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For Immediate Release
Office of the Press Secretary
September 2, 2004
Strengthening Social Security
Fact Sheet: President Bush's Commitment to Strengthening Social Security
President Bush has said that "Social Security is one of the greatest achievements of the American government, and one of the deepest commitments to the American people." He is committed to ensuring that the promise of Social Security is kept for current seniors and those nearing retirement - and that we fix the Social Security system for our children and grandchildren.
Social Security is sound for today's seniors and those nearing retirement, but it needs to be fixed for younger workers -- our children and grandchildren. In 1950, there were 16 workers to support every one beneficiary of Social Security. Today, there are only 3.3 workers supporting every Social Security beneficiary. By the time our youngest workers - those just entering the workforce today - turn 65, there will only be 2 workers supporting each beneficiary.
As a result of these demographic changes, the current system will not be able to afford to pay the benefits scheduled for our children and grandchildren without enormous payroll tax increases. The Social Security payroll tax, which was once 2%, is now more than 12%. Economists calculate that under the current system, the payroll tax would have to rise to more than 18% if our children and grandchildren are to receive their scheduled benefits.
Women - especially widows- are particularly affected by the problems in Social Security. The current Social Security system cannot fund the benefits promised to future widows - and, while widows would benefit disproportionately from inheritance rights in Social Security, the current system has no inheritance rights. Divorced women can also be disadvantaged by the Social Security system. If a woman leaves the paid workforce to stay at home with children, and then is divorced in less than ten years, she does not have a Social Security earnings record to entitle her to benefits on her own, nor has she become entitled as a spouse.
The 2004 report of the Social Security Trustees estimates the present value of Social Security's permanent deficit - above and beyond all future payroll taxes to be paid by American workers - at more than $10 trillion.
The President's Vision for Social Security
By acting now, we can ensure that our children and grandchildren are not saddled with high taxes that would limit their economic opportunities and their ability to achieve the American dream. The President will keep the essential promise that Social Security has represented since its founding - while ensuring that the retirement security of 21st Century retirees is not limited by the shortcomings of a financing system that was designed in 1935.
To ensure its long-term future, Social Security needs to be fixed soon. Any fix will require choices, bipartisanship, and public discussion. There are a variety of good plans that have been proposed to fix Social Security and to establish personal accounts, including a number of options presented by the bipartisan President's Commission to Strengthen Social Security.
The President will work with Congress to determine the best elements of the proposals that have been put forward, according to these principles:
Establishing personal accounts does not add to the total costs that Social Security faces. The obligation to pay Social Security benefits is already there. While personal accounts affect the timing of these costs, they do not add to the total amount obligated through Social Security. In fact, every plan scored by SSA that contains personal accounts would, according to actuarial analysis, reduce the costs of permanently fixing the system.
Doing nothing to fix our Social Security system will cost us, as well as our children and grandchildren, an estimated $10 trillion, according to the Social Security Trustees. Leadership means recognizing that these costs already exist, and that passing such a debt on to our children and grandchildren is irresponsible.