04-18-2005, 07:52 PM
Bush Says Raising Retirement Age a Possibility
By Steve Holland
COLUMBIA, S.C. (Reuters) - President Bush said on Monday proposals to raise the retirement age for Social Security benefits and restructuring those benefits to be more generous to low-income workers are among possibilities for overhauling the country's largest entitlement program.
Bush mentioned the possible ways to preserve Social Security's solvency and called for Congress to come together to make the tough choices in an address before a joint session of South Carolina's Republican-controlled legislature.
At the same time, he painted a dire picture of Social Security's future if nothing is done, saying problems would start in three years when the first baby-boomers retire.
"By 2034 the annual shortfall will be more than $300 billion and by the year 2041 the entire system will be bankrupt," he said.
He appealed directly to younger workers in his uphill battle to convince Americans of the need for private retirement accounts as part of the Social Security system.
Bush said younger Americans are comfortable with investing in stocks and bonds and the system would be set up so the money would not be wasted at the racetrack or in a lottery.
"Telling younger workers they have to save money in a 1930s retirement system is like telling them they have to use a cell phone with a rotary dial," Bush said.
He hailed various experts and Republican and Democratic lawmakers for offering proposals for changing the system. He praised in particular South Carolina Republican Sen. Lindsey Graham for a proposal to raise the cap on Social Security taxes paid by high-income earners. Conservatives have called that a tax increase.
Graham has been pushing Bush to offer more details about how to fix the program's financial problems and insist on a vote in the U.S. Congress in coming months. Bush has spent more than two months pushing for an overhaul but has not offered a detailed proposal while calling for action this year.
Bush also cited a proposal to further raise the retirement age, which is currently 65 and already being increased so that people born in 1960 or after will be able to receive full benefits at 67.
Later, in an interview with CNBC, Bush was asked whether the retirement age should be raised to about 70. "Certainly one of the options. As I recall, President (Bill) Clinton, my predecessor, suggested that might be a good part of the fix," Bush said. "There's a variety of things on the table."
In his South Carolina speech, Bush mentioned proposals to tie Social Security benefits to prices rather than wages to slow their growth, and to have a progressive way of structuring benefits that will be more generous to low-income workers.
"In other words, all these ideas are on the table, but they have one thing in common, they all require us to act now," Bush said.
The only option Bush ruled out is raising the payroll tax, which is currently 12.4 percent. "That'll hurt the economy and cost jobs," he said. (Additional reporting by Adam Entous)
By Steve Holland
COLUMBIA, S.C. (Reuters) - President Bush said on Monday proposals to raise the retirement age for Social Security benefits and restructuring those benefits to be more generous to low-income workers are among possibilities for overhauling the country's largest entitlement program.
Bush mentioned the possible ways to preserve Social Security's solvency and called for Congress to come together to make the tough choices in an address before a joint session of South Carolina's Republican-controlled legislature.
At the same time, he painted a dire picture of Social Security's future if nothing is done, saying problems would start in three years when the first baby-boomers retire.
"By 2034 the annual shortfall will be more than $300 billion and by the year 2041 the entire system will be bankrupt," he said.
He appealed directly to younger workers in his uphill battle to convince Americans of the need for private retirement accounts as part of the Social Security system.
Bush said younger Americans are comfortable with investing in stocks and bonds and the system would be set up so the money would not be wasted at the racetrack or in a lottery.
"Telling younger workers they have to save money in a 1930s retirement system is like telling them they have to use a cell phone with a rotary dial," Bush said.
He hailed various experts and Republican and Democratic lawmakers for offering proposals for changing the system. He praised in particular South Carolina Republican Sen. Lindsey Graham for a proposal to raise the cap on Social Security taxes paid by high-income earners. Conservatives have called that a tax increase.
Graham has been pushing Bush to offer more details about how to fix the program's financial problems and insist on a vote in the U.S. Congress in coming months. Bush has spent more than two months pushing for an overhaul but has not offered a detailed proposal while calling for action this year.
Bush also cited a proposal to further raise the retirement age, which is currently 65 and already being increased so that people born in 1960 or after will be able to receive full benefits at 67.
Later, in an interview with CNBC, Bush was asked whether the retirement age should be raised to about 70. "Certainly one of the options. As I recall, President (Bill) Clinton, my predecessor, suggested that might be a good part of the fix," Bush said. "There's a variety of things on the table."
In his South Carolina speech, Bush mentioned proposals to tie Social Security benefits to prices rather than wages to slow their growth, and to have a progressive way of structuring benefits that will be more generous to low-income workers.
"In other words, all these ideas are on the table, but they have one thing in common, they all require us to act now," Bush said.
The only option Bush ruled out is raising the payroll tax, which is currently 12.4 percent. "That'll hurt the economy and cost jobs," he said. (Additional reporting by Adam Entous)