Remarks to the Mortgage Bankers Association of America

Weekly Compilation of Presidential Documents, March 9, 1998

The strategy is clearly working. There is renewed confidence in the American economy. Its stability, its strength, its steady growth are the envy of the world. More than ever we are also investing in the future. A record two-thirds of Americans almost - as Marc said, almost two-thirds - now live in their own homes, and we must finish the job. I agree with you that the most important thing we can do in this session of Congress is to support Secretary Cuomo's plan to raise the FHA loan limit. We can pass it, and we must.

Now, last month I submitted to Congress the first balanced budget in a generation. If we are fortunate and if we can work together with our allies around the world to minimize the impact of the recent difficulties in Asia on our own economy, Mr. Raines says that we'll probably have a balanced budget this year. Instead of deficits, America can now look forward to about a trillion dollars in surpluses over the next 10 years.

Now, that is a tempting target in an election year in Washington. But, first of all, let me remind you they have not materialized yet. And we shouldn't count those chickens before they hatch. Secondly, we should remember what we did to the long-term strength of America when we quadrupled the debt of this country in the 12 years from 1981 through 1992. And we should not repeat that error again. Finally, we shouldn't use the surplus for any new tax cuts or new spending programs until we have confronted the challenge of saving Social Security first. I think that is very important.

All of you are generally familiar with the problem. It's projected that the Social Security Trust Fund will not cover payments starting in the year 2029. That's the year when all the baby boomers will finally be in the Social Security system, and at presently projected birth and immigration rates and labor force participation rates, it means that there will be only about two people working for every person drawing Social Security.

Now, those things could all change to some extent, but no matter what, it is clear that the generation of the baby boomers entering the Social Security system will be quite larger than the generation just following it. Indeed, the generation now in public schools, starting last year, is the first generation in American history larger than the baby boom generation. I do not know a single person my age or younger - because I'm the oldest of the baby boomers - I hate that, but it's true - [laughter] - I don't know a single person who doesn't think about the problems we could create for our children if we don't make the changes now in the Social Security system we need to. No one wants to burden our children and our ability - their ability to raise our grandchildren.

On the other hand, it is important to remember that it's just since 1985 that senior citizens have been less poor than the rest of us. That is an astonishing achievement for a country that 60 years ago had 70 percent of its seniors living below the poverty line, many of them in abject poverty. Now, if we make small changes today with discipline, we can deal with this issue. And I also want to point out something all of you know, which is that hardly anybody - even though Social Security helps people keep body and soul together - hardly anybody in America can retire and maintain his or her standard of living on Social Security alone. So we must also do more to help Americans save for their own retirement. We've done a lot of work with the 401(k) plans and other things; we need to do more.