Bush: Social Security on road to bankruptcy
WASHINGTON (CNN) -- President Bush used his weekly radio address Saturday to push for Social Security reform, saying the system will be paying out more money than it gets in payroll deductions in less than 15 years.
Bush said the system was created in a different era and doesn't account for 21st century realities.
"While benefits for today's seniors are secure, the system is headed towards bankruptcy down the road," Bush said. "In the 1950s, there were about 16 workers paying for every Social Security beneficiary. Today, there are about three. And eventually, there will only be two workers per beneficiary."
"These changes signal a looming danger: In the year 2018, for the first time ever, Social Security will pay out more in benefits than the government collects in payroll taxes. And once that line into the red has been crossed, the shortfalls will grow larger with each passing year. By the time today's workers in their mid-20s begin to retire, the system will be bankrupt, unless we act to save it."
The president said he had met with congressional leaders from both parties earlier in the week and asked them to join him in preserving Social Security for future generations. "A crisis in Social Security can be averted, if we in government take our responsibilities seriously and work together today."
Bush outlined several principals to guide reforms. First, he said, nothing would change for those receiving Social Security and those who are near retirement. Second, he said, payroll taxes should not increase "because higher taxes would slow economic growth." And the nation should "tap into the power of compound interest" by giving younger workers the option to save some of their payroll taxes in a personal account, "a nest egg they can call their own, which government cannot take away."
In 1935, when Social Security was created, most women did not work outside the home, and American workers' life expectancy was less than 60 years, Bush said. Today, more mothers work, and Americans live longer and have longer retirements.
"I came to Washington to solve problems, not to pass them on to future presidents and future generations," Bush said. "I campaigned on a promise to reform and preserve Social Security, and I intend to keep that promise ... The American people voted for reform in 2004, and now they expect us to work together and deliver on our promises."