THE WHITE HOUSE
Office of the Press Secretary
For Immediate Release December 9, 1998
PRESS BRIEFING BY
DIRECTOR OF THE NATIONAL ECONOMIC COUNCIL
GENE SPERLING
The Briefing Room
3:50 P.M. EST
MS. WEISS: Good afternoon, ladies and gentlemen. GeneSperling will give a readout of today's Social Security meeting sinceit was closed to all of you. Mr. Sperling. MR. SPERLING: Let me just give a sense of what todaywas like and then I'll be available for any questions. As you know,yesterday we had three panels that you saw were very well balanced interms of differing views with participation from the audience who,themselves, were largely made up of heads of organizations andexperts. And then yesterday afternoon from 3:30 p.m. to 5:00 p.m.,we had a breakout session in which members of the administration andCongress were divided up into six groups and had informalconversations which went quite well and were notable for the degreeof varying interest in the rooms that were able to talk about in away people thought was productive and civil. This morning, we did something that was quite novel,which was that a month before the legislative season even began, weasked each of the leaders, Speaker Designate Livingston, MajorityLeader Lott, Leader Daschle and Gephardt, to choose 12 people, and wewould choose 12 people, and we had 60, then, participants who weredivided into two groups of 30. Each of those groups of 30 then wentthrough two sessions. One was led by Bob Reischauer, as you know isformal Congressional Budget Office Director, and Martin Feldstein atHarvard University did the presentation on the different mechanismsfor pre-funding or investing in higher returns, either through morecollective or individual approaches and then a second panel or secondworkshop was coordinated by Ken Kies, the former staff director ofthe Joint Tax Committee, and Bob Greenstein, who is head of theCenter for Budget and Policy priorities, who went through the moretraditional Social Security reforms options -- issues such asretirement age, cost-of-living increase. All of the presenters werechosen for balance and were asked to work with each other over thelast couple of weeks. After that, all 60 of the people met at the Blair Housewith the President, and had a meeting that went for, I would say,over an hour. Let me try to give you a little flavor of each ofthose meetings without -- and I know this may make things hard -- butto honor the ground rules, without attributing specificremarks to specific members of Congress. I will try to give youa sense of what the President himself said. In the first issue, there was significant discussion about the different types of plans, I think because our two presenters each have options out in the public view. Marty Feldstein has a plan, as do Bob Reischauer with Henry Aaron in their new book. So, clearly, as that discussion went on, some of the discussion focused on the pros and cons of their different plans. Other issues that came up involved issues concerningthe surplus -- how much of the surplus would be available, howmuch should be used, could be used. In the other discussionsthere were also questions about the long-term projections, issuesrelated to administrative cost on individual accounts -- whetheror not individual accounts could be bequeathed in the case ofsomebody passing away. On the Reischauer discussion, there was much discussionon the corporate governance issues -- was it possible to makecollective investment by Social Security independent, and protectit from the political process? Those were among the things thatwere discussed in the earlier sessions, and I'm happy to go backand go over that. The President then met with everyone at the BlairHouse. It was a very candid conversation and there was, Ithought, a remarkable amount of goodwill and bipartisanship.People felt that the effort this morning of bringing everybodytogether had been, as one key member called it, "a sign of realmomentum." There was an agreement to have some bipartisan effortto put together paper that could be -- and briefing materials andpros and cons of the different plans so that each member couldget some similar material and that people could be gettingbrought up to speed on materials that they could discuss witheach other, so the President, himself, suggested this and we willbe getting together, the staff, the administration, and House andSenate to come up with the paper. Secondly, there was an agreement to do more of the typeof meetings that we had today, which would be to bring asignificant number of people together with balanced experts,presenting for it, and will be discussing the timing of goingforward on those meetings. There was also significant discussionon what form of process could ultimately be best to lead to adecision. I thought that the discussion was very productive.People had differing views, but I think if you were there, youwould have felt that the differing views being expressed weretruly tactical and there was not a sense of game-playing. As youknow, some people have proposed the President put out a plansoon, a specific plan. Others encouraged the President to try tocome up with a smaller process eventually that would allow for abipartisan plan to come forward. Still others suggested a seriesof consultations that would allow the President to work with someof the key committee people, so, as one person said, it would besomething the President was pushing, but it would have enoughfingerprints from both Democrats and Republicans that nobodycould walk away from it. I cannot tell you that anything was resolved in termsof what the exact process was, but I thought that many positiveideas were discussed. There were different views on how quicklyand whether the President should put forward a plan. There alsowas agreement that we both had to broaden out and bring morepeople into the process, but that at some point in the processsmaller groups had to emerge who were capable of sitting andworking down through the details. I will say again, the prospect or the occasion inDecember, a month before the beginning of legislative process ona key issue like Social Security, to have this many members ofCongress, Democrat and Republicans, come here, many of themtravel from out of town just for this meeting, for really apacked house of complete, full participation with the Presidentin this kind of four or five hour session I think was verysignificant. And I think to the degree that people felt thatthere was starting to be some polarization among some of theoutside groups and interests, I think everybody felt that thiswas a positive bit of momentum for the notion of getting thisdone, working in a bipartisan and civil way, and trying to beable to have discussion and disagreements without some of theharshness and politics that have too often characterized theSocial Security debate in the past. Q Are you able to say now, having gone through theday, whether the main obstacle -- or maybe you can proportionthem -- will be actually figuring out the nuts and bolts of aplan, or getting through the political obstacles that you justtalked about? MR. SPERLING: I think the clear answer is both. Ithink that -- I think both are going to be a challenge. A lot ofthe people tried to -- in the session with the President, severalof the senators tried to express that while some of thedifferences seemed large, that in fact there was more agreementthan people might see. There was very large agreement on theimportance of dealing with the issue quickly. There wassubstantial agreement to the notion that there should be someeffort to bring higher returns into the Social Security system. In, for example, the meetings with Reischauer andFeldstein, they were both emphatic on the notion that SocialSecurity needed to have higher returns. And as some peoplepointed out, what you really have is a very strong, significantdisagreement that exists on how to pre-fund for higher returns,whether it should be done more collectively or individualized;and that people of good faith should be able to get together andto argue through those things. And even one of the people who isthe absolute strongest proponent of individual accounts, a SenateRepublican, who argued that he felt that at the end of the daythat would prevail, was very forthcoming in suggesting thatpeople like himself should be willing to sit down and listen andlook at the Reischauer-Aaron plan and others and talk through thedifferent issues. So I think that a lot of work still needs to be done bypeople in looking for the type of approaches that could bringpeople together. I think this is the normal part of a process.People are putting out specific plans, they're putting out theirideal plan and they're laying markers and they're laying outideas. Now the legislative process starts, and that requiresnot just the President, but members of both parties to start theeffort of looking for what might bring enough people together sothat you could get bipartisan majorities in both Houses. Q Are you looking toward getting something done bythe State of the Union message in terms of a plan out there? Andwhat effect would an impeachment vote have, a vote forimpeachment have on this bipartisanship that you have seen today? MR. SPERLING: On your first point, in terms of what wewant to do by State of the Union, the President, in virtuallyevery meeting that he's had with congressional leaders has triedto encourage as much meetings and conversation and consultationas possible before the State of the Union. To be perfectly honest, there is a little bit of beingon different clocks here. The normal process for members ofCongress -- and I don't say this in the slight bit to be critical-- but the normal congressional process is not to be in town thatmuch between now and the State of the Union, and, yet, for us, wewould like to have as much engagement as possible by the State ofthe Union; that clearly gives the President more information sohe has a greater sense of how he can use the State of the Unionto bring people together. So I think, obviously, that will be a very big questionfor us is how much engagement we can have before then, andobviously, how the President uses the State of the Union process.I felt like, when we left there, that we would be trying to getback together with this group for a similar meeting prior to theState of the Union. And there was discussion of each of the --the people there, going back to their respective leaders andtalking about, at the appropriate time, how both to broaden theprocess -- bringing more people in -- but how, also, at leastsome point down the road, to allow for smaller groups to startworking together on hammering out specifics. Q On the first question, about a vote forimpeachment -- would that destroy the bipartisanship that you nowhave? MR. SPERLING: You know, that is a question that Ithink other people, members of Congress, would have to answer.All I can say is that, for us, we go on with the business ofgovernment. We go on with the business of public policy. We goon with the business of dealing with issues like Social Securityand education, that we know the American people care about andelected us to deal with. And as long as we continue to have these criticalpriorities the country cares about, we're going to keep working.We are going to keep reaching our hand out to Democrats andRepublicans, to deal with issues like Social Security. And all Ican say is, from our point of view, there is nothing that isgoing to get in the way of us working in a bipartisan way to tryto deal with the Social Security issue. Q Gene, a number of the Republicans that came,including Mr. Archer, put great stress on this, that thePresident said he would be willing to put forward a specific planif that were decided that would be the thing to do. They seemedto draw the impression that he had moved somewhat toward that.Did he move somewhat toward committing to do that or not? MR. SPERLING: What he said was that he would do --what the President said and, I think, where there is a lot ofagreement between us and Chairman Archer, is that the Presidentis not challenging others to come first or asking, for example,the Republicans to come first with a plan. He understands thepolitical difficulties involved. He said very explicitly he's in a second term, he's thePresident, he understands that he needs to provide the politicalcover to anybody who is willing to come together and be part of abipartisan plan. And he said he would do whatever would be mosteffective in leading to a productive process that would lead tobipartisan legislation. He said that if he believed -- and there was realconsensus that him putting forward a plan at some point was thebest way to go forward, he was willing to do that. I think thediscussion showed today that there was some disagreement aboutthat. I would say probably at least half, if not more, of thepeople who spoke today encouraged the President to try to work ina bit more of a bipartisan way in coming forward with ideas. They were concerned that the President, by putting outa specific plan, might actually encourage people to just -- topolarize instead of come together. I spoke -- I had a goodchance to speak one on one with Chairman Archer yesterday. Ispoke to him. I think he is completely sincere. I think hewants Social Security reform done. I believe he wants to work ina bipartisan way. I think that what we may have is some tacticaldisagreement as to what's the best way to go forward. I think what he really wants is he wants a plan that hecan work in his committee and so that we're really moving forwardand that this doesn't just go on at a discussion forum endlessly.Many other people who spoke thought that it might be moreproductive to try to have a different way of putting a planforward. But, again, I really believe these are tacticaldifferences. I believe Chairman Archer is dealing in good faithwith us and would like to get Social Security reform done thisyear. Q Gene, you said that there was substantialagreement on the need for higher returns. Would it be fair,then, to say that that reflected the view of the administrationofficials who were there that most of them are in substantialagreement with that -- MR. SPERLING: Yes. Yes, and I think there's noquestion -- what the President said was that he felt that therewas growing agreement that in some way or another, one wanted tobring higher returns for the Social Security system. What he didsay was he thought that as this discussion carried forward thatpolicy makers like himself had to be very straightforward withthe American people about what the risks are with seeking higherreturns, but that he felt and that many of the people there feltthat overall, particularly when compared with the alternatives,that seeking some strategy to bring in higher returns throughinvestment would be a good way to go. Let me repeat: The President did say today, and hassaid in the meetings with his economic and Social Security team,that he believes we should be looking for ways to get higherreturns into Social Security. What the mechanism is for doingthat, obviously, remains a controversial issue, but I do believethere is a growing consensus, which the President is part of,that we do need the type of investment options that would bringhigher returns to Social Security. Q Are you talking about within the existing taxstructure? Are you talking about, as Gephardt said outside, anadditional tax-advantage optional plan, to invest in the privatesector? MR. SPERLING: I actually wasn't speaking one way orthe other on the issue you're talking about, which is whetherthere should be some form of individualized account. In thediscussion today with Bob Reischauer and Martin Feldstein, theywere both arguing for higher returns. Martin Feldstein wassuggesting that individuals should make that investment and hisargument was largely because he felt that gave people greatersense of individual control, avoided politicalization ofinvestment. Bob Reischauer argued that, when the collective, thegovernment, through a Social Security Reserve Board, does it,there's lower administrative costs, which saves money for people,and that it makes it easier to smooth out good and bad years. That is very much the heart of a lot of the debategoing forward. But again, there's a lot of agreement within thatdebate. The agreement is prefunding for higher returns and newinvestment options. And I think there's also a growing -- Ithought throughout the conference there was -- I don't want tosay unanimous view, but I thought there was a growing consensusthat, in some way or another, the surplus that we've reservedshould be part of the solution and that, with the surplus and thepossibilities for higher returns, we increase the chances ofhaving a Social Security reform package that keeps a strongstandard of living for America's senior citizens and could bepolitically palatable enough to pass. Q You said the surplus would be part of thesolution. The President said a while back, arguing against taxcuts this year -- once Social Security gets done, then, he seemedto suggest, he might favor tax cuts. Are you saying that, infact, maybe the idea is to take this surplus and future surplusesand cure Social Security that way, in which case there wouldn'tbe any surplus ever for a tax cut? MR. SPERLING: I think what the President believes isthat some portion of the surplus will be necessary for abipartisan Social Security plan. How much of that is yet to bedetermined. The President's view was, until we know, we shouldreserve 100 percent of it for Social Security. If we are able tocome up with a solution to Social Security that does not use allof the surplus, then our view has been that there should be aserious national discussion about what best should be done withthat surplus. We have not suggested it should just go to one thing.I think the President has certainly said -- and he said in thismeeting -- that, certainly, Medicare was a critical issue ofwhich one had to consider for use by the surplus. Certainlyother issues that are arguments that people have made havecertainly been for tax cuts. Also, some people have talked aboutthe remaining surplus being used for military readiness, andothers for priorities like education. So, all I'm saying is, our position is all of thesurplus should be reserved until we know how much is needed tofix Social Security. Not just hypothetically to fix SocialSecurity, but how much will actually be needed for a bipartisan,acceptable plan that will pass. If there's remaining surplus,surplus is left, I think that there will be a debate aboutwhether it should go to just debt reduction, Medicare, militaryreadiness, education, or tax cuts. Q What you call "surplus" is simply masked now bythe trust account of Social Security -- MR. SPERLING: No -- the point you're making is, overthe next several years, the overwhelming majority of the unifiedsurplus comes from excess Social Security payroll taxes. So oneof the strongest arguments for why the unified surplus should bereserved for Social Security, at least until we have fixed it, isthat so much of the surplus actually comes from Social Security. As you spread out your long-term projection, more andmore of the surplus comes from non-Social Security issues, butcertainly, some may argue that all of the surplus that comes fromSocial Security should be reserved just for Social Security. Q Did you hear that argument today? MR. SPERLING: I did not hear that argument so muchtoday, but I have certainly heard it when I have done forumsaround the country, and I think there are certainly people whowould make that argument. I'm sure that will be a seriousargument. Q How would you characterize the discussion ofraising the age eligibility and also lifting the cap, the $68,000cap on collecting taxes? MR. SPERLING: Both of those -- let's see. BobGreenstein presented the retirement age issues, and Ken Kiespresented the issues of raising the wage base -- let me makeclear, that does not suggest either of them was for that, thatwas their assignment. I would guess that Ken Kies is not wildlyexcited about that idea, although I really don't know his fullview. They were presenting -- there were very strongpresentations in the group that I was in. There was not as muchback and forth on that. I think people commented on the factthat the statistics shown today showed that a very large numberof Americans are now retiring at 62 or before 65. Only 30 yearsago, only about 10 percent of Americans retired at 62; now it isclose to 60 percent -- or at least retired enough to take theirearly Social Security retirement. Some of the people there were engaged in the 1983reform. In my group, Bill Archer was there, Jack Lew; both wereinvolved in '83. We talked about it some. But I did not get asense of how many people in the room supported or opposed eitherof those options. The issues presented on the raising of thewage base are that it now covers about 86, 87 percent. That'sgoing to continue to go down. One of the options that's been on the table is toeither stabilize that or to increase it to 90 percent. Thatobviously would make more revenues available for Social Security,but it comes at the cost of raising the taxes paid by more upperincome wage-earners. Q Can you just clear something up? When you saysome strategy for seeking higher returns, just to be clear, areyou saying the President endorses using some portion of SocialSecurity taxes to invest in markets, whether the governmentinvests it or whether individuals invest it? That's clearly whatyou're saying. MR. SPERLING: With the caveat that he has not made anyfinal decisions, I think that the answer is yes, that in someform or another, that is at least where he appears to be stronglyleaning at this time. Q Question? MR. SPERLING: The question was, in some form oranother was the President supporting some form of investment inmarkets for Social Security. And I said with the caveat that hehas not made any final decisions, he certainly seems to beleaning in that direction. Q Is he leaning away whether it's to governmentinvesting a portion of the money or individual accounts? Does hehave any preference with regard to those? MR. SPERLING: Those are good questions and I thinkthat's going to be one of the issues that is maybe the singlemost contentious issue in whether or not we get Social Securityreform. And at this point, I think the President feels that itwould be best for him to stay open-minded and to try to work withboth sides and see if we can start to find some common ground. Q Specifically, how did the President indicate todaythat he was interested in the question of higher returns? Ifhe's leaning, how did he tell them that? MR. SPERLING: Well, what happened was one of themembers spoke and I believe yesterday, in fact, Rick Santorum, Ibelieve, in his opening remarks talked about that ultimatelyyou have to raise revenues, raise taxes or raise returns. Thoseare the three options. And you could kind of argue there's afork in there which is use of the surplus which doesn't require achange of law to raise additional, but it would be allocatingsurpluses there. But when the President spoke, he said that he realizedthat there may need to be some tough choices that need to bemade, but that of the three main options presented, certainlymost people understood they were trying to find a responsible wayto raise returns, would be the most attractive to most of theAmerican public and to most members of Congress. He also said, though, that he felt people would have tobe straightforward in discussing the risks, which is that thereare years where the market -- there have been years where themarket has not performed as well. People would have tounderstand in any plan that while, over any 30 or 40-yearmeasure, even somebody who invested in the stock market in 1928ends up being a winner, that returns over a 30-40 year periodalmost always out-performed any other investment option, thatthere have been period of several years where the market has notperformed as well and there is volatility there, and that wewould have to be straightforward when talking to people andsaying that on the whole, our analysis shows this is the rightthing to do, a good way to get higher returns, but to make surethat the public fully understood what the risks entailed in doingso were and why we had decided that they were risks worth taking. Q Can I follow up? Is the President persuaded thatfollowing this path is the answer to the insolvency question orjust one ingredient, maybe the politically appealing ingredientto solving the insolvency question? MR. SPERLING: I think that if you look at SocialSecurity reform options four years ago versus now, I thinkthere's no question that the stronger fiscal situation we're in,the ability to have unified surpluses certainly makes the optionsless politically painful for members to vote for, and mostimportantly, allow for options that keep the standard of livingfor most senior Americans or people who will be senior Americansstrong. So I don't think we've expressed a view yet and willfor a while as to how much of the solution can come from use ofthe surplus or higher returns versus other more traditionalSocial Security options. Q Are you concerned that by saying this today,though, that you are in some way raising expectations about thisbeing the magic solution? MR. SPERLING: No, because I think that we've also madeclear that there are other issues that need to be dealt with,such as Medicare, which is also a long-term entitlement problemthat affects senior Americans. And I've mentioned other issuesthat clearly people in the policy arena in Washington and mostimportantly in the public care deeply about, from tax cuts tomilitary readiness to education and training, to those who favormore debt reduction. So, remember -- I think there are always two issueswhich is, how much of a surplus can you use and how much shouldyou use in light of what you think it could be used for and thealternative. I think you will find that a lot of people'sopinions on what should happen to the surplus are affected bywhat they think will happen in the alternative. Somebody today-- one of the experts today said that if they thought that all ofthe surpluses would be used for debt reduction, they might havedifferent views on what they thought should be done for SocialSecurity since they felt less confident that the money would besaved in a responsible way, they felt saving it for SocialSecurity or a large amount was not only good for Social Security,but would also lead to higher national savings than thealternatives where the money would not be saved in one form oranother. Q Gene, when you talk about there was agreement thatyou would continue to pre-fund Social Security, does that meanthat you've ruled out going back to a pay-as-you-go system? MR. SPERLING: I don't -- I think under anycircumstance you're not going to be -- I think what you'retalking about, and let me make clear on this -- I think peopleare moving towards more of a partially pre-funded system. SocialSecurity is and will be a largely pay-as-you-go system. Rightnow, I believe around 85 cents on the dollar go to pay existingbenefits. So you're largely dealing in pay-as-you-go world. But, look, the way Social Security works is -- a pay-as-you-go system works is, if you are one of the first people in apay-as-you-go system, you're doing great, because in the endyou're getting a benefit that's based on a 35 or 38-year worklife and you may have only worked 10 or 15 years. Then thesystem matures and people have worked a full career and they'regetting a full benefit. And that system can stay stable for awhile in a pay-as-you-go, as long as there is the same number ofworkers supporting the same number of retirees, assuming they'rehaving relatively the same amount of productivity. A pay-as-you-go system is essentially a commitment byone generation to pay for its parents and grandparents'retirement on the promise that the next generation will pay fortheirs. What we have now is a situation where the nextgeneration will not have as many workers per beneficiary, perretired person -- for two reasons; because of the baby boom andbecause people are living longer and working a smaller portion oftheir life. In that situation a pay-as-you-go system loses itsstability and then the rational thing to do is to start trying tosave more. So essentially what you're talking about is havingpartial pre-funding to make up for -- to deal with the fact that20, 30, 40 years out there is only going to be two workers forevery beneficiary. Q Well, what does that then do in terms of your needfor more money to do that? Because, after all, in 2012 or 2013,you're going to start dipping into this trust fund and then itwill be -- you'll be paying out more benefits than you will becollecting in taxes. So what does that do for -- MR. SPERLING: You still have a Social Security trustfund right now in which even though in 2013, the amount ofpayroll tax comes in is not enough anymore to meet the benefitsgoing out, you have accumulated interest savings in the SocialSecurity trust fund, they keep you going until you're around2021, and then you start redeeming bonds until 2032. That's whenthe trust fund runs out. Now, because of the stronger fiscal situation we're in,right now our projections show that, for at least a few decades,the government can both pay back the Social Security trust fundwhat it owes and still have a surplus on top of that. So we'rein a very different fiscal situation than we were fix or sixyears ago. Now, when someone says, how can you make the SocialSecurity Trust Fund real up to 2032, projections show you can notonly pay back on the IOUs in the Social Security trust fund, butyou have a surplus on top of that. So we're in a very differentsituation. At some point, however, I think both CBO's and OMB'slong-term forecasts show a surplus running out. So it can't bethe answer forever, but it can be part of the solution now. Q In the discussion over who does the investing, the government or individuals, was there any discussion about the distributional aspects of one plan or the other? What was the tenor of that discussion, and was there any movement on that issue? MR. SPERLING: There was a little discussion with thePresident. I have to say, I was in one of the panels -- I was inone of the groups, not the other. In the discussion with thePresident, there was certainly one Senator who spoke about theimportance of having a beneficiary impact statement, that anyplan would need to look at what the impact was on women, onlower-income Americans, and -- but I think your question is agood one. I do think that the debate right now may be getting somuch into the mechanism of how to do the investment that peopleare maybe short-cutting the debate on what impact it has on theactual people. And I think it would be a very good thing ifthere was more analysis where people looked at particular plansand said, How do those plans affect different people in differentsituations? We did talk -- in Bob Greenstein's presentation, he didtalk about the problem with single, elderly women, particularlywidowed elderly women -- why the system may not be working aswell for them in reducing poverty, and the fact that there werepolicy solutions that could be part of Social Security reformthat could deal with that issue. Q Gene, Gene -- do you want to follow? Q Yes, I do -- MR. SPERLING: This politeness, I don't know if I canhandle it. Q It's not the usual crowd. (Laughter.) What doesthat mean -- MR. SPERLING: Never sit in the front row. (Laughter.) Q What does that mean for which way you'll go? Imean, I assume that means if you're going to be even distributionor better-than-even distribution -- better than the samedistribution, you will have to go toward a government-sponsoredinvestment plan as opposed to individual investments. Is thatright? MR. SPERLING: I don't think that's a simple questionwhere there's a simple answer. I think that, on most issues, onmost things, it depends a lot on how you devise it -- whetherthere's guarantees for programs -- what the distribution is like. For example, I'll give you -- for those who favorindividual accounts, and again, I'm not expressing our view --for those who favor, there are certainly some that are moreprogressive than others. One that gives everybody a flat amount-- so whether you make $20,000 or $80,000, you still get severalhundred dollars, the same amount -- is obviously going to be moreprogressive for a lower-income person than one that just takes apercentage of income. So I think within any system there are probably waysthat you can design it so that it can be more progressive or lessprogressive, and I think that is one of the issues that you'llsee when people start putting out more specific plans. Butagain, while there seems to be a rather -- a time-simple debatebetween whether you do pre-fund collectively or individualized --within those options are a lot of design choices and a lot ofdifferent ways you can splice it, that can have a large effect onthe distributional impact. Q Gene, why weren't Livingston and Lott there, anddoes it matter for the White House that they weren't? MR. SPERLING: We were very happy with theparticipation today. Obviously, it would have been nice to havehad both of them, but the fact was, each of them was asked todesignate 12 people; they each did; they each participated bysending outstanding people there. And clearly, some of thepeople that they've designated to be some of their point peoplespeak -- Livingston is Speaker-designate now. He may feel somediscomfort about appearing in the role of the Speaker before he'sactually Speaker. And again, he's going through a transition. So I do not assume anything bad about that at all. Theimportant thing was -- I don't know the exact title you'resupposed to use these days -- but Speaker-designate Livingstoncooperated with us, chose excellent people to participate. Andso we were very happy. It would have been nice to have him, butwe were very happy with his participation. Majority Leader Lott sent Senator Santorum and Judd Gregg, who are the two people he's used in the past as his point people on Social Security. In addition, we had Pete Domenici and Phil Gramm, who are putting out their own plan now. So you really had a significant number of the Social Security heavyweights from both parties, with the full cooperation of the Republican and Democratic leaders. So I look very favorably on the participation and the willingness to cooperate of all of the leaders. Q Should we look for the President maybe to gosomewhere in between actually going to a full-blown plan and thefive points he's talked about today. Is that maybe an interimground that we might expect, such as touching on some of theareas that you kind of talked about today? MR. SPERLING: I really am not in a position to say. Ican tell you the type of discussion that we have internally a lotand will continue to have. And what was helpful today was thatso much of our discussion has often been internal, just becauseof the season. Now, to have 50 of the key members of Congressaround giving their input, does give us a lot better sense ofwhat type of thing would move forward. The more we can have these types of discussions andmeetings, the better position the President is in to know whattypes of steps would be unifying as opposed to polarizing. Q Gene, speaking of polarizing, there are a numberof interest -- interest groups seem to be digging in their heels.Two major ones came up last week. Do you think now that some ofthe key players are starting to come together, the interestgroups will come along? Or might they be disruptive to theprocess and might still push for full privatization or no changeat all? MR. SPERLING: I think that it's understandable thatpeople with strongly-held views want to put out strong positions,and many times they want to do that not because that's where theythink the end product has to be, but they want to express theirviews strongly and they want to move the center a little moretowards their way. Our hope would be that while people arestrong in their views that they allow this debate to have some ofthe civil and bipartisan tone it did today. I'll tell you, in the breakout groups yesterday peoplewere really struck by some of the terrific discussion that wenton between some of the members who were from -- some of theinterest groups were strongly for just collective investmentversus private accounts. People thought it was a very productiveand civil debate. And there's nothing wrong with people havingstrong opinions, and not everybody has to believe, as we do, thatwe should try to find a way to come to a bipartisan SocialSecurity reform, but the President has spent over a year sayingthat we should try to derail this third-rail mentality thatexists for Social Security. And to the degree that everybodycould participate in that form of discussion, I think it willdramatically increase the chances we can do some good for thecountry. Thank you. | 
