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Office of the Press Secretary

For Immediate Release February 9, 1998

February 9, 1998

THE SOCIAL SECURITY SYSTEM. Since its inception in 1935, the Social Security system has proven to be an outstanding success in providing security and dignity for retired and disabled workers, as well as their families and survivors. The elderly poverty rate has fallen from more than 35 percent in 1959, to just 10.8 percent in 1996. Social Security benefits keep roughly 15 million Americans out of poverty. Those benefits represent more than 75 percent of income for elderly households in the bottom 40 percent of the income distribution, and are particularly important to the economic security of elderly widows.

THE LONG-RUN CHALLENGE. The Social Security system is expected to face increasing strains, because the retirement of the baby boomers means that the number of retirees is expected to grow much faster than the number of workers. There are currently just over 3 workers who contribute for every Social Security beneficiary. By 2030, it is expected that there will be only 2 workers for every Social Security beneficiary. According to the intermediate projection of the Social Security Trustees Report, the retirement of the baby boomers is expected to cause the Social Security Trust Fund to start falling by 2019, and to be depleted by 2029 -- at which time income to the system would only be sufficient to pay about 75 percent of current law benefits.

PRESIDENT CLINTON'S APPROACH TO SOCIAL SECURITY REFORM. President Clinton is strongly committed to strengthening Social Security over the next two years. His plan includes:

(1) Putting Our Fiscal House in Order. Before we could begin to address the long-run problems in Social Security, we first had to solve our immediate fiscal problem. Under President Clinton's leadership, we have now done that. The budget deficit has fallen from $290 billion in 1992 to $22 billion last year, and President Clinton's FY 1999 budget will produce balance by next year.

(2) Surpluses Reserved Pending Social Security Reform. As the President emphasized in his State of the Union address, the projected budget surpluses should be reserved pending Social Security reform. Until we address the critical challenge of strengthening the Social Security system and ensuring retirement and disability security for America's workers, as well as their families and survivors, we should not use the projected surpluses for anything else.

(3) Nonpartisan Regional Conferences in 1998. The President believes that we must use 1998 to engage in a national discussion about Social Security reform. He urges all Americans to participate in the debate. The President or Vice President will attend several nonpartisan and balanced regional conferences, and will also host a conference on private retirement savings by July. The President and Vice President also encourage other groups to organize conferences. The upcoming year-long effort should allow all Americans to express their views, and hear the views of others.

(4) White House Conference. At the end of the year, the President will host a bipartisan White House Conference on Social Security as a culmination of the various conferences, forums, and discussions held throughout the year. The purpose of the White House conference is to bring together the lessons learned from the national dialogue.

(5) Bipartisan Negotiations in January 1999. Following the White House conference at the end of the year, the President and his team will begin negotiations in January 1999, with bipartisan Congressional leaders and members over Social Security reform. The President is firmly committed to strengthening the Social Security System.