Office of the Press Secretary
(Kansas City, Missouri)

For Immediate Release April 7, 1998


Penn Valley Community College
Kansas City, Missouri

11:25 A.M. CDT

THE PRESIDENT: Thank you very much, ladies and gentlemen. Good morning. Thank you, Governor Carnahan, for your leadership on so many areas and your friendship. I'd like to thank the leaders of this fine institution for welcoming us here and for the mission they perform every day. I thank Senators Kerrey and Santorum for their concern, longstanding, for Social Security reform and their presence here, and Representatives Hulshof and Pomeroy, who are participating in the program, and Representative McCarthy, and also Representative David Dreier from California, who is a native of Kansas City, who are here.

I thank the members of our administration who have come who will be participating: the Director of the Office of Management and Budget, Frank Raines; the Deputy Secretary of the Treasury, Larry Summers; the Director of the National Economic Council, Gene Sperling; and the Administrator of Social Security, Ken Apfel.

Attorney General Nixon, Treasurer Graeber, Insurance Commissioner Sebelius, thank you all for being here. Mayor Cleaver, thank you for hosting us. I don't know if Mayor Marinovich is here or not, but if she is, hello. (Laughter.)

I'd also like to thank the leaders of the AARP, including Horace Deets, and the leaders of the Concord Coalition, including Martha Phillips, for their hosting of this forum. The AARP has long been a leading voice for the elderly, the Concord Coalition long a leading voice for fiscal responsibility over the long run, and their willingness to work together is very important. I'd also like to thank the Speaker of the House, the Senate Majority Leader, and the House and Senate Democratic leaders for nominating and being represented here today by the members of Congress who are on the program.

As the Governor said, this is a good time for America and a time of great hope. Our economy is the strongest in a generation. Many of our social problems are on the mend. Our leadership in the world is unrivalled. Within the next year, we will have a balanced budget. And where once there were deficits projected as far as the eye can see, we now have projected surpluses as far as the eye can see -- a trillion dollars' worth over the next decade.

But this sunlit moment is not a time to rest. Instead, it is a rare opportunity to prepare our nation for the challenges and the opportunities of the 21st century -- or in the words of the old saying, to fix the roof while the sun is shining. In the coming century, the aging of our society will present both great challenges and great opportunities. I hope to live to be one of those people and so, to me, it's a high-class problem.

But because a higher percentage of our people will be both older and retired, perhaps our greatest opportunity and our greatest obligation at this moment is to save Social Security. In the State of the Union address, I called on Congress to set aside every penny of any surplus until we had dealt with Social Security first. Both parties in both chambers of Congress have joined in this call. That is the good news.

Today we turn to the business at hand -- building public awareness of the nature and scope of the problem, and building public consensus for the best changes. Clearly, we will strengthen Social Security and reform it only if we reach across lines of party, philosophy, and generation. And that is one reason for the broad representation of age groups in this audience today. We have to have open minds and generous spirits. And we all have to be willing to listen and to learn.

For too long, politicians have called Social Security the "third rail" of American politics. That's Washington language for, it's above serious debate. This year we must prove them wrong. This conference, with its wide participation, is a good start. On the political calendar, 1998 is an election year. But on the Social Security calendar, we must resolve to make it an education year, when we come to grips with the problems of the system and come together to find the answers.

This issues is complicated, so we need the best ideas -- whatever their source. The issue is controversial, so we have to have a national consensus on both the nature of the problem and the direction we must take.

That's why I've asked all the members of Congress to also host town hall meetings in their own districts. I'll be talking with several of them by satellite later today. And we'll hold more additional forums like this one around the country. In December, there will be a White House Conference on Social Security. In January, I intend to convene the leaders of Congress to draft a plan to save it. With this effort we can forge a national consensus, and we must.

For 60 years, Social Security has meant more than an ID number on a tax form, more than even a monthly check in the mail. It reflects our deepest values, the duties we owe to our parents, to each other, to our children and grandchildren, to those who misfortune strikes, to our ideals as one America.

Missouri's native son, Mark Twain, once said, "I've come loaded with statistics, for I've noticed a man can't prove anything without statistics." So I thought we would begin today with a few statistics. Today, as the first chart shows, 44 million Americans depend upon Social Security, and for two-thirds of our senior citizens it is the main source of income. For 18 percent of our seniors it is the only source of income.

But Social Security is more than just a retirement program. Today you can see that more than one in three of the beneficiaries are not retirees. They are children and spouses of working people who die in their prime. They are men and women who become disabled, or their children.

So Social Security is also a life insurance policy, and a disability policy, as well as a rock-solid guarantee of support and old age. That is why we have to act with care as we make needed repairs to the program occasioned by the huge growth in retirees.

Since its enactment over 60 years ago, Social Security has changed the face of America. When President Roosevelt signed the bill creating the Social Security system, most seniors in America were poor. A typical elderly person sent a letter to FDR begging him to eliminate "the stark terror of penniless old age." Since then, the elderly poverty rate has dropped sharply. You can look here and see that in 1959 the poverty rate was over 35 percent for retirees. In 1979, it had dropped to 15.2 percent. In 1996, the poverty rate is down below 11 percent.

Now, there's something else I want to say about this. Even though most seniors need other sources of income in addition to Social Security to maintain a comfortable lifestyle: if Social Security did not exist, today half of all American retirees would be living in poverty -- 60 percent of all women. Fifteen million American seniors have been lifted out of poverty through the Social Security system.

Today the system is sound, but the demographic crisis looming is clear. The baby boomers -- 76 million of us -- are now looking ahead to their retirement. And people, clearly, are living longer, so that by 2030, there will be twice as many elderly as there are today.

All these trends will impose heavy strains on the system. Let's look at the next chart here. You can see that in 1960, which wasn't so long ago, there were over five people working for every person drawing Social Security. In 1997, last year, there were over three people -- 3.3 people -- working for every person drawing. But by 2030, because of the increasing average age, if present birthrates and immigration rates and retirement rates continue, there will be only two people working for every person drawing Social Security.

Now, here's the bottom line. The Social Security Trust Fund is sufficient to pay all the obligations of Social Security -- both retirement and disability -- until 2029, after which it will no longer cover those obligations. Payroll contributions will only be enough to cover 75 cents on the dollar of current benefits.

If we act now, we can ensure strong retirement benefits for the baby boom generation without placing an undue burden on our children and grandchildren. And we can do it, if we act now, with changes that will be far simpler and easier than if we wait until the problem is closer at hand. For example, a $100 billion of the budget surplus, if used for Social Security, would add a year or more to the solvency of the Trust Fund with no other changes being made. Other changes, which could be made, can be phased in over time, and keep in mind, small changes decided on now can have huge impacts 30 years from now.

So how should we judge the proposals to change the Social Security system? Here are principles that I believe we should follow, and they're on the next chart here. I believe, first of all, we have to reform Social Security in a way that strengthens and protects a guarantee for the 21st century. We should not abandon a basic program that has been one of the greatest successes in our country's history.

Second, we should maintain universality and fairness. For half a century, this has been a progressive guarantee for citizens; we have to keep it that way. It was not until 1985 that the poverty rate among seniors was lower than the poverty rate for the population of America as a whole. It is an astonishing achievement of our society that it is now so much lower, and we should not give it up.

Third, Social Security must provide a benefit that people can count on. Regardless of the ups and downs of the economy or the financial markets, we have to provide a solid and dependable 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 in three Social Security beneficiaries who are not retirees.

And fifth, anything we do to strengthen Social Security now must maintain our hard-won fiscal discipline. It is the source of much of the prosperity we enjoy today.

Now, these are the principles that will guide me as we work to forge a consensus. I hope they're ones that all of you can also embrace. This national effort will call on the best of our people. It will require us to rise above partisanship. It will require us to plan for the future, to consider new ideas, to engage in what President Roosevelt once called "bold, persistent experimentation." It will remind us that there are some challenges that we can only meet as one nation acting through our national government, just as there are others we can better meet as individuals, families, communities.

This is also a challenge for every generation. To the older Americans here today, let me say, you have nothing to worry about. For you Social Security is as strong as every. To the younger people here today who may believe that you will never see a Social Security check -- indeed, I saw a poll which purported to be serious that said that Americans in their twenties thought it was more likely they would see a U.F.O. than that they would every draw Social Security. (Laughter.) That skepticism may have been well founded in the past, but just as we put our fiscal house in order, we can and must put Social Security in order.

And above all, to my fellow baby boomers, let me say that none of us wants our own retirement to be a burden to our children and to their efforts to raise our grandchildren. It would be unconscionable if we failed to act, and act now, as one nation renewing the ties that bind us across the generations.

Thank you very much. (Applause.)

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