gore wants to pass the burden on to future generations. The Gore plan will eventually require either a 25 percent increase in income taxes – the largest in our history – or a substantial reduction in benefits.
But there is good news. There is a new attitude in Washington that shows that reforming social security can and must be bipartisan. Recently I met with Senator Bob Kerrey – a Democrat who is a leader for social security reform. Senator Kerrey, and Senator Moynihan, both Democrats, and Senator McCain, a Republican, recently had a press conference to discuss common principles of reform. They proposed an innovative framework for members of Congress to work together on this issue – a framework that includes a bipartisan commission.
I support a bipartisan commission, because it will help pave the way to a consensus on reform. We can already see the emerging outlines of a consensus – led by people like Senators Breaux, Gregg, Grassley, and Gramm… Congressmen Kasich, Archer, Shaw, Kolbe and Stenholm. As president, I will build on that momentum, with some clear principles.
First, we must not change social security for those now retired, or nearing retirement. Let me put this plainly. For those on social security – or close to receiving it – nothing will change. Government has made a commitment, and you have made your plans. These promises will be honored. Yet, without reform, younger workers face a great risk – a lifetime of paying taxes for benefits they may never receive. The reforms I have in mind will actually increase their retirement income.
Second, all social security funds in the federal surplus must stay where they belong – dedicated to social security. In my economic plan, more than $2 trillion of the federal surplus is locked away for social security. For years, politicians in both parties have dipped into the trust fund to pay for more spending. And I will stop it.
Third, the payroll tax must not be raised. We cannot tax our way to reform.
Fourth, reform should include personal retirement accounts for young people – an element of all the major bipartisan plans. The idea works very simply. A young worker can take some portion of his or her payroll tax and put it in a fund that invests in stocks and bonds. We will establish basic standards of safety and soundness, so that investments are only in steady, reliable funds. There will be no fly-by-night speculators or day trading. And money in this account could only be used for retirement, or passed along as an inheritance.
Right now, the real return people get from what they put into social security is a dismal two percent a year. Over the long term, sound investments yield about a six percent return. Investing that four percent difference, over a lifetime, can show dramatic results. A worker who invests even a limited portion of his or her paycheck could, over a career, end up with hundreds of thousands of dollars for retirement.
The American securities markets, over time, have been among the most reliable investments in the world. Through the Great Depression, a World War, and 11 recessions, the overall stock market has never lost money over any 20-year period. It is the best, safest way to build personal wealth. That’s why teacher pension plans and private business retirement plans all across America invest in such funds.
Some in Washington call this idea risky. But here are some simple questions you should ask them: Do they own stock themselves? Is that part of their own retirement plan? Does it make them feel more secure, or less, to own investments? Clearly, they don’t think this is risky for themselves. People in Washington see it as an opportunity. Yet it is an opportunity they would deny to others.
Every federal worker is offered a personal account to help improve their retirement – 1.3 million have these accounts. Al Gore, who calls these bipartisan proposals risky, has a substantial amount of his money invested in the stock market. If he is building his own retirement security in the market, why does he object to young Americans doing the same?
Consider this simple fact: Even if a worker chose only the safest investment in the world – an inflation-adjusted U.S. government bond – he or she would receive twice the rate of return of social security.
There is a fundamental difference between my opponent and me. He trusts only government to manage our retirement. I trust individual Americans. I trust Americans to make their own decisions and manage their own money.
Let me be clear. Personal accounts are not a substitute for social security. They involve only a limited percentage of the payroll tax so the safety net remains strong. Let me say this again: For those who are retired or near retirement, there will be no changes at all to your social security. But we can and must give younger workers the option of new opportunities.
Personal accounts build on the promise of social security – they strengthen it, making it more valuable for young workers. Senator Moynihan, Democrat, says that personal accounts take the system to its “logical completion.” They give people the security of ownership. They allow even low-income workers to build wealth, which they will use for their own retirement and pass on to their children. Some plans would match the contributions of low-income workers to their personal accounts. That is also an idea we should consider.
Senator Kerrey, also a Democrat, recently said: “It’s very important, especially for those of us who have already accumulated wealth, to write laws to enable other people to accumulate it, and arrive where we are.” Ownership in our society should not be an exclusive club. Independence should not be a gated community. Everyone should be a part-owner in the American Dream.
Within the framework of these principles, we can keep social security strong and stable. We can keep our commitments. We can avoid tax increases. And millions of Americans will have an asset to call their own. This is the best thing about personal accounts. They are not just a program, they are your property. And no politician can take them away.
As our society grays, we must keep our commitments. But we must also set new goals. Our nation has a vital interest – a moral interest – in making retirement a time of security and health and contribution.
Last week, I visited with a group of senior citizens in Davenport, Iowa, and outlined my plan to make long-term care available and affordable, instead of a path to financial ruin. Soon I’ll be offering proposals to encourage senior volunteerism, and to fight diseases of the aged. But today let me focus on one more issue – another issue where partisanship is blocking progress.
Our nation must reform Medicare – and, in doing so, ensure that prescription drugs are affordable and available for every senior who needs them. As with social security, Medicare reform must be guided by clear tenets.
Medicare must be preserved as an entitlement for all who qualify. Seniors on Medicare should have access to the latest medical technology. Medicare must offer comprehensive coverage for low-income seniors, including prescription drugs. And any reform must ensure the solvency of Medicare.
Seniors deserve a wider scope of coverage, and they deserve to have more choices among health plans. Over the last few years, both Republicans and Democrats have embraced these goals. Yet despite the best efforts of leaders like Senator Frist, Congressman Thomas, Senator Kerrey and Senator Breaux, the Clinton/Gore Administration has blocked bipartisan Medicare reform.
When I am president, I will lead Republicans and Democrats to reform and strengthen Medicare and set it on firm financial ground.
And I make this pledge to seniors: Every senior will have access to prescription drug benefits.
Prescription drugs are becoming the treatment of choice. Drugs are often more cost-effective than surgery or hospitalization, with fewer risks and better results. And the picture gets better year by year. By one estimate, suppliers are now working on more than 600 new medicines to treat the causes of disability among seniors.
But prescription drugs can be expensive. The average senior already pays $450 each year in out-of-pocket drug expenses. Twelve percent of Medicare beneficiaries have drug bills of $1000 or more. Ninety-eight percent of health plans today offer some form of prescription drug benefit. Yet Medicare does not. And this must change.
A bipartisan approach is already gaining support in Congress. Under this model, every person on Medicare could choose a plan with a prescription drug benefit. And for low-income seniors, Medicare itself would cover the whole cost of the plan – including prescriptions.
This is a realistic reform – balancing personal and public responsibilities. Just as important, it keeps government out of the business of setting prices or dictating treatments, which it must never do.
Our society is aging, and this brings new responsibilities. In our time, we must reform and strengthen the programs on which many seniors depend. But we must also renew the values that inspired these programs – the values of a generous and welcoming society.
Our seniors contribute goods and gifts only they can offer. Sometimes these goods register on the economic scales, in second careers. And sometimes they escape the measure of economics – in the lessons they teach to their grandchildren, and the love they give.
I think of my own parents, my busy mom, and my 75-year-old father who parachutes from airplanes. Both are examples of the active, important lives that many older Americans are living. Mom and Dad are the greatest possible blessing at this stage in our own lives, and in the lives of our children.
Modern medicine has lengthened the years allowed us. But, as President Kennedy said, “It is not enough for a great nation merely to have added new years to life – our objective must also be to add new life to those years.”
When leaders build the health and security of older Americans, our nation gains their talents and shows its values. We are enriched by their skills, and we show the respect they have earned. It is a daily opportunity, and an ancient obligation: Honor thy father and mother.
Our seniors have blessings to give. And our nation has promises to keep.