How to Save Social Security

J U N E 1 9 9 5

A presidential speech we'd like to hear

Time: Next month
Place: The East Room at the White House
Cast: President Bill Clinton and the congressional leadership of both parties, including key committee chairmen

MY FELLOW AMERICANS, I come before you tonight to address an issue of grave importance to every citizen, but I want to direct my remarks especially to those of you who are retired and receiving Social Security benefits. Over the past several years, because of loose and misleading talk on television, in the newspapers, from spokespeople for the American Association of Retired Persons, and, it must be said, from leaders in both political parties, the impression has been created that someone in the government wants to "cut" your Social Security benefits. The impression is that if you are now receiving, say, $800 a month, someone wants to reduce that payment to $750 or $700. That impression is absolutely false. No such plan has been proposed. And I pledge to you tonight, on behalf of my Administration and on behalf of the leaders of both major parties, that no such plan is going to be proposed. Let me repeat: I and the congressional leaders standing here with me pledge to you that no one now receiving Social Security payments will ever see those payments reduced below their present level.

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From the archives:

"Will America Grow Up Before It Grows Old?" by Peter G. Peterson (May, 1996)
"The long gray wave of Baby Boomers retiring could lead to an all-engulfing economic crisis -- unless we balance the budget, rein in senior entitlements, raise retirement ages, and boost individual and pension savings."

However, this is not to say that all is well with Social Security. It is true that unless prudent steps are taken, Social Security will be in desperate trouble in a few years, and will eventually face bankruptcy. How can that be, if you are receiving from the trust fund only money that you contributed during your long years of labor? Well, part of the answer is that you aren't receiving only money that you contributed. In fact, most of you withdrew all of your contribution during the first two or three years of your retirement. The money you are receiving now comes directly from the contributions of younger people who are working and paying FICA taxes every week. The problem is that fifty years ago there were forty-two workers for every beneficiary, whereas now there are only 3.2 workers for every beneficiary, and in 2010 there will be only 2.9.

By the year 2013 Social Security will be paying out more than it takes in. Without reform the Social Security trust fund will eventually be gone, and we won't have the money to pay all who are entitled.

What can we do? All the leaders standing before you tonight have agreed on two easy, painless steps. First, starting in ten years the minimum age for receiving Social Security payments will be raised to seventy. Obviously, this won't affect current retirees, who are already receiving benefits, and the ten-year delay will give future retirees time to plan. We believe that this change makes obvious sense: when Social Security was enacted, life expectancy in this country was 61.7 years; now expectancy has increased to 76.3 years, and it is time for the Social Security law to reflect this demographic change.

The second step is this: beginning next year we will gently slow the growth in Social Security payments. I repeat: we will not cut your payments; we will slow the rate by which they increase. It is that rate of increase that has helped to put the Social Security trust fund on the road to insolvency, and tomorrow's workers -- your children and grandchildren -- on the road to a Social Security burden that would be painful for them to bear.

If we act now, with continued benefits for all and cuts for none, we can secure our future and theirs.

Thank you, and God bless America.

Copyright © 1995 by The Atlantic Monthly Company. All rights reserved.
The Atlantic Monthly; June 1995; "How to Save Social Security: A presidential speech we'd like to hear"; Volume 275, No. 6; page 53.