Transcript of Bush/Gore Debate Exchange on Social Security

October 4, 2000

Following is the text of the primary exchange on Social Security reform in last night’s presidential debate between Vice President Gore and Texas Gov. George W. Bush.

MR. JIM LEHRER (Moderator): New question on Social Security. Both of you have Social Security reform plans and we could spend the rest of the evening and two or three other evenings talking about them in detail. We're not going to do that. But, many experts, including Federal Reserve Chairman Greenspan, Vice President Gore, say that it will be impossible for either of you, essentially, to keep the system viable on its own during the coming baby boomer retirement onslaught without either reducing benefits or increasing taxes. Do you disagree?

MR. GORE I do disagree, because if we can keep our prosperity going, if we can continue balancing the budget and paying down the debt, then the strong economy keeps generating surpluses. And here's what I would do, here's my plan. I will keep Social Security in a lockbox, and that pays down the national debt and the interest savings I would put right back into Social Security. That extends the life of Social Security for 55 years.

Now, I think that it's very important to understand that cutting benefits under Social Security means that people like Winifred Skinner from Des Moines, Iowa, who's here, would really have a much harder time. Because there are millions of seniors who are living almost hand to mouth. And you talk about cutting benefits, I don't go along with it. I am opposed to it. I'm also opposed to a plan that diverts one out of every six dollars away from the Social Security trust fund.

You know, Social Security is a trust fund that pays the checks this year with the money that's paid into Social Security this year. The governor wants to divert one out of every six dollars off into the stock market, which means that he would drain a trillion dollars out of the Social Security trust fund over the, in this generation, over the next 10 years, and Social Security under that approach would go bankrupt within this generation. His leading adviser on this plan actually said that would be O.K. because then the Social Security trust fund could start borrowing. It would borrow up to $3 trillion. Now, Social Security has never done that, and I don't think it should do that. I think it should stay in a lockbox, and I'll tell you this, I will veto anything that takes money out of Social Security for privatization or anything else, other than Social Security.

MR. BUSH Well, I thought it was interesting that on the two minutes, he spent about a million and a half on my plan, which means he doesn't want you to know that what he's doing is loading up I.O.U.'s for future generations. He puts no real assets in the Social Security system. The revenues exceed the expenses in Social Security till the year 2015, which means all retirees are going to get the promises made.

So for those of you who he wants to scare into the voting booth to vote for him, hear me loud and clear. A promise made will be a promise kept. And you bet we want to allow younger workers to take some of their own money. See, that's a difference of opinion. The vice president thinks it's the government's money. The payroll taxes are your money. You ought to put it in prudent, safe investments so that one trillion, over the next 10 years, grows to be three trillion. The money stays within the Social Security system. It's a part of the Social Security system. He keeps claiming it's going to be out of Social Security. It's your money. It's a part of your retirement benefits. It's a fundamental difference between what we believe. I want you to have your own asset that you can call your own. I want you to have an asset that you can pass on from one generation to the next. I want to get a better rate of return for your own money than the paltry 2 percent that the current Social Security trust gets today.

So, Mr. Greenspan missed the -- I thought missed an opportunity to say there's a third way and that is to get a better rate of return on the Social Security moneys coming into the trust. There's $2.3 trillion of surplus that we can use to make sure younger workers have a Social Security plan in the future. If we're smart, if we trust workers and if we understand the -- the power of the compounding rate of interest.

MR. GORE Here's the difference. I give a new incentive for younger workers to save their own money and invest their own money but not at the expense of Social Security, on top of Social Security. My plan is Social Security plus; the governor's plan is Social Security minus. Your future benefits would be cut by the amount that's diverted into the stock market. And if you make bad investments, that's too bad. But even before then the problem hits because the money contributed to Social Security this year is an entitlement, that's how it works. And the money is used to pay the benefits for seniors this year.

If you cut the amount going in, one our of every six dollars, then you have to cut the value of each check by one out of every six dollars unless you come up with the money from somewhere else. I would like to know from the governor, I know we're not supposed to answer -- ask each other questions, but I'd be interested in knowing, does that trillion dollars come from the trust fund or does it come from the rest of the budget?

MR. BUSH No. There's enough money to pay seniors today and the current affairs of Social Security. The trillion comes from the surplus. Surplus is more -- is money, more money than needed.

Let me tell you what your plan is, it's not Social Security plus, it's Social Security plus huge debt is what it is. You leave future generations with tremendous I.O.U.'s. It's time to have a leader that not -- doesn't put off, you know, tomorrow what we should do today. It's time to have somebody to step up and say, look, let's let younger workers take some of their own money and under certain guidelines invest it in the private markets. The -- the -- the -- the safest of federal investments yields 4 percent. That's twice the amount of rate of return that the current Social Security trust. There's a fundamental difference of opinion here, folks. Younger worker after younger worker hears my call that says I trust you. And you know what, the issue is changing, because seniors now understand that the promise made will be a promise kept. But younger workers now understand we better have a government that trusts them. And that's exactly what I'm going to do.

MR. GORE When F.D.R. established Social Security, they didn't call him I.O.U.'s, they called them the full faith and credit of the United States. If you don't have trust in that, I do. And if you take it out of the surplus and the trust fund, that means the trust fund goes bankrupt in this generation, within 20 years.

MR. BUSH This is a government that thinks a 2 percent rate of return on your money is satisfactory. It's not. This is a government that says younger workers can't possibly have their own asset. We need to think differently about the issue. We need to make sure our seniors get the promise made. But I want to tell you, if we don't trust younger workers to manage some of their own money, with the Social Security surplus, to grow from one trillion to three trillion, it's going to be impossible to bridge the gap without what Mr. Gore's plan will do, causing huge payroll taxes or major benefit reductions.

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