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 Clinton Kicks Off Social Security Debate(04-07-98)



President Bill Clinton Speaks To Lawmakers' Town Meetings Via Satellite

April 7, 1998

CLINTON: Good afternoon. Thank you, Ken.

As Ken said, I'm speaking to you from Kansas City, where we're talking about what we must do as a nation to strengthen Social Security for the 21st century. And I'm looking forward to continuing to talk with you today.

Let me begin by thanking Representatives Bob Borski, Ben Cardin, Nancy Johnson, Jim Kolbe, and Gerry Weller for holding these town meetings across our nation. For each of you lawmakers, these forums are not the only way you've worked to strengthen Social Security.

Representatives Borski and Cardin are cosponsors of key legislation to establish the Save Social Security First Reserve Fund. Representative Borski supports saving any budgetary surplus for investment in Social Security, and I know Representative Cardin does as well.

Now Representative Johnson has been a strong advocate for Social Security beneficiaries. She's urged her fellow members of Congress to continue to act with fiscal restraint as they debate what to do with the budget surplus.

Representative Kolbe is one of our foremost experts on retirement and pension policy, and is the sponsor of a resolution to establish a joint commission on Social Security reform.

And Representative Weller has been a powerful voice for protecting the Social Security Trust Fund, and was an original cosponsor of the Social Security Preservation Act.

Together, all of you are proving that we can work in a bipartisan way to make sure that Social Security is as solid for our children as it was for our parents. And I thank you for that.

As you know this year, working together with Congress, we will be balancing the budget for the first time in 30 years. We have a right to be proud of that achievement, but we must also build on it.

In the State of the Union, I called on Congress to set aside every penny of any budget surplus until we save Social Security first. Social Security is deeply woven into our nation's social fabric. For 60 years, it's meant more than an ID number on a tax form, even more than a monthly check in the mail.

It reflects our deepest values and the duties we owe to one another.

Today, 44 million Americans depend upon Social Security. For two-thirds of our seniors, it's the main source of income. And one in three beneficiaries are non-retirees.

Social Security is life insurance and disability benefits as well as a rock-solid foundation of retirement security.

Today, Social Security is sound. But a demographic crisis looms if we fail to act. For over the next 30 years, 76 million baby boomers will retire. By 2030, there will be twice as many elderly Americans as there are today.

If we don't act now, by then, payroll contributions will only cover 75 percent of benefits. That's why I've challenged our nation to act now to strengthen Social Security for the 21st century.

Here are the principles I want to follow for meeting this challenge.

First, any reform should strengthen and protect Social Security for the 21st century. We can't abandon the basic core program that's been one of the great successes of our nation's history.

Second, we must maintain the universality and the fairness of Social Security. For a half century, this program has been a progressive guarantee for citizens. We have to keep it that way.

Third, Social Security must provide a benefit people can count on. Regardless of the ups and downs of the economy or the financial markets, we must make certain that Social Security will provide a foundation of retirement security.

Fourth, Social Security must continue to provide financial security for disabled and low-income beneficiaries. We can never forget the one out of three Social Security beneficiaries who aren't retirees.

And fifth, any strengthening of Social Security must maintain America's hard-won fiscal discipline, one of the main reasons we're enjoying our prosperity today.

These are the five principles that will guide me on Social Security -- principles by which I'll judge all possible proposals. They are principles I believe can and should guide us all as we work toward a national consensus for reform.

Above all, I know that we can strengthen Social Security only if we reach across the lines of party philosophy and generation, with open minds and generous spirits. For too long, politicians have called Social Security the "third rail" of American politics. That's Washington language for you can't really discuss any changes seriously. This year we have to prove them wrong.

I know that on the political calendar 1998 is an election year. But on the Social Security calendar, let's all resolve to make 1998 an education year, a year we come to grips with the problems with the system and come together to find the answers.

These forums are a very hopeful beginning, and I'm pleased to have had this chance to start this vitally important dialogue with all of you today.

This December, we'll host a White House conference on Social Security, and in January, I'll convene the leaders of Congress to draft a plan to save Social Security for the 21st century.

I'm confident we'll meet this challenge as Americans always do: by working together, honoring our values and preserving the solemn compact between generations that helped to build our nation.

Now I'd like to turn the discussion over to Congressman Borksi. Bob, take it away.

U.S. REPRESENTATIVE ROBERT BORSKI (D-PA): Thank you very much, Mr. President.


CLINTON: Thank you.

BORSKI: First, let me commend you for your leadership in setting this issue before the American public and for joining us here in Philadelphia at this most important forum.

Social Security is, in my view, the greatest success story that we have in the federal government of the United States of America. It's important for the people of my district, not just the recipients --while there are close to 100,000 recipients in the third district of Pennsylvania -- but also to the (AUDIO GAP) of the citizens of the city of Philadelphia.

Mr. President, one point I wanted to make, and I shared with our audience here earlier, that as well as Social Security works, there are still 10,000 people in our district who live below the poverty line and who are Social Security recipients. And all the areas that we talk about -- and we've got to make sure that this system is around, not just for the recipients today, but for people of our generation, and for our children and grandchildren. But we must also -- please keep in mind that there are a large number of people who live below the poverty line even with the Social Security system working as well as it does.

So in the fixes that we have I just urge you to keep those folks in mind as we move to make this system work better for all of us.

And again, thank you very much for being here with us today and for your leadership on this most important issue.

CLINTON: Thank you.

Congressman Cardin.

U.S. REPRESENTATIVE BENJAMIN CARDIN (D-MD): (AUDIO GAP) applauding your leadership on this issue. You have really bought it to the forefront of discussion.

Let me summarize some of the discussions that we've had here in Columbia, Maryland.

First, we think now is the time to act to preserve Social Security. Our economy is strong. You've presented a balanced budget. It's important to save Social Security for future generations.

I'm particularly pleased that this meeting is taking place on a college campus. But we've heard from young people who have a direct interest in what we have thought to do.

I agree with the five goals that you have laid out that we must judge any proposal. But I would hope that you would add a sixth. And that sixth would be that we increase private savings in this country so that we have more private funds put into retirement accounts dedicated to (OFF-MIKE) retirement income that would help increase the income security for our future retirees.

We've talked about a lot of proposals here and some that have already been publicly mentioned. But let me just mention one that we talked a little bit about here, and one that we hoped would get some discussion. And that is that we would leverage by directing some of an individual's FICA payment into a diversified investment fund, provided that the individual employer is prepared to participate by including some private retirement plan within his program. Thus, we will be providing higher retirement income for the individual, greater private savings, and potential savings for the long-term solvency of the Social Security trust fund.

We'll share that with you in greater detail. But the important thing is that the national dialogue has begun. And we in the third congressional district look forward to that discussion.

CLINTON: Thank you.

Congresswoman Johnson.

U.S. REPRESENTATIVE NANCY JOHNSON (R-CT): (AUDIO GAP) including New Britain, Connecticut, this forum. And my seniors here in New Britain would like to say something to you. (APPLAUSE)

Nothing is more important to us -- nothing is more important to us than Social Security.

The confidence it gives seniors, the financial security it gives them, coupled with Medicare and the health care security that that gives our retirees, are just at the heart of their enjoying their retirement years. And we thank you for your leadership on this Social Security issue in meeting the challenge that the future poses for all of us.

And I want to thank you personally, Mr. President, for working with me and some others to make sure that we did not increase the eligibility age for Medicare this year as some wanted to do. Your stalwart voice in keeping -- in preventing that from happening was critical to our success, and we thank you here in New Britain for that.

I also want to relay a couple of questions from my seniors here. First of all, a little advice.

Mike Karlin (ph), the director of our senior citizen center, wants us to include annual physicals in Medicare as we move down the line of better preventive benefits.

And then in terms of Social Security, we want to know if you personally feel confident that the seniors in this room can count on Social Security and a cost-of-living increase during all their retirement years, and whether or not their children will be able to count on Social Security, and as my friend and colleague, Ben Cardin said, on better retirement benefits through a more aggressive effort by government to help people save for their retirement and help their employers participate in providing retirement benefits in their place of work?

So we want to work with you to save Social Security and preserve those benefits. But we also want to work with you to make them better, because it's very hard today to live on just Social Security.

CLINTON: Thank you.

Congressman Kolbe.

U.S. REPRESENTATIVE JIM KOLBE (R-AZ): Thank you very much, Mr. President, and I'm here in Sierra Vista, Arizona, at Buena (ph) High School with...


You can hear from that we have a very enthusiastic audience here. And they have a lot interest in this issue. Most of these are juniors, seniors that will be graduating soon, going on to college, getting into the work force.

I want to applaud you for joining in this dialogue, for helping provide the leadership in this country -- for providing the leadership in this country on this issue. It's very, very important that we start to talk about this issue now.

As has been suggested by others who spoke before me, Social Security is a great American success story. And there are millions of Americans today who can retire in comfort and security knowing the Social Security is there. But as you have also suggested in your opening remarks, Mr. President, it doesn't -- that doesn't assure that it's going to be there forever. And the reason for that is very simple. It is, as you pointed out, the demographics of what is happening.

People are living longer, which is good news of course, but for the Social Security system it means more people are retired and are drawing on those benefits.

KOLBE: And on the other side of that coin, people are not having as large families. There's a smaller number of workers out there for those who are retired. So it becomes a greater strain on people.

I started out this discussion here with the high school students by asking them how many of them thought they would see a Social Security payment, and I don't think more than one or two hands, if that, went up in this audience of a couple of hundred students here.

So they have a real concern about it. And what I would like to point out to you and to others is that, as we go into this debate, we have to balance it very carefully, because, on one side, we have to assure senior citizens that are getting Social Security that they're going to be able to have -- know that they're going to continue to draw those Social Security benefits and those payments.

But the other side is the generational issue. And that is, as more and more young people become dissatisfied and have lost confidence that they're going to see a Social Security payment, we need to make sure that we restore the generational credibility to this argument.

And so I would urge you, and all of us, as we go into this debate to be thinking about not only making sure that young people are going to be able to retire -- that older people can continue to draw their retirement benefits -- but that young people will be able to retire with dignity.

A couple of specific questions that came up here today, Mr. President -- Do we need to raise the retirement age faster than is currently planned? That would help provide some security for the system. And is it necessarily the only solution to have another tax increase? I think that, increasingly, I'm finding young people and middle-aged people -- because of more use of 401(k)s and other things -- they want to have a way to put some of their money aside for themselves.

That's some of the things that we've been talking about here, Mr. President. Thank you very much.

CLINTON: Thank you, Jim.

Gerry Weller.

WELLER: Well, thank you, Mr. President, and on behalf of the 300 residents...


... of the Holland Home (ph), a retirement center here in the south suburbs, South Side of Chicago, we want to thank you not only for your leadership in making this a bipartisan effort, but for including us and everyone in our communities in Chicago and the south suburbs in today's discussion.

One commitment you have from all of us here -- and of course, I represent a diverse district, and there are a lot of Republicans, a lot of Democrats -- and one common consensus we have is we want to keep the politics out of Social Security, and we have a commitment from all of us to work with you to come up with a real bipartisan solution that saves Social Security for this generation...


CLINTON: Thank you.

WELLER: ... as well as the next.


We've had a pretty good discussion here this morning. And of course, I've had several forums like this in my district, and I find that seniors, as well as their children and grandchildren, come up with some pretty pointed questions and concerns.

And one point I thought that was pretty clear, Mr. President, was that the seniors that are here today -- they made it very clear that not only are they concerned about their own benefits, but they're concerned for their children and grandchildren.

And as we look at ways for strengthening Social Security long term, they made it very clear they do not want to increase payroll taxes on their children and grandchildren. They want to save Social Security without raising taxes on their kids.

And you know, I've got a couple of questions that I'd like to share with you, Mr. President. John Fenema (ph) and Alberdine Kerr's (ph), who are the president and vice president of the residents' council here, asked me to share these questions with you.

And Mr. Fenema's (ph) question says, you know, since 1983, politicians in Washington have raided Social Security to pay for welfare, foreign aid and B-2 bombers. When are the politicians in Washington going to stop stealing from Social Security?

The second question, which is Mrs. Kerr's (ph) question -- she's from Chicago as well -- she says that so many reports say that Social Security will collapse before our grandchildren can benefit. And of course, Mr. President, you've put a pretty short timetable talking about December, coming up with a negotiated agreement. And they're very interested in what are your specific plans to prevent Social Security from not being there when their kids have their turn?

They want Social Security to be there for their children. And they're really interested in some of your specific ideas, if you could share them with us today.

Again, I'm committed to working with you, and I want to thank you for this bipartisan effort.

CLINTON: Thank you. Well, let me try to answer it -- thank you very much, Congressman.

Let me try to go back over some of what all of you said.

First of all, Congressman Cardin talked about the need to increase private savings. Some others did. Congressman Borski talked about the fact that there were still some people on Social Security living in poverty.

Now, let me try to address those things together, along with some of the other concerns which were mentioned.

It is true that there are still about 11 percent of our elderly people in America living in poverty, but it's important to recognize that that's a lower percentage than the overall population in America, and that it's just been since 1985 that the poverty rate among seniors is lower than the overall poverty rate.

Now, what can we do to make it better. There has to be -- there have to be other sources of income. There have to be other sources of private savings. And that is -- of course, the possibility that some part of that could come out of Social Security reform is one of the things that we're discussing.

But over and above that, I'd like to point out that Congress has done a lot of work with our administration over the last five years, first of all, to save 8 1/2 million pensions that were under water when I took office, to stabilize 40 million others, and to make it increasingly more attractive for employees on modest wages and for small business employers to take out 401(k) plans, and then to make it easier for people to move from job to job and take their 401(k) with them.

We've also dramatically expanded the availability of IRAs.

So we've tried to do some things already to help increase the ability and the attractiveness of saving over and above Social Security.

I don't think -- no matter what we do with Social Security, the American people are going to have to be sensitized, the younger generation is, to do more to save for their own retirement.

On the other hand, I think it would be a great mistake, even for the youngest members of these audiences today, to believe that we shouldn't preserve Social Security as a universal guarantee, because without Social Security today, almost half the seniors today would be living in poverty, even though most seniors have income over and above that.

So the trick is to save Social Security, but also to have more income coming to people from private savings.

Now, let me mention just one or two other things.

Nancy Johnson talked about wanting to make one Medicare statement about annual physicals. I believe that more and more, as people live to older ages, and are healthier, we'll have to do more preventive care within the Medicare program.

Nancy, you know we've worked hard to deal with -- to have more mammographies, for example. We're doing other preventive screening now. I think the more of that we do, the more money we're going to save over the long run. And more importantly, we'll improve the length and the quality of life.

She said people want to know whether the seniors can count on Social Security. The answer to that is absolutely yes.

The Social Security trust fund, according to Mr. Apple here, who's got a legal responsibility to tell the truth about it, is stable until 2029. Now, in 2029, shortly thereafter, the taxes coming in will only cover about 75 percent of our obligations. One of the reasons we want to move now is that by making relatively modest changes now, we can extend the life of the Social Security trust way out beyond 2029.

Can young people, the high school students here, look forward to drawing Social Security? The answer to that is they certainly can if we do our jobs here in the next several months.

You know, a few years ago, I can understand your skepticism because we were running huge deficits. We were projected to have $300 billion a year deficits as far as the eye can see. Now, we're going to have a balanced budget sometime in the next year, and it's projected that we'll have a trillion dollars in surpluses over the next decade -- more than enough money, if we do some other things, to fix the Social Security system for the younger people listening here today.

But I want to say again, no matter what we do to Social Security, those of you who are 16, 17, 20 and 21, I know it's hard to think about the end your life, your later years when you're that age. But you will have to do more through your employer or through your own individual efforts to save for your own retirement over and above Social Security if you want to maintain your standard of living when you retire.

Now Mr. Kolbe asked a couple of questions about raising the retirement age, and then Mr. Weller asked about specific plans. Let me say I don't want to dodge any of that, but I think all those proposals should be out there on the table.

And I think that the most important thing now is if I advocate a specific plan right now, then all the debate will be about that. The first thing we've got to do is to get the American people solidly lined up behind change. Let's stick with these basic principles I've outlined, and let's -- I want to encourage other people to come forward with their ideas.

In December, we'll all sit down and come up with our -- you know, we'll all put our various ideas on the table, and we'll begin hammering out a plan that we can present in January.

I still -- I hear some new ideas almost every week coming from Democratic and Republican members of Congress and private citizens that I think should be aired. If I put a specific plan on the table now, it will undermine and weaken debate, not strengthen it.

I do agree with those of you who say it ought to be possible for us to save Social Security without a payroll tax increase. I don't think we ought to automatically rule out any ideas over the next 30 to 50 years, as some would do. But I think that we plainly know that we can do this and provide for increased strength of the system without a payroll tax increase, given current assumptions. So I believe that will be possible.

Now let me just answer one last question. You asked about raiding the Social Security fund. Let me say that that just depends on how you look at it.

The Social Security trust fund is basically a guarantee that certain obligations will be paid out -- to retirees, including the COLA, as well as to the disabled and to those who are the survivors who are eligible to be paid under it.

Now, in 1983, when the Social Security reforms were passed, it is true that the government was collecting more in Social Security taxes than were needed in any given year to pay for that. So rather than raise other taxes to pay for other governmental expenses, the rest of the government borrowed and gave a bond to the Social Security trust fund, with the full faith and credit of the United States behind it, a legal obligation to pay back the money with interest to the Social Security trust fund when it was needed to pay out.

And so there is no reason to believe that all the money that's been taken out since 1983 will not be paid back in as soon as it's needed to meet the legal obligations of the Social Security trust fund.

By doing that, by borrowing that money and paying it back, we didn't do anything to affect the obligations of the fund to pay Social Security recipients in the future, but we did keep the government from borrowing more money out in the private sector, competing with the private sector for money, and running interest rates up.

So I think on balance it's been a safe and sound thing to do. And I do not believe that the raid has occurred in the Social Security trust fund. It would be a raid if the money were not paid back when it's due to be paid to you. But the money will be paid back when it's due to be paid to you. And that's one of the things that we have to make sure is never interfered with: the legal obligation of the United States government to replenish that trust fund and pay back that money when it's needed for the recipients.

Thank you very much.


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