Anna Escobedo Cabral, Treasurer of the United States

Remarks by Anna Escobedo Cabral, Treasurer of the United States, before the National Association of Hispanic Publications

It is great to be with you today. I have had the pleasure of knowing and working with this great organization and your leadership for many years now. They have modeled an extraordinary commitment to the association members, and to the Latino community. I congratulate Hernan Guaracao, Eddie Escobedo and Tom Oliver for their vision, dedication and for a tremendously successful conference this year. I also want to acknowledge and thank Zeke Montes, your immediate past President, for the fine work he did and continues to do on behalf of NAHP.

As the largest minority, representing more than 14 percent of the population, wielding greater than $700 billion in purchasing power, yours is a market few can afford to ignore. Your newspapers continue to be an important medium for reaching that market.

But perhaps most important, you are all examples of how a business can do well and do good at the same time. Indeed, a core function of your mission is to inform. As one of the most important sources of information for Latino households, your continued success and viability is critical to our shared goal of improving the quality of life for Latinos.

In this there is much work for us to do. Whether it is about working to increase high school and college graduation rates, improving our access to and understanding of health care and healthy living, or helping Hispanic business owners to grow and prosper, your efforts to make sure families have the information they need to succeed makes a difference to so many lives.

The same is true for a particularly important area we have in common. Like our national Latino leaders, President Bush's Administration has been working to ensure that financial literacy is accessible to Latino families.

The challenge can be daunting at times. A few facts help illustrate the point:

When a group of Americans was given a 14-question test of their financial literacy, they answered less than half the questions correctly.
82 percent of high school seniors failed a 13-question quiz examining their knowledge of issues like interest rates, savings, loans, credit cards and calculating net worth.
An estimated 10 million Americans have no relationship with a mainstream financial service provider such as a bank or credit union. And, unfortunately, 40 percent of those unbanked are Hispanic. Clearly, we do not represent 40 percent of the population.
Finally, 75 percent of Hispanics have not accumulated enough savings for retirement. They rely exclusively on Social Security for their retirement.
As highly successful and influential individuals in the publication industry, you hold a number of competing titles: business owner, parent, son or daughter, spouse, friend, committed citizen and community leader. These and the many others that follow each of you lays the ground work for the generations to come. We share a strong commitment to family and community, across generations.

I, like you, wear a number of those hats as well. Among them, is my current position as Treasurer of the United States which affords me the opportunity to help make the President's vision of an ownership society a reality. I believe in that vision and the promise it holds for Latino families.

The President has said that if you own something, you have a vital stake in the future of our country. He believes that the federal government should change to help meet the challenges of our times. Strengthening Social Security for future generations; ensuring that the pension promises made to workers and retirees are kept; making the tax code simpler, fairer and pro-growth; reducing the burden of lawsuits on our economy; and expanding access to affordable health care options with health savings accounts are all critical milestones toward meeting the needs of Americans in our changing world. And we'll continue to work to grow the economy and hold the line on spending so that we remain on track to cut the deficit in half by 2009.

When he talks about an ownership society, I believe the President is speaking directly to the heart of Latinos. We have enormous faith and commitment in the American Dream – to work hard and produce a bounty to share with your family, to own a home, a business, to get our children through college, have access to quality healthcare, to see our parents retire with dignity, and know that our children will be able to do the same.

As a result of his vision and efforts, during the first four years of his Presidency, we saw lower taxes spur our economy back to health, we saw businesses grow, prosper and create new jobs, and we witnessed first hand a boom in homeownership.

In his second term, the President has embarked on an aggressive campaign to tackle the hard issues of our times, chief among them, Social Security reform. In that way, he reminds me of my very brave and courageous grandparents, for they had to risk all they had, they had to risk a great deal, to start a new life in the United States.

The President in his State of the Union Address called on Congress and the American people to work together to fix Social Security. It's a system in desperate need of repair. It was created in 1935, 70 years ago. And if it's not fixed now, we will end up saddling our children and grandchildren with an enormous financial burden.

Changing our Social Security system is a tremendous task that can only be done if we join together to make it happen. We all know that "En la union esta la fureza." One will not make a difference but many will. It is important for each of you to know and understand this debate, and what is at stake. Strong, independent men and women like you can change the course of history for the better for this great country and for the Latino community.

Social Security provides a critical foundation of income for retired and disabled workers – people we know and care about. Perhaps your mother and father, or an uncle or friend. Indeed, for one-third of Americans over age 65, Social Security benefits constitute 90 percent of their total income. Hispanics, African-Americans, and unmarried elderly women are even more reliant on Social Security. More than 40 percent of Latinos rely on Social Security as their sole source of revenue for retirement.

We know two things - Social Security is safe for today's seniors, but it is in serious danger for our children and grandchildren.

As you may know, Social Security is a pay-as-you-go system with today's workers paying to support today's retirees. But each year, there are more retirees taking money out, and not enough additional workers to support them. In the 1950s there were about 16 workers paying for every beneficiary. Today, there are about 3, and eventually, when today's younger workers retire, there will only be two workers to support each person on Social Security. Add to this the fact that the first members of the Baby Boom generation turn 60 next year, in 2006. You see, this is not a distant problem. It's just around the corner.

By 2018, the government will begin to pay out more in Social Security benefits than it collects in payroll taxes, and shortfalls then grow larger with each passing year.

As a result, our children get a raw deal. In order to make up the shortages, they will face significant increases in taxes, and huge cuts in benefits.

One of the tests of leadership is to confront problems before they become a crisis. President Bush came to Washington to solve problems, not pass them on to future Presidents and future generations. He knows that the longer we wait to take action, the more difficult and the expensive the changes will be. Doing nothing will cost the most in the long run, resulting in either dramatic tax increases, severe benefit cuts or both.

Any fix will require bipartisanship. There are a variety of good plans that have been proposed in the past to fix Social Security. The President will work with Congress to determine the best elements of the proposals that have been put forward. This nation must always strive to leave behind a better America for our children and grandchildren. If we invest now and work to fix the problem, we can leave them with a more secure retirement in the future.

Fixing Social Security is also going to require a productive and well-informed debate of the issues. Secretary Snow last week launched the "60 Stops in 60 Days" tour in which Administration officials will crisscross the nation to take the President's message on strengthening Social Security to the American people. Another tool in this effort to encourage a national dialogue is the Web site Treasury launched yesterday: www.StrengtheningSocialSecurity.gov. Its purpose is to provide Americans with information on the serious problems that the Social Security system faces. I encourage you to check it out.

In order to move the debate forward, the President has laid out some principles for reform as he works with Congress to find a solution.

He is committed to protecting current and near retirees. There will be no changes for those in or near retirement. No one born before January 1, 1950 will be affected.

The President has also said that he will not raise payroll tax rates because higher taxes will slow economic growth. As business people, you know only too well the potential dampening effect of increased taxes.

Another guiding principle of reform is that we must find a lasting solution – a permanent fix. The system and the American people deserve better than a band-aid approach that will find us back at square one in a few short years.

Finally, the President believes that voluntary personal accounts must be a part of the solution because they give younger workers the option to build a nest egg they can call their own. Government can't take it away, and they can pass it on to their children.

Personal retirement accounts are a better deal for the younger worker, who would be able to choose from a conservative mix of bonds and stocks that would yield a greater return than the younger worker is earning in the Social Security Trust. A young person who earns an average of $35,000 a year over his or her working career that elects to participate in the personal account option, based on conservative projections, would have nearly $250,000 saved in the account at retirement. That's the power of compound interest, something you all know a great deal about.

That money would provide a nest egg for the owner of the account and give them the opportunity to watch it grow over time at a rate greater than anything the current system can deliver. It is money that that person can pass on to whomever he or she chooses.

You know, my father worked hard all his life, and paid into the Social Security system. He filed the paperwork necessary to begin receiving benefits, but died before receiving his first check. He died the same month the checks were scheduled to start coming. He died too young, of course. We came from a very modest home. He worked hard all his life, but could never really get ahead enough to save money. Social Security was all he had to support himself in his retirement. But he died before receiving a single check. He would have given anything to be able to pass those funds on to his children. Instead, the government kept that money.

Personal retirement accounts would ensure that Latino families have a chance to save and grow their hard earned money in an account that belonged to them, that they could pass on to their children.

Change is a scary thing. Few of us are comfortable with change, but, as we learned during the course of our lives and careers, "Para nadar hay que tirarse al agua." I know that you all have had to jump in the water a few times. Here's your opportunity to jump in and make a real difference for your parents, yourselves, and your children. I am very proud of being among so many young, bright, and committed Latinos, because I know that together, we can accomplish remarkable things.

My grandmother used to say "La gallina vieja da buen caldo." Not that I am a gallina vieja by any means, and I'm not suggesting you are, but I do believe that the talent and wisdom in this room ensures we have much to look forward to in the future. The President has faith in you, as well. He is working hard to ensure that all Americans share in his vision of an ownership society. That vision holds great promise for our community.

Congratulations again for a successful conference. Thank you to each and every one of you for the work you do everyday at work, at home, and in the community.

-30- FROM THE OFFICE OF PUBLIC AFFAIRS March 13, 2005 2005-3-13-1-17-9-28330 SOURCE: United States Department of the Treasury