President Bush is hoping to rally public support for his plan to change the U.S. pension program. Opposition Democrats say the president's plan would cut benefits for older Americans.
Following up on Wednesday's State of the Union address, President Bush is hitting the road to push for changes in the pension fund known as Social Security.
With two days of campaign-style stops in the states of North Dakota, Montana, Nebraska, Arkansas, and Florida, President Bush is looking to build on the momentum that White House officials hope he began in the State of the Union.
"I am going to spend the next couple of days going around the country explaining to people as clearly as I can the problem," said President Bush. "Because I expect people in Congress, when they see a problem, to then come up with solutions. So, last night I said all options are on the table except for running-up payroll taxes."
President Bush says the system is in crisis with Social Security expected to pay out more than it takes in by the year 2018.
But getting legislators to act on a problem which is at least 14-years away is difficult for any president, especially one facing some opposition on the issue from those in his own party.
So Mr. Bush used his State of the Union to outline some of the details of his plan, while still leaving room for political compromise with Congress.
At the heart of the president's plan is introducing private accounts for younger workers. Mr. Bush wants to allow those workers to invest some of their Social Security taxes in financial markets to earn higher rates of return than are currently being delivered in the federal program.
That is because there are fewer and fewer workers paying into the program to support more and more retirees, in part, because people are living longer and the large number of people born immediately after the Second World War are now approaching retirement.
Mr. Bush told supporters in Fargo, North Dakota that it is time to fix the problem now before he says the system reaches bankruptcy in 2042.
"What does that mean? It means you either have to run up taxes, cut benefits, cut programs or borrow money," he said. "That is what it means. In big ways. And so I went to Congress last night and said, 'I see a problem.' Some of them don't see the problem, evidently."
Democrats say the president wants to privatize Social Security which they say would threaten benefits for older Americans and risk the retirements of younger workers who could lose money in the uncertainties of financial markets.
Mr. Bush says those at or near retirement have nothing to fear from his program because for them, nothing will change.
His voluntary private investment accounts are limited to workers who were born after 1950. Starting in 2009, they would be able to move up to four percent of their taxable income into individual investment accounts which would be restricted to a financially conservative mix of stock, bond, and mutual funds.
The federal government would continue to administer those funds and pay out any profits above inflation-adjusted gains of three percent, which is what that money would have earned if it had been invested in traditional Treasury bonds.
