FROM THE OFFICE OF PUBLIC AFFAIRS

Thank you Richard, and thank you for hosting this year's luncheon and meeting of the U.S. Savings Bonds Volunteer Committee. Before I make the formal presentations we have for you, I'd like to thank you, your 2001 committee and Banco Popular for helping make last year a tremendous year for the savings bond program.

Richard, as private sector CEOs you and I always looked at the bottom line to let the numbers tell the story. So, let's take a quick look at the numbers you and your committee posted. Bond sales in fiscal year 2001, totaled $6.6 billion -- up an impressive 30 percent from a year earlier. Your efforts to encourage Americans to take a look at the value of our newest savings bond, the inflation-indexed I Bond also made their mark. For the first time, I Bonds accounted for more than half of all bond sales.

I know that this success was the result of your personal commitment, not only as chair, but also as a member of the committee over several years to encourage Americans to plan for and save for their future. Your efforts to reach out to the Hispanic community with this important message are particularly gratifying. This dovetails with your efforts to reach out to the under-served and un-banked to bring them into the financial mainstream.

So, it is with great pleasure that I present you with Treasury's Gold Medal of Merit as a token of our appreciation. I'd also like to present this special Citation that commemorates our thanks for your service.

As I ask Vance Coffman to join me at the podium, I'd like to remind you that his and Lockheed-Martin's support over the years are hard to beat. Vance is no stranger to the committee having headed up the savings bond effort among his colleagues in the Aerospace industry. And in doing so he demonstrated his and his company's leadership by consistently earning the program's highest honors for participation. So as I present you with this certificate appointing you Chair of the 2002 U.S. Savings Bonds Volunteer Committee, I want to thank you in advance for the energy and leadership you and your team will bring to our effort this year.

What you, the Savings Bond Volunteers, do is a crucial part of educating Americans of every age and background on the importance of retirement savings. In the broader context of saving, I'd like to make a few comments on the security of the nation's retirement system. The pension system has evolved in recent years into one that increasingly emphasizes two of the country's quintessential values, personal responsibility and freedom of choice. This evolution provides workers much greater opportunity than ever before to build wealth and save for their own retirement but also imposes a greater degree of individual responsibility in doing so.

Defined contribution plans, commonly known as 401(k) plans, give individual workers their own account in which they can build wealth and save for retirement. Participants are allowed, within limits set in the tax code, to choose the level of their plan contributions. The tax relief plan signed into law last summer increased the amount individuals can put into IRAs and 401(k)s, because the President is very committed to expanding every American's ownership and control of their retirement nest eggs.

Your 401(k) is a nest egg you own, and you decide how to invest your contributions, choosing among a set of investment options offered by their employer. In many plans, participants are also free to invest their employer's matching contributions as they see fit. This freedom to choose among investments allows employees to choose the tradeoff between risk and return with which they are most comfortable.

Working Americans value that sense of ownership and control - especially the knowledge that no one can take your nest egg away from you. That peace of mind depends on public confidence that retirement plans operate fairly and openly. The rapid collapse of the Enron Corporation and the effect of the decline in its stock price on its employees' retirement funds may have diminished that confidence. When the company's stock became virtually worthless, employee's life savings dissolved.

 The experience of Enron employees is unsettling to the millions of Americans whose life savings are in their 401(k) plans. Working Americans save to buy a home, to pay for their children's education, and to retire in comfort. The President is very concerned that people lost much of their retirement savings through no fault of their own.

The Justice Department is pursuing a criminal investigation. The Department of Labor and the Securities and Exchange Commission are also conducting separate investigations for potential violations of their regulations.

If anyone at Enron broke the rules, they will be punished. At the same time, we need to look at the policy issues presented by the Enron case. We need to determine whether the rules that apply to 401(k) plans, pensions, and other types of retirement plans are adequate to ensure that individuals do not lose control over the life savings they own. We also need to review whether accurate information is available so that individuals can make wise saving and investment decisions.

Last week the President directed me, Secretary Chao of the Labor Department and Secretary Evans of the Commerce Department to convene a working group to analyze pension rules and to develop recommendations to strengthen retirement security. This review will focus on the issues of fair play in the market and the balance between consumer choice and firms' interests in offering defined contribution plans.

A working group of senior staff has already met twice and Secretaries Chao and Evans and I will hold our second meeting later today. The working group is looking at a broad range of issues, including the rules governing diversification, temporary lock out, and the availability of information to employees. We must ensure that the rules enhance opportunities for individuals to invest in our economy and ensure that their ownership of their life savings is protected. We want to enhance, not limit, choices individuals can make in planning for their retirement security. At the same time, we want to preserve and enhance employers' incentives to offer retirement options that will help their employees build an economically successful future. For individuals to make the best possible decisions, they must know that the rules prevent anyone from taking those decisions away from them. We are committed to delivering to the President recommendations that promote the retirement security of working Americans.

We are also pursuing new methods of making the full range of Treasury securities more widely available, because Treasury securities are a valuable tool for every American seeking financial security. We offer the safest, most liquid, securities in the world to fill investor needs across the whole spectrum of portfolios, from the individual investor who has $50 to invest, to the largest asset managers and other firms who invest billions of dollars in managing their portfolios.

The Internet now gives us the technological wherewithal to create the broadest possible primary market for Treasury securities that imagination and effort will allow.

The Bureau of Public Debt already has some of this in place. Their website offers investors the opportunity to get information on and buy both savings bonds and marketable bills and notes directly from the Treasury. Creating and continually enhancing this direct link to Treasury products will let our customers move seamlessly along the whole continuum of the securities we offer as their investment needs evolve.

Enhancing and protecting retirement security for all Americans is one of President Bush's priorities, and one of my top agenda items for this year. I'm eager to expand the availability of savings tools to all Americans, and to ensure that working American's ownership of their retirement nest eggs is protected.