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Bush Wants Changes in Social Security - 2005-01-17


President Bush begins his second term this coming week with Thursday's inauguration at the U.S. Capitol. White House correspondent Scott Stearns reports, one of his biggest priorities for the next four years is reforming the federal retirement program known as Social Security.

President Bush wants younger workers to invest some of their retirement savings in the stock market where he says they will earn a higher rate of return than leaving those savings in the current Social Security system.

Younger workers will need more money at retirement because, if nothing is changed, the current system will start running out of money in 2018 with fewer workers supporting more and more retirees.

In his weekly radio address, President Bush said if Social Security is not fixed now, it may not be able to pay out benefits promised to future generations.

"Every year we put off the coming crisis, the higher the price our children and grandchildren will have to pay. According to the Social Security trustees, waiting just one year adds $600 billion to the cost of fixing Social Security. If we do not act now, government will eventually be left with two choices: dramatically reduce benefits, or impose a massive economically ruinous tax increase. Leaving our children with such a mess would be a generational betrayal."

The president's political opponents say privatizing Social Security will reduce benefits for older Americans and endanger the retirement of younger workers relying on funds invested in uncertain financial markets.

In the Democratic radio address, Michigan Senator Debbie Stabenow said Washington should not gamble with workers' futures.

"America's insurance policy was never meant to be a privatized 401 K plan or a high-risk investment. It was meant to be the secure foundation for your retirement."

Senator Stabenow says the costs of shifting to a privatized system would add to the national debt.

"Our nation already is staggering under the largest budget deficit in the history of the country. Taking on even more debt could destabilize financial markets, drive up interest rates, and stifle economic growth."

Senator Stabenow says Democrats are ready to work with the president on improving Social Security but will oppose attempts to privatize the program.

President Bush has yet to endorse any specific legislation on Social Security but says there will be no increase in payroll taxes to pay for the changes ahead.

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