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Remarks Prepared for
U.S. Secretary of Labor Elaine L. Chao
Retirement Security for the 21st Century
Little Rock, Arkansas
Tuesday, June 28, 2005
Thank you, Lieutenant Governor [Win Rockefeller].
And thank you, Mary Jane [Rebick, President, Copy Systems, Inc.],
for showing me the work that you all do here and for hosting this event today.
Wherever I go, I talk with women entrepreneurs. They are always an inspiration.
Small businesses are the engine of job growth in our economy. They create two
out of three new jobs across America. And it's interesting to note that women-owned
businesses are growing at twice the rate of all U.S. firms. Therefore, women
entrepreneurs are making a significant contribution to the economic vitality
of our country. So, thank you for having me visit.
I want to talk about a very serious challenge facing our country—and
you, America's workers—and that is Social Security. I also want to hear
from you. What you're thinking about your future. What you're concerns are
about retirement. And your ideas on how to move ahead. Because your retirement
security is important to President Bush, me and this Administration.
That's why President Bush put Social Security reform at the top of his second-term
agenda. He knows we must solve the financial problems of Social Security permanently,
and not just create a temporary Band-Aid solution.
First of all, it is important to understand that Social Security is safe for
today's retirees and for those nearing retirement. Retirees currently receiving
Social Security benefits and for everyone born before 1950, nothing will change.
But the system needs to be modernized so that it's there when you retire,
when your children retire and when your grandchildren retire.
Right here in Arkansas, you have more than 540,000 people receiving Social
Security benefits. And that number will only increase as the baby-boomer generation
begins to retire in 2008. They will live longer, healthier lives. And that's
good. But what it also means is that there will be fewer workers paying into
Social Security while more retirees are drawing benefits as you can see in
this chart.
That's because Social Security is a pay-as-you-go system. In other words,
the money you pay into Social Security is not being put away into an account
with your name on it. Instead, your money actually goes to pay the benefits
current retirees receive.
This imbalance won't work. Think about your checkbook for a minute. You and
I both know that we cannot write a check for more money than is in our accounts.
The government is facing that same problem with Social Security, which you
can see on this chart.
In fact, in just 12 years, the Social Security system will pay out more than
it takes in in payroll taxes. And if nothing is done, today's 30-year-olds
will see a 26-percent cut in benefits when they retire as pictured in this
chart.
The President has laid out several principles for Social Security reform:
First, there must be no changes in benefits for people at or near retirement.
Second, there must be no increase in payroll taxes because we don't want to
dampen job creation.
And third, empower younger workers by giving them the choice of voluntarily
taking a small portion of their payroll taxes and putting into a Voluntary
Personal Retirement Account. They will own and control the account. And can
pass it on 100 percent to their children.
For example, if a worker earned $35,000 annually over his or her lifetime
and invested 4 percent of payroll taxes in a conservative mix of bonds and
stocks, he or she would have a nest egg of $250,000 upon retirement—that's
in addition to traditional Social Security benefits. And it could be passed
on to their children.
The President's goal in reforming Social Security is to better protect workers
and retirees. He wants you to be confident that you
will have a secure retirement after a lifetime of work.
That's why our country needs to come together to solve this problem. The President
wants a bipartisan solution and will work with members of Congress from both
parties. But he has made it clear that our country must do something, and we
must do it now .
Social Security is a promise that the government made to you—to workers. And
it's a promise the government must keep.
And now, I'd like to hear from you and your concerns about retirement security.
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