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CNN Live Event/Special
President Bush Announces Formation of Social Security Commission
Aired May 02, 2001 - 10:26 ET
THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
DARYN KAGAN, CNN ANCHOR: We're going to go live now to the White House -- President Bush coming out to announce a new commission he's putting together: a 14-member commission to look at the future of Social Security -- key among the issues that these commission members will be looking at: the privatization of Social Security -- allowing Americans to invest their money in places like the stock market.
Let's go ahead and listen in to the president.
GEORGE W. BUSH, PRESIDENT OF THE UNITED STATES: Thank you all for being here. And I want to thank your family members who are here as well.
Social Security is one of the greatest achievements of the American government, and one of the deepest commitments to the American people. For more than six decades, it has protected our elderly against poverty and assured young people of a more secure future. It must continue to do this important work for decades to come.
Yet, it has been apparent for many years that Social Security itself is becoming insecure. Social Security was designed for an era when few Americans lived much past the age of 65, and when families of three or four children were more than the exception. When Social Security was created there was about 40 workers paying Social Security taxes for every one retiree receiving benefits. Today, there are three workers for every retiree, soon there will be two.
Long life is a blessing, smaller families are an individual choice, but the consequence of this blessing and this choice is that the Social Security payroll tax, which was once 2 percent has now passed 12 percent. Economists calculate that it will have to rise past 18 percent if the baby boomers are to receive the same benefits as Social Security has promised, unless we take steps soon to reform the way Social Security is financed.
The threat to the stability of Social Security has been apparent for decades. For years, political leaders have agreed that something must be done, but nothing has been done. We can postpone action no longer. Social Security is a challenge now; if we fail to act, it will become a crisis. We must save Social Security, and we now have the opportunity to do so. Our government will run large budget surpluses over the next 10 years. These surpluses provide an opportunity to move to a stronger Social Security system.
Two months ago in my address to Congress, I described the principles that must guide any reform of Social Security. First, Social Security reform must preserve the benefits of all current retirees and those nearing retirement. Second, the Social Security reform must return the Social Security system to sound financial footing. Third, Social Security reform must offer personal savings accounts to younger workers who want them.
Today, young workers who are paying the Social Security might as well be saving their money in their mattresses, that's how low the return is on their contributions. And the return will only decline further, maybe even below zero if we do not proceed with reform.
Personal savings accounts will transform Social Security from a government IOU into personal property and real assets; property that workers will own in their own names and that they can pass along to their children. Ownership, independence, access to wealth should not be the privilege of a few.
They're the hope of every American, and we must make them the foundation of Social Security. Today I'm naming a presidential commission to turn these principles into concrete reforms. This task is not easy, but the mandate is clear: Strengthen Social Security and make us promise more certain and valuable for generations to come.
I have asked the commission to deliver its report later this fall. Social Security does not belong to any one political party, so the commission is drawn from both parties. Social Security does not belong to the government or to the politicians, and so my commission has members from many different walks of life.
It will be chaired by two outstanding Americans, Senator Daniel Patrick Moynihan and Richard Parsons of AOL Time Warner. Senator Moynihan has been aptly described as the nation's best thinker among politicians since Lincoln and its best politician among thinkers since Jefferson. A profound mind, a compassionate heart and a far-seeing imagination have distinguished him throughout his career.
Our task today is to preserve what is the best in Social Security, while updating it, and for a new time. And nobody will do that job better than this great student of Social Security's history and stalwart champion of Social Security's principles.
As co-chief operating officer of AOL Time Warner, Richard Parsons is one of the leaders of this nation's information age economy. Few people have served more tours of duty in the American government in business -- senior aide in the Ford Administration, managing partner of a distinguished law firm, CEO of a major savings bank before becoming president of Time Warner.
Mr. Parsons serves his community as ably as he has served his country. He chairs the Upper Manhattan Empowerment Zone Development Corporation, where he mobilized the creativity of the private sector to bring jobs and opportunity to people in need. And he sits on the boards of Howard University and the Lincoln Center. Richard Parsons represents in our time the spirit of business statesmanship at its highest.
Fourteen other fine Americans have joined the Moynihan-Parsons Commission. Seven of them are Republicans and seven are Democrats. They include a former aide to Robert Kennedy and a former aide to Ronald Reagan -- political leaders, entrepreneurs, eminent experts on the Social Security system. Every one of these fine men and women is passionately committed to the safety, success and long-term security of Social Security.
I'm giving this commission a great task and its members have my full faith. When it makes its report, the Congress and I will face some serious decisions, but we must be inspired by the example of the founder of Social Security, President Franklin Delano Roosevelt.
In his fireside chat of September 1934, shortly before Congress enacted Social Security, he warned that there will always be those frightened by boldness and cowed by the necessity for making decisions. "They will complain," he said, "that all we have done is unnecessary and subject to great risks."
But now, as then, bold actions and serious decisions are necessary. And we in our time must rededicate ourselves to the great ideal Roosevelt defined 67 years: Greater freedom and greater security for the average man then he has ever known before in the history of America. That's our charge and we must keep it.
And now, one of the co-chairmen of this commission, Senator Daniel Patrick Moynihan.
(APPLAUSE)
DANIEL PATRICK MOYNIHAN, FORMER U.S. SENATOR: We thank you, Mr. President, for the opportunity you have given us. The president earlier remarked to the commission that this is a defining issue, and it is surely that. It's the most important possibility in social insurance since Franklin D. Roosevelt in his address to the joint session of the Congress. In January, the president spoke of his purpose to provide wealth and independence to all persons. This is a large purpose and we are happy to join in whatever service we may add.
BUSH: Thank you.
(APPLAUSE)
RICHARD PARSONS, CO-COO, AOL TIME WARNER: Let me say very briefly, that on behalf of all the commission members, we are honored and pleased at the confidence that the president has shown in us in giving us this mandate. It's particularly my honor and privilege to serve as co-chair with fellow New Yorker, Senator Moynihan.
One of the few things the president didn't tell you about me is that I am a baby boomer. I was born in 1948, and I've been contributing to the Social Security system since 1964. And until this point in time, I've never believed that I was going to get anything out of Social Security...
(LAUGHTER)
PARSONS: ... when I retired, never.
(APPLAUSE)
PARSONS: Because unless the system is reformed, it's a pay-as- you-go system. And it's one thing when you have 40 workers supporting every retired person on a pay-as-you-go basis. When you have two workers for every retired person, it can't work -- do the math. So we've all known the system needs to be reformed and to sort of borrow a phrase from my college days, you know, "If not now, when? And if not us, who?" So we look forward to working with the president under his leadership. We applaud his courage for taking this issue on and we hope we don't let you down.
BUSH: Thank you.
Now I have the honor of signing the commission into being.
(APPLAUSE)
KAGAN: We will go ahead and watch as President Bush signs this commission into being. This is a commission -- a 14-member commission led by former Senator Daniel Patrick Moynihan that will look into revising Social Security -- many in this country agreeing that this is a system that needs to be overhauled -- how you do it a matter of controversy -- this commission all made up of members that agree that part -- Americans should be allowed to invest part of their payroll taxes in private retirement accounts -- the Democrats not completely agreeing with that -- all Democrats. And we will be hearing from them a little bit later on.
One note on this commission: This is just a recommendation commission. Anything, before it would become law, of course, would have to go before Congress.
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