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Retirement Planning > Social Security

Bush Refuses To Show Social Security Hand

By Allison Bell

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President Bush emphasized today during his last press conference of the year that he wants Social Security reform efforts to protect the benefits of older Americans.[@@]

Bush noted that Social Security will be one of several important items on his domestic agenda during his second term in office.

Other items will include tort reform, immigration reform and education reform, along with efforts to address the budget deficit, Bush said, according to a written transcript of the press conference.

And Bush talked about the importance of avoiding too much discussion about the details of his Social Security reform goals.

Reporters and others will try “to get me to negotiate with myself in public,” Bush said. “I’m not going to do that. I don’t get to write the law. I will propose a solution at the appropriate time, but the law will be written in the halls of Congress. And I will negotiate with them, with the members of Congress, and they will want me to start playing my hand.”

But Bush did give some general answers about how he wants to see Social Security reform efforts proceed.

In the past, Bush has emphasized that he wants Congress to let workers put a portion of their Social Security contributions into investment accounts that would be managed by the workers themselves.

“I fully recognize this is going to be a decision that requires difficult choices,” Bush said.

Bush said any changes would have to protect the interests of people who are near retirement age and people who already are collecting Social Security benefits.

“The minute you bring up Social Security reform, people go running around the country saying — really, what he says is he’s going to take away your check — or that which you have become dependent upon will no longer be available for you to live on,” Bush said. “And so, therefore, part of setting the stage, or laying the groundwork for there to be a successful reform effort is assuring our seniors that they just don’t have to worry about anything. The formula they’re relying on won’t change.”

Other Bush comments about Social Security reform and related matters:

- The payroll tax “will not go up.”

- One important step will be convincing some members of Congress that Social Security has a problem. “If people don’t think there’s a problem, we can talk about this issue until we’re blue in the face, and nothing will get done,” Bush said. “And there is a problem. There’s a problem because now it requires 3 workers per retiree to keep Social Security promises. In 2040, it will require 2 workers per employee to meet the promises.”

In 2018, there will be more money coming out of the system than going in, Bush predicted.

“It’s a lot less painful to act now than if we wait,” Bush said.

- The government would impose controls on management of any worker-directed Social Security investment accounts. “People could set aside a negotiated amount of their own money in an account that would be managed by that person, but under serious guidelines,” Bush said. “You can’t use the money to go to the lottery, or take it to the track. There would be — it’s like the — some of the guidelines that some of the thrift savings plans [have] right here in the federal government.

- Privatized accounts should help younger workers.

“The younger worker would gain a rate of return, which would be more substantial than the rate of return of the money now being earned in the Social Security trust fund,” Bush said.

- Privatized accounts should help the whole economy.

Privatized accounts would make “capital available for — when people save, it provides capital for entrepreneurial growth and entrepreneurial expansion,” Bush said.

- Bush said he believes the controversial new Medicare drug benefit program should help improve the condition of Medicare.

“It seems like to me, that if the government is willing to pay $100,000 for heart surgery, but not a dime for the prescription drug that would prevent the heart surgery from happening in the first place, aren’t we saving money when we provide the money necessary to prevent the surgery from being needed in the first place?” Bush asked.

The transcript for the press conference is on the Web at http://www.whitehouse.gov/news/releases/2004/12/20041220-3.html

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