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President Clinton Speaks At A Forum On Social Security Reform

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The Briefing Room

Office of the Press Secretary
(Albuquerque, New Mexico)

For Immediate Release July 27, 1998


The Johnson Center Gymnasium
University of New Mexico
Albuquerque, New Mexico

10:30 A.M. MDT

THE PRESIDENT: Thank you very much. Ladies andgentlemen, before you sit down, if I might, I want to dosomething quite serious, but I think important, here at thebeginning. I would like to ask Senator Domenici and SenatorBingaman and Congressman Kolbe and Becerra to come up and standwith me, and I'd like to ask all of us to offer a moment ofsilent prayer for the memory and the families of the two policeofficers who were slain at our Nation's Capitol.

(A moment of silence is observed.)

Amen. Thank you very much.

Let me, now on a somewhat lighter note, say thatMayor Baca was reeling off all of his relatives on SocialSecurity -- I'm glad to see one person here who I believe is noweligible for Social Security, former governor Bruce King, and hiswife, Alice, over there. (Applause.) I point them out for aspecial purpose. One of the demographic realities we have toconfront is that women are living longer than men. Governor Kingis in a wheelchair because of a fright he received from arattlesnake, which his wife killed. (Laughter and applause.) Sowe congratulate both of them. (Applause.)

Let me also say I'm glad to see this great anddiverse group of Americans here in Albuquerque. You can alwaysdepend upon getting an audience that genuinely does look likeAmerica if you come to Albuquerque. I thank all the NativeAmericans here who are in the audience. Thank you very much forcoming. (Applause.) I see our friends from the Sikh communityover there. I know there are a lot of Hispanic Americans here.I know there are African Americans, Asian Americans and others.(Applause.) We thank you for coming here. And I also thank allthe young people that are in the audience, because this is anissue for all ages of Americans to deal with together.(Applause.)

I would like to acknowledge our Social SecurityCommissioner, Ken Apfel; to thank Bill Gordon, the Provost of theUniversity of New Mexico, and all the university family formaking us welcome here today. I thank Horace Deets of the AARPfor being here, and Harvey Meyerhoff of the Concord Coalition,and Carolyn Lukensmeyer of Americans Discuss Social Security.

I want to say a special word of thanks to the AARPand the Concord Coalition for hosting this forum. And of course,I thank the members of Congress who are here and the leaders ofthe Congress for nominating the members who are on this program.

We are very blessed at this moment to have a strongeconomy in America. The question for us is whether we will dowhat societies often do when times are good and sit back andenjoy it, or whether we will face the larger challenges that ourpresent prosperity and confidence permit us to face. They aresignificant and formidable, if you think about the next 50 years:How are we going to build the world's best elementary andsecondary education system? How are we going to bring economicopportunity to the people who don't enjoy this prosperity,whether they're in inner-city neighborhoods, or rural communitieswhere agriculture is in trouble, or Native American communities?How are we going to deal with the challenge of growing theeconomy and preserving our natural environment? Big, significantchallenges.

One of those challenges clearly that we must facetogether is saving Social Security, and I might add, with it,Medicare, for the 21st century. One of our biggest challenges iswhat I call a high-class problem -- we are an aging society. Weare living longer and better and healthier, and that imposescosts. The older I get, the more I like that problem. That's ahigh-class problem.

It wouldn't have been too many years ago that itwould have been rather unusual to find a mayor who could stand upand cite three of his family members who are over 75 years ofage. That's not so unusual anymore. But we know now thatbecause of the demographic challenges facing us, we have to makesome adjustments in the Social Security system to strength andpreserve it in a new century.

As all of you know, I have said since my State ofthe Union address that we should set aside every penny of anysurplus until we save Social Security first. At the very momentwhen we have switched from deficits as far as the eye can see tosurpluses as far as the eye can see, it's tempting to offer alarge tax cut or perhaps a new spending program paid for by theprojected surplus. Some have advocated this course, but we mustnot squander the hard-won legacy of fiscal responsibility thathas brought us our present moment of prosperity. Instead weshould use it to tackle the long-term challenges of the UnitedStates.

Any new tax cut or new spending program done beforewe save the Social Security system would commit funds that may beneeded to honor our commitment to our parents and our commitmentto our children. I think those of us who are part of theso-called baby boom generation feel that most acutely because itis in the years when all of us -- that is -- and I'm the oldestof the baby boomers -- those who are between the ages of,roughly, 52 and 35 -- when we all get into the retirement system.It is then when the greatest stresses will be placed upon it atpresent levels of retirement, projected birthrates and projectedimmigration rates.

So I am very grateful for the bipartisan spirit inwhich we have been pursuing this. I'm grateful for the peoplewho are here. I appreciate Senator Dominici's strong leadershipand his strong support for taking the responsible course. In anelection year, asking politicians to hold off on a tax cut isalmost defying human nature, but Senator Dominici and manyRepublicans have joined our Democrats in saying together, let'sdeal with this problem -- the American people waited 29 years toget out of the red ink and look at the black; we can take a yearto enjoy the black and deal with the long-term problems of thecountry before we decide everything we have to do with thesurplus. Let's deal with first things first.

Also I want to thank, as I said, Senator Bingaman,Congressman Kolbe and Congressman Becerra. We have to reachacross the lines of party, philosophy and generation. This willrequire open minds and generous spirits. We all have to bewilling to listen and learn. In preparation for this forumtoday, I had three different sessions with my staff members,briefing me on all the various reforms that have been advocatedby the extraordinarily distinguished panel of experts from whomyou will hear in a few moments. And I've been doing my best tobe open to new ideas and to listen and to learn.

I have asked every member of Congress not only tosupport the forums we're having here today, but to hold townmeetings in every district in America. And we will have a WhiteHouse conference on Social Security at the end of this year.Next year I will convene the bipartisan leadership of Congress tocraft a solution.

The stakes are very high. Those of you who areolder or who have had family members dependent on Social Securityknow that for 60 years Social Security has been far more than anID number on a tax form, even more than a monthly check in themail. It reflects the duties we owe to our parents and to eachother and this kind of society we are trying to build.

Today, 44 million Americans depend on SocialSecurity, and for two-thirds of seniors it's the main source ofincome. Today nearly one in three of the beneficiaries, however,is not a retiree. Social Security is also a life insurancepolicy and a disability policy.

Since its enactment over 60 years ago it has changedthe face of America. When President Roosevelt signed SocialSecurity into law most seniors were poor. A typical elderlyperson sent a letter to FDR begging him to terminate the "starkterror of penniless old age." Now, in 1996, the elderly povertyrate was below 11 percent. Without Social Security today nearlyhalf of all seniors would still live in poverty.

Today, the system is sound, but we all know ademographic crisis is looming. There are 76 million of us babyboomers now looking ahead to retirement age and longer lifeexpectancies. By 2030, there will be twice as many elderly asthere are today, with only two people working for every oneperson drawing Social Security. After 2032, contributions frompayroll taxes to the Social Security trust fund will be onlyenough to cover about 75 cents on the dollar of current benefits.

We know the problem. We know that if we act now itwill be easier and less painful than if we wait until later. Idon't think any of you want to see America in a situation wherewe have to cut benefits 25 percent, or raise inherentlyregressive payroll taxes 25 percent, to deal with the challengeof the future and our obligations to our seniors.

I can tell you, I've spent a lot of time talking tothe people I grew up with; most of them are middle-class peoplewith very modest incomes and they are appalled at the thoughtthat their retirement might lower the standard of living of theirchildren, or undermine their children's ability to raise theirgrandchildren. So let's do something now in a prudent,disciplined way that will avoid our having to make much moredramatic and distasteful decisions down the road.

Now, today, we're going to discuss one of the mostinteresting and important issues that will affect how much itwill cost to stabilize the Social Security trust fund and whatthe nature of it will be, and that is, whether and how thereshould be Social Security investments not just in low-riskgovernment bonds, as the investments are made today, but also inthe stock market. I think we have to be open-minded about theseproposals and we also have to ask the hard questions.

One I'll start with is, in the six years I've beenPresident, the value of the stock market has nearly tripled. I'mgrateful for that. Can we look forward to having that happenevery six years from now on? If not, what are the risks? Whatwill it cost to administer such a program? If you don't haveindividual accounts where administration costs may be higher,what would be the dangers of having the government -- eitheritself or through some third party independent agency -- makesuch investments?

I think that we just have to look at this andlisten, and I hope all of you today will leave with a betterunderstanding of both the appeal as well as the questions in eachand every proposal that has been raised. As I said, I have spenta lot of time studying them. I have tried to set out the fiveprinciples by which I think we should judge any proposed reforms.And let me just briefly state them again.

First of all, I think we should reform SocialSecurity in a way that protects the guarantee for the 21stcentury. We shouldn't abandon a program that has lifted ourseniors out of poverty and that is reliable. Second, I thinkwhatever we do we should maintain universality and fairness inthe program. For a half century this has been a progressiveguarantee for citizens. Third, Social Security must provide abenefit that people can count on so they can plan for theirfuture. Regardless of the gyrations of the markets, there mustbe at least a dependable foundation of retirement security.

Fourth, Social Security must continue to providefinancial security for disabled and low-income beneficiaries.Remember, one in three Social Security recipients is not aretiree -- something that is often lost on people when theycomment on the relatively low rate of return of the retirementprogram.

Now, finally, we must maintain our hard-won fiscaldiscipline in anything that we do. That means, from my point ofview, that any change we adopt must not lead to greater long-termprojected deficits. We worked awful hard for a generation to getour country out of the deficit mode. It's resulted in a lot ofprosperity for our country. I can tell you, as I deal with othernations around the world -- with the Asian financial crisis, withall the challenges other countries face -- money moves around theworld today in the flash of an eye. Investment is important.America will continue to be successful because of our great freeenterprise system as long as we have a responsible economicpolicy in this country. So we should not abandon that.

Now, those are the principles that I will use when Itry to evaluate all these proposals. But they don't answer thequestions. These are hard questions. And every person who's onethis panel of experts has worked hard to answer them. You'll seethey have very different answers, but they all deserve arespectful listen from you and you need to start, as I always tryto start, by saying, what's good about this idea, what are thepositives about it, what are the inherent questions that areraised? Try to work them through for yourself, and go back anddiscuss them with your friends and neighbors. And most of all,let's try to keep an open, positive, old-fashioned Americanattitude toward this.

We dare not let this disintegrate into a partisanrhetorical battle. Senior citizens are going to be Republicansand Democrats and independents. They're going to come from allwalks of life, from all income backgrounds, from every region ofthis country, and therefore, so will their children and theirgrandchildren. This is an American challenge and we have to meetit together.

Thank you very much. (Applause.)

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