Administration of George W. Bush, 2005 / Mar. 30

Interview With WHO Radio in Cedar Rapids, March 30, 2005

Social Security Reform have said the world has changed and is Jan Mickelson. The President probably changing and that we have a problem for wants to get in on this conversation. younger generations of Americans. The So- [Laughter] It’s an honor seeing you again, cial Security trust, for example—or the sir. trustees came out with a report recently The President. How are you doing? that said, ‘‘In 2017, the Social Security trust Mr. Mickelson. I’m doing great. You real- goes into the negative. In 2041, it is flat ize what a risk you’ve done, latching on broke.’’ to this Social Security thing? You put our And the reason why is because baby number one Senator at grave risk. [Laugh- boomers, like me and you, are getting ready ter] He had to burn his AARP card. to retire, and there’s a lot of us, and we’re [Laughter] Do you realize what a cheap living longer. buzzard that guy is? [Laughter] Mr. Mickelson. What have you heard? The President. No, I remember the ads I mean, I wasn’t planning on retiring. with the lawnmower. [Laughter] [Laughter] Mr. Mickelson. Well, see, he can’t use The President. Well, this isn’t forced re- his AARP discount anywhere anymore. He tirement. [Laughter] You get to be retire- had to burn that card. ment age whether you want to or not. The President. Well, you know, I appre- Mr. Mickelson. I’m still in denial about ciate the chairman. He’s got some political that. courage, which is necessary to take on The President. tough problems. It’s pretty easy to ignore Well, I’m afraid we’re problems in politics. What’s hard is to take headed there. But there’s a lot of us, and on a tough problem. And both Senator we’ve been promised greater benefits, and Grassley and I have dedicated ourselves to there’s fewer workers. So you’ve got more taking on the tough problem of Social Se- people getting greater benefits, living curity, and it is a problem. longer, and fewer people paying into the Mr. Mickelson. I was also warned by the system. And it’s just not going to work. Secret Service to keep the microphone And so I think one of the things that’s away from you in a diner situation—[laugh- happened, in this 60-day period that we ter]—because you have a karaoke gland set out to explain to the country we have that breaks out into Alan Jackson songs at a problem, is that people are now begin- the drop of a hat. Try to restrain yourself ning to understand there is a problem. this morning, sir. [Laughter] And the second thing that people are The President. Thank you very much. If beginning to figure out is that if you’re you’ve ever heard me sing, you know it’s 55 and over, you don’t have anything to not an issue. [Laughter] worry about; the Government is going to Mr. Mickelson. I think it was the minor- pay the promised benefits. And that’s an ity leader, Harry Reid, said, ‘‘Social Secu- important thing for people to understand. rity is a real crisis that exists only in one There’s a lot of people in Iowa counting place, in the minds of Republicans.’’ How on their Social Security check, and they would you respond to that? just need to hear , and the truth The President. Well, I would say that is—— there’s been a lot of people who aren’t Mr. Mickelson. Five hundred and sixty- Republicans who’ve looked at this issue and two thousand of us.

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The President. That’s a lot of you—not to be over $200 billion a year? It gets worse ‘‘us.’’ You’re not one yet. every year from 2017 to 2041. And so Mr. Mickelson. Well, there’s 562,000 there’s a huge hole that can only be filled Iowans that receive some kind of Social by dramatic benefit reductions and/or pay- Security benefit, and 2 out of 5 Americans roll increases. It’s estimated that in order do. to fix the problem if we wait, it will— The President. That’s right, and that’s payroll taxes will have to get up to 18 per- why it’s an important program. That’s why cent. And that’s unsatisfactory, as far as I’m it’s important to reassure those who receive concerned. And younger workers, blue a check, nothing changes. The people who State, red State, need to worry about this need to worry about this issue are the problem. younger Americans. They’re the ones who Now, older Americans do not. And I are going to have to pay enormous taxes keep saying that, because I know there’s or get enormous benefit cuts if this Gov- some propaganda out there that says to ernment is not willing to respond now. And older Americans, ‘‘You know, old Grassley so, to answer the question of the skeptics, and Bush are going to take away your we do have a serious problem. check.’’ Well, I’ve heard this before, every Mr. Mickelson. The red State division time I’ve run for office. Nothing changes. and blue State division affects this debate The Government will keep its promise for extremely importantly and efficiently. The those of us over 55 years old. It’s younger Democrats are marketing their opposition people. This is a generational issue, Jan, to any kind of Social Security reform in because many grandparents are now begin- the following way. I was up on their web ning to realize they’re going to get their site, and this is how they describe the na- check, and they’re starting to ask the ques- ture of their opposition. And they have four tion, ‘‘What about my grandchildren; what different categories—they say women, are you going to do about the grand- blacks, Hispanics, and the disabled all re- children,’’ because this is a serious problem. ceive a progressive return from Social Secu- Mr. Mickelson. I really appreciate the rity. They get more than they pay in. In phrase you use, the ‘‘ownership society.’’ essence, they say, you’d be an idiot, there- The President. Yes. fore, to go along with any kind of reform, Mr. Mickelson. That really works. Now, because they have it pretty good now, by how do we get the people who view them- comparison, paying a little in—or less in selves as recipients to see themselves as than other wage earners. So why should potential owners, so they don’t feel threat- we vote for something that, in essence, we ened by a transformation of the system that think might disenfranchise us? you have in mind? The President. Well, again, nothing The President. Yes, well, first of all, changes if you’re 55 years and older. I you’re referring to the personal savings ac- mean, the progressivity in the system stays count aspect of a solution. And the reason in the system. Plus, you can make the sys- I believe it’s important to encourage—or tem progressive for your younger workers. to allow younger workers, if they so choose, But a younger worker, whether they live to set aside some of their own money in in a blue State or a red State, ought to a personal savings account is threefold. be wondering whether or not the Congress One, they will get a better rate of return has got the will necessary to fix this prob- on their money than they’re going to get lem, because if we don’t, the system starts if the Government holds it for them. In going into the red, negative, in 2017. other words, in a conservative mix of bonds Do you realize, in 2027, the cost just and stocks held over time, the rate of re- to make good on the promises is going turn on the money, the growth of the

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money, the fact that it’s going to be grow- very powerful word describing much of our ing in a compounded way is going to be social safety net, ‘‘unsustainable.’’ greater. The President. Yes. Mr. Mickelson. Even if they haven’t paid Mr. Mickelson. We can’t do it. Demo- in as much, initially, to push them into graphically, as you mentioned earlier, we that progressive recipient category in which aren’t reproducing ourselves. they now exist? The President. Right. The President. Well, you can do both. Medicare/Healthcare Savings Accounts First of all, it’s more progressive, by the Mr. Mickelson. The same logic that you way, if you get a greater rate of return applied aptly to Social Security also applies on your money than if you don’t. But you to our medical delivery system. can also make sure the benefits that end The President. That’s right. up being determined by Congress—in Mr. Mickelson. Can we also move to the other words, the benefits that the Govern- ownership concept in that, in medical IRAs, ment can afford—they’re progressive in na- and make those universal, maybe using ture as well. medical IRA vouchers? And how about But progressivity really depends upon using the earned-income tax that lower in- how the benefit structure is decided by come people get and empower a savings Congress. We’ve got some money for some account, so they get an ownership concept benefits; we just don’t have enough to pay using their money in that regard? the promises made to younger workers. The President. That’s a very good point. And the best way to allow a younger work- As a matter of fact, the Senator and I er to more approximate that which the worked on Medicare reform. We wanted Government has promised is to let them the current system to work better for those earn a better rate of return on their money. people who are going to get—that are on Secondly, I like the idea of somebody Medicare. We wanted—for example, I owning something. I mean, there is kind think there’s a lot of benefit to have a of this mindset that only a certain investor prescription drug plan available in Medi- class can manage their own money. I think care because a lot of people will be able that’s a preposterous assumption. I think to avoid major surgery by taking prescrip- everybody ought to be encouraged to man- tion drugs. In other words, Medicare would age their own money. pay for heart surgery but not a dime for And thirdly, we do this, Jan—this is a the prescription drugs that might prevent very important point—this isn’t a novel the heart surgery from being needed in idea. Federal workers get to do this in the first place. So we modernized Medicare what’s called—in the Federal employee and, by the way, took care of rural hospitals program, retirement program. They get to in Iowa as we did so. take some of their own money and set it Secondly, though, in that bill is the no- aside so they get a better rate of return tion of health savings accounts, which pro- than that which the Government can get vides an IRA-type approach, as you men- for them. And Senator Grassley’s employees tioned, to encourage people to set aside get to do that; people working for the Agri- money on a tax-free basis so they get to culture Department get to do it. My atti- make the decisions for their own health tude, if it’s good enough for Federal em- care—in other words, own their own health ployees, it ought to be good enough for care plan. And it’s a great idea that is now younger workers. beginning to take hold with a lot of small Mr. Mickelson. Federal Reserve Chair- businesses and a lot of employees for small man Alan Greenspan keeps using another businesses.

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Thirdly, I’ve consistently proposed, Jan, there is a duty as the President—and fortu- that we have tax credits for the working nately, Senator Grassley believes there’s a poor people so that they, themselves, can duty as the chairman of the Finance Com- go in the marketplace and own their own mittee in the Senate—to take on problems account. And yes, so to answer your ques- and not pass them on. See, the easy route tion, absolutely, we can extend ownership. is to say, ‘‘Well, we really don’t have a Mr. Mickelson. So they earn—they keep problem.’’ But what’s going to end up hap- the time value of their own money. pening is, in 2017, people are going to The President. Precisely. show up to work, and they’re going to real- Mr. Mickelson. That’s the chief weakness ize their payroll taxes have gone up signifi- of the current system. cantly to pay for promises that the Govern- The President. On a tax-free basis, with ment has made. the HSAs, by the way. And so I’m saying to people, now is the Social Security Reform time to fix it. And I think there’s a political price for not getting involved in the proc- Mr. Mickelson. The birth-dearth issue ess. I think there’s a political price for say- that you made reference to, that’s the ele- ing, ‘‘It’s not a problem. I’m going to stay phant in the room. We have to address away from the table.’’ So in my State of that. Our culture is not—it’s not the first the Union Address I called upon Members time this has happened. I was reading— Teddy Roosevelt addressed this in the early of Congress, both parties, to bring good part of the century, dealing with the birth ideas forward. dearth in the last century, and he saw that Mr. Mickelson. Has the third rail moved? that generation of Americans were not re- The President. I think it has. I think producing themselves. And do you want to you’d made a mistake not addressing Social hear a really snotty quote from Teddy Roo- Security. I think the American people, sevelt? He said—— when they figure out how significant this The President. I don’t have much choice. problem is—and they’re beginning to figure [Laughter] it out—are then going to demand, from Mr. Mickelson. Yes, you do. You have both Republicans and Democrats, leader- the Executive order. [Laughter] ship. It says, ‘‘If you do not believe in your And I am—I love this—I love taking on own stock enough to wish to see the stock big issues, because I think that’s my job. kept up, then you’re not good Americans, I think that’s why the people of the country and you’re not patriots. I, for one, would put me in office. They expect a President not mourn your extinction, and in such to lead, and they expect a chairman of the event, I would welcome the advent of a Finance Committee to lead as well. And new race that would take your place, be- fortunately, the good State of Iowa has got cause you will have shown that you are such a man in Charles Grassley. I’m looking not even fit to cumber the ground.’’ forward to working with him on this issue. So that’s pretty—that’s a bully pulpit. Mr. Mickelson. Can I expect that in an The President. He was a colorful person. upcoming press conference that you’re at- [Laughter] That’s what I’ve been doing, tending that you will get up and address using the bully pulpit over the last weeks the Nation and tell the population of the to remind people we have a problem. And United States, ‘‘Get out there and repro- it’s easy in politics to ignore problems. It’s duce, or don’t cumber the ground?’’ just easy to say, ‘‘Well, there’s no problem.’’ [Laughter] But this is a serious problem for younger The President. No, you can’t expect that. generations of Americans, and I believe [Laughter]

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Mr. Mickelson. ‘‘Get off the—have some the country. I like coming to the great State more kids or get off the planet.’’ [Laughter] of Iowa—been here quite a few times and The President. You can expect me to may have to come back to keep pounding keep talking about Social Security. [Laugh- on the issue, but it is the right thing to ter] You can expect it because now is the do, which is to address problems. time to solve this problem. And I repeat Mr. Mickelson. Mr. President, thank you to the grandparents out there that if we for visiting Iowa. do not act, your grandchildren are going The President. Thanks for coming over. to be saddled with a huge burden. This Mr. Mickelson. Thank you for visiting us. Government has made promises it cannot Senator Grassley, thank you for gracing us. keep. It’ll keep the promises to those of Senator Grassley. Pleasure to be with us over 55 years old, but it has made prom- you. ises to a lot of younger Americans it cannot Mr. Mickelson. Thank you for being here. keep, and now is the time to solve the problem. NOTE: The interview began at 11:18 a.m. at And I’m going to keep working with the Spring House Family Restaurant and was Members of Congress from both political broadcast live on the ‘‘Mickelson in the parties to do our duty. And I like traveling Morning’’ program.

Remarks in a Discussion on Strengthening Social Security in Cedar Rapids March 30, 2005

The President. Thank you, Mr. Chairman. hope you paid, Senator. [Laughter] Well, Thank you all for coming. I want to thank I forgot your reputation. [Laughter] I guess our panelists here. We’re about to discuss I had to pick up the check, probably. Social Security. Before we do, I’ve got [Laughter] But I’m proud of the Senator’s some things I want to say. leadership on the Finance Committee. This First, I want to thank the good folks will be the committee in the United States here at Kirkwood Community College for Senate that will start a piece of legislation letting us come by. It’s a fantastic facility that will modernize Social Security. He’s you got here. I want to thank Mick and committed, as am I, to taking on this big Steve and all the faculty here. I believe issue. And as I told them at the Spring the community college system is an impor- House, he’s stubborn. I’m going to be stub- tant part of making sure that our economy born on the issue, and we’re going to keep continues to grow. And the reason why is, working this until we get something done. one of the bottlenecks for economic growth We need to. Now is the time to address is to whether or not we’ve got a workforce tough problems, before it becomes acute that is trained for the jobs of the 21st cen- for younger generations of Americans. tury. There is no better place to train peo- Thank you for understanding that, Chuck. ple for the jobs of the 21st century than Appreciate you coming. the community college system in America. And so I want to thank you for letting I want to thank Congressman Jim Leach, us come by. the Congressman from this district. I’m I want to thank . He and looking forward to—Leach is flying back I just came from the Spring House. Yes, with me. I’m always a better person after it was nice. We had a cup of coffee. I having sat down to listen to his wisdom.

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