Double You - Please Don't Go (Club Mix)

Double You - Please Don't Go (Club Mix)

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THE PRESIDENT: Thank you and good morning. The Vice President and I are delighted to welcome you here. We have an unusually large delegation from the United States Congress here today, and I believe I have all their names and I would like to acknowledge Senator Thomas and Representatives Becerra, Bliley, Borski, Cardin, Hill, Nadler, Pickering, Portman, Pomeroy, Markey, Smith, and Tauscher. I think I have got them all. And give them a hand. I think that's amazing that they're here. (Applause.) I would like to thank Secretary Shalala, Social Security Commissioner Apfel, and Gene Sperling for their work on this meeting today. I'd like to thank our panelists Laura Tyson, Uwe Reinhart, Martha McSteen, Hans Riemer, and Stuart Altman for their presence. And they will be introduced in a few moments. In my State of the Union address last week, I challenged Congress and the American people to meet the long-term challenges our country faces for the 21st century. Today you all know we are here to talk about perhaps the largest of those, the aging of America. The number of elderly Americans will double by 2030. Thanks to medical advances, by the middle of the next century, the average American will live to be 82 -- six years longer than today. These extra years of life are a great gift, but they do present a problem for Social Security, for Medicare, for how we will manage the whole nature of our society. As I have said repeatedly, this is a high-class problem, and the older I get the better it looks. (Laughter.) But it is one, nonetheless, that we have to face. Fortunately, we are in a strong position to act because of our prosperity and our budget surplus. It is well to remember that the current prosperity of this country was created not by rash actions in Washington, but by facing boldly the challenge forced by the budget deficits -- by getting the deficit down, getting into balance, bringing the interest rates down and bringing the economy back. We also should face the challenge of the aging of America in the same way. In the State of the Union, I laid out a three-part plan, and asked Congress to consider it -- to invest our surplus in ways that will both strengthen our economy today and in the future, and meet the needs of the aging of America. First, I proposed that we devote 62 percent of the surplus for the next 15 years to saving Social Security, investing a small portion in the private sector, as private, state and local government pensions do. The average position of the retirement fund in the stock market, of Social Security, would be under two percent of the market for the next 15 years, under three percent for the next 20 years, and always under four for the next 50 years. Over the course of the last week, I have been gratified to see discussions of this proposal, and obviously differences about the whole market investment issue, but substantial agreement in the idea of dedicating a large portion of the surplus to saving Social Security across partisan lines. And for that I am very grateful. I think we should build on this to extend the life of the Social Security trust fund further. If we do what I suggested it will add 55 -- take us to 2055. I think we should have a 75-year life for the Social Security trust fund. We should also make some changes to reduce the poverty rate among elderly women who have a poverty rate at twice -- almost twice the general poverty rate among seniors in our country. And I believe we should eliminate the limits on what seniors on Social Security can earn. To make the changes necessary to go to 75 years on the trust fund and deal with these other challenges, we will simply have to have a bipartisan process. There is no way to avoid it. But I'm confident that the changes, while somewhat difficult, are fully achievable. And if we work together we can make them. To prepare America for the senior boom will require more than saving Social Security. We also have to deal with the challenge to Medicare and our obligation to make sure that our seniors have access to quality health care. I want to say very clearly that we need to set aside enough of the surplus for Medicare and Social Security before we address new initiatives like tax cuts. That's why the second part of our proposal calls for devoting 15 percent of the surplus for 15 years to the Medicare trust fund. If we do this and nothing else we can secure the trust fund until after the year 2020. But I want to make something else clear. I believe that -- some have suggested that by dedicating the surplus to Medicare we won't need to make any decisions to reform the program. I disagree with that. Medicare needs revenues to increase its solvency, but it also needs reform to make sure that it is modern and competitive and to gain additional savings to help finance a long overdue prescription drug benefit. So, for me, reforming Medicare and committing the surplus go hand in hand. I'd also like to say that for me there could be no better use of our surplus in assuring a secure retirement and health care to older Americans. And I believe that it is good not only for older Americans, but for their children and grandchildren as well, and for the larger economy. Why is that Well, first of all, if we dedicate this portion of the surplus to Social Security and Medicare over the next 15 years, obviously in most of those years that money will not be needed. In all those years we will, in effect, be buying back the national debt. As we do that, we will bring the percent of our debt -- I mean, our publicly held debt as a percentage of our economy -- down to its lowest point since 1917, since before World War I. What will that do That will drive interest rates down and it will free private capital up to invest in the United States -- to create jobs, to raise incomes. So I think that it's very important. If you look around the world today at the troubles these countries are facing, when their budget deficits get out of hand, when their interest rates go through the roof and they can't get any money from anywhere, when we worry constantly about our trading partners, trying to keep them in good shape and help them to not only preserve our economic markets, to preserve partners for peace and democracy and freedom -- if we in the United States could actually be doing something to pay down our debt while saving Social Security and Medicare, we would keep these interest rates down. And it would be an enormous hedge against whatever unforeseen future volatility occurs in the global economy. So this is a strategy that will actually grow the American economy while preparing for the future. Of course, in an even more direct way it's good for the rest of America because, when the baby boomers retire -- as I said in the State of the Union, none of us want our children to be burdened with the costs of our retirement, nor do we want our grandchildren's childhoods to be lessened because our kids are having to pay so much for our retirement or our medical care. So, from my point of view, this is a very good thing for Americans of all ages, without regard to their political party, their income, their section of the country. I think this will benefit the country and help to bring us together and strengthen us over the next several decades. Let me just say very briefly that the third part of our proposal is to dedicate $500 billion of the surplus to give tax relief to working families through USA accounts -- Universal Savings Accounts. Under my plan, working Americans would receive a tax credit to contribute to their own savings account, and an additional tax credit to match a portion of their savings -- with the choice theirs about how to invest the funds -- and more help for those who are working harder on lower incomes and, therefore, would have a harder time saving. This new tax credit would make it easier for Americans to save for their own retirement and long-term care needs. And obviously, this would be further helped by something that is already in our balanced budget, which is the $1,000 long-term care tax credit. So these are the things that I think together would not only help us to manage and deal with in a very good way the aging of America, I think it would help us to secure the long-term economic prosperity of the country and help to keep families together across the generations without seeing unbearable strains put on those families, as so many of the baby boomers live longer and inevitably have more medical costs. So I hope that we will have a good debate in Congress. There will be others with their own ideas; I welcome them, I look forward to it. Today, we're going to focus on the programs that I mentioned at the beginning of my talk. And I'd like the Vice President, who has worked very hard on this with me, now to make a few remarks and to introduce our panelists so we can get on with the morning. Thank you very much. (Applause.) THE VICE PRESIDENT: Well, thank you very much, Mr. President, for your commitment to America's seniors and the understanding that you just presented to us, that working to save Social Security and Medicare are more than just fiscal responsibilities and more than just policy priorities -- they are profoundly moral responsibilities. And we're determined that our country will face them directly. You know, a lot of people thought that we'd never be able to balance the budget in our country, but we did. And for as long as we've heard about that concern we've also heard about the entitlement problem, as people call it. Well, we can deal with that, too, and that's what we're here to talk about. The President acknowledged all the members of the Congress, House and Senate, who are here. And we deeply appreciate your participation in this whole process. Thank you very much -- and the members of the administration team. I wanted to add to that Dr. Janet Yellen, the Chair of the President's Council of Economic Advisors. And I w