Sponsors

Luntz 2006: Retirement Security (Cont.)
Frank Luntz Republican Playbook -- Searchable Text-Version: NEW AMERICAN LEXICON -- PART VII "SOCIAL SECURITY = RETIREMENT SECURITY" (Part b)

(Social Security (Part b))

Q7: Won’t this new system jeopardize the benefits of current and near retirees?

A: Preserving the security of your benefits are a cornerstone of our program. Let me say this again. Your benefits are secure. If you are receiving your Social Security check, or nearing retirement, nothing will be taken away from you. Absolutely nothing.

PAGE 106 ---

Q8: By investing a portion of our Social Security contributions in financial markets, aren’t we in essence gambling our money on stocks?

A: The financial markets have made America the most financially secure nation on the globe, yet tens of millions of Americans have not had the opportunity to invest. Until now. Every American worker should have the right to own and control their retirement savings account so that they can reap the benefits of a safe, secure and rewarding retirement.

Federal employees and even Members of Congress can enroll in savings plans that give them the right to invest in CDs, treasury notes and other safe investments that yield more than the two percent we get from Social Security. Most Americans now have IRAs and 401K plans that allow them to make choices in how to invest their retirement savings.

And that’s all we’re getting with Social Security. A paltry two percent. That’s even below the inflation rate! That’s not enough to retire with a nest egg. There is no security in today’s system of Social Security.

And we also have common sense limitations. These personal retirement accounts would give people the chance to take a small portion of their Social Security and invest it. Not their entire Social Security — just a small portion. The majority of their payroll taxes would go into the same system as a safety net.

Q9: Amidst all the recent cases illustrating the rampant fraud that has taken place on Wall Street, can we trust these fat cats with our hard--earned money?

Currently our Social Security is being gambled by a Washington Bureaucracy that is spending the Social Security trust fund AS WE SPEAK — and I believe that is a lot more dangerous. The truth is, the bureaucrats have more faith in Washington then they do in you. I put my faith in the American people.

Q10: I know for a fact that the stock market has crashed several times since its inception, most recently the day after September 11th, Wouldn’t an event like this be devastating to my Social Security account?

It is true the stock market went down after September 11th, but that was just one day. You have to look at stock market returns over time. Since 1985, the Dow Jones industrial average has climbed nearly 400 percent, and individuals who chose to invest a portion of their Social Security will be investing over these long--term periods. The stock market has always out--performed treasury bills and inflation …combined — a rate far exceeding what Social Security returns now.

PAGE 107 ---

Q11: What other safeguards are in place to ensure my money will be there when I retire, no matter what the financial climate is like?

A: Aside from the strong performance of financial markets over the long term, as well as the fact that the majority of your account will remain in the Social Security trust fund as a safety net, the personal accounts that will be offered will be fully diversified. By employing a variety of financial products including stocks, treasury bills and bonds, they will allow you to diversify your risk. This diversification of investments is a proven strategy that has been used by millions of Americans who have already benefited with secure and long--term retirement benefits in the form of IRAs and 401ks.

PAGE 108 ---

RESTORING THE SECURITY IN SOCIAL SECURITY
(a 20--minute stump speech)

As our nation takes up the great debate around Social Security, I ask you to pause for a moment This is about something more important, more fundamental to our nation and its hardworking citizens…this is not just a debate about Social Security — this is a debate over your retirement security.

This is not about the size of a check or what the government owes you, although it may be tempting to think of it that way. You want to be sure that you are provided for in your golden years — that you are secure in your retirement — that you can spend these special years with peace of mind living without fear.

It is this most basic principle — RETIREMENT SECURITY — that we in Washington must address.

For I believe Social Security is not simply a government program, and it is more than a safety net. It is a solemn promise by the United States to generations of diligent, hard--working Americans. It is clear to me that no one who has worked hard their entire life should have to spend their golden years in poverty or live in fear of financial ruin.

For too long, financial experts and independent economists have warned that Social Security is on a collision course with insolvency. And yet Washington has not offered a meaningful solution. This is the old way, the political way ... to wait for the disaster to occur before making the necessary changes to PREVENT it.

Instead of addressing the problem and applying a solution, we in Washington do nothing until the situation deteriorates into a crisis...passing the buck from one generation to the next. And that’s the trajectory of Social

Security. Maybe not right now, but it’s coming.

Well, as Harry Truman once said, “The buck stops here.” It is our job in Congress to put an end to this vicious cycle and restore generational fairness to Social Security so that seniors get every dime they are entitled to but that it surveys for their children and doesn’t end up bankrupting their grandchildren. It is our responsibility to save and strengthen Social Security NOW, BEFORE the crisis occurs. It is what we were sent here to do and we have to get it done.

First and foremost, improving our Social Security system cannot be a partisan issue. When it comes to the retirement of tens of millions of Americans, there are no Democrats or Republicans. There are only

Americans — and those Americans are depending on us to stop the bickering and the cheap political stunts and do what’s right for .the current generation now receiving benefits, the next generation who are paying those benefits, and future generations who are now just entering the workforce.

PAGE 109 ---

(cont.)

I applaud my colleagues from BOTH sides of the aisle for working toward a solution to modernize Medicare and provide a prescription drug benefit. And today, as a team, we again need to come together and enact common sense, effective legislation that will protect American workers now and in the future.

While current Social Security retiree benefits are secure — and will remain so — in a little over a decade the source of these benefits will begin to show deficits, and thirty years from now the system will be spiraling towards bankruptcy. It would be easier to turn away and leave the tough decisions to others. But we do things in life not because they are easy but because they are necessary — no matter how hard they are.

To turn our back on this problem is to turn our back on the future — our children and the generations to come. We have a profound obligation to provide those that come after us with the same security we have enjoyed. For this to happen, we must take up this discussion — face this challenge — and enact long--term financial improvements to the Social Security system that will guarantee benefits for not just those on it but those who are paying into it.

Pardon the history lesson, but we all know that the current Social Security system was designed for a different generation and a different America. Let me give you four facts that have convinced me that the status quo is unacceptable and that modernization of Social Security is a moral imperative.

First, it is a fact that when Social Security was first created, men made up the vast majority of the workforce and bad a life expectancy not much more than 60 years. Today, in a majority of households, both men and women are working, and our life expectancy has risen more than. a decade. We are living longer, healthier, more productive lives ... and that trend is going to accelerate as we continue to lead the world in medical breakthroughs. But while that is great for us here today, that’s not great for an antiquated Social Security system.

Second, it is a fact that in the 195Os, about 16 workers paid into Social Security for every person drawing out. Today, the ratio is just 3 to 1, and when our kids retire, it will be down to two workers for each beneficiary. The burden we will be placing on the workforce is unimaginable, and it’s getting worse. If you think your taxes are too high now, imagine what they will be in the future if we don’t make the necessary changes in the present.

Third, it is a fact that the expansive Baby Boom generation continues to age — and the oldest of them turn 60 next year. Because of that, the number of workers in PAGE 109 ---

(cont.)

I applaud my colleagues from BOTH sides of the aisle for working toward a solution to modernize Medicare and provide a prescription drug benefit. And today, as a team, we again need to come together and enact common sense, effective legislation that will protect American workers now and in the future.

While current Social Security retiree benefits are secure — and will remain so — in a little over a decade the source of these benefits will begin to show deficits, and thirty years from now the system will be spiraling towards bankruptcy. It would be easier to turn away and leave the tough decisions to others. But we do things in life not because they are easy but because they are necessary — no matter how hard they are.

To turn our back on this problem is to turn our back on the future — our children and the generations to come. We have a profound obligation to provide those that come after us with the same security we have enjoyed. For this to happen, we must take up this discussion — face this challenge — and enact long--term financial improvements to the Social Security system that will guarantee benefits for not just those on it but those who are paying into it.

Pardon the history lesson, but we all know that the current Social Security system was designed for a different generation and a different America. Let me give you four facts that have convinced me that the status quo is unacceptable and that modernization of Social Security is a moral imperative.

First, it is a fact that when Social Security was first created, men made up the vast majority of the workforce and bad a life expectancy not much more than 60 years. Today, in a majority of households, both men and women are working, and our life expectancy has risen more than. a decade. We are living longer, healthier, more productive lives ... and that trend is going to accelerate as we continue to lead the world in medical breakthroughs. But while that is great for us here today, that’s not great for an antiquated Social Security system.

Second, it is a fact that in the 195Os, about 16 workers paid into Social Security for every person drawing out. Today, the ratio is just 3 to 1, and when our kids retire, it will be down to two workers for each beneficiary. The burden we will be placing on the workforce is unimaginable, and it’s getting worse. If you think your taxes are too high now, imagine what they will be in the future if we don’t make the necessary changes in the present.

Third, it is a fact that the expansive Baby Boom generation continues to age — and the oldest of them turn 60 next year. Because of that, the number of workers in America has increased since the 1950s, but the number of retirees has increased much faster.

PAGE 110 ---

(cont.)

And fourth, it is a fact that the return on your Social Security dollars is a paltry two percent. That’s it — two percent. That’s not enough to retire with a nest egg. That’s not enough to retire with a sense of security. And security is what Social Security is all about. To me, depending on a two--percent rate of return over the lifetime of paying into Social Security is more of a risk than trying an alternative approach.

Now these facts come straight from the Social Security trustees, Democrats and Republicans alike. They aren’t pretty, and neither is the outcome ...if we continue to do nothing and ignore the facts and whitewash the statistics.

What we need today is retirement security that can grow even stronger as the American people grow strong. What we need is retirement security that keeps pace with us. What we need is to strengthen Social Security so it in fact DEFINES retirement security.

Let me be frank. With each year we put off improving this system, the higher the price our children and grandchildren will have to pay. We also know that any change to our system will create short--term costs. I tell you this because I want to be upfront with you. I believe you have a right to know the fine print before you make a decision. Life is full of enough surprises — Washington should be honest with you and not sock it to you when you least expect it.

The plan I am about to outline will cost roughly a trillion dollars over the next ten years — and that’s a lot of money. But according to the Social Security Administrators, to do nothing will cost 11 trillion dollars — and every year we put this off, the bill to our children and the next generation increases by $600 hundred billion.

Our choice is between an enormous crisis starting 13 years from now, when Social Security begins to pay out more than it takes in, or face these challenges when they are a lot less expensive today. To me, the best course of action is to face these challenges now, protect current retirees, and save generations to come from needless financial heartaches.

One more point, and this one is strictly my opinion. Fixing Social Security is an issue of fairness... GENERATIONAL fairness. We should have a system that is fair to our parents and fair to the baby--boomers, but that is not enough. It has to be fair to our children and their children as well.

It may be solvent now, and it may run a surplus for 13 more years ... but what happens to the next generation of Americans? To do nothing would not be fair. It would not be responsible. It would not meet our obligation as the stewards not just of the past but of the future.

PAGE 111 ---

(cont.)

This great nation has made its share of mistakes, many of which were products of hard decisions put off to future generations...problems that were avoided by bequeathing them to our children. I do not intend to allow America’s next generation to inherit a broken system. And we in Washington have an obligation not to think merely of the next election but to plan for the next generation.

The answer involves ownership — owning and controlling your Social Security savings. You probably think you own your Social Security now — but you don’t. If you pay into the system year after year but die before you retire, you can’t pass on your Social Security benefits to your spouse or your children If you don’t think a two percent return on your Social Security is sufficient, you can’t change that.

Now remember... it’s YOUR money. It doesn’t belong to Congress, to the President, or even to the Social Security Administration. It’s YOUR money. Social Security is a basic right that you have paid for. The question is “are you going to make the government accountable?”

And the question for us as members of Congress becomes, “what are we going to do to make Social Security more reliable for the next generation?” We have a responsibility in Washington to modernize Social Security that achieves built--in reliability.

Let me say this again. YOUR Social Security belongs to YOU. It doesn’t belong to Washington. This is not about someone else’s retirement security. It is about YOUR retirement security and who will control YOUR savings. YOU should determine how your Social Security dollars will be saved and invested.

It is up to Washington to make the necessary reforms so that Social Security provides the opportunity for a better return than what it provides now. Two percent is not enough. You deserve more — and you deserve investment opportunities that are safe and sound for the long term, so that you will have peace of mind knowing that your retirement benefits will be there when you need them and expect them.

Federal employees and even Members of Congress can enroll in savings plans that give them the right to invest in CDs, treasury notes and other safe investments that yield more than the two percent we get from Social Security. Most Americans now have ERAs and 401K plans that allow them to make choices in how they invest their retirement savings.

And that’s what Social Security personal retirement accounts are all about — allowing Americans to voluntarily save some of their payroll taxes in a personal account for their retirement. At a two percent return, Washington has done a rotten job managing your Social Security savings. Just putting it in the bank in a long--term account and letting it sit there for a decade or more would have yielded a higher return.

PAGE 112 ---

(cont)

We think you can and should have the right to do better.

Personal retirement accounts can turn every American employee, into an owner, giving them a retirement fund they control themselves and can truly call their own.

But we also believe in common sense limitations. These personal retirement accounts would give people the chance to take a small portion of their Social Security and invest it. Not their entire Social Security — just a small portion. The majority of their payroll taxes would go into the same system as a safety net.

It would be voluntary, not mandatory. If you don’t want to invest, you don’t have to. If you want Washington to manage your money, you will have that right.

There would be strict limits to how much and where YOUR Social Security personal retirement account could be invested, but YOU would be making the decisions, not some bureaucrat in Washington.

The financial markets have made America the most financially secure nation on the globe, yet tens of millions of Americans have not had the opportunity to invest. Until now. Every American worker should have that right to own and control their retirement so that they can reap the benefits of a safe, secure and rewarding retirement.

Here’s what will not change, however. If you are receiving your Social Security check, or nearing retirement, nothing will be taken away from you. Absolutely positively nothing. Your benefits are and will remain secure.

Partisan critics of this plan argue that giving employees the right to control their retirement is essentially the same as gambling on the stock market. My first response is to say that they are gambling on a Washington bureaucracy that is spending the Social Security Trust fund AS WE SPEAK — and that is a lot more dangerous. The truth is, they have more faith in Washington than they do in you. I put my faith in the American people.

So I ask you to focus on the facts, study the issue, and then make up your own mind. When it comes to financial literacy and Social Security, the more you know, the better off we’ll all be.

Social Security has worked for decades and for generations. But as it now stands, this is not a modern system that meets modern needs. We have a terrific opportunity right now. Imagine the peace of mind in knowing the contributions you make each month to Social Security will result in a real nest egg of savings for your retirement that you own and no one can take away from you.

After all … it is your money.

Frank Luntz Republican Playbook (New American Lexicon) -- Searchable Text-Version

Also Available in:
PDF
Word 2003 (671kb)
RTF (908kb)
RTF (zipped--185kb)
XML (1.53mb)