December 1, 1981
Mr. Secretary, distinguished guests here at the head table, you, ladies and gentlemen -- and I understand there is another room where others of you are seeing this on closed circuit television. And that's kind of a kick for me, because I've been on the late, late show so long it's good to be on daytime TV. [Laughter]
I've been looking forward to this meeting with you for a number of reasons, but probably the best one is my belief that most problems can be solved when people are talking to each other instead of about each other.
Now, you know a speaker usually tries to establish in his own mind some relationship between himself and his audience or, put another way, why he or she is addressing a particular group. Well, I could say it is traditional for the President to address the White House Conference on Aging, but there's in my case a better answer. We're of the same generation. And we have met to counsel together on matters of mutual interest.
You know, when we were much younger, we defined a generation in a rather narrow sense. We perceived it as almost limited to our classmates. And then, as the number of candles on the birthday cakes increased, so did the breadth of our generation. As long-time adults, we now perceive our generation, as we call it, as including all those within several years on either side of our own age. And that is as it should be, for as adults, we've worked together to achieve common goals in our work, in our communities, and in our nation.
Just a few weeks ago at a White House luncheon for the Medal of Freedom recipients, one of those recipients was Eubie Blake. Eubie's one of the last of the great ragtime composers and pianists. We sat there at the luncheon table as contemporaries, because as I looked at him, his songs, his music were very much a part of my life. And yet, in my remarks about him and his accomplishments I mentioned that he was 98 years old, and he interrupted me and said ``Ninety-eight and a half.'' [Laughter]
Well now, having established the parameters of our generation, let me say a few words about us. It's right that each generation looks at the preceding one and is critical of its shortcomings. We were when it was our turn, and as a young generation will challenge our mores and customs, will question our values, as we did before them when we were young. But as the years pass, we learn not to cast aside proven values simply because they're old. At least we should learn that if civilization is to continue.
A few years ago, in the rebellious sixties and early seventies, we did see such a discarding of basic truths. It was a time when at least a part of the generation of our sons and daughters declared that no one over 30 could be trusted. One wonders what they think now that they themselves have passed that 30-year mark. [Laughter]
In those troubled times when no one was boasting about only living a stone's throw from the campus, I, as Governor, couldn't go on our campuses in California without causing a demonstration. And then one day the student body presidents of our nine university campuses and some of their other student officers asked to have a meeting with me. Well, I was delighted. I said yes, because I was anxious to establish some kind of communication. They arrived, some of them were barefoot, all of them were in T-shirts and jeans. And when we were all seated -- maybe I should say slouched -- [laughter] -- their spokesman opened the meeting.
``Governor,'' he said, ``it's impossible for you to understand us, to understand our generation.'' Well, I tried to establish some base for conversation, and I said, ``Well, we know more about being young than we do about being old.'' And he said, ``No, I'm serious. You can't understand your own sons and daughters. You didn't grow up in a world of instant electronic communications, of cybernetics, of men computing in seconds what it once took months and even years, of jet travel, nuclear power, and journeys into space to the Moon.''
Well, you know, usually in a situation of that kind you don't think of the right answer until the meeting's over and you're at home, and then it's too late. But he went on in that vein just long enough for the Lord to provide the right words. And when he finished I said, ``You're absolutely right. We didn't have those things when we were growing up. We invented them.'' And I was right, because almost everything he was talking about had come into being in our adult lifetime.
Yes, our generation has made mistakes and possibly fallen short at times. But we need apologize to no one. Only a few times in history is a single generation called upon to preside over a great period of transition, and our generation, yours and mine, has been one of those rare generations. We have gone literally, in our lifetime, from the horse and buggy to journeys to the Moon. We've known four wars and a great worldwide depression in our lifetime. We have fought harder and paid a higher price for freedom and done more to advance the dignity of man than any people who ever lived.
Having said what I have, maybe you can understand my frustration over the last couple of years -- during the campaign and now in this office I hold -- to be portrayed as somehow an enemy of my own generation. Most of the attack has been centered around one issue, social security. There's been political demagoguery and outright falsehood, and as a result, many who rely on social security for their livelihood have been needlessly and cruelly frightened. And those who did that frightening either didn't know what they were talking about or they were deliberately lying.
In October of 1980, as a candidate, I pledged that I would try to restore the integrity of social security and to do so without penalty to those dependent on that program. I have kept that pledge and intend to keep it -- both parts of it. We will not betray those entitled to social security benefits, and we will -- indeed, we must -- put social security on a sound financial base.
A recent poll showed that 59 percent of the people were willing to pay a higher tax in order to be sure of social security's continuation. Almost as many, 54 percent, have expressed mistrust and a lack of confidence that the program will be there when their time comes.
Well, let me take up that matter of increased tax. The answer to the problem isn't that simple. We already have an increase. It was passed in 1977, and I don't think very many people are aware that it calls for a series of increases -- one in this coming January and several more, automatically, over the next 5 years.
The payroll tax has increased 2,000 percent since 1950, and even with the increases yet to come, the accumulated deficit could still be $111 billion in the next 5 years.
In 1982 the maximum tax will be $2,170.80, matched of course by an equal amount by the employer. For the self-employed, that payment will be $3,029.40. The 1980 top rates are 6.7 percent and 9.35 percent for the self-employed on the first $32,400 of earnings. Now both the rates and the amount of earnings taxed will go up in the several increases that are already scheduled and that I have mentioned.
When the program started in 1936 it was $20 a year -- 1 percent of $2,000. Thirty years ago there were about 16 workers for each recipient. Now there are only 3.2, and in the next 40 years that's projected to fall to only 2.1.
Now, I'm not pointing out these facts because I want to scare anyone. I agree with what Congressman Claude Pepper has said, that this country is big enough and able enough to provide for those who have served it and who now have come to their time of retirement. But we can't afford -- and what we were trying to correct in our original proposal -- we can't afford to support, as disabled, people who are not disabled or educate from social security funds young people who come from families of great affluence and wealth. And this we've been doing. I had hoped that our proposal would have been taken as a beginning point for bipartisan solution of the problem. I was led to believe by others that it would. Well, that didn't happen.
Social security can and will be saved. It will require the best efforts of both parties and of both the executive and legislative branches of government. The future is too important -- the future of social security for it to be used as a political football.
It's for this reason that I have withdrawn our proposal and have established a bipartisan Task Force on Social Security Reform. The Task Force will consist of 15 members -- 5 appointed by the President, 5 by the Senate Majority Leader Baker, and 5 by Speaker of the House Tip O'Neill. The mandate of the Task Force is an important one. Time and again in the past, studies of the social security system have been made that pointed out the problems -- but nothing further was done. This must not happen again.
The charge of the Task Force will be to work with the Congress and the President, not only to propose realistic, long-term reforms to put social security back on a sound financial footing but also to forge a working, bipartisan consensus so that the necessary reforms will be passed into law.
The business of the Task Force on Social Security Reform is urgent. I will shortly be announcing appointments to it, and I hope that Majority Leader Baker and Speaker O'Neill will act promptly to select the remaining members. And I pledge my fullest cooperation to make the Task Force's mission a success.
We want the elderly needy, like all needy Americans, to know that they have a government and a citizenry that cares about them and will protect them. Their basic human needs must be met with compassion as well as efficiency. This, too, is a goal that I have set for our administration.
It's fashionable just now to talk about the graying of America. And if you go by the numbers, we are indeed a people growing older in years. Today, one American in five, more than 45 million in all, is over 55. By the year 2000, there will be another 10 million of us. But the American people are not just growing older; we're also growing healthier. Our years of full, active life are increasing -- thanks to the countless historic breakthroughs our nation has made in science, medicine, technology, economic opportunity, and education in this century. And here again our generation can take pride in the contributions we made to bring that about.
Today's young people, many instances, don't even know the names of diseases that plagued mankind when we were young and that have been eliminated by discoveries made again in our adult lifetime. Many of these breakthroughs were made by senior citizens who are still with us and will be for many years to come, enjoying the well-earned fruits of their own labor as researchers, educators, inventors, businessmen, or average men and women whose work in shops, factories, and farms helped make America possible.
Since 1979 [White House correction] the national mortality rate has dropped 2 percent each year. There are already more Americans over 65 than the entire population of Canada. Today's typical 65-year-old will live another 16 years, and our median national age will go up another 3 years in the next decade. I'm already ahead of that, and -- [laughter] -- that's a cause of great distress to a number of people. [Laughter]
But make no mistake, this growing older of Americans is an asset. The so-called senior market plays a key role in consumer spending and saving. One-fifth of the population, the over 55's, account for 27 percent of all consumer spending. Internal Revenue Service figures show that almost half, 46 percent of all the reported saving account interest is earned by people over 65 although they are only 11 percent of the population. Senior savers and senior spenders are a vital and positive part of the economy and are playing a positive role in our program for economic recovery. It couldn't succeed without us.
This administration is dedicated to the kinds of programs and policies that will allow the vast majority of older Americans to continue to live independent lives. This is not just a matter of economic common sense; it's a matter of basic human dignity.
Here, as elsewhere, the state of the aging is bound together with the state of the nation. We cannot have a healthy society without a healthy economy. Young and old alike, Americans have suffered too long from the combined burden of runaway inflation and an ever heavier tax burden. This destructive cycle has fed on itself. The same taxes and inflation that directly undermine the earning power of individual Americans also drive down productivity and economic growth nationwide.
Because of the graduated tax rate, each 10-percent increase in inflation pushes tax receipts up 17 percent. The taxpayers have that much less money to spend; Washington has that much more to squander; and the economy suffers another blow from the twin evils of inflation and stagnation. The only way to put an end to this disastrous cycle, a cycle that hits Americans on fixed incomes the hardest, is to make real cuts in spending and taxes.
And this administration has made a beginning. It's only a beginning, but the initial signals are encouraging. The inflation rate, as measured by the Consumer Price Index, has fallen from 12.4 percent in 1980 to 9.6 percent in the first 10 months of this year. And last month's figures marked the lowest rate of increase in 15 months. If we could hold to last month's increase cost, we would be down to a 4.4 percent inflation rate.
There was also improvement at the wholesale level, with prices rising at a 7½ percent annual rate, down from 11.8 in 1980. Now, this is especially important, because a decline in wholesale prices now usually means further relief for the consumer as wholesale goods reach the retail market down the line a ways.
Interest rates have also begun to drop. The prime lending rate of 16 percent has reached a 12-month low. Some banks have already dropped to below 16. A year ago, they were at 21½.
Now, these are only early signs. But they are all positive indicators that our economic policy is beginning to work.
Older Americans have also begun to benefit from our tax relief measures. The Economic Recovery Tax Act of 1981 will mean further relief from inflation and taxation, amounting to a 25-percent cut in personal income taxes over 3 years. And starting in 1985, personal tax rates and exemptions will be indexed to keep up with the cost of living so that just a cost-of-living increase won't move you into a higher tax bracket. Inflation will no longer push old and young Americans into ever-higher tax rates through bracket creep.
Other tax reforms of special benefit to older Americans include liberalizations in the capital gains tax, tax exclusions for older Americans selling their homes, and estate tax provisions.
None of this relief from taxation and inflation would be possible if we ignored the problem of runaway government spending. This administration is serious. We have cut back the increased rate of government spending. We're convinced that the Nation's economy cannot heal itself unless the Federal Government begins to put its own house back in order.
But while cutting spending, we have safeguarded services to those poor and elderly who depend on the Government. In the field of health care and human services, Federal spending is actually up by over 15 percent in 1981 and about another 10 percent in 1982. Elderly Americans making up 11 percent of our population will receive 28 percent of the Federal budget in this present fiscal year.
Our administration has also supported reauthorization of the Older Americans Act. The act helps older Americans keep up their independence through a wide variety of home- and community-based services, such as home health care, transportation, meals, and counseling. We're also working on improvements to the program that'll make it an even more effective means of strengthening the dignity and independence of the elderly.
Ours is a generation rich in experience as well as in years. We've been tried and tested. And we've also benefited from a surge of human progress that our parents and our grandparents could never even have imagined.
Now, I happen to be an optimist. I believe attitudes toward the elderly are getting better, not worse. And the polls seem to bear this out. One recent survey revealed that 65 percent of the younger work force now rejects the notion of requiring older workers to retire. Well, this is a dramatic turnaround from just 7 years ago. Then a plurality of younger workers took the opposite view. So, as some Americans grow older, America itself seems to be growing a little bit wiser and a little more tolerant.
You know, Cicero said, ``If it weren't for elderly citizens correcting the errors of the young, the state would perish.'' In those days of the generation gap that I mentioned earlier, it was almost as if our young rebels saw the generations as horizontal, each generation separated from the other like slices from a sausage. Well, humankind is vertical. Each generation sees farther than the one before, because it's standing on the shoulders of those who have gone before.
I look forward to receiving the results of your work here in this Conference. Now, I've been dwelling on the problems of concern for the members of our generation, problems I know that you will be considering. But may I ask also -- and maybe it isn't necessary to ask -- that you give your counsel with regard also to how we of our generation, in this time of danger to our nation and to the world, can be of help to this blessed land that we've already served so faithfully and so well.
We have much to offer, a great deal to offer. Let our children and our children's children one day say of us, the world that they live in is better because we were here before them.
Thank you very much.
Note: The President spoke at 12:30 p.m. in the Grand Ballroom at the Sheraton Washington Hotel. In his opening remarks, he referred to Secretary of Health and Human Services Richard S. Schweiker.