Social Security is one of the great moral achievements of American government. For almost 70 years, it has kept millions of elderly citizens out of poverty and assured young Americans of a more secure future. The Social Security system is essential, yet it faces a deepening long-term problem.
While benefits for today's seniors are secure, the system is headed toward bankruptcy down the road. If we do not act soon, Social Security will not be there for our children and grandchildren.
So this week I met with the bipartisan leadership of Congress and asked them to join me in a great cause: preserving the essential promise of Social Security for future generations. We must begin by recognizing an essential fact: The current Social Security system was created for the needs of a different era. Back in 1935, most women did not work outside the home, and the average life expectancy for American workers was less than 60 years. Today, more moms are working, and most Americans are blessed with longer lives and longer retirements. The world has changed, and our Social Security system must change with it.
Today, Social Security is not a personal savings plan. There is no account where your money goes to earn interest. Benefits paid to today's retirees come directly from the taxes paid by today's workers. And each year there are more retirees taking money out of the system, and not enough additional workers to support them.
In the 1950s, there were about 16 workers paying for every Social Security beneficiary. Today, there are about three. And eventually, there will only be two workers per beneficiary. These changes single a looming danger. In the year 2018, for the first time ever, Social Security will pay out more in benefits than the government collects in payroll taxes. And once that line into the red has been crossed, the shortfalls will grow larger with each passing year. By the time today's workers in their mid 20s begin to retire, the system will be bankrupt, unless we act to save it.
A crisis in Social Security can be averted, if we in government take our responsibilities seriously, and work together today. I came to Washington to solve problems, not to pass them on to future Presidents and future generations. I campaigned on a promise to reform and preserve Social Security, and I intend to keep that promise.
I have set forth several broad principles to guide our reforms. First, nothing will change for those who are receiving Social Security and for those who are near retirement. Secondly, we must not increase payroll taxes, because higher taxes would slow economic growth. And we must tap into the power of compound interest, by giving younger workers the option to save some of their payroll taxes in a personal account, a nest egg they can call their own, which government cannot take away.
Saving Social Security for future generations will not be easy. If it were easy, it would have already been done. There will be costs, yet the costs of continued inaction are unacceptable. And the longer we wait, the more difficult it will be to fix the system. Saving Social Security will require bipartisan cooperation and the courage of leaders in both parties. The American people voted for reform in 2004, and now they expect us to work together and deliver on our promises. I look forward to working with members of Congress on this important issue. Together we will make certain that America meets its duty to our seniors and to our children and grandchildren.
Thank you for listening.