President Discusses Strengthening Social Security in New Jersey

whitehouse.gov, Jan 06, 2006

THE PRESIDENT: Thanks for coming. I've got some things I want to talk about. I want to talk about freedom and peace. I want to talk about growing this economy. I want to talk about Social Security.

First, let me say to you that the Social Security system has been a very important system, and I understand that. Social Security has provided a safety net for many retirees. And that's an important safety net. But the safety net has got a hole in it, and we need to make sure we save that safety net for future generations of Americans to come.

The first thing I want to tell you about Social Security is that if you're getting your check, nothing will change. No matter what the talk is about reform, nothing will change. I don't care what the ads say, I don't care what the scare tactics say, you're going to get your check, just like the government said. The problem isn't for the seniors; the problem is for the youngsters coming up. The question is, will you get your check? Will we be able to keep the promise?

A lot of people say, well, Mr. President, you're talking about Social Security, it's called the third rail of American politics. That means, if you touch it, you get a huge electric shock. Now, why are you talking about it? Well, you're going to hear me describe the problem. But I think we have a duty in elected office to confront problems, and not pass them on to future Presidents, future Congresses, and future generations.

Do you realize that if you're a person who earns an average of $35,000 a year over your working career, $35,000, and you're allowed to take -- put 4 percent of the money -- the payroll tax aside in a personal account and you hold it over time, that when you retire, you'll save a quarter-of-a-million dollars. That's your money. That money, by the way, the quarter-of-a-million dollars, is the capital account. Now, you can't spend all that the minute you retire. This is a retirement account we're talking about. But it's your money, and the interest off that money goes to supplement the Social Security check that you're going to get from the federal government. See, personal accounts is an add-on to that which the government is going to pay you. It doesn't replace the Social Security system. It is a part of making -- getting a better rate of return, though, so -- to come closer to the promises made. That's important to know.

Secondly, you just can't take it all out. I mean, it's a retirement system. There will be rules about withdrawal. You can't put it in certain things if you -- start-ups. There are guidelines to encourage you to make the right kind of investments. Now, you can alter stocks and bonds and different things -- your choice. But it's been proven that when you hold money over a period of time in safe, conservative investments, it gets a better rate of return than the money you get in the Social Security system. So there will be guidelines about what you can invest in.