In Focus: State of the Union 2005
February 3, 2005
Good afternoon! It's great to be back on "Ask the White House." It's a good thing we're having this chat in cyberspace today... because I'm fighting a
nasty chest cold that I wouldn't want you to catch. I know you've sent in some great questions; let's get started.
Zak, from Cleveland, Ohio
As a party once known as fiscally responsible, the republicans have put
us further into debt than ever before. How is the President going to
restore fiscal responsibility to the Bush Administration?
Thank you for your good question Zak. I urge you to remember that our country has faced significant challenges in recent years that have contributed greatly to budget deficits and debt. The President inherited an economy in decline, and the brief recession we experienced had a significant impact on tax revenues. Whenever our economy slows, tax revenues decrease. The attacks that occurred on September 11th, 2001, literally kicked us when we were down, economically. At that point we also began to aggressively fight an enemy unlike any we'd fought before. The global war on terror has impacted budget deficits as well. All of that said, Zak, I want you to know that President Bush is utterly committed to fiscal discipline and fully appreciates the fact that the money in the federal budget is the taxpayers' money. The budget that he will send to the Congress on Monday holds the growth of discretionary spending below inflation and stays on track to cut the deficit in half by 2009. As he said in his speech last night when he talked about the spending discipline in his buget: "The principle here is clear: Taxpayer dollars must be spent wisely, or not at all."
John, from Arizona writes:
What does President Bush mean by "at or near retirement". What age will
be the cutoff for retaining benefits under the current plan. Those of us
near retirement do not have the 10 to 20 years necessary for investment
accounts to impact our retirement income.
Hello, John, and thank you for your question. As the President mentioned in his speech last night, Americans who are born before 1950 will not be impacted by Social Security reform. These people are all 55 years old or older. The President knows that while personal accounts represent a terrific opportunity for younger workers, those who are at or near retirement may not have the time to plan for changes in the traditional program. We believe it is only fair to provide full scheduled benefits for those who have been counting on those benefits in their planning and for whom it would be a significant hardship to adjust their current retirement and savings plans. If you were born before 1950, there will be no changes to Social Security for you.
sunnypass, from new york
Why is the state of the union address important?
The State of the Union has a long and interesting
history, and is considered important for many reasons - not the least of which is the fact that it is a time for the President to talk to the entire country, both Congress and the people. The U.S. Constitution requires that the President "shall from time to time give to Congress information on the State of the Union." The speech is seen, today, as an opportunity to outline the administration's agenda and legislative goals.
Matty, from Chicago writes:
Given the extremely low savings rate in the country, how will the
administration further alter the tax code to promote less consumption and
more saving and investing?
Good afternoon, Matty, and thanks for your question; you touch on an important issue. Saving is the path to independence for Americans in all phases of life, and the President wants to help create the conditions that encourage more Americans to take that path. That's why he has proposed savings vehicles such as Lifetime Savings Accounts (LSAs) and Retirement Savings Accounts (RSAs). He also proposes allowing younger workers to invest a portion of their Social Security into personal accounts that they would own and could use for their retirement or, if they choose, leave to their children. You should also know that the President recently appointed an Advisory Panel on Federal Tax Reform that will be examining questions like yours as they develop ideas on how to fundamentally change and overhaul our tax code. The current code is terribly complex, unfair in its complexity, and too often discourages rather than encourages economic growth. The Advisory Panel is made up of some of the finest minds around on tax policy, and they will be presenting reform options to me this summer. Those options will help us put together recommendations for the President, who has asked the Panel to look at reforming the tax code in a way that would make it simpler, fairer, and more pro-growth. I am looking forward to reviewing the Panel's report and believe that a tax code reform holds great promise for all taxpayers, and therefore for our economy.
Dan, from Washington DC
How does the administration plan to address the growing budget and trade
deficits and the significant decline in the dollar? Will central banks
abroad continue to buy US securities if these deficits are not reduced?
I am concerned about the threat of inflation.
Hello, Dan! As I told Matty from Chicago, the President's Advisory Panel on Tax Reform is beginning their historic task of examining our current code and developing ways in which it could be significantly reformed. At this time, all ideas are "on the table," while recognizing the importance of homeownership and charitable giving in our society, and I am looking forward to reviewing the options developed by the Panel this summer.
arc, from lewes, DE
Does the President have a deadline for the State of the Union Address? I
always presumed it had to be given by the end of January.
The speech is usually delivered on the last Tuesday in January. Its length, frequency and delivery date vary from year to year. No law requires a specific date, however.
Justin, from Provo, UT
What is going to be done with the dual deficits? What is going to be
done with the slumping dollar? Secretary Snow continues to talk about a
strong dollar policy, but nothing ever gets done about it; what will
occur to stem the tide?
Thanks for your question, Justin. Deficits are of concern to me and President Bush, and I appreciate this chance to address your question. At home, we've got to bring down our budget deficit by continuing on a path of economic growth, which will increase Treasury receipts, and partner those efforts with federal spending discipline. The President's budget, which will be released on Monday, holds the growth of discretionary spending below inflation, makes tax relief permanent, and stays on track to cut the deficit in half by 2009. Our current account deficit basically reflects differential growth rates between the United States and our trading partners. Higher growth rates in the world economy, particularly among our trading partners, is of paramount importance in this area. If our trading partners grow faster, they will buy more from us and reduce that gap. Flexible currencies also help the current account deficit. And you're right, Justin, I speak about our support for a strong dollar frequently. A strong dollar is good for the U.S. and good for our trading partners. Continued growth at home and shrinking our budget deficit will help the dollar, as will increased growth abroad.
Jennifer, from South Carolina
What does the State of the Union Adress usually consist of, and what is
Presidents today generally focus on reporting the details of their legislative agenda and national priorities to Congress and the American public. The speech can also serve to encourage policy-makers and citizens to support these initiatives and also develop "loftier" goals. For example, last night the President laid out ambitious goals for the future, behind which all Americans can unite, and urged the nation to move forward with the work that needs to be done this year - from growing our economy to saving Social Security and making America safer with decisive action to win the war on terror and spread freedom.
ADAM, from Alabama writes:
Who were two women sitting in the First Lady's box at the State of the
Thanks for your question, Adam. First Lady Laura Bush hosted some very special guests for the 2005 State of the Union Address. They were: Homira G. Nassery, a United Nations worker who has assisted the Afghan government in rural development and mentoring women participating in the new government; Safia Taleb al-Suhail, leader of the Iraqi Women's Political Council and recent Iraqi voter; and Janet and William Norwood, of Pflugerville, Texas, the parents of Sgt. Byron Norwood, a Marine killed on November 13, 2004 by sniper fire during an assault on Fallujah.
Brittany, from Long Beach, California
How will President Bush's points made at the State of the Union on
February 2, 2005 be used to "set the agenda"?
Thank you for your question, Brittany, it is an interesting one. By developing an exciting and important agenda, and delivering a compelling State of the Union Address, the President has effectively set the agenda in Washington, DC for the foreseeable future. You can expect your representatives on Capitol Hill to engage in and debate the President's proposals for the rest of the year - from the President's budget to his principles on Social Security reform. The agenda has been set, and the State of the Union Address was an outstanding articulation of that agenda.
Eli, from Flagstaff, AZ writes:
In his state of the union speach, the president stated a goal of
eliminating "150 government programs that are not getting results, or
duplicate current efforts, or do not fulfill essential priorities". What
are these programs?
That's a great question, Eli, but unfortunately I can't answer it today. The President's budget will not be released until Monday (February 7th) and I encourage you to look for it on the Office of Management and Budget's website on Monday. I can tell you that the President is dedicated, as he said last night, to fiscal discipline that is also compassionate, and to spending the taxpayers' dollars "wisely, or not at all."
Jim, from Colorado Springs, Colorado
What is the difference between the personal account now proposed by
President Bush and private accounts he was talking about a month ago?
Hello, Jim, thanks for your question. The President has always referred to personal accounts, but some often mischaracterize them as "private accounts." The best way to think of the President's proposal is as a "nest egg," managed by the government, that younger workers can own and build and pass on to their loved ones. It is expected that the personal retirement account nest egg will grow faster than workers' money grows in Social Security, and it will be money that cannot be taken away from its owner by the government, ever.
Beulah, from Middleburg, Florida
What happens to those who are in their forties and early fifties who may
not have time to build up a private account large enough to support them
at retirement? What about the money they have already paid into Social
As the President said last night, any changes that we would make to the current "defined benefit" system of Social Security would be very gradual. Among those choosing personal accounts, people in their forties would receive more benefits from traditional Social Security than people who are in their twenties, and they would also have 20 years to build their personal account nest egg, which is going to give them a better return on their investment than what they put into Social Security. For all ages under 55, future benefits would come from a combination of their personal accounts (if they choose... accounts would be voluntary) and traditional Social Security. Younger workers will draw a higher percentage of their benefits from their nest egg than workers who are in their forties and early fifties today.
chris, from california writes:
who are the people siting behind president bush and what are their
Hello, Chris! During the State of the Union Address, the Vice President and Speaker of the House site behind the President as he speaks. Last night, you saw Vice President Dick Cheney and Speaker of the House Dennis Hastert behind the president.
Angela, from Arlington VA
Will the President talk about his "Clear Skies" legislation?
Thank you for your question, Angela. The President did mention "Clear Skies" in his speech last night, which is evidence of how deeply he cares about it. He encouraged the Congress to pass the legislation because it will "cut power plant pollution and improve the health of our citizens."
Lisa, from North Carolina
I am a 44 yr old working mom. My question is by the time I am ready to
retire at the age of 65, will there be full social security benefits for
me to collect from?
Hi, Lisa. The current Social Security system can't afford to pay younger workers the benefits that you are promised in the law - that's why the President wants to reform the system so it's there when you retire, and so workers will also have the opportunity to invest in personal accounts and earn a higher return than the current system can pay them. Under the President's plan, you would have the option of putting some of your money into a personal account that you would own and control. The money you invest in that account would grow at a faster rate than tax dollars grow in Social Security. When you retire, you would draw your likely benefits from two places: Social Security checks and your own nest egg. I believe that you may end up with more retirement dollars than you would have under Social Security alone because your own account will have around 20 years to build and grow.
Jeff, from Georgia writes:
What will the social security reform mean to a guy that is in his early
40's and has no other means of retirement? I am always on the tail end
of the baby boomers and seem to always get the leftovers?
I appreciate your concern, Jeff. One of the reasons the President is leading the charge on Social Security reform is because he is aware of the demographic weight that the Baby Boom generation has added to the program. The boomers will cost the system a lot of money, and younger generations must also be looked after - that is the whole idea behind the President's proposed reforms. As I told Lisa from North Carolina, you may ultimately enjoy more money in your retirement than the current system can afford to pay thanks to the opportunity to invest in a personal retirement account that earns a significantly higher rate of return.
Thomas, from New Mexico
I took an early retirement, anticipating my social security at 62. How
will the new SS reform effect me?
Thanks for this important question, Thomas. Social Security reform will not affect you - the program will remain exactly the same for everyone 55 and older (everyone born before 1950).
Collin, from White Plains writes:
How can I obtain a copy of the Presidents State of the Union address?
The White House's website features a summary of the speech. The State of the Union Address in its entirety can be found here.
Kayla, from Texas writes:
Who was the one cabinet memeber not attending the 2005 State of the
Union Address? This is a question I was asked for my government class
Good question, Kayla; a lot of people were curious about this. As many people know, in an effort to maintain security, one Cabinet and two congressional leaders are absent from the Address. This year, House Republican Conference Secretary John Doolittle, R-Calif., outgoing Commerce Secretary Don Evans and Sen. Kent Conrad, D-N.D. were taken to undisclosed locations.
James, from Ohio, Ciccinati
Dear Mr Secretary, i thank you for sharing your busy time with us, to
talk about the State of Union speech. I think that the president is a
very good public speaker. I was imnpresed with al of his three States of
Union speeches. I interetsed to know more about the role of the
President in the procces of writing the speech; does he writes specifc
parts of it, when does the process start, how he practices,etc?
Thank you Mr. Secretary,
This is a great question, James; it is an interesting process. Generally speaking, here's how it goes: Small groups of the Presidents advisors take the President's ideas, proposals and vision and write a first draft with staff speechwriters. The President will then review the draft, concentrating on the structure and flow of the speech. As an active editor, he provides feedback and then collaborates with the speechwriters for revisions. Once a final speech is created, the President rehearses it as the speechwriters listen to his delivery. Speechwriters Michael Gerson, William McGurn and John McConnell worked on the 2005 State of the Union Address. The speech went through a total of 20 drafts.
Thanks to everyone who sent questions in today; they were terrific. I'm already looking forward to our next conversation on "Ask the White House."