Treasury Sec'y Snow on the Bush Agenda

This is a partial transcript from "Your World with Neil Cavuto," February 17, 2005, that was edited for clarity.

NEIL CAVUTO, HOST: Are the stars aligning for the president on fixing Social Security? Let us ask the man spearheading the effort, the same man who helped get the president's tax cut through. I'm talking about the treasury secretary of these fine United States, John Snow.

Welcome, Secretary. Good to have you.

JOHN SNOW, TREASURY SECRETARY: Thanks, Neil. Good to be back with you.

CAVUTO: I remember when you and I were talking about pushing the president's tax cuts. There were skeptics. I can remember when you were talking about two million jobs created last year. There were skeptics. Both were done. Now skeptics about this. What do you say?

SNOW: Well, I think Social Security will get done. It needs to get done. I was pleased by what chairman Greenspan said yesterday, that it needs to be fixed and that personal accounts play a part in fixing it.

CAVUTO: Yes, but he was doing typical Greenspan-ese. He was kind of giving both sides what they wanted to hear, right?

SNOW: For the Federal Reserve chairman, I thought it was an endorsement.

CAVUTO: Really? The fact that he's open to these accounts and all that?

SNOW: Neil, he and I have talked about this, of course, privately as well. That personal accounts done right, done right are something he approves of.

CAVUTO: Let me ask you. You've got to get wayward Democrats and even some moderate Republicans on board. And the way to do it is apparently to say you're open to raising the income threshold. It's kept at $90,000. Now it's pegged to inflation, maybe substantially raises. The president seemed to open the door, Secretary.

SNOW: I think what the president is saying is that everything is on the table except raising the payroll tax itself.

CAVUTO: But in effect if you raise the threshold, you have raised taxes, right?

SNOW: Well, the president didn't embrace that as the solution. He said he didn't rule it out.

CAVUTO: Right.

SNOW: He's put a lot of things on the table, and we're genuinely interested in having a dialogue with the Democrats, to have them engage. So far they haven't engaged. I hope they will engage.

This is too important an issue to have the outcome of the future retirement of our children and grandchildren depend on partisan politics. It shouldn't happen.

CAVUTO: Could I ask you this, sir? The $1 trillion or $2 trillion or $3 trillion or whatever it is to move from the present system to this system, would we do most of that through borrowing, bond issuance? Would we hike the threshold? Would we look likely, ultimately, at a combination?

SNOW: Well, the personal accounts and the borrowing that goes with them is part of an overall solution. I think it's an integral part, because after all, what the personal accounts give young people is a chance for a better deal than they're going to get under Social Security, a chance to do better, to have a better retirement.

CAVUTO: I know. But how do you compensate for the money that you pay out to do it?

SNOW: Well, when you go into the personal accounts, you relinquish a claim on Social Security which is equal to the amount of money you're coming out.

CAVUTO: But it's a future claim.

SNOW: That's right.

CAVUTO: Here and now, it's a loss of money.

SNOW: Well, it has to be funded, and we need to fund these accounts. These accounts will be like a lock box. And it's this different than usual borrowing.

CAVUTO: You don't look anything like Al Gore and you said lock box.

SNOW: Well, I say "like" a lot.

CAVUTO: "Like" a lot.

But, here's the rub, Secretary. That people in this country think this administration, many are trying to take Social Security away.

SNOW: Let me respond to that. What we're trying to do is preserve it, save it, and sustain it. It's on a course that isn't good. And the promises of Social Security can't be kept for future generations unless we take action. And the sooner we take action, the better the prospects for the economy for the future and for the retirement security of future generations.

CAVUTO: Do you think some big shots shouldn't get Social Security, that they earn a ton of money, they shouldn't get it?

SNOW: Well, I think Social Security is a broad compact among all the people. Everybody contributes, and everybody should have a claim on it. No, I would keep the original social compact.

CAVUTO: Treasury Secretary Snow, always a pleasure, sir. Thank you very much.

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