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WASHINGTON, Aug. 17 // -- The following is a transcript of
remarks by President Bush in signing of H.R. 4, the Pension Protection Act
of 2006:
Room 450
Dwight D. Eisenhower Executive Office Building
1:13 P.M. EDT
THE PRESIDENT: Thank you. Please be seated. Thanks. Welcome to the
White House. Were glad youre here. In a few moments, I will have the
honor of signing the most sweeping reform of Americas pension laws in over
30 years, the Pension Protection Act of 2006. And we welcome you here to
witness the signing.
Americans who spend a lifetime working hard should be confident that
their pensions will be there when they retire. Last year I asked Congress
to strengthen protections for the pensions of our workers. Members of both
parties came together to pass a good bill that will improve our pension
system, while expanding opportunities for Americans to build their own
nest- eggs for retirement. And Im really pleased to sign this bill into
law.
I want to thank two members of my -- three members of my Cabinet who
have joined us today: Secretary of Treasury Hank Paulson, Secretary of
Labor Elaine Chao, and the Director of the OMB Ron Portman. As an aside,
while Portman served in Congress he was the principal author of some of the
important provisions of this bill.
I also want to welcome members of the United States Senate and the
House of Representatives here. I welcome Senator Mike Enzi, who is the
Chairman of the Health, Education, Labor, and Pensions Committee. I welcome
Senator Blanche Lincoln from Arkansas. I welcome Congressman John Boehner,
House Majority Leader, who was instrumental in getting this bill passed;
along with Buck McKeon, whos the Chairman of the Education and Workforce
Committee; Congressman Bill Thomas, Chairman of the Ways and Means
Committee; Congressman John Kline of Minnesota. Thank you all for coming.
Thanks for coming back from your vacations. (Applause.)
Many Americans work for private companies that offer traditional
pensions, and most of those companies are meeting their obligations to
their employees and their retirees. Yet, some businesses are not putting
away the cash they need to fund the pensions they promised to their
workers. These companies get into financial trouble and go bankrupt, their
underfunded pension plans can leave some retirees with checks much smaller
than the ones they were promised.
The federal government has created an insurance system for businesses
offering private pensions, and that insurance is funded by premiums
collected from these employers. When some businesses fail to fund their
pension plans and are unable to meet their obligations to their employees,
it puts a strain on the entire system.
And if theres not enough money in the system to cover all the extra
costs, American taxpayers could be called on to make up the shortfall.
Every American has an interest in seeing this system fixed, whether youre
a worker at a company with an underfunded pension, or a taxpayer who might
get stuck with the bill.
The Pension Protection Act of 2006 will help shore up our pension
insurance system in several key ways. It requires companies who underfund
their pension plans to pay additional premiums. It extends the requirement
that companies that terminate their pensions must provide extra funding for
the system. This legislation insists that companies measure their
obligations of their pension plans more accurately. It closes loopholes
that allow underfunded plans to skip pension payments. It raises caps on
the amount that employers can put into their pension plans so they can add
more money during good times and build up a cushion that can keep pensions
solvent in lean times.
Finally, this legislation prevents companies with underfunded pension
plans from digging the hole deeper by promising extra benefits to their
workers without paying for those promises up front. The problem of
underfunded pensions will not be eliminated overnight. This bill
establishes sound standards for pension funding, yet, in the end, the
primary responsibility rests with employers to fund the pension promises as
soon as they can.
The message from this administration, from those of us up here today,
is this: You should keep the promises you make to your workers. If you
offer a private pension plan to your employees, you have a duty to set
aside enough money now so your workers will get what theyve been promised
when they retire.
In addition to reforming the laws governing traditional private
pensions, the bill I signed today also contains provisions to help workers
who save for retirement through defined contribution plans like IRAs and
401(k)s. These savings plans are helping Americans build a society of
ownership and financial independence.
And this legislation will make it easier for workers to participate in
these plans. It will remove barriers that prevent companies from
automatically enrolling their employees in these savings plans, ensure that
workers have more information about the performance of their accounts,
provide greater access to professional advice about investing safely for
retirement, and give workers greater control over how their accounts are
invested.
Finally, this bill makes permanent the higher contribution limits for
IRAs and 401(k)s that we passed in 2001, and that will enable more workers
to build larger nest eggs for retirement.
To ensure more secure retirement for all Americans weve got more work
to do. We must also prepare for the impact of the baby boomer generations
retirement, and what that impact will have on federal entitlement programs
like Social Security and Medicare. As more baby boomers stop contributing
payroll taxes and start collecting benefits -- people like me -- it will
create an enormous strain on our programs. Entitlement programs are
projected to grow faster than the economy, faster than the population and
faster than the rate of inflation. If we fail to act, spending on Social
Security and Medicare and Medicaid will be almost 60 percent of the entire
federal budget in the year 2030. And thats going to leave future
generations with impossible choices: staggering tax increases, immense
deficits or deep cuts in benefits.
We have an obligation to confront this problem now. The Secretary of
Treasury understands what Im telling the Congress: Now is the time to
move; now is the time to do our duty. Im going to continue to work with
the Congress and call on the Congress to work with the administration to
reform these programs so we can ensure a secure retirement for all
Americans.
Today, weve taken an important step toward ensuring greater retirement
security for millions of American workers. I want to thank the House and
the Senate for their good work on this vital legislation. Its been hard
work. It took a lot of pages to write that bill, as you can see.
(Laughter.) But the members did good work, and now Id ask them to join me
as I sign into law the Pension Protection Act of 2006. (Applause.)
(The bill is signed.) (Applause.)
END 1:19 P.M. EDT
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