FROM THE OFFICE OF PUBLIC AFFAIRS
February 9, 2005
JS-2239
The Honorable John W. Snow
Prepared Remarks to the Florida Bankers Association
February 9, 2005
Washington, DC
Thank you so much for having me here today; I appreciate the tireless efforts and partnership of Alex Sanchez and all of the Florida Bankers. I hope you're having a terrific meeting and spending plenty of time on the Hill with your Congressional Representatives.
I'm spending a good amount of time up there, myself, this week. The President delivered his budget to the Congress on Monday, and I'm proud to represent him and talk about his budget in committee hearings in both the House and the Senate.
Senators and Congressmen have wanted to talk to me as much about Social Security as about the budget. I encouraged both House and Senate Members to follow the President's political courage and leadership when it comes to saving Social Security for future generations. Our children's retirement security is more important that partisan politics, and confronting this problem before it becomes a crisis is a true test of leadership. President Bush came to
I reminded Members of Congress that Social security will not be changed for those 55 or older (born before 1950). Today, more than 45 million Americans receive social security benefits and millions more are nearing retirement. For the more than 45 million Americans who are currently receiving Social Security benefits, and those nearing retirement, benefits are secure and will not change in any way, period.
I believe we'll make real progress on Social Security once everyone agrees that the demographic future of the system makes it unsustainable. Simply put, there are fewer workers to support our retirees. People are living longer and having fewer children. As a result we have seen a dramatic change in the number of workers supporting each retiree's benefits. We had 16 workers paying into a system for every one beneficiary in 1950, and today we have just three workers for every beneficiary. That ratio will drop to two-to-one by the time today's young workers retire.
When today's young workers begin to retire in 2042, the system will be exhausted and bankrupt. Today's 30-year-old can expect a 27 percent benefit cut from the current system when he or she reaches retirement age. And, without action, these benefit cuts will only get worse. We must make social security better for younger workers.
Social Security reform will be hard work, but something this important must not be put off for another day.
Budgets are hard work, too, and they should be. After all, decisions about how to spend taxpayer dollars should not be taken lightly. I think the President summed up his budget approach very well when he said that taxpayer dollars ought to be spent wisely, or not at all.
Part of the context of the Fiscal Year 2006 budget is the path of today's economy. I was pleased to report to lawmakers yesterday and this morning that our economy is very strong, very healthy.
Well-timed tax cuts, combined with sound monetary policy set by the Federal Reserve Board, have resulted in very good economic growth and, most importantly, continual job creation. The economy has created over 2.7 million jobs since May of 2003. And while job growth can never be fast enough for those looking for work, the steady pace of job creation has been an unmistakable sign of an economy that has recovered from very tough times, and is now expanding.
The evidence abounds: GDP growth for 2004 was 4.4 percent. The unemployment rate is down to 5.2 percent – lower than the average rate of the 1970s, 1980s and 1990s. Real after-tax income per person is up by over eleven percent since the end of 2000 and household wealth is at an all-time high. Inflation, interest rates, and mortgage rates remain at low levels. Homeownership rates are at record highs.
The people here in this room should be very proud of those numbers. Because you are very much a part of our country's economic recovery and strength. Whether it's home mortgages or small-business start-up loans, you are providing the capital that enables terrific, job-creating economic growth.
You've done it with an eye toward economic progress, but also with heart. I especially want to commend you, in fact, for helping your communities and your entire state through one of the most devastating hurricane seasons on record.
I spoke to a group of your leadership back in October and said this at the time, but I don't want to miss the opportunity to deliver a specific message to the larger group: Thanks to all of you who made funds available early for last September's Social Security direct-deposit payments. Hurricane
In today's world you, as bankers, are taking care of your customers in a new way. In addition to providing essential financial services, you also work with law enforcement and intelligence services every day in the war against terrorism.
While hatred fuels the terrorist agenda, money makes it possible. That's why the work you do, and the information you share with authorities, is a critical element in winning the war on terror. With every battle that we win, every terrorist or organization that we designate, we tighten the noose on terrorist financial networks.
I deeply appreciate the work you do in this area. I know that many of you here today are concerned about developments related to the Bank Secrecy Act, and I'd like to talk about that because it's important we work together on this.
Compliance with the Bank Secrecy Act is vital; we take it seriously, and information reported by your institutions under this Act is critical to the national security of our country and to our efforts to protect our financial system from the abuses of money laundering and other financial crime.
We hear your concerns about the need for consistent enforcement. I want you to know that I have asked Under Secretary Stuart Levey, Assistant Secretary Zarate and Director Fox of the Financial Crimes Enforcement Network to fully engage the bank supervisory agencies and the Department of Justice to ensure that the examination and enforcement processes under the Bank Secrecy Act are fair, consistent, and achieving the ultimate policy goals of the statute.
We have also heard and read your concerns about the ambiguities surrounding money service businesses. I am asking Director Fox to convene a meeting here in
Again, I want to thank you for the efforts you and your institutions have made in complying with the Bank Secrecy Act. We are aware of the efforts you are making and the monies you are spending to ensure compliance. The financial sector – particularly depository institutions – has led the private sector in assisting in the war against terrorism, and it is clear that you appreciate the fact that you are on the front lines. On behalf of the President, I want to thank you for your efforts, and I want you to know that we appreciate your good corporate citizenship here in
Before I take your questions, I want to take a moment to encourage you, if you aren't already, to offer a new product to your customers. It's something that I think has huge market potential, and is of particular interest to your small-business customers.
I'm talking about Health Savings Accounts, HSAs. Last year's Medicare prescription drug bill created HSAs, an innovative new program to empower consumers to make better health care choices. HSAs are really super-charged IRAs that put patients back in charge of their health care. You own it, you control it, you can leave it to your heirs.
It's a new option for health coverage that is good news for individuals and employers who are struggling with their health-care costs.
One of the most common complaints we hear from consumers is that they can't find a local bank that offers these accounts. So I am confident that the market is there for you, that consumers are anxious for you to add this to your product line. It is also possible that demand for HSAs might take off very soon in
And there is good news for banks when it comes to offering this new product: first, any bank is automatically allowed to offer HSAs to your customers as either a trust or a custodial account. Second, the reporting on these accounts is minimal. You only need to report on them once a year – to the customer and the IRS – one form to report contributions to the account and another form to report the amount that has been taken out of the account.
Best of all: you won't need any new forms. Treasury has model forms that you can use, or you can adapt the forms you use for IRAs for HSAs.
HSAs are a critical step toward increasing the availability and affordability of health insurance for all Americans. They are also helping to put individuals in charge of their own health care… and that's something that is good news both for the American family and for the American economy as a whole.
As you know, the President supports this type individual control and ownership in many areas. He wants to see as many Americans as possible own their own homes, their own businesses if they want, their own health care and their own retirement savings.
I'm proud to be working for the President on these goals, and I'm looking forward to working with all of you as we protect
Thank you again; have a great meeting.