For Immediate Release
Office of the Press Secretary
September 2, 2004
Strengthening Social Security
Fact Sheet: President Bush's Commitment to Strengthening Social Security
President Bush has said that "Social Security is one of the greatest
achievements of the American government, and one of the deepest
commitments to the American people." He is committed to ensuring that
the promise of Social Security is kept for current seniors and those
nearing retirement - and that we fix the Social Security system for our
children and grandchildren.
The Challenge
Social Security is sound for today's seniors and those nearing
retirement, but it needs to be fixed for younger workers -- our
children and grandchildren. In 1950, there were 16 workers to support
every one beneficiary of Social Security. Today, there are only 3.3
workers supporting every Social Security beneficiary. By the time our
youngest workers - those just entering the workforce today - turn 65,
there will only be 2 workers supporting each beneficiary.
As a result of these demographic changes, the current system will
not be able to afford to pay the benefits scheduled for our children
and grandchildren without enormous payroll tax increases. The Social
Security payroll tax, which was once 2%, is now more than 12%.
Economists calculate that under the current system, the payroll tax
would have to rise to more than 18% if our children and grandchildren
are to receive their scheduled benefits.
Women - especially widows- are particularly affected by the
problems in Social Security. The current Social Security system cannot
fund the benefits promised to future widows - and, while widows would
benefit disproportionately from inheritance rights in Social Security,
the current system has no inheritance rights. Divorced women can also
be disadvantaged by the Social Security system. If a woman leaves the
paid workforce to stay at home with children, and then is divorced in
less than ten years, she does not have a Social Security earnings
record to entitle her to benefits on her own, nor has she become
entitled as a spouse.
The 2004 report of the Social Security Trustees estimates the
present value of Social Security's permanent deficit - above and beyond
all future payroll taxes to be paid by American workers - at more than
$10 trillion.
The President's Vision for Social Security
By acting now, we can ensure that our children and grandchildren
are not saddled with high taxes that would limit their economic
opportunities and their ability to achieve the American dream. The
President will keep the essential promise that Social Security has
represented since its founding - while ensuring that the retirement
security of 21st Century retirees is not limited by the shortcomings of
a financing system that was designed in 1935.
To ensure its long-term future, Social Security needs to be fixed
soon. Any fix will require choices, bipartisanship, and public
discussion. There are a variety of good plans that have been proposed
to fix Social Security and to establish personal accounts, including a
number of options presented by the bipartisan President's Commission to
Strengthen Social Security.
The President will work with Congress to determine the best
elements of the proposals that have been put forward, according to
these principles:
- President Bush will not change benefits for today's retirees or
near-retirees.
- The President wants to see Social Security permanently strengthened
for our children and grandchildren, without raising payroll taxes.
- The President favors voluntary personal accounts for younger
workers. Personal accounts provide ownership, choice, and the
opportunity for workers to build a nest egg for their retirement and to
pass on to their spouse or their children.
- Those who do not choose to have a personal account would continue
to draw their benefits as they always have from the Federal Social
Security program. President Bush believes that those who choose to
have a personal account should have increased personal ownership and
control of their nest egg within Social Security.
Establishing personal accounts does not add to the total costs that
Social Security faces. The obligation to pay Social Security benefits
is already there. While personal accounts affect the timing of these
costs, they do not add to the total amount obligated through Social
Security. In fact, every plan scored by SSA that contains personal
accounts would, according to actuarial analysis, reduce the costs of
permanently fixing the system.
Doing nothing to fix our Social Security system will cost us, as
well as our children and grandchildren, an estimated $10 trillion,
according to the Social Security Trustees. Leadership means
recognizing that these costs already exist, and that passing such a
debt on to our children and grandchildren is irresponsible.
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