THE PRESIDENT: It's been my honor to welcome the Social Security Trustees here to the Oval Office. We had a good discussion about the problems that face the Social Security system, and there is a recognition among the experts that we have a problem. And the problem is America is getting older and that there are fewer people to pay into the system to support a baby boomer generation which is about to retire.

Therefore, the question is, does this country have the will to address the problem. I think it must. I think we have a responsibility to solve problems before they become acute. And, therefore, I want to thank the trustees for their understanding and their work. I want to thank them for their recognition that this country must deal with this issue now. I look forward to working with the members of Congress to do just that.

I had a meeting earlier on this week with members of the United States House and Senate to discuss the importance of the Social Security issue. I fully recognize it's going to require a bipartisan effort to address this issue. I have articulated principles in the course of my campaign that I think are important. And it's very important for our -- those who have retired to recognize that nothing is going to change when it comes to Social Security. And it's very important for those who are near retirement to understand nothing will change.

But for the sake of our younger workers, for the sake of younger Americans, we must be willing to address this problem. And I think it's vital to consider allowing younger workers, on a voluntary basis, set aside some of their own payroll tax in personal accounts as part of a comprehensive solution to dealing with the Social Security issue.

So I want to thank the trustees for their hard work. I want to thank you for your understanding of the issue. And I appreciate your willingness to go out and help explain to the American people that the time is now, the time is ready for us to solve this problem.

I'll answer two questions. Scott.

Q Thanks, Mr. President. Secretary Rumsfeld heard some complaints from soldiers yesterday, who said, among other things, they've got inadequate armor as they head into Iraq. Do you know how widespread this problem is, and what are we doing about it?

THE PRESIDENT: First, I appreciate the fact that the Secretary went and visited our troops and took questions from the troops. I had the honor of visiting with our troops at Camp Pendleton on Tuesday. It's such an uplifting experience to be able to speak directly to the troops. And I had the honor of meeting with the families of the fallen, as well.

The concerns expressed are being addressed, and that is we expect our troops to have the best possible equipment. And if I were a soldier overseas wanting to defend my country, I'd want to ask the Secretary of Defense the same question, and that is, are we getting the best we can get us? And they deserve the best. And I have told many families I met with, we're doing everything we possibly can to protect your loved ones in a mission which is vital and important. And that mission is to spread freedom and peace. And I want to thank all the troops who will be spending their Christmas season overseas, away from their families, for their sacrifice; and I want to thank the families once again for the sacrifices they have made, as well.

Steve.

Q The transition to personal accounts may cost $2 trillion. Can the country afford to borrow that much?

THE PRESIDENT: I think what's really important in the discussions is to understand the size of the problem. And that is we are faced with a present value of unfunded liabilities of about $11 trillion. What's important, Steve, is before we begin any discussion is to understand the scope of the problem. And that's why these trustees are vital in helping educate the American people, and Congress, as to the size of the problem. And I will not prejudge any solution. I think it's very important for the first step to be a common understanding of the size of the problem; and then for members of both parties, in both bodies, to come together, to come and listen to the options available.

We have got a member of what was called the Moynihan Commission with us. They studied this problem in detail. They made some suggestions about how to move forward in solving the problem. Much of my thinking has been colored by the work of the late Senator Moynihan and the other members of the commission who took a lot of time to take a look at this problem, and who came up with some creative suggestions.

And so I look forward to working with Congress to address this issue in a straightforward manner.

Thank you all.

Q Are you against any withholding tax increase to pay for the transition, sir? Are you against --

THE PRESIDENT: We will not raise payroll taxes to solve this problem.

END 10:34 A.M. ES

President Participates in Conversation on Social Security Reform
Andrew W. Mellon Auditorium
Washington, D.C.
January 11, 2005

President George W. Bush participates in a discussion on Social Security reform at the Andrew W. Mellon Auditorium in Washington, D.C., Tuesday, Jan. 11, 2005. Also pictured, from left, are Sonya Stone, Rhode Stone, Bob McFadden and Scott Ballard. White House photo.

10:50 A.M. EST

THE PRESIDENT: Listen, thanks for coming today. As you can see, I am joined by some fellow citizens here on the stage who have come to talk about one of the great causes of our generation, and that is how to strengthen and save Social Security for generations to come.

I know this is an issue that some would rather not be talking about. It's an issue that is kind of -- I think some think has got too much political danger attached to it, and so, therefore, let's just kind of, maybe, move it down to the next group of people coming to Washington, or maybe things will get better by ignoring it. That's not what I think. And today I want to talk about why we have an issue with Social Security, why I believe those of us who have been elected to office have an obligation to do something about it, and then I want -- and give some ideas, some constructive ideas to Congress as to how to deal with the issue, and then I want others to share with me their ideas.

And we've got some people who have come a long way -- flown all the way to Washington, D.C., to share some thoughts with the President. And I think you'll find their stories interesting. I certainly did, when we had a little discussion a little bit ago.

First, let me tell you how much, I understand, Social Security has meant for generations of Americans. I mean, Franklin Roosevelt, in thinking boldly, envisioned a Social Security system where Social Security would help seniors with their retirement. And the system worked for a lot of people. And it's been a -- an incredible achievement, if you think about a piece of legislation being relevant for nearly 70 years.

The problem is, is that times have changed since 1935. Then, most women did not work outside the house, and the average life expectancy was about 60 years old -- which for a guy 58 years old, must have been a little discouraging. (Laughter.) Today, Americans, fortunately, are living longer and longer. I mean, we're living way beyond 60 years old, and most women are working outside the house. Things have shifted.

The Social Security system is not a personal savings account. The Social Security system is not an account where money is earned. The Social Security system is an account where money comes out to pay for retirees and is put in the system by people who are working. And that's changed. More and more retirees have taken out money relative to the number of people putting money in. In the '50s, there were 16 workers for every beneficiary. So the system was in pretty good shape. Today, there's three workers for every beneficiary. Relatively quickly, there's going to be two workers for every beneficiary. And that's a problem. And that's a problem because in the year 2018, in order to take care of baby boomers like me and -- (laughter) -- some others I see out there -- (laughter) -- the money going out is going to exceed the money coming in.

That's not a good thing. It means that you're either going to have to raise the taxes of people, or reduce the benefits. And the longer you wait, the more severe the pain is going to be to fulfill the promise for a younger generation of workers coming up. As a matter of fact, by the time today's workers who are in their mid-20s begin to retire, the system will be bankrupt. So if you're 20 years old, in your mid-20s, and you're beginning to work, I want you to think about a Social Security system that will be flat bust, bankrupt, unless the United States Congress has got the willingness to act now. And that's what we're here to talk about, a system that will be bankrupt.

Now, I readily concede some would say, well, it's not bankrupt yet; why don't we wait until it's bankrupt? The problem with that notion is that the longer you wait, the more difficult it is to fix. You realize that this system of ours is going to be short the difference between obligations and money coming in, by about $11 trillion, unless we act. And that's an issue. That's trillion with a "T." That's a lot of money, even for this town.

And so I'm looking forward to working with Congress to act. We've got an expert from the Social Security system that will talk about "the problem." And I'm going to talk about "the problem." You know, the problem is that some in Congress don't see it as the problem. They just kind of think that maybe things will be okay. But the structure of Social Security is such that you can't avoid the fact that there is a problem. And now is the time to get something done.

Now, I've talked about this, and I want the people to clearly understand, if you're a senior receiving your Social Security check, nothing is going to change. Those days of politicizing Social Security, I hope, are in the past. A lot of people who ran for office and if they even mentioned the word, Social Security, there would be TV ads and flyers and people knocking on doors saying, so-and-so is going to ruin Social Security for you. There is plenty of money in the system today to take care of those who have retired or near retirement. The issue really is for younger folks.

That's why we've got some younger folks up here. Not all of us are younger folks, are we? (Laughter.) Most of them are younger folks. I no longer qualify. (Laughter.) But younger people are listening to this issue. You know, I've traveled a lot. I campaigned on this issue of Social Security, and the need to strengthen it and reform it. I didn't shy away from it in 2000; I certainly didn't shy away from it in 2004. I laid it out there for the people to hear. I said, vote for me, and I'm going to work with Congress, see if we can't get something done to solve the system.

This is part of what -- this is part of fulfilling a campaign pledge. I wouldn't be sitting here if the people said, we don't want anybody to touch it; we think it's okay. Most younger people in America think they'll never see a dime. That's probably an exaggeration to a certain extent, but a lot of people who are young, who understand how Social Security works, really do wonder whether they'll see anything. My attitude is, once we assure the seniors who will receive Social Security today that everything is fine, I think we've got a shot to get something done, because younger Americans really want to see some leadership.

I said we're not going to run up the payroll taxes. I think running up payroll taxes will slow down economic growth. This economy is beginning to kick in, it's beginning to make sense. I think we can solve the problem without increasing payroll taxes. (Applause.)

I also threw out another interesting idea -- it's certainly not my idea, because others have talked about it, and that is to allow younger workers, on a voluntary basis, to take some of their own money and set it aside in the form of a personal savings account -- a personal savings account which is their own; a personal savings account which would earn a better rate of return than the money -- their money currently held within the Social Security trust; a personal savings account which will compound over time and grow over time; a personal savings account which can't be used to bet on the lottery, or a dice game, or the track. In other words, there will be guidelines. There will be certain -- you won't be allowed just to take that money and dump it somewhere. In other words, there will be a safe way to invest, to be able to realize the compounding rate of interest.

I've heard some say, well, this is risky to allow people to invest their own money. It's risky to let people say, you can take your money that's supposed to be for a retirement account and put it on the lottery, I realize that. But it's not risky. Federal employees -- the Thrift Savings plans invest under certain guidelines, and I don't hear them screaming it's risky. It makes sense to try to get a better rate of return on your money, if you expect there to be a Social Security system which is going broke. And that's what we're talking about.

Owning your own personal savings account does two other things. One, it allows you to pass on your savings to whoever you choose. You can't do that in Social Security today. If you pass away earlier than expected, that money that you put in the system is gone. And at the same time that you manage your own account, you own your own account. I love promoting ownership in America. I like the idea of encouraging more people to say, I own my own home, I own my own business, I own and manage my health accounts, and now I own a significant part of my retirement account. Promoting ownership in America makes sense to me to make sure people continue to have a vital stake in the future of our country.

And so I want to thank you all for coming today to give me a chance to address the Social Security issue. I plan on talking about it a lot. This isn't the first time I've talked about it since the campaign is over, and it's certainly not going to be the last, because I believe it is a vital issue. And I know that if we don't address the problem now, it will only get worse with time. And I believe there is a fundamental duty, for those of us who have been given the honor of serving the American people, to solve problems before they become acute, and not to pass them on to future Presidents and future generations.

Now, I want to talk to Andrew Biggs. He is the Associate Commissioner for Retirement Policy at the Social Security Administration. To me, that says, expert. (Laughter.) I don't know if that's fair to call you an expert or not.

* * * * *

THE PRESIDENT: Yes, that's good. How old are you?

MR. BIGGS: I'm 37.

THE PRESIDENT: Man, I wish I was 37. (Laughter.) Thirty-seven, talking to the President. That's great. (Laughter.) You ought to be concerned. I mean, you're one of these people -- yes, good. Well, I appreciate you helping.

You see, what he just said is, there is a problem. I happen to believe people who have been elected to office who ignore problems will face the price at the ballot box. I think more and more people recognize we have a problem. We've got a 37-year-old person here describing a problem. More and more people understand we have a problem. And the more people see it, the more it's expected we do something about it. And as Andrew said, he said, we better start now. That's why it's important that we have this dialogue. And that's why I'm going to continue dialoguing and talking to the leadership in Congress about, let's solve it now, let's do our duty.

Let me talk to Scott Ballard. He is from the great state of Washington. That's a long way away.

MR. BALLARD: That's right.

THE PRESIDENT: Brought your lads with you, I noticed.

MR. BALLARD: Yes.

THE PRESIDENT: Your sons. Yes, they had never been to Washington -- I said, have you ever been to Washington? He said, I live in Washington. (Laughter.)

MR. BALLARD: Yes. (Laughter.)

THE PRESIDENT: Pretty good line, you know? I meant, the District of Columbia, Washington. So what do you do, Scott?

MR. BALLARD: Well, my brother and I own and operate a private ambulance service. It was started by our parents in 1967. And my brother and I purchased it from them in 1986.

THE PRESIDENT: And why are you here? Besides bring your lads to the other Washington?

MR. BALLARD: Right. Well, first of all, I'm in a fairly unique situation, in that probably two-thirds of our customers are on Social Security. Yet the majority of my work force are in their early 20s, some of them are in their early 30s. So we have a lot of people that I work with currently who are on Social Security, and a lot of younger employees who will be impacted by these proposed changes.

THE PRESIDENT: So, like, if they were here, what would your younger employees say about Social Security? Do they ever talk about it? Do they ever think about it, do they ever --

MR. BALLARD: Not really. They don't talk about it too much, but I think if some of the changes that you are proposing are implemented, I think they will talk about it a lot more, and I think they'll take a much greater interest in it. We've seen that with our company 401(k) plan. Most of them, they don't talk about retirement at all, but once they start seeing something on paper, saying, oh, that's mine, and it's been in there a few years and they start to see it build, they become more interested in it, and they start doing whatever they can to manage it and make it grow so it's there when they retire.

THE PRESIDENT: That's kind of an interesting thought, isn't it -- when you see it on paper, the value of something, you begin to actually pay attention to what causes values to go up -- good policies that enhance growth. And what Scott just said is, he talked about the first change in retirement in America was the movement toward defined contribution plans, which 401(k)s, which really has promoted an ownership society, hasn't it? I mean, people wake up and they look at their account, and say, I'm so sure this person's policies are beneficial to my being able to earn a better rate of return. You pay attention because it's their own money. It's one of the benefits of a personal account in Social Security.

* * * * *

THE PRESIDENT: Right. Good. I appreciate you sharing that. (Applause.) Make sure you tell your customers -- tell your customers, nothing changes with Social Security for them. And tell your younger workers, they can do something about it. They can write their senators, they can write their congresspeople. You can let them know you expect the members of the United States Congress to hear the fact that there's a problem, and then to do something about it. That's what they can do.

We've got with us Bob McFadden. Looking sharp. (Laughter.) I didn't come close, I know. (Laughter.) Thanks for coming. I appreciate you taking time to be here. You are from Medford, New Jersey.

MR. McFADDEN: Yes, sir.

THE PRESIDENT: And why have you come from Medford, New Jersey to share some thoughts?

* * * * *

THE PRESIDENT: The 1 or 2 percent that the money inside the Social Security trust now earns -- is that right? Is he right at -- is it even as high as 1 percent?

MR. BIGGS: No, it's -- right now it is low because interest rates are low. Over the long-term, we're looking at around 3 percent. So you still do have a --

THE PRESIDENT: So it's more than double. But right now, it's, like -- yes, never mind. (Laughter.) Don't worry about it. (Laughter.) You can still keep your job. (Laughter.) Go ahead. Seven and a half percent since 1924. That's a great rate of return. Imagine if you're 50 years old and you start -- if you start -- if you hold that money for 50 years at that rate, it compounds and grows and ends up being a lot of money, is what you're saying.

MR. McFADDEN: Yes, sir.

THE PRESIDENT: Yes, okay. I'm glad I invited you. (Laughter.)

* * * * *

THE PRESIDENT: Let me say this. You brought up a very interesting point. There's kind of an assumption that only a certain group of people at a certain income can manage an account. It's -- it's as if you've got to have a net worth of "X" before savings becomes a real part of your life. I reject that. Bob rejects that.

Secondly, the interesting -- there's a -- African American males die sooner than other males do, which means the system is inherently unfair to a certain group of people. And that needs to be fixed. It's not a -- (applause.)

MR. McFADDEN: I agree, Mr. President, because from the minimal research that I've done, the average African American male right now is -- the life expectancy is 69, and I may be off a little bit. But if you're telling me that it's 69, and the age is going to go to 67, you do the math. (Laughter.)

THE PRESIDENT: Right.

MR. McFADDEN: That's two years. (Laughter.)

THE PRESIDENT: Glad you came. Thanks. Welcome, girls. Glad you all came. (Applause.)

Okay, I thought we would try to find somebody who represents the youth movement. I'm not saying you all are old, but we have found us a dairy farmer from the great state of Utah, Josh Wright. Welcome, Josh. Thanks for coming. He asked me if I could fix the BCS -- (laughter and applause.) No, I'm not going there, Josh. I'm staying on Social Security. It may be a little easier to fix, anyway. (Laughter.)

MR. WRIGHT: But he said that they wouldn't be able to take Texas, and --

THE PRESIDENT: Wait a minute. You don't need to talk about private conversations. (Laughter.) Okay, you're a dairy farmer?

MR. WRIGHT: That's correct.

THE PRESIDENT: Good. Milking those cows.

MR. WRIGHT: Yes. Not today, obviously. I made my dad stay home and do it. But we have a dairy farm in central Utah, and you can fit the whole town in this building here.

THE PRESIDENT: Kind of like Crawford.

MR. WRIGHT: There's a lot more cows than there are people, so I spend a lot of time talking to animals. (Laughter.)

THE PRESIDENT: Are they talking back yet? (Laughter.) When they start talking back, give me a call. (Laughter.)

MR. WRIGHT: Not when I have a stick in my hand, they don't say a lot. (Laughter.)

* * * * *

THE PRESIDENT: Do you think he's listening? Have they got C-SPAN out there in Utah?

MR. WRIGHT: I don't know. (Laughter.)

THE PRESIDENT: See that red dot? That's him, if he's listening.

MR. WRIGHT: He's probably watching the horse channel. He loves that channel. (Laughter.)

THE PRESIDENT: I appreciate you coming.

MR. WRIGHT: Thank you for letting me.

THE PRESIDENT: If nothing happens, at your age, it will be bust by the time it comes time for you to retire. That's why we have a person in the mid-20s here -- besides the fact the guy's got a pretty good sense of humor. (Laughter.) If nothing takes place, if Congress says, oh, don't worry, we'll just push it down the road; why do we need to deal with it, there's no crisis -- if nothing happens, and we don't start moving on it now, by the time Josh gets to retirement age, the system will be flat broke.

And that's not right, it doesn't seem like to me. It seems like people who have been elected to office must say, we want it to be wholesome and healthy, like it has been for other generations. Oh, I know there's a lot of politics here in Washington, and people are -- some are afraid to touch it, some don't want to touch it, some provide excuses not to touch it. I know, I've heard it before. But I believe that the President has a responsibility for setting the agenda, and I believe people who have been elected to the House of Representatives and the United States Senate has an obligation to confront problems head on. (Applause.)

By the way, tell the old man, 1946 was a great year.

MR. WRIGHT: It was a great year.

THE PRESIDENT: You wouldn't be sitting here if it wasn't, you know. Anyway. (Laughter.)

We've got a mom and her daughter with us. I'm so glad you both came. Thanks for being here. Sonya is the daughter. Rhoda is the mom. And I want the Stone women to talk about their lives and how it relates to Social Security. If you don't mind, Sonya, why don't you start? What do you do?

MS. STONE: Sure. I'm a chief financial officer for a firm here in Washington. But I'm really here as a mom. I happen to be a divorced mom, raising three children -- two wonderful boys, Jeff and Eric, that are here with me -- and I have a beautiful daughter, Emily, who is also here with me. She's nine years old. Emily has been severely disabled since birth, both mentally and physically, and she will be dependent on Social Security for her lifetime. And I would like to make sure that Social Security is going to be there for her as its been for my mother.

THE PRESIDENT: Good. A CFO, like, you know something about numbers?

MS. STONE: I know a little bit about numbers, and I --

THE PRESIDENT: I presume you've looked at the numbers.

MS. STONE: I have looked at the numbers. And I would very much like to see the current Social Security system improved with the establishment of personal accounts, so that families could harness the power of the capital markets to allow them to build a nest egg over the course of their lifetimes that could then be passed on to their families. And I know that if my father, who paid in for over 40 years, had had the opportunity to establish an account like that, that would then have grown and survived him, and been available to not only provide for my mom, but ultimately for his grandchildren and his granddaughter, who he never knew, I think that would have made him very happy.

THE PRESIDENT: Sure. I think it's important for people to understand compounding rate of interest. In other words, if you take a dollar, set it aside and it grows at three percent over 30 years or 40 years, and compare that to the same dollar that grows at 7 percent on an average basis over 30 years, there is a huge difference in money.

So it matters how much money -- how much interest, or how much rate of return your money earns. We're kind of throwing around these words as if everybody understands compounding rate of interest and rate of return, but what people need to understand is that the money that's now -- your money in the government is earning much less than it's capable of generating under safe conditions. Safe conditions -- I think that's what you're saying.

MS. STONE: That's what I'm saying. And I would just add that, as a mom, I know what it's like to lay awake at night and worry about the future of your children. And I know one thing about moms, they know how to make tough choices; we make them every day, on everything from health care to education to which bill to pay next. And I think we understand that whenever you're faced with a difficult problem, the sooner you start and the more honest you are about the nature of the problem, the greater chance you have of success. So I'm very hopeful that we would get started.

THE PRESIDENT: Good, thanks. Well done. (Applause.) Now what about your -- introduce your mom.

MS. STONE: I would like to introduce my mom. This is my mother, Rhoda Stone. And she is grandmother of three, and originally from Helsinki, Finland, and has been here over 40 years.

THE PRESIDENT: Fantastic. Same age as my mother.

MS. STONE: Just turned 80.

THE PRESIDENT: Is she still giving you instructions?

MS. STONE: Every day, and I do my best.

THE PRESIDENT: It never stops, does it? (Laughter.) No.

MRS. STONE: It shouldn't stop.

THE PRESIDENT: That's right. (Laughter.) Let her rip.

* * * * *

THE PRESIDENT: Thank you for saying that. Good job.

Yes, I think one of the interesting things that Rhoda talked about is the need for people to understand that Social Security is a part of retirement income. That's why it was created, and therefore, the idea of developing the habits early -- necessary to make sure you've got that which is necessary to live on, such as saving money, is important. I happen to believe that once personal savings accounts are part of the Social Security system, that it will encourage other savings to take place, as well. People will be able to see the benefits of savings, understand how important it is as a dad to, say, two beautiful little girls, to start setting aside money for college education is a way to save, not necessarily for retirement in this case, but to be a good -- to be a good dad and do your duty as a father.

And so I appreciate that point. In other words, it's a point that says that people have got to understand you have a responsibility to set aside money so that you can live comfortably. And it worked in your case. Thankfully you had a wise husband.

MS. STONE: I wish we would have had a chance to put --

THE PRESIDENT: As additional -- as addition to the savings you set aside out of the personal savings accounts. I agree.

And that's -- so it's a -- this is a -- I hope you've -- I hope you have come away with a better understanding of the importance of this issue. I mean, we've got people of all generations here, people who say, look, this is an issue. And the fundamental question confronting the people elected to the United States Congress is, will they act? I will assure you, I'm going to ask them to act. I think that one of the reasons I'm sitting here is because I said to the people of the country, we have an issue with Social Security, we have a problem, I think it's important to be a problem solver; give me four more years, and I intend to work with people of both parties and solve problems. And there is a problem with Social Security. (Applause.)

I see a problem. I also see a solution. And I realize that it's going to require bipartisan cooperation. And I look forward to working with members of both political parties in both Houses, to come together and do our duty. (Applause.) I realize it's not going to be easy. This isn't easy. If it were easy, it would have already been done. It kind of makes it fun, though, doesn't it? Take on the tough jobs.

Members who will work -- constructively work with us will be able to look back and say, I did my duty. I came to Washington to be more than just a place holder. I came to Washington to analyze a problem, to deal with a problem, and to leave a legacy behind of fixing the problem. And so I'm looking forward to working with the members of Congress.

I want to thank our panelists who are here. I want to thank our audience for coming. May God bless you all. (Applause.)

END 11:33 A.M. EST

State of the Union Address- February 2, 2005
Chamber of the U.S. House of Representatives
The United States Capitol
Washington, D.C.

9:10 P.M. EST

President George W. Bush delivers his fourth State of the Union Address at the U.S. Capitol, Wednesday, Feb. 2, 2005.

THE PRESIDENT: Mr. Speaker, Vice President Cheney, members of Congress, fellow citizens:

As a new Congress gathers, all of us in the elected branches of government share a great privilege: We've been placed in office by the votes of the people we serve. And tonight that is a privilege we share with newly-elected leaders of Afghanistan, the Palestinian Territories, Ukraine, and a free and sovereign Iraq. (Applause.)

Two weeks ago, I stood on the steps of this Capitol and renewed the commitment of our nation to the guiding ideal of liberty for all. This evening I will set forth policies to advance that ideal at home and around the world.

Tonight, with a healthy, growing economy, with more Americans going back to work, with our nation an active force for good in the world -- the state of our union is confident and strong. (Applause.)

Our generation has been blessed -- by the expansion of opportunity, by advances in medicine, by the security purchased by our parents' sacrifice. Now, as we see a little gray in the mirror -- or a lot of gray -- (laughter) -- and we watch our children moving into adulthood, we ask the question: What will be the state of their union? Members of Congress, the choices we make together will answer that question. Over the next several months, on issue after issue, let us do what Americans have always done, and build a better world for our children and our grandchildren. (Applause.)

First, we must be good stewards of this economy, and renew the great institutions on which millions of our fellow citizens rely. America's economy is the fastest growing of any major industrialized nation. In the past four years, we provided tax relief to every person who pays income taxes, overcome a recession, opened up new markets abroad, prosecuted corporate criminals, raised homeownership to its highest level in history, and in the last year alone, the United States has added 2.3 million new jobs. (Applause.) When action was needed, the Congress delivered -- and the nation is grateful.

Now we must add to these achievements. By making our economy more flexible, more innovative, and more competitive, we will keep America the economic leader of the world. (Applause.)

America's prosperity requires restraining the spending appetite of the federal government. I welcome the bipartisan enthusiasm for spending discipline. I will send you a budget that holds the growth of discretionary spending below inflation, makes tax relief permanent, and stays on track to cut the deficit in half by 2009. (Applause.) My budget substantially reduces or eliminates more than 150 government programs that are not getting results, or duplicate current efforts, or do not fulfill essential priorities. The principle here is clear: Taxpayer dollars must be spent wisely, or not at all. (Applause.)

To make our economy stronger and more dynamic, we must prepare a rising generation to fill the jobs of the 21st century. Under the No Child Left Behind Act, standards are higher, test scores are on the rise, and we're closing the achievement gap for minority students. Now we must demand better results from our high schools, so every high school diploma is a ticket to success. We will help an additional 200,000 workers to get training for a better career, by reforming our job training system and strengthening America's community colleges. And we'll make it easier for Americans to afford a college education, by increasing the size of Pell Grants. (Applause.)

To make our economy stronger and more competitive, America must reward, not punish, the efforts and dreams of entrepreneurs. Small business is the path of advancement, especially for women and minorities, so we must free small businesses from needless regulation and protect honest job-creators from junk lawsuits. (Applause.) Justice is distorted, and our economy is held back by irresponsible class-actions and frivolous asbestos claims -- and I urge Congress to pass legal reforms this year. (Applause.)

To make our economy stronger and more productive, we must make health care more affordable, and give families greater access to good coverage -- (applause) -- and more control over their health decisions. (Applause.) I ask Congress to move forward on a comprehensive health care agenda with tax credits to help low-income workers buy insurance, a community health center in every poor county, improved information technology to prevent medical error and needless costs, association health plans for small businesses and their employees -- (applause) -- expanded health savings accounts -- (applause) -- and medical liability reform that will reduce health care costs and make sure patients have the doctors and care they need. (Applause.)

To keep our economy growing, we also need reliable supplies of affordable, environmentally responsible energy. (Applause.) Nearly four years ago, I submitted a comprehensive energy strategy that encourages conservation, alternative sources, a modernized electricity grid, and more production here at home -- including safe, clean nuclear energy. (Applause.) My Clear Skies legislation will cut power plant pollution and improve the health of our citizens. (Applause.) And my budget provides strong funding for leading-edge technology -- from hydrogen-fueled cars, to clean coal, to renewable sources such as ethanol. (Applause.) Four years of debate is enough: I urge Congress to pass legislation that makes America more secure and less dependent on foreign energy. (Applause.)

All these proposals are essential to expand this economy and add new jobs -- but they are just the beginning of our duty. To build the prosperity of future generations, we must update institutions that were created to meet the needs of an earlier time. Year after year, Americans are burdened by an archaic, incoherent federal tax code. I've appointed a bipartisan panel to examine the tax code from top to bottom. And when their recommendations are delivered, you and I will work together to give this nation a tax code that is pro-growth, easy to understand, and fair to all. (Applause.)

America's immigration system is also outdated -- unsuited to the needs of our economy and to the values of our country. We should not be content with laws that punish hardworking people who want only to provide for their families, and deny businesses willing workers, and invite chaos at our border. It is time for an immigration policy that permits temporary guest workers to fill jobs Americans will not take, that rejects amnesty, that tells us who is entering and leaving our country, and that closes the border to drug dealers and terrorists. (Applause.)

One of America's most important institutions -- a symbol of the trust between generations -- is also in need of wise and effective reform. Social Security was a great moral success of the 20th century, and we must honor its great purposes in this new century. (Applause.) The system, however, on its current path, is headed toward bankruptcy. And so we must join together to strengthen and save Social Security. (Applause.)

Today, more than 45 million Americans receive Social Security benefits, and millions more are nearing retirement -- and for them the system is sound and fiscally strong. I have a message for every American who is 55 or older: Do not let anyone mislead you; for you, the Social Security system will not change in any way. (Applause.) For younger workers, the Social Security system has serious problems that will grow worse with time. Social Security was created decades ago, for a very different era. In those days, people did not live as long. Benefits were much lower than they are today. And a half-century ago, about sixteen workers paid into the system for each person drawing benefits.

Our society has changed in ways the founders of Social Security could not have foreseen. In today's world, people are living longer and, therefore, drawing benefits longer. And those benefits are scheduled to rise dramatically over the next few decades. And instead of sixteen workers paying in for every beneficiary, right now it's only about three workers. And over the next few decades that number will fall to just two workers per beneficiary. With each passing year, fewer workers are paying ever-higher benefits to an ever-larger number of retirees.

So here is the result: Thirteen years from now, in 2018, Social Security will be paying out more than it takes in. And every year afterward will bring a new shortfall, bigger than the year before. For example, in the year 2027, the government will somehow have to come up with an extra $200 billion to keep the system afloat -- and by 2033, the annual shortfall would be more than $300 billion. By the year 2042, the entire system would be exhausted and bankrupt. If steps are not taken to avert that outcome, the only solutions would be dramatically higher taxes, massive new borrowing, or sudden and severe cuts in Social Security benefits or other government programs.

I recognize that 2018 and 2042 may seem a long way off. But those dates are not so distant, as any parent will tell you. If you have a five-year-old, you're already concerned about how you'll pay for college tuition 13 years down the road. If you've got children in their 20s, as some of us do, the idea of Social Security collapsing before they retire does not seem like a small matter. And it should not be a small matter to the United States Congress. (Applause.) You and I share a responsibility. We must pass reforms that solve the financial problems of Social Security once and for all.

Fixing Social Security permanently will require an open, candid review of the options. Some have suggested limiting benefits for wealthy retirees. Former Congressman Tim Penny has raised the possibility of indexing benefits to prices rather than wages. During the 1990s, my predecessor, President Clinton, spoke of increasing the retirement age. Former Senator John Breaux suggested discouraging early collection of Social Security benefits. The late Senator Daniel Patrick Moynihan recommended changing the way benefits are calculated. All these ideas are on the table.

I know that none of these reforms would be easy. But we have to move ahead with courage and honesty, because our children's retirement security is more important than partisan politics. (Applause.) I will work with members of Congress to find the most effective combination of reforms. I will listen to anyone who has a good idea to offer. (Applause.) We must, however, be guided by some basic principles. We must make Social Security permanently sound, not leave that task for another day. We must not jeopardize our economic strength by increasing payroll taxes. We must ensure that lower-income Americans get the help they need to have dignity and peace of mind in their retirement. We must guarantee there is no change for those now retired or nearing retirement. And we must take care that any changes in the system are gradual, so younger workers have years to prepare and plan for their future.

As we fix Social Security, we also have the responsibility to make the system a better deal for younger workers. And the best way to reach that goal is through voluntary personal retirement accounts. (Applause.) Here is how the idea works. Right now, a set portion of the money you earn is taken out of your paycheck to pay for the Social Security benefits of today's retirees. If you're a younger worker, I believe you should be able to set aside part of that money in your own retirement account, so you can build a nest egg for your own future.

Here's why the personal accounts are a better deal. Your money will grow, over time, at a greater rate than anything the current system can deliver -- and your account will provide money for retirement over and above the check you will receive from Social Security. In addition, you'll be able to pass along the money that accumulates in your personal account, if you wish, to your children and -- or grandchildren. And best of all, the money in the account is yours, and the government can never take it away. (Applause.)

The goal here is greater security in retirement, so we will set careful guidelines for personal accounts. We'll make sure the money can only go into a conservative mix of bonds and stock funds. We'll make sure that your earnings are not eaten up by hidden Wall Street fees. We'll make sure there are good options to protect your investments from sudden market swings on the eve of your retirement. We'll make sure a personal account cannot be emptied out all at once, but rather paid out over time, as an addition to traditional Social Security benefits. And we'll make sure this plan is fiscally responsible, by starting personal retirement accounts gradually, and raising the yearly limits on contributions over time, eventually permitting all workers to set aside four percentage points of their payroll taxes in their accounts.

Personal retirement accounts should be familiar to federal employees, because you already have something similar, called the Thrift Savings Plan, which lets workers deposit a portion of their paychecks into any of five different broadly-based investment funds. It's time to extend the same security, and choice, and ownership to young Americans. (Applause.)

Our second great responsibility to our children and grandchildren is to honor and to pass along the values that sustain a free society. So many of my generation, after a long journey, have come home to family and faith, and are determined to bring up responsible, moral children. Government is not the source of these values, but government should never undermine them.

Because marriage is a sacred institution and the foundation of society, it should not be re-defined by activist judges. For the good of families, children, and society, I support a constitutional amendment to protect the institution of marriage. (Applause.)

Because a society is measured by how it treats the weak and vulnerable, we must strive to build a culture of life. Medical research can help us reach that goal, by developing treatments and cures that save lives and help people overcome disabilities -- and I thank the Congress for doubling the funding of the National Institutes of Health. (Applause.) To build a culture of life, we must also ensure that scientific advances always serve human dignity, not take advantage of some lives for the benefit of others. We should all be able to agree -- (applause) -- we should all be able to agree on some clear standards. I will work with Congress to ensure that human embryos are not created for experimentation or grown for body parts, and that human life is never bought and sold as a commodity. (Applause.) America will continue to lead the world in medical research that is ambitious, aggressive, and always ethical.

Because courts must always deliver impartial justice, judges have a duty to faithfully interpret the law, not legislate from the bench. (Applause.) As President, I have a constitutional responsibility to nominate men and women who understand the role of courts in our democracy, and are well-qualified to serve on the bench -- and I have done so. (Applause.) The Constitution also gives the Senate a responsibility: Every judicial nominee deserves an up or down vote. (Applause.)

Because one of the deepest values of our country is compassion, we must never turn away from any citizen who feels isolated from the opportunities of America. Our government will continue to support faith-based and community groups that bring hope to harsh places. Now we need to focus on giving young people, especially young men in our cities, better options than apathy, or gangs, or jail. Tonight I propose a three-year initiative to help organizations keep young people out of gangs, and show young men an ideal of manhood that respects women and rejects violence. (Applause.) Taking on gang life will be one part of a broader outreach to at-risk youth, which involves parents and pastors, coaches and community leaders, in programs ranging from literacy to sports. And I am proud that the leader of this nationwide effort will be our First Lady, Laura Bush. (Applause.)

Because HIV/AIDS brings suffering and fear into so many lives, I ask you to reauthorize the Ryan White Act to encourage prevention, and provide care and treatment to the victims of that disease. (Applause.) And as we update this important law, we must focus our efforts on fellow citizens with the highest rates of new cases, African American men and women. (Applause.)

Because one of the main sources of our national unity is our belief in equal justice, we need to make sure Americans of all races and backgrounds have confidence in the system that provides justice. In America we must make doubly sure no person is held to account for a crime he or she did not commit -- so we are dramatically expanding the use of DNA evidence to prevent wrongful conviction. (Applause.) Soon I will send to Congress a proposal to fund special training for defense counsel in capital cases, because people on trial for their lives must have competent lawyers by their side. (Applause.)

Our third responsibility to future generations is to leave them an America that is safe from danger, and protected by peace. We will pass along to our children all the freedoms we enjoy -- and chief among them is freedom from fear.

In the three and a half years since September the 11th, 2001, we have taken unprecedented actions to protect Americans. We've created a new department of government to defend our homeland, focused the FBI on preventing terrorism, begun to reform our intelligence agencies, broken up terror cells across the country, expanded research on defenses against biological and chemical attack, improved border security, and trained more than a half-million first responders. Police and firefighters, air marshals, researchers, and so many others are working every day to make our homeland safer, and we thank them all. (Applause.)

Our nation, working with allies and friends, has also confronted the enemy abroad, with measures that are determined, successful, and continuing. The al Qaeda terror network that attacked our country still has leaders -- but many of its top commanders have been removed. There are still governments that sponsor and harbor terrorists -- but their number has declined. There are still regimes seeking weapons of mass destruction -- but no longer without attention and without consequence. Our country is still the target of terrorists who want to kill many, and intimidate us all -- and we will stay on the offensive against them, until the fight is won. (Applause.)

Pursuing our enemies is a vital commitment of the war on terror -- and I thank the Congress for providing our servicemen and women with the resources they have needed. During this time of war, we must continue to support our military and give them the tools for victory. (Applause.)

Other nations around the globe have stood with us. In Afghanistan, an international force is helping provide security. In Iraq, 28 countries have troops on the ground, the United Nations and the European Union provided technical assistance for the elections, and NATO is leading a mission to help train Iraqi officers. We're cooperating with 60 governments in the Proliferation Security Initiative, to detect and stop the transit of dangerous materials. We're working closely with the governments in Asia to convince North Korea to abandon its nuclear ambitions. Pakistan, Saudi Arabia, and nine other countries have captured or detained al Qaeda terrorists. In the next four years, my administration will continue to build the coalitions that will defeat the dangers of our time. (Applause.)

In the long-term, the peace we seek will only be achieved by eliminating the conditions that feed radicalism and ideologies of murder. If whole regions of the world remain in despair and grow in hatred, they will be the recruiting grounds for terror, and that terror will stalk America and other free nations for decades. The only force powerful enough to stop the rise of tyranny and terror, and replace hatred with hope, is the force of human freedom. (Applause.) Our enemies know this, and that is why the terrorist Zarqawi recently declared war on what he called the "evil principle" of democracy. And we've declared our own intention: America will stand with the allies of freedom to support democratic movements in the Middle East and beyond, with the ultimate goal of ending tyranny in our world. (Applause.)

The United States has no right, no desire, and no intention to impose our form of government on anyone else. That is one of the main differences between us and our enemies. They seek to impose and expand an empire of oppression, in which a tiny group of brutal, self-appointed rulers control every aspect of every life. Our aim is to build and preserve a community of free and independent nations, with governments that answer to their citizens, and reflect their own cultures. And because democracies respect their own people and their neighbors, the advance of freedom will lead to peace. (Applause.)

That advance has great momentum in our time -- shown by women voting in Afghanistan, and Palestinians choosing a new direction, and the people of Ukraine asserting their democratic rights and electing a president. We are witnessing landmark events in the history of liberty. And in the coming years, we will add to that story. (Applause.)

The beginnings of reform and democracy in the Palestinian territories are now showing the power of freedom to break old patterns of violence and failure. Tomorrow morning, Secretary of State Rice departs on a trip that will take her to Israel and the West Bank for meetings with Prime Minister Sharon and President Abbas. She will discuss with them how we and our friends can help the Palestinian people end terror and build the institutions of a peaceful, independent, democratic state. To promote this democracy, I will ask Congress for $350 million to support Palestinian political, economic, and security reforms. The goal of two democratic states, Israel and Palestine, living side by side in peace, is within reach -- and America will help them achieve that goal. (Applause.)

To promote peace and stability in the broader Middle East, the United States will work with our friends in the region to fight the common threat of terror, while we encourage a higher standard of freedom. Hopeful reform is already taking hold in an arc from Morocco to Jordan to Bahrain. The government of Saudi Arabia can demonstrate its leadership in the region by expanding the role of its people in determining their future. And the great and proud nation of Egypt, which showed the way toward peace in the Middle East, can now show the way toward democracy in the Middle East. (Applause.)

To promote peace in the broader Middle East, we must confront regimes that continue to harbor terrorists and pursue weapons of mass murder. Syria still allows its territory, and parts of Lebanon, to be used by terrorists who seek to destroy every chance of peace in the region. You have passed, and we are applying, the Syrian Accountability Act -- and we expect the Syrian government to end all support for terror and open the door to freedom. (Applause.) Today, Iran remains the world's primary state sponsor of terror -- pursuing nuclear weapons while depriving its people of the freedom they seek and deserve. We are working with European allies to make clear to the Iranian regime that it must give up its uranium enrichment program and any plutonium reprocessing, and end its support for terror. And to the Iranian people, I say tonight: As you stand for your own liberty, America stands with you. (Applause.)

Our generational commitment to the advance of freedom, especially in the Middle East, is now being tested and honored in Iraq. That country is a vital front in the war on terror, which is why the terrorists have chosen to make a stand there. Our men and women in uniform are fighting terrorists in Iraq, so we do not have to face them here at home. (Applause.) And the victory of freedom in Iraq will strengthen a new ally in the war on terror, inspire democratic reformers from Damascus to Tehran, bring more hope and progress to a troubled region, and thereby lift a terrible threat from the lives of our children and grandchildren.

We will succeed because the Iraqi people value their own liberty -- as they showed the world last Sunday. (Applause.) Across Iraq, often at great risk, millions of citizens went to the polls and elected 275 men and women to represent them in a new Transitional National Assembly. A young woman in Baghdad told of waking to the sound of mortar fire on election day, and wondering if it might be too dangerous to vote. She said, "Hearing those explosions, it occurred to me -- the insurgents are weak, they are afraid of democracy, they are losing. So I got my husband, and I got my parents, and we all came out and voted together."

Americans recognize that spirit of liberty, because we share it. In any nation, casting your vote is an act of civic responsibility; for millions of Iraqis, it was also an act of personal courage, and they have earned the respect of us all. (Applause.)

One of Iraq's leading democracy and human rights advocates is Safia Taleb al-Suhail. She says of her country, "We were occupied for 35 years by Saddam Hussein. That was the real occupation. Thank you to the American people who paid the cost, but most of all, to the soldiers." Eleven years ago, Safia's father was assassinated by Saddam's intelligence service. Three days ago in Baghdad, Safia was finally able to vote for the leaders of her country -- and we are honored that she is with us tonight. (Applause.)

The terrorists and insurgents are violently opposed to democracy, and will continue to attack it. Yet, the terrorists' most powerful myth is being destroyed. The whole world is seeing that the car bombers and assassins are not only fighting coalition forces, they are trying to destroy the hopes of Iraqis, expressed in free elections. And the whole world now knows that a small group of extremists will not overturn the will of the Iraqi people. (Applause.)

We will succeed in Iraq because Iraqis are determined to fight for their own freedom, and to write their own history. As Prime Minister Allawi said in his speech to Congress last September, "Ordinary Iraqis are anxious to shoulder all the security burdens of our country as quickly as possible." That is the natural desire of an independent nation, and it is also the stated mission of our coalition in Iraq. The new political situation in Iraq opens a new phase of our work in that country.

At the recommendation of our commanders on the ground, and in consultation with the Iraqi government, we will increasingly focus our efforts on helping prepare more capable Iraqi security forces -- forces with skilled officers and an effective command structure. As those forces become more self-reliant and take on greater security responsibilities, America and its coalition partners will increasingly be in a supporting role. In the end, Iraqis must be able to defend their own country -- and we will help that proud, new nation secure its liberty.

Recently an Iraqi interpreter said to a reporter, "Tell America not to abandon us." He and all Iraqis can be certain: While our military strategy is adapting to circumstances, our commitment remains firm and unchanging. We are standing for the freedom of our Iraqi friends, and freedom in Iraq will make America safer for generations to come. (Applause.) We will not set an artificial timetable for leaving Iraq, because that would embolden the terrorists and make them believe they can wait us out. We are in Iraq to achieve a result: A country that is democratic, representative of all its people, at peace with its neighbors, and able to defend itself. And when that result is achieved, our men and women serving in Iraq will return home with the honor they have earned. (Applause.)

Right now, Americans in uniform are serving at posts across the world, often taking great risks on my orders. We have given them training and equipment; and they have given us an example of idealism and character that makes every American proud. (Applause.) The volunteers of our military are unrelenting in battle, unwavering in loyalty, unmatched in honor and decency, and every day they're making our nation more secure. Some of our servicemen and women have survived terrible injuries, and this grateful country will do everything we can to help them recover. (Applause.) And we have said farewell to some very good men and women, who died for our freedom, and whose memory this nation will honor forever.

One name we honor is Marine Corps Sergeant Byron Norwood of Pflugerville, Texas, who was killed during the assault on Fallujah. His mom, Janet, sent me a letter and told me how much Byron loved being a Marine, and how proud he was to be on the front line against terror. She wrote, "When Byron was home the last time, I said that I wanted to protect him like I had since he was born. He just hugged me and said, 'You've done your job, Mom. Now it is my turn to protect you.'" Ladies and gentlemen, with grateful hearts, we honor freedom's defenders, and our military families, represented here this evening by Sergeant Norwood's mom and dad, Janet and Bill Norwood. (Applause.)

In these four years, Americans have seen the unfolding of large events. We have known times of sorrow, and hours of uncertainty, and days of victory. In all this history, even when we have disagreed, we have seen threads of purpose that unite us. The attack on freedom in our world has reaffirmed our confidence in freedom's power to change the world. We are all part of a great venture: To extend the promise of freedom in our country, to renew the values that sustain our liberty, and to spread the peace that freedom brings.

As Franklin Roosevelt once reminded Americans, "Each age is a dream that is dying, or one that is coming to birth." And we live in the country where the biggest dreams are born. The abolition of slavery was only a dream -- until it was fulfilled. The liberation of Europe from fascism was only a dream -- until it was achieved. The fall of imperial communism was only a dream -- until, one day, it was accomplished. Our generation has dreams of its own, and we also go forward with confidence. The road of Providence is uneven and unpredictable -- yet we know where it leads: It leads to freedom.

Thank you, and may God bless America. (Applause.)

END 10:03 P.M. EST

President Discusses Strengthening Social Security in Montana
Montana ExpoPark
Great Falls, Montana
February 3, 2005

President George W. Bush listens to retired senior citizen Leo Keller during a Town Hall meeting about the strengthening of Social Security at the Montana ExpoPark in Great Falls, Mont., Thursday, Feb. 3, 2005. White House photo by Eric Draper

3:55 P.M. MST

THE PRESIDENT: Thank you all for coming. (Applause.) Thank you all for being here. Go ahead and have a seat. Thank you. Nice to be in the part of the world where the cowboy hats outnumber the ties. (Applause.) Thanks for coming. Gosh, it's wonderful to be back in Montana. What a fabulous state, full of really decent, honorable people.

Conrad, thanks for introducing me. I'm glad you didn't auction me off. (Laughter.) Doing a fine job in the United States Senate, and I'm proud to call you friend. Thank you very much, sir. (Applause.)

And I want to thank Max Baucus for being here. We have worked a lot together in four years. You know, we've confronted a lot of things in this country -- we've confronted a recession, and confronted the need to get this economy growing. And Max worked hard with the administration to cut taxes and open up markets. And I appreciate working with you, Max. It's been a lot of fun. We got more work to do. (Applause.)

We're here to talk about an issue after a while that's going to remind us we got a lot of work to do if we're going to do our duties as public servants. But, Max, thank you. Denny Rehberg, thank you, friend, for coming. I'm honored you're here. Proud of the United States Congressman from the great state of Montana (Applause.) And Jan.

The Governor met me at the airport -- the Governor is here. Governor, thank you for coming. I'm proud you're here. One of these days you're going to join the same club as me and Judy and Marc Racicot -- that's the ex-governors club. (Applause.) But right now, you may have the best job in America, being the governor of a great state. Proud you're here. Lt. Governor is here with us today. We got a lot of other officials -- Secretary of State -- thanks for coming.

You know, we're flying over on Air Force One, and guess all -- guess what Burns and Rehberg -- all they wanted to talk about was cattle. (Laughter and applause.) Montana beef. (Applause.) And that's an important subject because it's part of how to make sure our economy continues to grow. They kept asking, are you talking to markets overseas to get the Montana beef into those markets? I said, you bet I am. And we'll continue to do so.

One of the reasons I work with Max to -- on free trade is because I believe when we open up markets for products, U.S. products, Montana products, people are going to more likely be able to find a job. We want to be selling stuff you grow here and stuff you produce here all around the world. And so I want to tell -- tell Max and Denny and Conrad, we're going still be opening up markets.

They also had a few other things on their mind. They wanted to talk about energy. Last night, I said to the United States Congress -- I said, we have been debating energy long enough. (Applause.) It is time -- it is time to get a sound energy plan to my desk so we can become less dependent on foreign sources of energy. (Applause.)

People in Montana know something about energy. I know that. They said also make sure you keep in mind the needs of the rural health -- hospitals and docs. You've got some rural -- you've got some rural issues here in Montana because you've got a lot of land. (Laughter.) And not a lot of people. (Laughter.) That's the way a lot of folks probably want to keep it, too, I suspect. (Applause.)

If you want to have health care available and affordable, we've got to do something about these lawsuits that are running good doctors out of practice. (Applause.) We've got a problem in that these lawsuits are making it costly for docs to stay in business, and are hurting the federal budget, too. When you're afraid of getting sued, you practice defensive medicine. In other words, you prescribe more than you need to just in case you have to go to a court of law. And that runs up the cost of Medicare, Medicaid, veterans benefits.

So I've come to the conclusion that the medical liability issue is a national problem that requires a national solution. And I call upon Congress to pass real, meaningful medical liability reform. (Applause.)

Before we -- before we talk about Social Security, I do want to talk a little bit about the amazing times we're living in. Just think about what has happened in the last four months. There was an election in Afghanistan. Millions -- millions of people voted for -- (applause) -- voted for a leader -- voted for a President for the first time in 5,000 years. I don't know who's counting, but that's a lot, you know. (Applause.) I mean, it's an amazing story, when you think about it. It wasn't all that long ago that the Taliban was providing safe haven to al Qaeda in Afghanistan. And that's where they plotted and trained. That's why we went in, to rout them out.

We said if you harbor a terrorist, you're equally as guilty as a terrorist. The doctrine still stands. And the reason the doctrine still stands is because there's an enemy that still hates what we stand for. We will stay on the offense. No matter where they hide, where they run, the United States of America and coalition forces will be after them to keep us safe. (Applause.)

That is our duty. That's the responsibility of the federal government. And I want to thank those who wear our uniform for serving this great country of ours. (Applause.) But the lesson of Afghanistan -- the lesson of Afghanistan should remind us we've got a greater force at our disposal than just our military, and that is our belief in the ability of freedom to change societies.

And we saw it. The high school students and college students here are watching some amazing history unfold. Think about what you've seen. You saw people vote in Afghanistan to elect a President. You saw people vote in the Ukraine to elect a President. You saw people vote in the Palestinian Territories to elect Abu Abbas. And you saw last Sunday some incredibly brave people in Iraq defy the terrorists and cast their ballots by the millions, because of freedom. (Applause.)

Freedom is powerful. Freedom is incredibly powerful. I believe that freedom is embedded in everybody's soul. That's what I believe. I believe that given a chance, people will vote. And people will -- people will adhere to the rules of self-government. It's not easy in parts of the world, though, where there's terrorists and tyrants trying to stop the march of freedom. And the reason they are, and the reason they're trying to stop the march of freedom is because they think the exact opposite. They believe in control of people's lives. They don't believe in freedom of religion. They don't believe in freedom of speech. They don't believe in freedom of the press. They don't believe in freedom, period. And we do. That's why we're still a target. but that's why we'll prevail in the long run, because deep in everybody's soul is that deep desire. And you know what I believe it's deep in everybody's soul? Because I believe it's the Almighty God's gift to every soul on the face of the Earth. (Applause.)

You about ready, Leo? Let me say one other thing. They asked me -- you know, I've been asked, and they say, is there a timetable of withdrawal from Iraq? Here's the answer to that. You don't set timetables. You don't want the enemy to say, okay, we'll just wait them out. The timetable is as soon as possible. And it's going to be based upon the willingness and the capacity of the Iraqi troops to fight the enemy. And so our mission -- our mission is to provide training and command structure and officer training to the Iraqis so they can defend their own freedom. That's what they want to do. I talk to their leadership all the time. And like any independent free country, they want to defend themselves. And our job is to help them defend themselves. And when they do, and when they're ready, our troops will come home with the honor they have earned. (Applause.)

And as freedom spreads -- as freedom spreads in parts of the world that have not known freedom, our children and grandchildren are more likely to grow up in peace. And that's what we want. We want to spread the peace. (Applause.)

Let me talk about Social Security. You know, people say, gosh, that's a pretty tough issue to be bringing up. We've got a war to fight, why are you bringing up Social Security? Here's why: The job of the President is to confront problems, not to pass them on to future generations or future Presidents. (Applause.) That's the way Montana people think. If you see a problem, go fix it. (Applause.) Don't theorize, don't pontificate, but fix it. And so the question is, do we have a problem?

First of all, let me explain why I think we -- I know we have a problem. When Social Security was designed, there were 16 workers for every beneficiary in 1950 --actually, designed in the '30s -- in 1950, there were 16 workers for every beneficiary. That meant it was a lot easier to afford that which the government promised. When you've got 16 people paying in for one person, it -- you can see why the system was solvent.

What's happened since the design of the system, however, is that people are living longer -- thankfully. (Laughter.) That's good news. (Laughter.) What else is happening since the system was designed is we had what's called the baby boomers -- that would be me, Baucus, others, you know -- (laughter) -- people whose hair is getting grayer on a regular basis. And we're fixing to retire in big numbers. So you're living longer and you've got bigger -- you've got big numbers retiring, and fewer workers paying into the system -- 3.3 workers per beneficiary. Plus, Congress, over the years, has promised an increase of benefits. So think about the math. Fewer people paying into the system, more people living longer, more people retiring, for greater benefits.

Now, that is -- and because Social Security is a pay-as-you-go system, there's not a great big trust of money. The money that goes in from your paycheck goes out to the beneficiaries. That's how it works. And so, obviously, as the demand for money increases as a result of more people retiring and people living longer and benefits going up, more has to come in.

Now, if you look at this chart up there, in 2018, the Social Security system goes negative. That means more money is going out than is coming into the system. And every year after that, as you can see, the cash deficit -- that is the money going out is greater than the money coming in -- increases. In 2027, it's about $200 billion a year. That's above and beyond the payroll taxes we're collecting. Ten years later, it's about $300 billion. Every year, the situation gets worse.

So you can imagine what will be happening if we don't do anything. You know, Congress is going to show up, and somebody says, we're $200 billion short. Where are you going to get the money? Well, you can tax somebody to get the money; you can get rid of the benefits that you promised; you can cut other programs; or you can keep borrowing debt. That's why I think we've got a problem.

Now, before I start talking about what I intend to do about it, I've got to make some things just as plain as I can. If you're a senior citizen today on Social Security, you don't have to worry about it. The trust has got plenty of money to take care of you.

I understand how this issue works. Everybody says, he's talking about Social Security, there goes my check. That's what happens all the time when they're talking about Social Security. You're in good shape. And if you're near retirement, 55 years or above, you're in good shape. Nothing changes. Those are the facts. The problem is, is that the younger workers have got a problem. And I think we have a duty to worry about our children and our grandchildren.

You know, 2018 may not -- may seem like a long way down the road for people who are running for office every two years. It's not that far down the road. If you've got a five-year-old child, that child will be 18 years old before you know it, and the Social Security system starts losing money. In 2042, the system will be broke. Again, for some of us in politics, that may seem like ages. You know, don't worry about it; 2042 seems like forever. And in my cases, of course, I'm not going to be around in politics. I'm moving on after four years. But, nevertheless, it's not that far. And the longer you wait, the harder it is to fix the problem.

So my judgment is -- and that's why I went in front of Congress yesterday, and said, okay, let's fix the problem. And I put all ideas on the table, except for running up payroll taxes. If you've got a good idea, bring it. No President, I don't think, has ever said that when it comes to Social Security. Some of you veterans may remind me whether that's the case, or not. I don't think so. I'm willing to stand up with the Congress, I don't care if it's a Republican idea, Democrat idea, independent idea -- bring them forward. Let's work together and fix the system. (Applause.)

There are a lot of ideas out there -- thank you all -- there's a lot of ideas out there. I mentioned some of the authors of the ideas last night. I've got one myself that I think is a very interesting idea -- along with others. What I'm about to tell you will not permanently fix Social Security -- by the way, there's no need just to put a Band-Aid on the deal. If we're going to get after it, let's fix it permanently. Let's let people look back generations from now and say, I appreciate the way the Congress and the President worked together to do what was right on Social Security. (Applause.)

So let me give you an idea that I think is worth considering. I thought it was worth considering so much, I put about five paragraphs in my speech into it, you know. (Laughter.) And it's this: I believe you ought to be able -- allowed to take some of your own money, payroll taxes, and set up a personal retirement account, on a voluntary basis. And the reason why I believe that is because the rate of return in your account will be greater than the rate of return on the money you're getting in Social Security. And that's important. Because if you're a younger worker and set aside some of your money that would normally be going into the trust, into a persona account, over time, that rate of return grows and accumulates. And you end up with a nest egg, I guess is the best way to put it -- a nest egg that will then complement your Social Security checks when you finally retire.

Now, there's a lot of questions about this, of course -- can you take it to the lottery? Is that considered an investment? Can you take your payroll taxes and set up a fund and go to the lottery or the track or shoot some dice? The answer is, no. (Laughter.) Obviously. You have to have a conservative mix of stocks and bonds. And there are a lot of funds that are conservatively tailored so you can get a reasonable rate of return. Obviously, the lower the risk, the lower the rate of return. But it should be a rate of return greater than that which you're earning in the Social Security trust, and that's important over time.

Secondly, you just can't once you retire pull it all out. In other words, there will be a phased withdrawal in order to make sure that the Social Security benefits you get, coupled with the money coming out of your own personal account is done in such a way to help you retire.

Third, there are ways to make sure your fund can avoid swings in the market at the very end of -- right before you retire. So there's some wise things we can do, just like we do for the federal government employees, see? They've got this plan; it's called the thrift savings plan. My attitude is, if it's good enough for people working in the federal government, it ought to be good enough for people working elsewhere in America. And I -- (applause.)

I like the idea of you owning something. I love an ownership society. We want more people owning their own home. We want people owning their own business. We want people owning their own farm. We want people owning and managing their own health care accounts. And I think it makes sense to have people owning and managing their own retirement account. (Applause.)

So we're going to talk about Social Security. And by the way, this will be phased in. I know they're throwing out all kinds of numbers -- $1 trillion, $2 trillion, $3 trillion. When you get to the federal government, we -- it's no longer millions or billions, it's trillions at the federal government. It's amazing, isn't it? Anyway, we're going to phase it in. That doesn't all happen -- happen at once. I think it's important to -- gradually phase in the idea of personal accounts so younger workers can get used to it, and so that the plan is more affordable, so it's more fiscally sound, fiscally responsible to fade [sic] it in. And we put out such a plan that will help people understand that we can do this without busting the budgets. And that's important for people to understand, as well. No, this is doable. It's just going to take some political will.

Now, I want to talk to somebody who professes to be an expert. Actually, he is an expert. We were in Fargo earlier, and he handled himself brilliantly for a professor. No. (Laughter.) Jeff Brown, from the University of Illinois, knows the subject well. He is obviously a good sport. He takes a pretty good needle. And -- but tell us -- just give us -- back me up. You've studied the issue. (Laughter.) Now, I've come here and they say, what do you expect the President to say. Put some expertise out there.

DR. BROWN: Happy to do so, Mr. President. And thank you very much. (Applause.)

* * * * *

THE PRESIDENT: What was the life expectancy when Franklin Roosevelt designed the program -- or Congress -- 60, maybe? I think it was 60.

DR. BROWN: Back in the 19 -- in the mid-1930s, a person born in the United States could expect to live, on average, around 60 -- low 60 years old.

THE PRESIDENT: See, that's how the system was designed: pay-as-you-go as you work, people not living very long. It's changed. The world has changed. The system hasn't changed with it. And that's what we're talking about.

You got any other thoughts, Professor?

DR. BROWN: Sure, I'll go on as long as you let me. (Laughter.)

THE PRESIDENT: Reminds me of my college days. (Laughter.)

DR. BROWN: I'm used to having an hour and 20 minutes with an audience that can't leave.

THE PRESIDENT: When I was awake. (Laughter and applause.)

DR. BROWN: The other thing, I just --

THE PRESIDENT: Talk about the personal accounts. I know -- it obviously makes some people nervous. It's a new idea. It's a new concept. People -- all of a sudden, when you take a system like Social Security, that's been around so long and it has done a lot of really -- made a big difference in people's lives, and you throw out a new idea -- it's the world in which the status quo sometimes is the easy default position. And -- give us some thoughts on that.

* * * * *

THE PRESIDENT: So Leo Keller is with us. He said, do you mind if I wear my hat? I said, not all, Leo. It's a fine-looking hat. (Applause.) Thanks for wearing it. I'm glad you're here. Welcome. Leo, you're here to talk about Social Security. Give us some wisdom.

* * * * *

THE PRESIDENT: Yes, that's a really interesting idea. What he just said is very important. Once people get into the habit of savings, it encourages other savings. This society is -- Leo, first of all, a couple points. One, you made my point on life expectancy. (Laughter.) You're looking strong at 79, headed to 80. You're doing great. (Applause.)

MR. KELLER: Thank you.

THE PRESIDENT: Secondly, it is important for Leo to know that nothing changes. There are a lot of people out there saying, they've heard the Social Security debate, I wonder really if this means I'm not going to get my check. I cannot -- I'm just going to say it again and again and again. Matter of fact, this is stop two of five where I'm traveling around the country; I know I've got a lot of explaining to do. And one of the most important explanations of all is Leo is going to get his check. Nothing changes. The system is sound. (Applause.) Any discussion about younger workers does not mean that Leo and anybody like Leo is not going to have the promise that the government made. That's just really important to know.

And thirdly, you're right about your grandkids. See, I like a guy who says, my grandkids are capable of owning and managing something. It's a different mind-set. The 401ks, for example, have changed the attitude toward investment, hasn't it? I mean, a 401k, when you were coming up, Leo, was just three numbers and a letter in the alphabet. (Laughter.) And now it's an idea, where people manage their own retirement, and they own something, they see it, it's visible. It's an important part of our society today, and it seems like to me, as we modernize the system of Social Security, we incorporate a portion of that new system into the concept of somebody owning something.

So thanks for coming, Leo. You did a fabulous job. And the hat, listen, I'm telling you --

MR. KELLER: My pleasure.

THE PRESIDENT: Those women look at that hat and that club, and they're going wild. (Applause.)

Kelly Kost -- Kelly, thanks for coming. What do you do?

MS. KOST: I am in sales and administration. I work for Mission Mountain Les Schwab Tires in Ronan, Montana.

THE PRESIDENT: Ronan?

MS. KOST: Ronan, yes.

THE PRESIDENT: How many people live there?

MS. KOST: I have no idea. (Laughter.)

THE PRESIDENT: Either do I. (Laughter.) At least you know where it is. (Laughter.) Talk -- talk about Social Security. First of all, Kelly has got the hardest job in America. She's a single mom.

MS. KOST: I've been a single mom since 1989. My twins are 18-years-old -- Jade and Jordan.

THE PRESIDENT: Where are they? Yes.

MS. KOST: Jordan is a member of the Army National Guard.

THE PRESIDENT: There you go. (Applause.)

MS. KOST: Jade will be the valedictorian of her class --

THE PRESIDENT: There you go. Your mom is humiliating you, but it's good to know. (Applause.) Very good.

MS. KOST: Yes. And they will both be entering college this fall.

THE PRESIDENT: Fabulous, mom. You're doing your job.

MS. KOST: Thank you, thank you.

THE PRESIDENT: Listen to your mother. (Laughter.) I'm still listening to mine. (Laughter and applause.) Let's talk about Social Security.

* * * * *

MS. KOST: I'm just wondering how user-friendly these will be.

THE PRESIDENT: Yes, that's a fabulous question. There are a lot of people who are comfortable with making investments; there are some people who are just worried about it -- is it hard? And the answer to the question is, it will be incredibly user-friendly. It's got to be, because the options will be limited. The key is to allow people to have their own account that gets a better rate of return than the money in the current system. And over time, that will inure to your benefit.

And you can do that with a very conservative mix of stocks and bonds. The Professor talked about -- Doctor or Professor, which one -- either one? How about, "Jeff?" Anyway -- (laughter) -- he talked about the thrift savings plan for federal employees. There are five options. And it spelled out what the options are. In other words, you're not going to have to go in and pick stocks. You'll pick a group of stocks or a group of bonds or a mixture of them. And they'll be described to you. So, yes, it's very user-friendly. And that's a very good question.

The other questions I get are, can you just jerk your money out at any time? No. This is a retirement fund. It's meant to help you after you retire. The benefits of this idea is, one, it gets a better rate of return. It just will. Over time, you'll hear, well, the stock market will crash and, therefore, I'll lose all my money. Well, first of all, if you study the history of investment over a 15- or 16-year period of time, there's always been a positive return. Now, there may be a down year. But over time, we're talking about you get a positive return. And there are investment vehicles that would help deal with any market decline. But we're talking about a mix -- a conservative mix of stocks and bonds. And that's an important question.

Now, the other benefit, of course, is that it's yours. Your Social Security benefit is simply a promise. You don't own it, the government will decide. The government can't pay for it, the government says, well, we're going to reduce your benefits.

When you have your own personal account, it's yours. The government cannot take it away. And you can give it to whatever child you decide -- unless you get mad at them and then give it to somebody else. (Laughter.) But it's -- and that's an important concept about -- when you're talking about ownership. We're talking about a better rate of return on your money, something you own that cannot be taken away, and something you can pass on from one generation to the next. And that's an important concept. Young families ought to be thinking about, obviously, saving to pass on from one generation to the next. I don't see why we can't incorporate that into the Social Security system. Because I know it can work financially. As a matter of fact, it makes the system more sound. It makes it more likely a younger worker is going to end up with that which the government has promised. And that's important.

Speaking about young couples, Amy and Mike Borger are with us. Welcome.

MRS. BORGER: Thank you. (Applause.)

THE PRESIDENT: Where do you both live?

MRS. BORGER: We live in Great Falls.

THE PRESIDENT: Right here. (Applause.) Beautiful town full of great people. I was touched by the number of people that came out and waved. And I thank them for that.

Do you have children?

MRS. BORGER: We do. We have our daughter, Jordan, is 12, right down in the front. And our son, Shane --

THE PRESIDENT: There she is, Jordan waving. That's good.

MRS. BORGER: -- is two. And we're expecting our third baby in April.

THE PRESIDENT: Awesome, yes. Georgia -- you're going to name it Georgia? No. (Laughter.)

MRS. BORGER: No.

THE PRESIDENT: I don't blame you. (Laughter.) Tell me about your ideas on Social Security. Thoughts, worries, concerns?

MRS. BORGER: I guess, we're in a unique position in our life. I'm fortunate enough to still have my four grandparents living. It's very important to me that system that has been promised continues to be the same for them. Looking for our -- my husband and myself, we want to make sure that when we're ready to retire, the system is what has been promised to us, as well as for our children. And we appreciate the chance to be given an opportunity to have a hand in that with the personal accounts.

THE PRESIDENT: Yes, thanks. If you look over your shoulder, which you've already done -- you can actually look right there -- you'll see it's not going to be around unless we do something now. These good folks are in the danger zone unless Congress acts, because the cash deficits increase every year starting in 2018. That's an important date for people to remember. They may argue in Washington -- it maybe 2019, or 2018 and a half. It's happening, is the point. And it gets worse every year. I repeat to you -- in 2027, we're looking for $200 billion extra to pay what has been promised. I don't know how Congress is going to deal with that in 2027 unless we act now.

And we need to think about young families. You're a high school librarian?

MRS. BORGER: I am.

THE PRESIDENT: You lucked out, buddy. I married a school librarian, too. (Laughter and applause.)

MR. BORGER: It can be hard at times, can't it?

THE PRESIDENT: No, not at all. (Laughter.) Well, if it has, I'm not confessing publicly. (Laughter.)

What do you do?

MR. BORGER: I'm a supervisor at Poulson's. It's a home improvement center here in Great Falls.

THE PRESIDENT: Great, good, good. (Applause.) Some of your fellow employees are here. That's good. They probably want a personal account, as well.

MR. BORGER: A good friend of mine that I work with, his son is serving in Iraq right now.

THE PRESIDENT: Where's he -- where is -- where's Dad? Appreciate it. Email your son, we're proud of him. (Applause.) It had to make you feel good, Dad, last night when the Iraqi lady hugged the mom of the fallen Marine. I know it made her feel good. It was a -- it was a show of gratitude from the Iraqi people that said, thank you for our freedom; thank you for the sacrifice. Your son is serving a noble cause, sir -- security of America and peace to the world. (Applause.)

I'll tell you something really interesting that Amy is doing, by the way. We'll get to Social Security in a minute -- kind of meandering around. (Laughter.) Amy is into distance learning. Where do you go?

MRS. BORGER: Boise State University.

THE PRESIDENT: From your living room?

MRS. BORGER: From my living room.

THE PRESIDENT: Interesting thought, isn't it? The reason I bring that up is, obviously, education is vital for the future of the country. No Child Left Behind is working. We're going to keep it strong, we will not undermine it. (Applause.) On the other hand, we've got to be wise about how we use technology. Think about that -- the education system has changed; Social Security hasn't. Anyway, education -- here she is going to get a --

MRS. BORGER: Masters in educational technology.

THE PRESIDENT: Yes, from your living room. Pretty cool, isn't it? We've got to keep those kind of -- keep these ideas moving. And Boise State has done a good thing to allow you to do that.

All right, Mike, back to Social Security. Do you think you'll ever see anything?

MR. BORGER: I hope to.

THE PRESIDENT: Yes. It's an interesting question -- I just want to stop you -- I promise you're going to get more than two words in here. (Laughter.) It may be hard to tell. (Laughter.) Doesn't that kind of worry you when the young guys says, I hope to? (Laughter.) When old Leo was his age, he said, no question. Are you going to see a Social Security check? No doubt. Now we've got youngsters saying, I hope so, as if there is doubt. And there should be doubt.

MR. BORGER: My wife and I work very hard for what we earn. And we have a lot of bills and day care and two children, and a third on the way. And it's hard to set money aside to start our -- to start our own IRA and that stuff. So we're very dependent on what Social Security or the personal accounts can offer. So it's real important to us that something gets reformed and things change so that there is a guarantee for us and our children. And also, it's a concern to me that people like Leo and my in-laws and my parents and friends of mine that are coming upon the age that they retire, that their Social Security that they worked very hard for won't be touched.

THE PRESIDENT: Right.

MR. BORGER: And that that will be there for them.

THE PRESIDENT: It will be. And I can't guarantee for you. That's what we're here to discuss.

See, I'm traveling around because -- first of all, I believe in the will of the people. I believe that people can influence policy. And so the next couple of months I'm going to be traveling the country, telling people I think we got a problem, and asking people to get involved. Nothing changes for Leo, but this couple that's about to be raising three kids is -- they're going to have a system that's just not going to work unless this United States Congress and the President act together.

I believe it's going to happen. I really do. Oh, the pundits will say it looks too tough, and this -- somebody said it's not going to happen, and somebody opined it's not going to happen. But when the people really figure we got a problem, they're going to demand a solution. They're going to say to members of both political parties, what the heck are you doing in Washington, D.C. if you're not willing to settle down and solve the problems facing this generation? (Applause.)

I'd like to answer a few questions if you've got any. I'm sure somebody has got a few. Yes, sir, with that shirt on. Fine-looking shirt you got there. Thank you all for coming out, by the way. It's a -- it's a joy to be here. (Applause.)

Q Mr. President, do you foresee that if we fix this program, we can move the retirement age back to 65? For some people it's 66, 67, 68, and on and on.

THE PRESIDENT: Yes. Well, there's a lot of discussions about whether we ought to move it back or move it forward. And that idea is on the table. Again, this is one of those ideas where, in the past, if you talked about it, somebody would club you over the head with it in a political race. And I think we ought to debate whether or not the age ought to be 65, 66, 67. These are for younger workers now -- nothing changes for older workers. And that's on the table. That's what I said last night. I reminded people that my predecessor, President Clinton, suggested that that might be part of a solution, to raise the retirement age. But I don't think you can end up making that decision now until you look at all the other options. And we're just going to have to take the hard look at all the different options on the table. And people are living longer -- but this all, again, pertains to younger workers. And it's -- it will be part of the debate that goes on in Washington, D.C. And I'm willing to have it.

Yes, ma'am. Just can barely stand it. (Laughter.)

Q Sir, you are a blessing. And our family prays for you every day.

THE PRESIDENT: Thank you. (Applause.) Thank you for saying that.

Q My husband and I are privileged to have a 35-year-old daughter who is mentally disabled. And she works hard in a supportive living center in Helena, Montana. And many people against your proposal are trying to scare the disabled by saying they will lose their Social Security --

THE PRESIDENT: Not true. Nothing changes.

Q -- which she needs. So is she okay?

THE PRESIDENT: Nothing changes when it comes to the disabled -- the disability aspect of Social Security. This is all aimed -- all discussions about the retirement aspects of Social Security. (Applause.) I'm glad you asked that. Thank you for your prayer.

I tell people this -- I tell people this: I don't see how a President can do the job without the prayers of the people. I know other Presidents probably wouldn't agree with that, necessarily. (Applause.) I quoted Abraham Lincoln today. He said, "I would be," -- I think -- I kind of paraphrased him. We actually had the National Prayer Breakfast this morning. Started off by saying the State of the Union was kind of like a prayerful session. They were praying I'd hurry up and finish the speech. But it's -- (laughter.)

Anyway, I quoted Abraham Lincoln who said, I don't see how you can be President without prayer, is what he said. And I agree with that assessment. One of the most powerful -- (applause) -- of the presidency is to know that people are praying for me and Laura. And I want to thank you for that.

Having said that, I also want to -- I know there's a lot of talk about religion and politics. It is essential that whoever the President is and whoever is in Congress always honor the fact that in this country, you can pray, or not pray, and be equally American. You can be a religious person, or not a religious person and be equally viewed as a patriot. And if you're religious, you're equally American if you're a Jew, Christian, Muslim, Hindu. That's the greatest thing about our country. That's what distinguishes us from the Taliban, is the freedom to be -- the freedom to choose what you want to choose. (Applause.)

You've got a question? All right, thank you.

Q Mr. President, I was reading in a liberal newspaper today -- (laughter.)

THE PRESIDENT: Sounds like a loaded question to me. (Laughter.)

Q An opinion was that, on the average, individuals will make about six-and-a-half percent on the market over time, and that that was less than what is being made in the Social Security system.

THE PRESIDENT: No, that's -- I don't want to subscribe a political label -- I would describe as somebody who doesn't know what they're talking about. (Laughter.) That's just not the truth. Professor?

DR. BROWN: That's what I'm here for, is to find the truth.

THE PRESIDENT: Thank you, sir. Thank you. Thanks for coming.

DR. BROWN: Yes, historically, over the last 80 years, the stock market has returned about seven-and-a-half percent over inflation, and that's far higher than you get from government bonds or on the return from the current system.

THE PRESIDENT: Well, he's talking about the return within the Social Security system, and it's, like, near zero.

DR. BROWN: It's about 1 to 2 percent for --

THE PRESIDENT: And the difference between 1 percent return on your money and 4 percent return on your money over time is significant?

DR. BROWN: Yes. Just to give you an idea of the difference between -- suppose you invested $1,000 a year from the time you're in your early 20s until you retire, suppose you get a 3 percent rate of return, you might have about $65,000. Get a 7 percent rate of return, you're going to have over $200,000. So it's a very big difference.

THE PRESIDENT: That's how money grows. And that's an important concept that we need to incorporate if we want the Social Security system to be available for younger families and younger workers. It's a really important part of a reform package.

Okay, any more questions? I'm kind of winding down here because I've got to head on to Nebraska. Yes, ma'am? The red shirt.

Q I have one -- I kind of have one question for you.

THE PRESIDENT: Sure.

Q Can you quote Proverbs 17:17 for me?

THE PRESIDENT: Do what?

Q Can you quote Proverbs 17:17 for me?

THE PRESIDENT: No. (Laughter.) That's an easy one. Can you? Quote it.

Q "A friend loves at all times, and a brother is born for adversity."

THE PRESIDENT: Thank you. (Applause.) Very good. I thought you were going to ask me if I knew how to get to Livingston. (Laughter.) It's like that guy, said, what color -- he said, to get to Livingston, you've got to go down the highway and you go through the cattle guard, and you -- (laughter) -- turn left, and go through another cattle guard. And a fellow comes back and says, hey, what color uniforms do those cattle guards have on? (Laughter and applause.) That never happens in Montana.

Yes, sir.

Q Thank you, Mr. President, for coming to Montana.

THE PRESIDENT: Nice to be back. Big Sky. (Applause.)

Q When my wife and I continue to pay into the system, what percentage of that will we have the opportunity --

THE PRESIDENT: Yes.

Q -- to invest in? And what kind of mountain bike do you ride? (Laughter.)

THE PRESIDENT: I'm not supposed to endorse products, but it's called a Trek. (Laughter.) Are you a mountain bike, guy?

Q Yes, I am.

THE PRESIDENT: Oh, listen, let me -- I'll get to the -- I'll try to remember what -- the real question you asked. (Laughter.) First of all, I hope people exercise on a regular ba

Presidential Statements

George W. Bush - 1st Quarter, 2005

George W. Bush -
1st Quarter, 2005