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THE WHITE HOUSE

Office of the Press Secretary

For Immediate Release December 9, 1998

                           PRESS BRIEFING BY 
               DIRECTOR OF THE NATIONAL ECONOMIC COUNCIL
                             GENE SPERLING
      
                           The Briefing Room

3:50 P.M. EST

MS. WEISS: Good afternoon, ladies and gentlemen. Gene Sperling will give a readout of today's Social Security meeting since it was closed to all of you.

Mr. Sperling.

MR. SPERLING: Let me just give a sense of what today was like and then I'll be available for any questions. As you know, yesterday we had three panels that you saw were very well balanced in terms of differing views with participation from the audience who, themselves, were largely made up of heads of organizations and experts. And then yesterday afternoon from 3:30 p.m. to 5:00 p.m., we had a breakout session in which members of the administration and Congress were divided up into six groups and had informal conversations which went quite well and were notable for the degree of varying interest in the rooms that were able to talk about in a way people thought was productive and civil.

This morning, we did something that was quite novel, which was that a month before the legislative season even began, we asked each of the leaders, Speaker Designate Livingston, Majority Leader Lott, Leader Daschle and Gephardt, to choose 12 people, and we would choose 12 people, and we had 60, then, participants who were divided into two groups of 30. Each of those groups of 30 then went through two sessions. One was led by Bob Reischauer, as you know is formal Congressional Budget Office Director, and Martin Feldstein at Harvard University did the presentation on the different mechanisms for pre-funding or investing in higher returns, either through more collective or individual approaches and then a second panel or second workshop was coordinated by Ken Kies, the former staff director of the Joint Tax Committee, and Bob Greenstein, who is head of the Center for Budget and Policy priorities, who went through the more traditional Social Security reforms options -- issues such as retirement age, cost-of-living increase. All of the presenters were chosen for balance and were asked to work with each other over the last couple of weeks.

After that, all 60 of the people met at the Blair House with the President, and had a meeting that went for, I would say, over an hour. Let me try to give you a little flavor of each of those meetings without -- and I know this may make things hard -- but to honor the ground rules, without attributing specific remarks to specific members of Congress. I will try to give you a sense of what the President himself said.

In the first issue, there was significant discussion about the different types of plans, I think because our two presenters each have options out in the public view. Marty Feldstein has a plan, as do Bob Reischauer with Henry Aaron in their new book. So, clearly, as that discussion went on, some of the discussion focused on the pros and cons of their different plans.

Other issues that came up involved issues concerning the surplus -- how much of the surplus would be available, how much should be used, could be used. In the other discussions there were also questions about the long-term projections, issues related to administrative cost on individual accounts -- whether or not individual accounts could be bequeathed in the case of somebody passing away.

On the Reischauer discussion, there was much discussion on the corporate governance issues -- was it possible to make collective investment by Social Security independent, and protect it from the political process? Those were among the things that were discussed in the earlier sessions, and I'm happy to go back and go over that.

The President then met with everyone at the Blair House. It was a very candid conversation and there was, I thought, a remarkable amount of goodwill and bipartisanship. People felt that the effort this morning of bringing everybody together had been, as one key member called it, "a sign of real momentum."

There was an agreement to have some bipartisan effort to put together paper that could be -- and briefing materials and pros and cons of the different plans so that each member could get some similar material and that people could be getting brought up to speed on materials that they could discuss with each other, so the President, himself, suggested this and we will be getting together, the staff, the administration, and House and Senate to come up with the paper.

Secondly, there was an agreement to do more of the type of meetings that we had today, which would be to bring a significant number of people together with balanced experts, presenting for it, and will be discussing the timing of going forward on those meetings. There was also significant discussion on what form of process could ultimately be best to lead to a decision.

I thought that the discussion was very productive. People had differing views, but I think if you were there, you would have felt that the differing views being expressed were truly tactical and there was not a sense of game-playing. As you know, some people have proposed the President put out a plan soon, a specific plan. Others encouraged the President to try to come up with a smaller process eventually that would allow for a bipartisan plan to come forward. Still others suggested a series of consultations that would allow the President to work with some of the key committee people, so, as one person said, it would be something the President was pushing, but it would have enough fingerprints from both Democrats and Republicans that nobody could walk away from it.

I cannot tell you that anything was resolved in terms of what the exact process was, but I thought that many positive ideas were discussed. There were different views on how quickly and whether the President should put forward a plan. There also was agreement that we both had to broaden out and bring more people into the process, but that at some point in the process smaller groups had to emerge who were capable of sitting and working down through the details.

I will say again, the prospect or the occasion in December, a month before the beginning of legislative process on a key issue like Social Security, to have this many members of Congress, Democrat and Republicans, come here, many of them travel from out of town just for this meeting, for really a packed house of complete, full participation with the President in this kind of four or five hour session I think was very significant. And I think to the degree that people felt that there was starting to be some polarization among some of the outside groups and interests, I think everybody felt that this was a positive bit of momentum for the notion of getting this done, working in a bipartisan and civil way, and trying to be able to have discussion and disagreements without some of the harshness and politics that have too often characterized the Social Security debate in the past.

Q Are you able to say now, having gone through the day, whether the main obstacle -- or maybe you can proportion them -- will be actually figuring out the nuts and bolts of a plan, or getting through the political obstacles that you just talked about?

MR. SPERLING: I think the clear answer is both. I think that -- I think both are going to be a challenge. A lot of the people tried to -- in the session with the President, several of the senators tried to express that while some of the differences seemed large, that in fact there was more agreement than people might see. There was very large agreement on the importance of dealing with the issue quickly. There was substantial agreement to the notion that there should be some effort to bring higher returns into the Social Security system.

In, for example, the meetings with Reischauer and Feldstein, they were both emphatic on the notion that Social Security needed to have higher returns. And as some people pointed out, what you really have is a very strong, significant disagreement that exists on how to pre-fund for higher returns, whether it should be done more collectively or individualized; and that people of good faith should be able to get together and to argue through those things. And even one of the people who is the absolute strongest proponent of individual accounts, a Senate Republican, who argued that he felt that at the end of the day that would prevail, was very forthcoming in suggesting that people like himself should be willing to sit down and listen and look at the Reischauer-Aaron plan and others and talk through the different issues.

So I think that a lot of work still needs to be done by people in looking for the type of approaches that could bring people together. I think this is the normal part of a process. People are putting out specific plans, they're putting out their ideal plan and they're laying markers and they're laying out ideas.

Now the legislative process starts, and that requires not just the President, but members of both parties to start the effort of looking for what might bring enough people together so that you could get bipartisan majorities in both Houses.

Q Are you looking toward getting something done by the State of the Union message in terms of a plan out there? And what effect would an impeachment vote have, a vote for impeachment have on this bipartisanship that you have seen today?

MR. SPERLING: On your first point, in terms of what we want to do by State of the Union, the President, in virtually every meeting that he's had with congressional leaders has tried to encourage as much meetings and conversation and consultation as possible before the State of the Union.

To be perfectly honest, there is a little bit of being on different clocks here. The normal process for members of Congress -- and I don't say this in the slight bit to be critical -- but the normal congressional process is not to be in town that much between now and the State of the Union, and, yet, for us, we would like to have as much engagement as possible by the State of the Union; that clearly gives the President more information so he has a greater sense of how he can use the State of the Union to bring people together.

So I think, obviously, that will be a very big question for us is how much engagement we can have before then, and obviously, how the President uses the State of the Union process. I felt like, when we left there, that we would be trying to get back together with this group for a similar meeting prior to the State of the Union. And there was discussion of each of the -- the people there, going back to their respective leaders and talking about, at the appropriate time, how both to broaden the process -- bringing more people in -- but how, also, at least some point down the road, to allow for smaller groups to start working together on hammering out specifics.

Q On the first question, about a vote for impeachment -- would that destroy the bipartisanship that you now have?

MR. SPERLING: You know, that is a question that I think other people, members of Congress, would have to answer. All I can say is that, for us, we go on with the business of government. We go on with the business of public policy. We go on with the business of dealing with issues like Social Security and education, that we know the American people care about and elected us to deal with.

And as long as we continue to have these critical priorities the country cares about, we're going to keep working. We are going to keep reaching our hand out to Democrats and Republicans, to deal with issues like Social Security. And all I can say is, from our point of view, there is nothing that is going to get in the way of us working in a bipartisan way to try to deal with the Social Security issue.

Q Gene, a number of the Republicans that came, including Mr. Archer, put great stress on this, that the President said he would be willing to put forward a specific plan if that were decided that would be the thing to do. They seemed to draw the impression that he had moved somewhat toward that. Did he move somewhat toward committing to do that or not?

MR. SPERLING: What he said was that he would do -- what the President said and, I think, where there is a lot of agreement between us and Chairman Archer, is that the President is not challenging others to come first or asking, for example, the Republicans to come first with a plan. He understands the political difficulties involved.

He said very explicitly he's in a second term, he's the President, he understands that he needs to provide the political cover to anybody who is willing to come together and be part of a bipartisan plan. And he said he would do whatever would be most effective in leading to a productive process that would lead to bipartisan legislation.

He said that if he believed -- and there was real consensus that him putting forward a plan at some point was the best way to go forward, he was willing to do that. I think the discussion showed today that there was some disagreement about that. I would say probably at least half, if not more, of the people who spoke today encouraged the President to try to work in a bit more of a bipartisan way in coming forward with ideas.

They were concerned that the President, by putting out a specific plan, might actually encourage people to just -- to polarize instead of come together. I spoke -- I had a good chance to speak one on one with Chairman Archer yesterday. I spoke to him. I think he is completely sincere. I think he wants Social Security reform done. I believe he wants to work in a bipartisan way. I think that what we may have is some tactical disagreement as to what's the best way to go forward.

I think what he really wants is he wants a plan that he can work in his committee and so that we're really moving forward and that this doesn't just go on at a discussion forum endlessly. Many other people who spoke thought that it might be more productive to try to have a different way of putting a plan forward.

But, again, I really believe these are tactical differences. I believe Chairman Archer is dealing in good faith with us and would like to get Social Security reform done this year.

Q Gene, you said that there was substantial agreement on the need for higher returns. Would it be fair, then, to say that that reflected the view of the administration officials who were there that most of them are in substantial agreement with that --

MR. SPERLING: Yes. Yes, and I think there's no question -- what the President said was that he felt that there was growing agreement that in some way or another, one wanted to bring higher returns for the Social Security system. What he did say was he thought that as this discussion carried forward that policy makers like himself had to be very straightforward with the American people about what the risks are with seeking higher returns, but that he felt and that many of the people there felt that overall, particularly when compared with the alternatives, that seeking some strategy to bring in higher returns through investment would be a good way to go.

Let me repeat: The President did say today, and has said in the meetings with his economic and Social Security team, that he believes we should be looking for ways to get higher returns into Social Security. What the mechanism is for doing that, obviously, remains a controversial issue, but I do believe there is a growing consensus, which the President is part of, that we do need the type of investment options that would bring higher returns to Social Security.

Q Are you talking about within the existing tax structure? Are you talking about, as Gephardt said outside, an additional tax-advantage optional plan, to invest in the private sector?

MR. SPERLING: I actually wasn't speaking one way or the other on the issue you're talking about, which is whether there should be some form of individualized account. In the discussion today with Bob Reischauer and Martin Feldstein, they were both arguing for higher returns. Martin Feldstein was suggesting that individuals should make that investment and his argument was largely because he felt that gave people greater sense of individual control, avoided politicalization of investment. Bob Reischauer argued that, when the collective, the government, through a Social Security Reserve Board, does it, there's lower administrative costs, which saves money for people, and that it makes it easier to smooth out good and bad years.

That is very much the heart of a lot of the debate going forward. But again, there's a lot of agreement within that debate. The agreement is prefunding for higher returns and new investment options. And I think there's also a growing -- I thought throughout the conference there was -- I don't want to say unanimous view, but I thought there was a growing consensus that, in some way or another, the surplus that we've reserved should be part of the solution and that, with the surplus and the possibilities for higher returns, we increase the chances of having a Social Security reform package that keeps a strong standard of living for America's senior citizens and could be politically palatable enough to pass.

Q You said the surplus would be part of the solution. The President said a while back, arguing against tax cuts this year -- once Social Security gets done, then, he seemed to suggest, he might favor tax cuts. Are you saying that, in fact, maybe the idea is to take this surplus and future surpluses and cure Social Security that way, in which case there wouldn't be any surplus ever for a tax cut?

MR. SPERLING: I think what the President believes is that some portion of the surplus will be necessary for a bipartisan Social Security plan. How much of that is yet to be determined. The President's view was, until we know, we should reserve 100 percent of it for Social Security. If we are able to come up with a solution to Social Security that does not use all of the surplus, then our view has been that there should be a serious national discussion about what best should be done with that surplus.

We have not suggested it should just go to one thing. I think the President has certainly said -- and he said in this meeting -- that, certainly, Medicare was a critical issue of which one had to consider for use by the surplus. Certainly other issues that are arguments that people have made have certainly been for tax cuts. Also, some people have talked about the remaining surplus being used for military readiness, and others for priorities like education.

So, all I'm saying is, our position is all of the surplus should be reserved until we know how much is needed to fix Social Security. Not just hypothetically to fix Social Security, but how much will actually be needed for a bipartisan, acceptable plan that will pass. If there's remaining surplus, surplus is left, I think that there will be a debate about whether it should go to just debt reduction, Medicare, military readiness, education, or tax cuts.

Q What you call "surplus" is simply masked now by the trust account of Social Security --

MR. SPERLING: No -- the point you're making is, over the next several years, the overwhelming majority of the unified surplus comes from excess Social Security payroll taxes. So one of the strongest arguments for why the unified surplus should be reserved for Social Security, at least until we have fixed it, is that so much of the surplus actually comes from Social Security.

As you spread out your long-term projection, more and more of the surplus comes from non-Social Security issues, but certainly, some may argue that all of the surplus that comes from Social Security should be reserved just for Social Security.

Q Did you hear that argument today?

MR. SPERLING: I did not hear that argument so much today, but I have certainly heard it when I have done forums around the country, and I think there are certainly people who would make that argument. I'm sure that will be a serious argument.

Q How would you characterize the discussion of raising the age eligibility and also lifting the cap, the $68,000 cap on collecting taxes?

MR. SPERLING: Both of those -- let's see. Bob Greenstein presented the retirement age issues, and Ken Kies presented the issues of raising the wage base -- let me make clear, that does not suggest either of them was for that, that was their assignment. I would guess that Ken Kies is not wildly excited about that idea, although I really don't know his full view. They were presenting -- there were very strong presentations in the group that I was in. There was not as much back and forth on that. I think people commented on the fact that the statistics shown today showed that a very large number of Americans are now retiring at 62 or before 65. Only 30 years ago, only about 10 percent of Americans retired at 62; now it is close to 60 percent -- or at least retired enough to take their early Social Security retirement.

Some of the people there were engaged in the 1983 reform. In my group, Bill Archer was there, Jack Lew; both were involved in '83. We talked about it some. But I did not get a sense of how many people in the room supported or opposed either of those options. The issues presented on the raising of the wage base are that it now covers about 86, 87 percent. That's going to continue to go down.

One of the options that's been on the table is to either stabilize that or to increase it to 90 percent. That obviously would make more revenues available for Social Security, but it comes at the cost of raising the taxes paid by more upper income wage-earners.

Q Can you just clear something up? When you say some strategy for seeking higher returns, just to be clear, are you saying the President endorses using some portion of Social Security taxes to invest in markets, whether the government invests it or whether individuals invest it? That's clearly what you're saying.

MR. SPERLING: With the caveat that he has not made any final decisions, I think that the answer is yes, that in some form or another, that is at least where he appears to be strongly leaning at this time.

Q Question?

MR. SPERLING: The question was, in some form or another was the President supporting some form of investment in markets for Social Security. And I said with the caveat that he has not made any final decisions, he certainly seems to be leaning in that direction.

Q Is he leaning away whether it's to government investing a portion of the money or individual accounts? Does he have any preference with regard to those?

MR. SPERLING: Those are good questions and I think that's going to be one of the issues that is maybe the single most contentious issue in whether or not we get Social Security reform. And at this point, I think the President feels that it would be best for him to stay open-minded and to try to work with both sides and see if we can start to find some common ground.

Q Specifically, how did the President indicate today that he was interested in the question of higher returns? If he's leaning, how did he tell them that?

MR. SPERLING: Well, what happened was one of the members spoke and I believe yesterday, in fact, Rick Santorum, I believe, in his opening remarks talked about that ultimately you have to raise revenues, raise taxes or raise returns. Those are the three options. And you could kind of argue there's a fork in there which is use of the surplus which doesn't require a change of law to raise additional, but it would be allocating surpluses there.

But when the President spoke, he said that he realized that there may need to be some tough choices that need to be made, but that of the three main options presented, certainly most people understood they were trying to find a responsible way to raise returns, would be the most attractive to most of the American public and to most members of Congress.

He also said, though, that he felt people would have to be straightforward in discussing the risks, which is that there are years where the market -- there have been years where the market has not performed as well. People would have to understand in any plan that while, over any 30 or 40-year measure, even somebody who invested in the stock market in 1928 ends up being a winner, that returns over a 30-40 year period almost always out-performed any other investment option, that there have been period of several years where the market has not performed as well and there is volatility there, and that we would have to be straightforward when talking to people and saying that on the whole, our analysis shows this is the right thing to do, a good way to get higher returns, but to make sure that the public fully understood what the risks entailed in doing so were and why we had decided that they were risks worth taking.

Q Can I follow up? Is the President persuaded that following this path is the answer to the insolvency question or just one ingredient, maybe the politically appealing ingredient to solving the insolvency question?

MR. SPERLING: I think that if you look at Social Security reform options four years ago versus now, I think there's no question that the stronger fiscal situation we're in, the ability to have unified surpluses certainly makes the options less politically painful for members to vote for, and most importantly, allow for options that keep the standard of living for most senior Americans or people who will be senior Americans strong.

So I don't think we've expressed a view yet and will for a while as to how much of the solution can come from use of the surplus or higher returns versus other more traditional Social Security options.

Q Are you concerned that by saying this today, though, that you are in some way raising expectations about this being the magic solution?

MR. SPERLING: No, because I think that we've also made clear that there are other issues that need to be dealt with, such as Medicare, which is also a long-term entitlement problem that affects senior Americans. And I've mentioned other issues that clearly people in the policy arena in Washington and most importantly in the public care deeply about, from tax cuts to military readiness to education and training, to those who favor more debt reduction.

So, remember -- I think there are always two issues which is, how much of a surplus can you use and how much should you use in light of what you think it could be used for and the alternative. I think you will find that a lot of people's opinions on what should happen to the surplus are affected by what they think will happen in the alternative. Somebody today -- one of the experts today said that if they thought that all of the surpluses would be used for debt reduction, they might have different views on what they thought should be done for Social Security since they felt less confident that the money would be saved in a responsible way, they felt saving it for Social Security or a large amount was not only good for Social Security, but would also lead to higher national savings than the alternatives where the money would not be saved in one form or another.

Q Gene, when you talk about there was agreement that you would continue to pre-fund Social Security, does that mean that you've ruled out going back to a pay-as-you-go system?

MR. SPERLING: I don't -- I think under any circumstance you're not going to be -- I think what you're talking about, and let me make clear on this -- I think people are moving towards more of a partially pre-funded system. Social Security is and will be a largely pay-as-you-go system. Right now, I believe around 85 cents on the dollar go to pay existing benefits. So you're largely dealing in pay-as-you-go world.

But, look, the way Social Security works is -- a pay-as-you-go system works is, if you are one of the first people in a pay-as-you-go system, you're doing great, because in the end you're getting a benefit that's based on a 35 or 38-year work life and you may have only worked 10 or 15 years. Then the system matures and people have worked a full career and they're getting a full benefit. And that system can stay stable for a while in a pay-as-you-go, as long as there is the same number of workers supporting the same number of retirees, assuming they're having relatively the same amount of productivity.

A pay-as-you-go system is essentially a commitment by one generation to pay for its parents and grandparents' retirement on the promise that the next generation will pay for theirs. What we have now is a situation where the next generation will not have as many workers per beneficiary, per retired person -- for two reasons; because of the baby boom and because people are living longer and working a smaller portion of their life.

In that situation a pay-as-you-go system loses its stability and then the rational thing to do is to start trying to save more. So essentially what you're talking about is having partial pre-funding to make up for -- to deal with the fact that 20, 30, 40 years out there is only going to be two workers for every beneficiary.

Q Well, what does that then do in terms of your need for more money to do that? Because, after all, in 2012 or 2013, you're going to start dipping into this trust fund and then it will be -- you'll be paying out more benefits than you will be collecting in taxes. So what does that do for --

MR. SPERLING: You still have a Social Security trust fund right now in which even though in 2013, the amount of payroll tax comes in is not enough anymore to meet the benefits going out, you have accumulated interest savings in the Social Security trust fund, they keep you going until you're around 2021, and then you start redeeming bonds until 2032. That's when the trust fund runs out.

Now, because of the stronger fiscal situation we're in, right now our projections show that, for at least a few decades, the government can both pay back the Social Security trust fund what it owes and still have a surplus on top of that. So we're in a very different fiscal situation than we were fix or six years ago. Now, when someone says, how can you make the Social Security Trust Fund real up to 2032, projections show you can not only pay back on the IOUs in the Social Security trust fund, but you have a surplus on top of that. So we're in a very different situation.

At some point, however, I think both CBO's and OMB's long-term forecasts show a surplus running out. So it can't be the answer forever, but it can be part of the solution now.

Q In the discussion over who does the investing, the government or individuals, was there any discussion about the distributional aspects of one plan or the other? What was the tenor of that discussion, and was there any movement on that issue?

MR. SPERLING: There was a little discussion with the President. I have to say, I was in one of the panels -- I was in one of the groups, not the other. In the discussion with the President, there was certainly one Senator who spoke about the importance of having a beneficiary impact statement, that any plan would need to look at what the impact was on women, on lower-income Americans, and -- but I think your question is a good one. I do think that the debate right now may be getting so much into the mechanism of how to do the investment that people are maybe short-cutting the debate on what impact it has on the actual people. And I think it would be a very good thing if there was more analysis where people looked at particular plans and said, How do those plans affect different people in different situations?

We did talk -- in Bob Greenstein's presentation, he did talk about the problem with single, elderly women, particularly widowed elderly women -- why the system may not be working as well for them in reducing poverty, and the fact that there were policy solutions that could be part of Social Security reform that could deal with that issue.

Q Gene, Gene -- do you want to follow?

Q Yes, I do --

MR. SPERLING: This politeness, I don't know if I can handle it.

Q It's not the usual crowd. (Laughter.) What does that mean --

MR. SPERLING: Never sit in the front row. (Laughter.)

Q What does that mean for which way you'll go? I mean, I assume that means if you're going to be even distribution or better-than-even distribution -- better than the same distribution, you will have to go toward a government-sponsored investment plan as opposed to individual investments. Is that right?

MR. SPERLING: I don't think that's a simple question where there's a simple answer. I think that, on most issues, on most things, it depends a lot on how you devise it -- whether there's guarantees for programs -- what the distribution is like.

For example, I'll give you -- for those who favor individual accounts, and again, I'm not expressing our view -- for those who favor, there are certainly some that are more progressive than others. One that gives everybody a flat amount -- so whether you make $20,000 or $80,000, you still get several hundred dollars, the same amount -- is obviously going to be more progressive for a lower-income person than one that just takes a percentage of income.

So I think within any system there are probably ways that you can design it so that it can be more progressive or less progressive, and I think that is one of the issues that you'll see when people start putting out more specific plans. But again, while there seems to be a rather -- a time-simple debate between whether you do pre-fund collectively or individualized -- within those options are a lot of design choices and a lot of different ways you can splice it, that can have a large effect on the distributional impact.

Q Gene, why weren't Livingston and Lott there, and does it matter for the White House that they weren't?

MR. SPERLING: We were very happy with the participation today. Obviously, it would have been nice to have had both of them, but the fact was, each of them was asked to designate 12 people; they each did; they each participated by sending outstanding people there. And clearly, some of the people that they've designated to be some of their point people speak -- Livingston is Speaker-designate now. He may feel some discomfort about appearing in the role of the Speaker before he's actually Speaker. And again, he's going through a transition.

So I do not assume anything bad about that at all. The important thing was -- I don't know the exact title you're supposed to use these days -- but Speaker-designate Livingston cooperated with us, chose excellent people to participate. And so we were very happy. It would have been nice to have him, but we were very happy with his participation.

Majority Leader Lott sent Senator Santorum and Judd Gregg, who are the two people he's used in the past as his point people on Social Security. In addition, we had Pete Domenici and Phil Gramm, who are putting out their own plan now. So you really had a significant number of the Social Security heavyweights from both parties, with the full cooperation of the Republican and Democratic leaders. So I look very favorably on the participation and the willingness to cooperate of all of the leaders.

Q Should we look for the President maybe to go somewhere in between actually going to a full-blown plan and the five points he's talked about today. Is that maybe an interim ground that we might expect, such as touching on some of the areas that you kind of talked about today?

MR. SPERLING: I really am not in a position to say. I can tell you the type of discussion that we have internally a lot and will continue to have. And what was helpful today was that so much of our discussion has often been internal, just because of the season. Now, to have 50 of the key members of Congress around giving their input, does give us a lot better sense of what type of thing would move forward.

The more we can have these types of discussions and meetings, the better position the President is in to know what types of steps would be unifying as opposed to polarizing.

Q Gene, speaking of polarizing, there are a number of interest -- interest groups seem to be digging in their heels. Two major ones came up last week. Do you think now that some of the key players are starting to come together, the interest groups will come along? Or might they be disruptive to the process and might still push for full privatization or no change at all?

MR. SPERLING: I think that it's understandable that people with strongly-held views want to put out strong positions, and many times they want to do that not because that's where they think the end product has to be, but they want to express their views strongly and they want to move the center a little more towards their way. Our hope would be that while people are strong in their views that they allow this debate to have some of the civil and bipartisan tone it did today.

I'll tell you, in the breakout groups yesterday people were really struck by some of the terrific discussion that went on between some of the members who were from -- some of the interest groups were strongly for just collective investment versus private accounts. People thought it was a very productive and civil debate. And there's nothing wrong with people having strong opinions, and not everybody has to believe, as we do, that we should try to find a way to come to a bipartisan Social Security reform, but the President has spent over a year saying that we should try to derail this third-rail mentality that exists for Social Security. And to the degree that everybody could participate in that form of discussion, I think it will dramatically increase the chances we can do some good for the country.

Thank you.

END 4:31 P.M. EST