Bill Clinton: “Maybe I could say this at a little--I keep trying to get back to the basic thing. If we don't do anything, sometime in…”

“Maybe I could say this at a little--I keep trying to get back to the basic thing. If we don't do anything, sometime in about 35 years, we're going to have to--Senator Domenici said 50 percent; I think it comes a little later than that, 50 percent. But let's say in 2030, we run out of money. We're going to have to do one of three things: We're either going to have to raise the payroll tax by quite a lot; we're going to have to cut benefits by quite a lot; or we're going to have to have the Government stop doing a huge percentage of everything else it's doing, most of which are things that you believe we should be doing, and just put the money into Social Security. So we really got into this whole discussion--both if you take Professor Reischauer's view that the Government should invest more in equities to get a higher rate of return, or the view expressed by Dr. Weaver that individual accounts should do it--we got into this discussion to figure out whether we could have, at acceptable risk, a higher rate of return on the money that's already there so we wouldn't have to raise taxes, cut benefits dramatically, or shut down a whole lot of the rest of the Government. So there's going to be a transition cost regardless. Now, one of the things that I want to compliment all these Members of Congress here for doing, we want to avoid having to have a big tax increase for the transition, which is why we're trying to hold on to this surplus we've got for the first time in 29 years, because whatever we decide to do with this, we're going to have to commit a substantial part of the money that has been accumulated or will be accumulated to fund that. And I want to ask you one question. Are you saying that you would support some portion of the payroll tax being made available for individual accounts if retirees, or future retirees--savers, workers-- also had the option to opt into a system like the one we've got, so you could choose the one we have or you could choose one with a smaller guaranteed benefit and more investment? Is that what you're saying? I just want to make sure because I think that's something we need to know. [Mr. Reischauer said that the Federal employee system would not solve the problem if Social Security were cut. Senator Bingaman voiced concern that if money were taken out of the payroll tax to finance individual retirement accounts, then benefits would have to be cut and the retirement age would have to be raised. Audience members then discussed how to invest the budget surplus.]”