Bush's Transmitter

Hear the voice inside Bush's transmitter.
CAUTION: This is an audio satire.

It's been an incredible time. It's been an amazing time, hasn't it, to watch and to see these people around the world demanding their freedom. And it's such an honor to be a part of helping people realize the great potential of a free society. It was an amazing moment to stand in Georgia, Tbilisi, Georgia, in front of over 150,000 people that were so thrilled to see a representative of the United States, and of course, thrilled to see us there because we stand for freedom and human dignity, and the belief that everybody counts, and that you ought to be able to worship freely. I hope you take great pride in what America stands for, and know that, as we spread not American values, but God-given values, around the world, this world is a better place. (Applause.)

I want to thank Congressman Paul Ryan. He's one of the bright lights in the United States Congress, a very sharp guy. (Applause.) He jumped on Air Force One, easy ride home -- right, Ryan? (Laughter.) Are you going back? Oh, he is going back. Good. But we spent a lot of time talking about this issue. He's a smart guy and cares a lot about the Social Security issue. I really appreciate you taking time out to come and hear this discussion.

I want to thank Andrew Ziegler, the President of the Milwaukee Art Museum, and David Gordon for letting us come by. What a fantastic building. I mean, it's really -- (applause.) I know you're incredibly proud of this fantastic facility, and I know the citizens of Milwaukee support it strongly, as you should. So thanks for letting us come by and use this facility. It's a -- look at it this way -- it's a chance to show it off for the world, to the extent the world is watching C-SPAN. (Applause.)

I had an amazing experience. I stopped by a business here called OnMilwaukee.com. (Applause.) A little bit of a following, things are catching on. I rode over here with Jeff Sherman and Andy Tarnoff, two young guys, Milwaukee citizens who started this company -- entrepreneurs who took risk and have put out a product people obviously want. It's a fast-growing little business. I met our participants over there to talk about what we're going to do here, but I also love to see entrepreneurs. You know, part of the role of government is to create an environment in which people are willing to take risk and -- which means low taxes, reasonable regulation. We've got to get rid of all these junk lawsuits that are threatening small businesses, the job creators. But I want to thank Andy and Jeff and their employees or associates for welcoming me there. And it was -- thanks for putting me on the front page of today's edition. (Laughter.)

I also want to welcome Jack Voight, the State Treasurer; and the State Senate Majority Leader Dale Schultz. (Applause.) Hey, Dale. Tell your wife hello. We traveled on a bus together.

Let me start off on Social Security by saying this: Franklin Roosevelt did a smart thing in setting up a safety net for people who, when they retired, would know they would be able to more likely live in dignity upon retirement. He did a smart thing. And it worked -- Social Security worked for a long time. As a matter of fact, I fully understand that right here in the state of Wisconsin, a lot of people are counting on the Social Security check. In other words, Social Security is really important for a lot of people's lives. In my home state of Texas, a lot of people rely solely on their Social Security check.

And as we discuss Social Security, it's important for the people of Milwaukee to understand, and Wisconsin to understand, that this discussion we're having really is not about you, but it's about your children and your grandchildren -- because I can look in the camera and say with absolute certainty, if you're on Social Security today, nothing will change, you will get your check. The system is solvent enough -- (applause.) The system is solvent for people born before 1950.

The reason I have to say that is because many of you are aware of what takes place in politics. People say the darndest things to try to change people's opinions. They might say, if old so-and-so gets elected you're not going to get your Social Security check. In other words, people have been using Social Security to scare seniors to vote one way or the other for a long period of time. And so, therefore, when I'm talking about the reform, I want you to recognize, one, Social Security is important; and two, if you're a senior, you have nothing to worry about. You will get your check.

But if you've got a grandchild, you've got plenty to worry about if you care about your children and your grandchildren. And here's why -- here's why. There's a lot of us getting ready to retire. We're called baby boomers. I'm one. As a matter of fact, my retirement age is in 2008. (Laughter.) I turn 62 in 2008 -- it's kind of convenient. (Laughter.) And there's a lot of us. As a matter of fact, by the time the baby boomers fully retire, there's going to be over 70 million of us. That's compared to 40-some odd million today. So the number of retirees that the system will have to take care of is increasing dramatically, and we're living longer.

A lot of baby boomers have been working out and taking care of our bodies, making good choices, and medicine is better, and we're living longer. It's just a fact. We're living longer than the previous generation -- and we've been promised greater benefits. People running for office saying, vote for me, I'm going to give you more benefits when it comes to Social Security. And sure enough, they got elected and they kept their promise. And so you've got a lot of people getting ready to retire who are living longer who are getting greater benefits, and fewer people paying into the system.

In 1950, there was, like, 15 workers to one beneficiary. In other words, you had a lot of workers relative to the number of beneficiaries. Today, there's 3.3 workers per beneficiary. Relatively quickly, it will be two workers per beneficiary. Fewer people paying greater benefits to a greater number of people who are living longer.

Now, secondly, Social Security is not a savings account. In my travels around the country I hear people say, why don't you just give us the money back we put in. But that's not the way Social Security works. It's a pay- as-you-go system. You pay; we go ahead and spend. (Laughter.) You pay through payroll taxes; we spend on paying for the beneficiaries, the retirees for that year. But if we've got any money left over, we didn't save it for you, we spent it on government. That's the way it works. It's a pay-as-you-go. And then there's -- all that's left over is a file cabinet full of IOUs. I have seen the file cabinet in West Virginia firsthand, and I saw all the IOUs. But the system is not the kind of system where we're holding the money for you. That's not the way it works. We're spending your money and left behind some paper that can only be good if the government decides to redeem the paper. That's a pay-as-you-go system.

The pay-as-you-go system starts to go in the red because it's going to pay out more in benefits than it collects in taxes in 2017. That's 12 years from now. If you've got a six-year-old child, that will be about the time your child starts to drive, if the driving age is 18 here in Wisconsin. In 2027 -- and by the way, the situation gets worse every year, fewer people paying for more beneficiaries. In 2017, the system will be $200 billion for that year in the red. I don't know where they're going to get the money. Every year it gets worse. In 2032, it's like $300 billion in the red. In 2041, it's bust.

Now, if you're a senior you have nothing to worry about because it's got plenty of money for you. But if you're a young worker, a young entrepreneur, a young mom paying into the system, you're paying into a bankrupt system unless the United States Congress decides to act.

Now, I see a problem. I fully recognize that some in Washington don't see a problem. They'd rather kind of sweep this issue under the rug. But that's not the job of the President. The job of the President is to confront problems and not pass those problems on to another President, or another Congress, or another generation. (Applause.) And I realize if we don't act, it's going to cost $600 billion a year because of inaction. And I realize if we don't act, we're liable to saddle a younger generation of Americans with an 18-percent payroll tax to make good for the promises that you've made for me. And that's not fair, and that's not right.

And so I went in front of the Congress and said, we got a problem. I said it at the State of the Union. I also told the leadership that I plan on campaigning on this issue -- in other words, traveling the country doing exactly what we're doing here, making it perfectly clear to the American people we have a problem. Guess what -- they now know we got a problem. And that's bad news for people in Washington, D.C. who would rather do nothing, because once the people figure out we got a problem, the next question they're going to say to members of the United States Congress is, what do you intend to do about it.

Now, I have an obligation to do more than just say we got a problem. I've got an obligation to say, here's some -- here's some ideas that we got to work on. First, anything we do, we got to make sure that future generations receive benefits equal to or greater than benefits enjoyed by today's seniors. I think that's a reasonable principle.

Secondly, I believe that -- I know we can solve a lot of the issue by embracing what's called progressive indexing of benefits. It's a long word, fancy words for this. Here's what happens: The promises Congress has made says that your benefits will raise -- rise based upon wage increases. If you were to say to the upper- income folks, your benefits will raise -- rise based upon inflation, you've gone a long way to solving the solvency problem. It sounds simple, but it basically means that poor people won't have to retire to poverty, and the wealthier people in America will get benefits that increase with the rate of inflation -- for people born prior to 1950 -- I mean, after 1950.

That progressive indexing plan does a couple of things. One, I think it is an important principle to say to somebody who has been working all their life in a hard job that you're not going to retire into poverty. America can make that promise. And it's a promise we ought to make for people. It makes sense. We want our people retiring with dignity. That's one way to make the Social Security system better.

But it also makes sense to say to somebody who doesn't think they're going to see any benefits anyway, you're going to get benefits, they're just not going to grow quite as fast. They'll grow; they're going to be bigger -- equal to or bigger than their previous generation; they're just not going to be quite as big as the government promised you -- that politicians promised you. They'll be bigger, but for the sake of solvency and permanency, if we don't do this, you're going to be saddled with a $200-billion-a-year bill in 2027. In other words, there's a reasonable approach that I'm confident that Congress, if it takes a look at, will see it is reasonable.

Now, we've got to come together and solve other problems to make sure we permanently solve the issue. I keep saying, permanently, because I remember in 1983 when President Reagan and Speaker O'Neill, in the spirit of bipartisanship, said, we got a problem with Social Security, and they came together, and said, we're going to put out a 75-year fix. The problem is, we're now 22 years later and that 75-year fix didn't stick. In other words, if we're going to sit down at the table, let's get it done forever. Let's say -- let's say to a younger generation of Americans, we're going to permanently solve the Social Security issue so you can grow up with peace of mind. (Applause.)

I'm almost through. I think as we permanently fix the system there's an opportunity -- I know there's an opportunity to make the system a better deal for younger workers. And so I've asked Congress to consider this idea: Younger workers ought to be allowed to take some of their own payroll taxes, if they so choose, and set up a personal savings account. Some of the taxes will be in a -- that they pay -- after all, it's their money that they're paying -- they ought to be allowed to take some of their money and set up a personal savings accounts.

Here are the benefits for doing that. One, the government does a lousy job on getting a good rate of return on your money. As a matter of fact, people calculate that in the Social Security system you earn about 1.8 percent on your money. That's not a very good deal. You see, if you have a personal savings account, you could do a lot better than 1.8 percent. A conservative mix of bonds and stocks, you can get up to 7 percent or 8 percent -- 4 percent. If you're only in T-bills, you do better than 1.8 percent. And it's that difference in interest that over time compounds that means a lot.

In other words, if you start setting aside money, with a decent rate of return, it grows over time, it compounds. And it's that power of compound interest which younger workers ought to be allowed to take advantage of. But the system today doesn't let them take advantage of that. (Applause.)

So let me give you an example. If you're a 20-year-old mom earning $8 an hour over the career, and you're allowed to take a third of your payroll taxes and put it in a conservative mix of bonds and stocks, by the time that person retires, she would have a $100,000 nest egg. See, that's the power of compound interest.

Here's another interesting example for you. Say you've got a child and that child decides to become a police force, marries a nurse, they're in the workplace in 2011, and they work their entire careers. They set aside money based upon the average salary of a policeman and nurse. By the time they retired at 65, they would have a $669,000 nest egg. (Applause.)

That's what money does when it grows. That's what happens. And people ought to be allowed to take advantage of that, if they choose. The government is not saying you have to set up a personal retirement. I fully understand some people might not feel comfortable about putting their money in bonds and stocks. I know that. That's why this is a personal savings account -- a voluntary personal account. Government is not saying, you must do this. They're saying, if you so choose, you should be allowed to make that decision.

And a lot of people are going to make that decision. You know why? The world has changed when it comes to investors. We're about to talk to some young investors. I can assure you, when I was their age, I wasn't spending much time thinking about 401(k)s. They didn't exist. There wasn't a lot of talk about people running - - how's your IRA doing? They didn't exist. The whole notion of people being -- entrusting people with their money and watching it grow is changing. The culture is changing. The investor class is no longer confined to just a few people. The investor class is varied, and we ought to have policies in place that encourage every American to become an owner and investor and watch their assets grow. (Applause.)

Laura said, don't get too long-winded, but it's not working. (Laughter.) A couple of other points I want to make. The system is inherently unfair to some. If you're -- if you and your spouse are working and both of you contributing in the Social Security system, and one of you die early, when you turn 62, you get a choice to make. You can either take the benefits accrued in the Social Security system to you, or to your husband, but not both. Think about that. Somebody has worked all their life, contributed to the system, dies early, and the money just disappears. That doesn't seem fair to me. That doesn't seem fair to me that fellow Americans working all his or her life, contributing in the system, and then dies early, and the surviving spouse gets a burial benefit and, at 62, gets the greater of the benefit structure, but not both. It's not fair. If you allow a younger worker to set aside money and watch that asset base grow, you're really saying, if something bad happens to you, you can pass tha

Before we get to our panel, a couple of other points. One, you can't take your money and put it in the lottery. In other words, this isn't one of these deals where it's a -- you can take it and put it in high flyers. This is a retirement fund. This is a safety net. Therefore, there's going to be a conservative mix of bonds and stocks available for you to choose from. You can mix it up between bonds and stocks and T-bills any way you want, but you cannot take your money to the track. In other words, it's a safety net. There will be guidelines.

Secondly, there will be fee structures that are reasonable. Wall Street can't rip you off in this deal. I'm sure you've heard people say, oh, Bush's plan, it's going to give Wall Street a windfall. Wait a minute, there are all kinds of public retirement funds that exist around the country where the fee structures are reasonable managed. You'll be treated fairly.

Speaking about that, all kinds of retirement systems around, I don't know if you know this or not, but the United States Congress took a look at this idea in what's called the Thrift Savings Plan. That's the federal savings plan. And they thought about maybe giving somebody the option of putting their money in a conservative mix of bonds and stocks because they -- the people who vote on that must have recognized the power of compound interest. And guess what happened. They adopted a plan that says, members of the United States Congress, if they so choose, can take some of their own money and set it aside in a conservative portfolio of bonds and stocks. Here's my attitude about that -- and it should be the attitude of the American people. If setting aside money so it can grow better in a conservative mix of bonds and stocks is okay for United States senators, it ought to be okay for workers all across America. (Applause.)

Ready to go? I think we're going to get something done. I really do. I think the American people understand we've got a problem. I think seniors are now beginning to understand all the scare tactics, all the propaganda is just that. And they're going to get their checks. And finally, the final part of this equation is, there's a lot of young Americans who are beginning to pay attention to this issue and say, wait a minute, I'm not contributing hard-earned money into a system that's going broke, and I don't like what I hear, and I expect members of both political parties to set aside their parties and focus on the good of the United States of America. (Applause.)

I want to thank you all for coming. First, we're going to start off with Jeff Brown. Jeff is what we call an expert -- right?