CNN LIVE EVENT/SPECIAL
President Bush Speaks About 401(k) Reform
Aired February 1, 2002 - 12:30 ET
THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
BILL HEMMER, CNN ANCHOR: Live from West Virginia, White Sulfur Springs, the Greenbrier Resort, and the president.
GEORGE W. BUSH, PRESIDENT OF THE UNITED STATES: It is rare that a fellow can give two 50-minute addresses in the same week.
I knew you'd be thrilled.
J.C., thanks for those kind words, and thanks for your leadership. One of us didn't get the dress code right.
Yes, I didn't get the memo.
Anyway, I'm delighted to be here. I am.
First, I want to say something about the leaders of the two bodies represented here. Your speaker and majority leader -- I call him majority leader -- are two really good men to work with. I have loved my experience working with Denny and Trent last year. I really enjoy the candid discussions. But most importantly, what I really appreciate is the desire to work together to do what's right for the country. We're lucky to have two such strong and good men leading the country. And so it's an honor to be with the speaker and Senator Trent Lott, and I look forward to a fabulous year working with the two men in 2002.
I think this is going to be a great year. I do. I've never been more optimistic about anything in my life. In the Oval Office, there is a painting by a friend of mine named Tom Lee (ph), and when you come in the Oval Office you'll notice it's the western-looking painting right by the door where Logan (ph) used to sit.
By the way, this is Logan's last day working for me, and which is -- I didn't fire him. He voluntarily left.
But anyway if you were to look where Logan used to be, there's a painting that is -- shows a great expanse of West Texas, and it is -- the guy who painted the painting was the person who wrote the quote I used at the end of the convention, which I'm sure most of you have memorized by now.
It said, "Sara (ph) and I live on the east side of the mountain. It is the sunrise side, not the sunset side. It is the side to see the day that is coming, not to see the day that is gone." It's so important for a president to see a day that is coming, that is positive. And I do, in clear and vivid ways. I see a day that is much better for not only America and Americans but the world.
We have an historic opportunity to fight a war that will not only liberate people from the clutches of barbaric behavior but a war that could leave the world more peaceful in the years to come.
None of us asked for this war. None of us wish that what happened on September 11 happened, and we continue to pray for the victims. But now that it's happened, this nation is ready to seize the moment. And I'm so proud that the people in this room and on this podium understand the historic opportunity we have. And I want to thank you for joining this most noble and just cause. We fight for freedom, and we stand for freedom, and we won't relent until we defend freedom at its core.
And that's why the budget I sent up there has got a significant increase in defense spending, because we owe it to the defenders of freedom to give them the best equipment, the best housing, the best training and another pay raise.
Now in my speech I tried to educate the American people about what we're up against. I talked about the fact that thousands of people had gone through Al Qaeda killer camps, and they're still roaming around. And so long as they're roaming around with the intention of hurting us, this nation will hunt them down.
I have been traveling the country as you know, and I'm so pleased with the fact that the American people are incredibly patient and resolved, and share our determination to achieve our noble objective. They know that we have succeeded in one phase of our war in Afghanistan. We liberated women and children by demolishing the Taliban and its repressive government.
They also know the stage we're now in, which is hunting down the cave dwellers, it's going to take a while. They understand that, and I am grateful for the people's understanding. They understand that this is a dangerous phase of the war.
But they have also been assured by me and by you all that we're not going to weary; we're not going to rush our military. We're going to be steady and relentless until we achieve the objective of getting the Al Qaeda killers and bringing them to justice.
But they also understand that we are not preoccupied by one or two people; that while bin Laden thinks he can hide in a cave or Mullah Omar thinks he can run, it's just a matter of time.
I don't know how much time. And I don't worry about the time when he is brought -- or they are brought to justice. That's just not one of my concerns. It's going to happen.
And, you know, we got him running, and that's -- it's just -- we'll get him. But that's not a -- that's not where we're preoccupied.
And the American people understand that, because they understand our goal is broader than just two individuals. It is terror wherever terror exists, and it's upholding that doctrine -- forcefully upholding the doctrine that says, "If you harbor a terrorist, if you feed a terrorist, if you hide a terrorist, you, too, are as guilty as a terrorist."
But the moment is broader than just destroying terrorist training camps or finding terrorist trainers and bringing them to justice. The moment that we must seize says that, in order for the world to be peaceful for our children and grandchildren, we've got to prevent nations which develop weapons of mass destruction from mating up with terrorist groups that will threaten the United States and our allies.
Now we've got nations on notice, as a result of the speech last Tuesday night. Of course I hope they change behavior on their own. I hope they hear the message of not only the United States but a vast coalition of freedom-loving countries, as we clearly say, "Get your house in order. Don't develop weapons of mass destruction."
And then people say, "What are the consequences?" They will find out in due course if they can't get their house in order. The mighty United States will do whatever it takes to defend our security.
Make no mistake about it, if you threaten us with weapons of mass destruction, if you threaten our allies and friends with weapons of mass destruction, we will do whatever it takes to protect our people.
And that's what we're doing at home. And I want to thank you all for working with us. There's been some great ideas that have come out of the Congress about how best to protect the homeland, and we've incorporated a lot of them in the initial strategy that we're outlining, not only in our budget, but over the course of the last couple of weeks, and we'll continue to do so. And Tom Ridge and our team is open for more suggestions about how to protect the people.
And so our bioterrorism initiative is substantial and real, and I want to thank you for working on it. Our first responder initiative, where we're working with local governments through governors, is going to be real and meaningful. Our airport security measures are strong. I mean, we're doing everything we can, and the American people need to know that.
And so when you go back to your districts, I thank you very much for sharing our mutual concern and our knowledge that the enemy still wants to hit but our government is responding forcefully.
You need to know, and I know you know this, that the FBI under Bob Mueller has changed its culture. It's still after spies and white collar criminals, and that's important. But the primary focus of 4,000-plus agents is to disrupt the enemy; is to find out any information possible and run it down. We take every lead seriously. We take every hint of evidence seriously. We understand the intentions of the enemy. And your constituents must know that this government is doing everything in our power to make America safe.
But the best way to secure the homeland for the long run is to get them -- get them where they hide, get them where they train and bring them to justice.
And you just need to know something about your president: I am not going to weary on this subject, like I said in my first speech in September after the war.
I understand the call. My determination today is as strong as it was when I addressed you all in October, and my determination three years from now will be just as strong then as it is today. I understand the call, I understand the mission, and this great country will defend freedom to its core.
I said in my State of the Union that I stand in awe of the American people, and you know what I'm talking about. You've seen in it in your communities when you go back home. You've seen it in your coffee shops. You've seen it in your different clubs. You've seen it when you've seen your neighbors. I mean, this country is a country that is not only strong and determined, but it's a compassionate country as well.
People often have asked me, "What can I do to participate in the war against terror?" And as you know, in this particular issue I see things pretty clearly in just plain terms. Since this is a war of good versus evil, those who want to participate in the war against terror can do acts of kindness to overwhelm the evil done to the country. People can participate in the war against terror all kinds of ways: You can help serve as eyes an ears, you can alert the alert, but you can love a neighbor. An American, in fighting the war against terror, can walk across the street to a neighbor whose shut-in and say, "I care for you." And it's those millions of acts of kindness on a daily basis that define our country and stand defiantly in the face of evil. And so one of the things I've tried to do is capture the magnificent spirit of the country, and we set up what's called the USA Freedom Corps. And somebody who's interested in joining can dial 1- 877-USA-CORPS, or if you happen to be computer literate, USAFreedomCorps.gov.
And it's a chance for citizens to heed my call which says, "We'd like you to serve your country for two additional years, or 4000 hours over your lifetime." Now I understand many in this room and many of your constituents already have heard the call. Let's keep doing it. My call is, "Keep doing it."
But some don't know where to start. And here's a good place for people to start, and if they call the USA Freedom Corps number, they will find ways to -- if you're a senior citizen, participate in Senior Corps, or if you want to teach, Teach For America, or if you want to go to the Peace Corps, we're expanding the Peace Corps to take our values and compassion into the Islamic world, for example. There's all kinds of opportunities to serve, and we're calling on the American people to do so.
And it's really to help change our culture. That's how I view it. A lot of us grew up in a culture which has said, "If it feels good, just go ahead and do it. If you've got a problem, blame somebody else." See I believe out of this evil can come a new culture -- a new assessment of what America's all about. Our hope is that the country's culture changes to one of responsibility, that each of us are responsible for the decisions we make in life.
If you are a mom and dad, you are responsible for loving your child with all your heart and all your soul. If you're a compassionate neighbor, you're responsible for helping a neighbor in need. If you're corporate America, you're responsible for making sure you reveal you reveal your all assets and liabilities to your shareholders and your employees.
So part of ushering in the responsibility era, not only from the individual basis but on the corporate basis, I have proposed some pension reform plans -- pension reforms I'd like to outline briefly for you today and ask you to take them up as quickly as possible.
We are now seeing some proposals to protect pensions. My plan will strengthen the workers' ability to manage their own retirement funds by giving them more freedom to diversify, better access to professional investment advice, and quarterly information about their investments.
Employers should be encouraged to make generous contributions to workers' 401(k) plans. It's a positive development when employers give stock to people who work for them.
About 42 million workers own 401(k) accounts with a total of $2 trillion in assets, and that's a critical part of retirement security for workers all across America. But workers should also have the freedom to choose how to invest their retirement savings. And so the proposal I'll submit to Congress and work with members here in this room will allow workers to sell company-contributed stock and diversify into other investment options after three years of participation in their company's plan.
To ensure that blackout periods are fair, the plan will ensure that company executives be bound by the same blackout restrictions they impose on their workers.
If it's OK for the sailor, it ought to be OK for the captain.
My plan also requires that workers be given a 30-day notice before any blackout period begins so workers can plan to make changes in their investments.
This is a matter of fairness. It's a matter of openness. It's a matter of respect for the process. And I look forward to working with you to get something done.
I also look forward to working with you to continue the progress we've made on a lot of issues. I think America appreciates it when people come to this body, or your respective bodies, and work hard for what's good for the country. We've made good progress doing that.
I am so proud of working with you. I'm proud to be able to call you a colleague here in Washington, D.C. It's been a remarkable experience for me. It's a joy to exchange ideas. It's been sometimes a joy to watch the legislative process.
Generally, it's an amazing experience to watch.
But I'm looking forward to working with you to make sure that the legislation that does come out is positive and hopeful for the American people.
Thanks for your friendship.
HEMMER: Quite clearly, the contrast of Enron continuing there in West Virginia, the president, and the proposals from the White House a allow workers across America and pension plans and 401(k) plans to have more freedom to diversify, one of the points that the president mentioned in the end there, and also better access to advice for investing.
The president indicating some pretty remarkable numbers -- 42 million Americans invested in 401(k)s, $2 trillion in assets across the board and country there, as the president said, if it's OK for the sailor, it's OK for the captain.
Brooks Jackson is watching this. We heard a few things in there. Going to make a difference or not?
BROOKS JACKSON, CNN CORREPSONDENT: Well, Bill, some of these steps are positive steps. I think most pension analysts who look at this from the employee's standpoint would a agree with that, but there are some things that the president is not proposing that I think we will hear more about later on.
It is interesting to look, however, at how this would have affected Enron employees. That's of course the impetus for all of this. And the fact is, if you look at the cold, hard facts, what the president is proposing would not have helped Enron employees very much.
First of all, the president saying he would give them more freedom to diversify, employees who have company stock in their 401(k)s, and although it's not widely appreciated, Enron employees, 89 percent of the stock that they had in their 401(k)s was stock they were free to diversify, but they didn't. They had 16 choices of mutual funds and other things other than Enron stock, but they -- most of them chose to ride it pretty much all the way down.
And the president referred to the lockdown period, when -- sometimes when company's change administrators of these plans, there is a blackout period where you cannot trade stock. That Is what happened to Enron employees. But that would say a fairly small part of the Enron's eomployees loss. The stock had already dropped to $15 dollars by the time that period began -- Bill.
HEMMER: Brooks, is this simply the hangover of Enron, or had there been a push anywhere in Washington to allow things like more diversification and more freedom of movement of ones cash in a plan?
JACKSON: Absolutely. This has been debated in Congress before. There was an effort back in the mid-90s to put some sort of percentage limits on the amount of stock that -- company stock that could be in 401(k) plans, but it was pretty much watered down to nothing. Companies didn't want it, and when the stock market was booming, most employees didn't want it. To give you some appreciation of what a problem this is at Enron, 69 percent of the 401(k)s stock was in Enron stock, far more than investment advisers would say is prudent, but right now, Procter & Gamble has 95 percent, Hewitt (ph) Williams 92 percent. Many large American corporations have even higher concentrations of company owned stocks in their 401(k)s.
HEMMER: Interesting findings. Certainly the issue has got some steam now.
Brooks, thanks. Brooks Jackson in Washington.
Also in Washington, at the White House, here's Major Garrett.
Quickly, Major, what is the White House saying about important, how important this issue may be for them right now going forward, especially given the events of Enron and the controversy surrounding that.
MAJOR GARRETT, CNN CORRESPONDENT: Well, bill the political importance of this could not be overestimated. George Bush got about 13 million more votes as a presidential candidate from 1996 to 2000 than Bob Dole did, and one of the reasons is more and more Americans are participating in these pension and 401(k) plans with stock, and Republican analysts tell me he it is because they wanted to get into the marketplace. Republicans believe as more Americans come into the marketplace, they become more Republican in their orientation, or sensitive to what Washington does to regulate and tax business, become more Republican.
That could all be undermind when people belive when they are participating in the stock markets, they are not getting all the best information, or big wheels in a corporation, can do more with their stocks than they can. That is why the White House has got to get in front of this issue, and you saw a little bit of pension populism, with the president saying, as you said, that if it's OK for the captain, it's got to be OK for the sailor too.
HEMMER: And, Major, quickly here, what are they saying at the White House? Are they saying that if they put a good stiffarm otu there, they can remove themselves, or is this something that's going to be linked for a long time here.
GARRET: They know they have to get out in front of this issue. They have to have the White House viewed synonymously with pension reform and protecting people who are involved in these accounts. If they don't, they believe Enron will really damage not just the president but Republicans genericly. That's something in an election year this White House just can't stand for -- Bill.
HEMMER: Major, Major Garrett from the fron lawn on the White House, thank you.
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