![[Briefing Room header]](.gifs/head_briefing.gif)
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
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