issues2000

George W. Bush on Social Security


Don�t treat Social Security like it�s a federal program

You know what else has changed on this issue? There are thousands of younger workers who understand that if our government does not think differently, they either are going to have to pay huge payroll tax increases or have major reductions in benefits. It doesn�t have to be that way. We trust individual workers, and so our plan says we�re going to keep the promise to our seniors. But we�ll allow younger workers at their choice to invest some of their own money in the private markets to get a better rate of return so that the Social Security promise will be kept.

And this frightens some in Washington. Because they want the federal government controlling the Social Security like it�s some kind of federal program. We understand differently though. You see, it�s your money not the government�s money.

Source: Speech in St. Charles, MO Nov 2, 2000

Don�t treat Social Security like it�s a federal program

in the private markets to get a better rate of return so that the Social Security promise will be kept.

And this frightens some in Washington. Because they want the federal government controlling the Social Security like it�s some kind of federal program. We understand differently though. You see, it�s your money not the government�s money.

Source: Speech in St. Charles, MO Nov 2, 2000

Set aside $2.4T for seniors as well as younger workers

I�m going to set aside $2.4 trillion of Social Security surplus. That�s $2.4 trillion more in payroll taxes than we owe the seniors, which means there is a really interesting opportunity to make sure we not only fulfill the promises to the seniors but we have a social security system that is hopeful for younger workers. We must let younger workers take a portion of their payroll taxes and put it in the marketplace. The agents of the status quo have misread the people.
Source: Speech in Florida Oct 26, 2000

Young workers want to invest some Social Security money

[We want] to give younger workers the option at their choice of being able to manage some of their own money in the private sectors to make sure there�s a Social Security system around tomorrow. There�s a lot of young workers at our rallies we go to, that when they hear that I�m going to trust them at their option to be able to manage, under certain guidelines, some of their own money to get a better rate of return so that they�ll have a retirement plan in the future, they begin to nod their heads.
Source: Presidential debate, Boston MA Oct 3, 2000

Gore�s plan requires taxes: �Social Security Plus Huge Debt�

Q: What is your Social Security plan?

GORE: I will keep it in a lockbox. The interest savings, I would put right back into it. That extends the life for 55 years. I am opposed to a plan that diverts 1 out of every 6 dollars away from the Trust Fund. It would go bankrupt within this generation.

BUSH: We want to allow younger workers to take some of their own money & put it in safe investments so that $1 trillion grows to $3 trillion. The money stays within the system.

GORE: I give a new incentive for younger workers to invest their own money. My plan is �Social Security Plus.� The governor�s plan is �Social Security Minus.� Your future benefits would be cut by the amount that�s diverted into the stock market. And if you make bad investments, that�s too bad.

BUSH: Your plan is �Social Security Plus Huge Debt.� If we don�t trust younger workers to manage some of their own money, it�s going to be impossible to bridge the gap without causing huge payroll taxes or major benefit reductions.

Source: Presidential debate, Boston MA Oct 3, 2000

Prohibit govt investment in the stock market, private OK

Source: The Economist, �Issues 2000� Sep 30, 2000

Blueprint: Maintain retiree benefits; young get more options

Source: Blueprint for the Middle Class Sep 17, 2000

I will touch the third rail so I can fix it

Social Security has been called the �third rail of American politics� -- the one you�re not supposed to touch because it shocks you. But, if you don�t touch it, you can�t fix it. And I intend to fix it.

To seniors in this country: You earned your benefits, you made your plans, and President George W. Bush will keep the promise of Social Security. No changes, no reductions, no way.

For younger workers, we will give you the option -- your choice -- to put a part of your payroll taxes into sound, responsible investments. This will mean a higher return on your money, and, over 30 or 40 years, a nest egg to help your retirement, or pass along to your children.

When this money is in your name, in your account, it�s not just a program, it�s your property. Now is the time to give American workers security and independence that no politician can ever take away.

Source: Speech to Republican National Convention Aug 3, 2000

Open questions: transition costs & bad investors bailouts

BushGore
  • Allow investing an unspecified amount of payroll taxes in the stock market.
  • Does not preclude decreasing guaranteed benefits for future retirees.
    Use the federal budget surplus to pay down the debt and use the interest saved to keep Social Security solvent.
  • Subsidized retirement savings plan open to families earning up to $100,000 a year.
Unanswered questions
  • Will the government bail out people who make poor investment decisions?
  • What about the costs of making the transition to & then maintaining the accounts?
  • If some payroll taxes are diverted to private accounts, how will the government make up the difference for current retirees?
  • What if future administrations don�t display the kind of fiscal discipline Gore�s plan requires?
  • What if the projections of budget surplus money to pay down the debt doesn�t come true?
Source: Associated Press in Boston Globe, p. A10 Jul 5, 2000

No specifics like: What age? What percentage?

[Bush�s Social Security proposal] largely skirted specifics, preferring to talk about broad principles. It was unclear, for instance, exactly how much money people could set aside for individual accounts and what sort of investment options they would have. Asked about his lack of detail, Bush called his speech �pretty darn detailed to be talking about a framework to get something done.� His aides said that he had avoided specifics because Hillary Rodham Clinton�s abortive effort to craft a plan for universal health coverage had shown that being locked into one plan was a recipe for legislative disaster on a complicated issue.

But the lack of specifics on matters like what percentage of payroll tax would go to accounts, and what age group would see the change, opened Bush to charges that he was masking some of the hard choices ahead and trying to sidestep questions about how he could afford the transition. The cost of transition could be as much as $1 trillion.

Source: New York Times, p. A18 May 16, 2000

Maintain basics of government�s �most successful program�

Social security is the single most successful program in government history. [But] within two decades, there simply won�t be enough younger workers to pay the benefits earned by the old. For those on social security-or close to receiving it-nothing will change. In my economic plan, more than $2 trillion of the federal surplus is locked away for social security. For years, politicians have dipped into the trust fund to pay for more spending. And I will stop it.
Source: Speech in Rancho Cucamonga, in �Renewing America�s Purpose� May 15, 2000

2% real return is not enough; sound investments get 6%

Reform should include personal retirement accounts for young people. Right now, the real return people get from what they put into social security is a dismal 2% a year. Over the long term, sound investments yield about a 6% return. American securities markets, over time, have been among the most reliable investments in the world. I trust Americans to manage their own money. Everyone should be a part-owner in the American dream.
Source: Speech in Rancho Cucamonga, in �Renewing America�s Purpose� May 15, 2000

Support retirement via government-plus-private system

    There is a fundamental difference between my opponent and me. He trusts only government to manage our retirement. I trust individual Americans. I trust Americans to make their own decisions and manage their own money. [My plan]:
  1. We must not change Social Security for those now retired, or nearing retirement.
  2. All Social Security funds in the federal surplus must stay where they belong, dedicated to Social Security.
  3. The payroll tax must not be raised. We cannot tax our way to reform.
  4. Reform should include personal retirement accounts for young people. A young worker can take some portion of his or her payroll tax and put it in a fund that invests in stocks and bonds. We will establish basic standards of safety and soundness, so that investments are only in steady, reliable funds. Money in this account could only be used for retirement, or passed along as an inheritance.
Source: Speech in Rancho Cucamonga, in �Renewing America�s Purpose� May 15, 2000

Privatize Social Security to take advantage of stock market

Gore accused Bush today of devising a �secret plan� that could bankrupt the Social Security system. Gore asserted that Bush was quietly developing a �risky� plan to allow individual investment accounts in Social Security that would jeopardize millions of taxpayers� savings. �How does the Bush plan propose to deal with the bankruptcy of Social Security that his privatization scheme would cause? He doesn�t even bother to provide an answer.�

Under Bush�s proposal, taxpayers would be allowed to invest a small part of their Social Security payroll taxes in the stock or bond markets. Bush�s aides argue that such a plan would help taxpayers take advantage of the stock market�s historic growth.

But Gore asserted today that the plan would make the system vulnerable to huge market fluctuations that could hurt millions of retirees. And as he has repeatedly done in recent days, he suggested that Mr. Bush was charting a course that was �reckless� and �irresponsible.�

Source: James Dao & Frank Bruni, Associated Press May 4, 2000

No government investment in private stocks or bonds

Source: GeorgeWBush.com: �Issues: Policy Points Overview� Apr 2, 2000

Consider raising retirement age

Bush said he would consider raising the retirement age for Social Security benefits as a way to help extend the life of the ailing program.
Source: CNN.com, �GOP Arizona Debates� Nov 22, 1999

Supports subsidized Medicare menu with means testing

On Medicare, Bush said he was attracted to the plan drafted by Sen. John Breaux (D-La.). Bush said. �[I find attractive] the idea of having a basket of opportunity with premiums subsidized at the federal level, based on means testing.� Bush also said, �The Breaux plan didn�t cut benefits.� But then he acknowledged that the plan did recommend raising the age of eligibility for Medicare.
Source: (cross-ref to Health Care) Dan Balz, The Washington Post Apr 25, 1999

Lock-box yes; tax increase no; bipartisanship yes.

Bush has a sense of the direction his Social Security reform plan would take, but nonetheless said repeatedly that the next president will have to forge a bipartisan consensus to be successful on that front. �I approve of the lock boxing the Social Security money,� he said, referring to plans to prohibit spending the anticipated Social Security surpluses on other programs. �I don�t believe we ought to have a tax increase to make the plan whole.�
Source: Dan Balz, The Washington Post Apr 25, 1999

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