February 9, 2005
Clinton on the Social Security crisisBy Richard N. Weltz
Virtually all Congressional Democrats and party officials, not to mention a number of prominent Republicans, are jumping all over President Bush's warnings and proposals about the Social Security program.
There really is no looming crisis, they say. And even if there is one, it's much farther in the future than his predictions indicate; and his arithmetic is all wrong; and there is no need at all to begin taking corrective action now. And anyway, if action is needed, just a few minor fixes will do.
It's all a devilish trick, we're told, to begin 'privatizing' the system — a step that will put future retirees at serious risk while enriching the president's Wall Street cronies.
What a 180—degree turnabout from what the leader of these same Democrats was saying just a few short years ago, particularly in the latter part of his second term, when there was no danger of electoral fall—out from an honest approach.
Not just once, and not just casually, Mr. Clinton drove home over and over again in speeches across the nation to groups of all sorts, large and small, in person and via broadcast, his clear recognition of the coming crisis in Social Security finances and the urgent need to begin a program of significant reform. Why, he even alluded favorably [Satellite Address, March 21, 1998] to steps that 'would give a higher rate of return on the investment.'
Here are just a few excerpts from the message preached by Mr. Clinton over just a relatively short period:
And all of you know that the Social Security system is supposed to be in trouble. Now, what does that mean? It is not in trouble today. Nobody today has got any problems drawing their money. In fact, today we collect more money in Social Security taxes every year, quite a bit more, than we pay out.
The problem is that when the baby boomers retire ——starting with me; I'm the oldest of the baby boomers —— people my age and down about 18 years younger, we are the largest group of Americans that have ever lived, except the group that started first grade last year, —— second grade, or third grade, whatever it is, something in grade school —— because we've got more children in schools now, public schools, than we had during the baby boom generation for the first time. But we're going to have 18, 20, 25 years where there will be a huge number of people on Social Security in their retirement years compared to the people who are paying in. That is the issue.
[From: President Clinton's Speech in Champaign—Urbana, Illinois —— January 28, 1998]
We have a great opportunity now to take action now to avert a crisis in the Social Security system. We have a great opportunity now to be able to tell all these young people who are shadowing their Cabinet and administration leaders that Social Security will be there for them when they retire. We have a great opportunity, those of us in the baby boom generation, to tell our own children that when we retire and start drawing Social Security, it isn't going to bankrupt them to take care of us and undermine their ability to take care of their own children. We need to do this.
[From: REMARKS BY THE PRESIDENT ON SUBMISSION OF 1999 BUDGET—— February 2, 1998]
There is no better example of that principle for the strength of America than the opportunity and the duty all of us as Americans have now to save Social Security for the 21st century. So today I return to discuss what we have to do to achieve that and why it is so important.
You know, there was a recent poll which said that young people in the generation of the students here felt it was far more likely that they would see a UFO than that they would draw Social Security.
* * *
This fiscal crisis in Social Security affects every generation. We now know that the Social Security trust fund is fine for another few decades. But if it gets in trouble and we don't deal with it, then it not only affects the generation of the baby boomers and whether they'll have enough to live on when they retire, it raises the question of whether they will have enough to live on by unfairly burdening their children and, therefore, unfairly burdening their children's ability to raise their grandchildren.
* * *
In 1960, there were 5.1 Americans working for every one person drawing Social Security. In 1997, there's still 3.3 people working for every one person drawing Social Security. In 2030, the year after the Social Security trust fund supposedly will go broke unless we change something, at present projected retirement rates —— that is, the presently projected retirement age and same rates —— there will be two people working for every one person drawing Social Security.'
* * *
And if nothing is done by 2029, there will be a deficit in the Social Security trust fund, which will either require —— if you just wait until then —— a huge tax increase in the payroll tax, or just about a 25 percent cut in Social Security benefits.
[From: REMARKS BY THE PRESIDENT ON SOCIAL SECURITY —— February 9, 1998 —— Gaston Hall, Georgetown University, Washington, D.C.]
But here's the basic problem —— which I'm sure you understand. In 2029, all the baby boomers will be 65 or over. Most of them will be in the retirement system. At that time, if we continue to work at present rates, retire at present rates and grow our population at present rates, there will be only about two people working for every one person drawing. * * *
So the trick is how to make this system last beyond 2029 without having undue new tax burdens on younger people who are trying to raise their children; what options are out there for doing that; and how can we also make it easier, as many of you said, to save for your own retirement. The one think I think is very important is that young people understand especially what the realities are. I mean, I saw a survey the other day that said that some people —— a lot of people in their 20s thought it was more likely that they would see a UFO than that they would ever draw Social Security. Now, that's not accurate. We can easily save this system. And we may be able to do a number of things, including some of the things that some of you suggested that would give a higher rate of return on the investment.
[From: REMARKS BY THE PRESIDENT IN SATELLITE ADDRESS TO PEW CHARITABLE TRUSTS' "AMERICANS DISCUSS SOCIAL SECURITY" —— March 21, 1998]
Now, if we don't act, the Social Security trust fund will be depleted by the year 2029, and payroll contributions will only cover 75 percent of benefits. We mustn't break the solemn compact between generations. We must be guided by a strong sense of duty to our parents, but also to our children. Now, if we act soon and responsibly, we can strengthen Social Security in ways that will not unfairly burden any generation —— retirees, the baby boomers, their children or their children's children.
So I challenge my generation to act now, to protect our children and ensure that Social Security will be there for them after a lifetime of hard work. I challenge young people to do their part, to get involved in this national effort to strengthen Social Security for the 21st century.
[From: RADIO ADDRESS OF THE PRESIDENT TO THE NATION —— March 21, 1998]
But this sunlit moment is not a time to rest. Instead, it is a rare opportunity to prepare our nation for the challenges and the opportunities of the 21st century —— or in the words of the old saying, to fix the roof while the sun is shining. In the coming century, the aging of our society will present both great challenges and great opportunities. I hope to live to be one of those people and so, to me, it's a high—class problem.
But because a higher percentage of our people will be both older and retired, perhaps our greatest opportunity and our greatest obligation at this moment is to save Social Security.
[From: ADDRESS BY THE PRESIDENT TO A NATIONAL FORUM ON SOCIAL SECURITY ——April 7, 1998 —— Penn Valley Community College, Kansas City, Missouri]
Nearly everybody knows that something substantial, really substantial, has to be done to reform the Social Security system to accommodate the baby boom generation and then, subsequent, the generations after that.
[From: REMARKS BY THE PRESIDENT ON THE REPORT OF THE SOCIAL SECURITY AND MEDICARE TRUSTEES ——April 28, 1998 —— The Rose Garden]
Today, Social Security is sound, but a demographic crisis is looming. By 2030, there will be twice as many elderly as there are today, with only two people working for every person drawing Social Security. After 2032, contributions from payroll taxes will only cover 75 cents on the dollar of current benefits. So we must act, and act now, to save Social Security.
[From: REMARKS BY THE PRESIDENT VIA SATELLITE TO THE REGIONAL CONGRESSIONAL SOCIAL SECURITY FORUMS ——July 27, 1998 —— Albuquerque, New Mexico]
We have a huge baby boom challenge coming when all the baby boomers retire. Social Security, as presently constituted, cannot sustain that retirement. We have to reform Social Security if we want to have it for our parents —— that's me, when the baby boomers retire —— without undermining the standard of living of our children and grandchildren.
[From: REMARKS BY THE PRESIDENT ON INCOME AND POVERTY REPORT——September 24, 1998 —— The Rose Garden]
But consider this: 75 million baby boomers are going to be retiring over the next 15 to 20 years. Today there are more than 3 people working for each Social Security beneficiary, and by the year 2030 there will be only 2 people working for each Social Security beneficiary. That's just the fundamental fact of life that we have to adjust to. And it constitutes a serious challenge.
[From: REMARKS AT ROUNDTABLE DISCUSSION ON WOMEN AND RETIREMENT SECURITY —— October 27, 1998 —— The East Room]
Now, what's the issue here? Why is Social Security in trouble? First of all, if you're getting a check now, relax, you're going to be fine. That's not the issue. The issue is this: we are living longer. The baby boomers are coming up for retirement, and those of you who gave birth to baby boomers know that until this crowd started school last year —— this crowd of children in school —— the baby boomers were the largest American generation ever, and larger than our children.
So that when we retire, the baby boomers, there will only be about two people working for every one person drawing Social Security. To give you an idea, today there are more than three people working —— about three and a half people working for every one person drawing Social Security. In addition to that, there will be more and more and more women retiring and living on Social Security because women, on balance, have a longer life expectancy. And they are less likely to have pensions or personal savings. For 25 percent of the women on Social Security, it's the only income they receive.
Now, when the 75 million baby boomers retire and when there are only two people on Social Security for every one person ——two people working for every one person drawing —— we will in about 20 years start having to pay out of the Social Security trust fund, as provided by law, benefits, because the annual income won't be enough to cover the annual outgo. Then in about 34 years, even the trust fund won't be enough to cover the benefit.
[From: REMARKS BY THE PRESIDENT AT ST. SEBASTIAN'S PARISH CHURCH ——October 30, 1998 —— Woodside, New York]
It is, nonetheless, a significant challenge: 75 million baby boomers retiring during the next two decades. By 2013, what Social Security takes in will no longer be enough to fund what it pays out. That's just 15 years away. Then we'll have to use the proceeds from the trust fund. By 2032, just 34 years away, the money Social Security takes in will only be enough to pay 72 percent of benefits.
[From: REMARKS BY THE PRESIDENT IN OPENING WHITE HOUSE CONFERENCE ON SOCIAL SECURITY—— December 8, 1998]
But we are going to face early next year a great challenge of fashioning a bipartisan solution to save Social Security for the 21st century. I tell everybody it is a formidable problem, but it will only get worse if we delay it. And it is a high—class problem —— we have this problem because we're living longer. The average life expectancy of the American people, as reported just a few weeks ago, exceeds 76 years. And that is a high—class problem. We should be grateful for this problem.
[From: REMARKS BY THE PRESIDENT AT SOCIAL SECURITY AND Y2K EVENT ——December 28, 1998 —— Room 450 —— Old Executive Office Building]
SOURCE: Official Web site of the Social Security Administration, at: http://www.ssa.gov/history/clntstmts.html#conf
So, are the Dems telling us that Bill Clinton lied repeatedly about Social Security (in the way he insisted he never had 'sex with that woman') — or are both the former and current presidents correct about the coming crisis and the need to start now to provide a long—term fix?
So, is the hysterical denial of a simple numerical truth anything more than a reluctance by the pols of both colors to give up their control over an enormous hidden slush fund and a resistance against the independence their constituents would gain by true ownership of at least part of their own retirement funds? Is it more secure to depend on the 'kindness' of electoral promises for the future levels of wealth—transfer handouts?