Go ahead and sit down, please. Thanks for the warm welcome. It's good to be back in Florida. (Applause.) I'm looking for my little brother, but he didn't show. (Laughter.) It's okay, I love him anyway. Plus, he's doing a great job as the Governor. (Applause.)

If you're interested in serving the country, find somebody who is looking for shelter and help them find housing; love somebody who hurts; help somebody get rid of an addiction. You see, that's what -- that's how you change a society. And, Margaret, you're part of the army of compassion, and I want to thank you for your service. (Applause.)

We're headed toward peace, and that's important. (Applause.) We're still at war. I wish I could report to the nation during my State of the Nation, and here in Florida, that the war is over. It's not; there's still an enemy that cannot stand America, that still wants to inflict harm on our people, precisely because we refuse to relent in our love for freedom. But we're making good progress.

First, I want to thank the troops and their families for helping us -- (applause) -- for helping us stay on the offensive against the terrorists and the haters. Every time a terrorist is brought to justice, our children and grandchildren are safer. But, as well, every time a democracy is born in a part of the world and around the world, our children and grandchildren are safer, as well.

We've seen a remarkable, remarkable series of events when you think about it. In a very brief period of time, Afghanistan became a democracy, people were able to vote for a President of that country -- they tell me, for the first time in 5,000 years.

If you're interested in true peace in the Middle East, like I am, I fully understand that for there to be true peace, the Palestinian people must be allowed to express themselves in the ballot box, give their opinions in the public square. There must be a free press. In other words, there must be a true democracy in order for there to be peace in the Middle East. We're headed that way.

And finally, as you know, last Sunday the Iraqi citizens, in spite of threats and violence and beheadings and all kinds of horrible acts, went to the polls by millions. They defied the few acts of the terrorists. (Applause.) Every time a society becomes a free society, our children and grandchildren are better off, because free societies are peaceful societies. Democracies promote peace, and that's what we're interested.

So I'm enthusiastic and optimistic about what is taking place in the world, and I believe the United States has a duty and an obligation not only to future generations of Americans, but to people who live in tyranny, to promote democracy wherever tyranny exists. I believe every soul yearns to be free; that's what I believe. I believe everybody desires to be free. The Iraqi elections helped prove that point. The people did incredibly brave things in order to express their will. It's because people love freedom and if given the chance to be free, they accept freedom.

And for those of you who have got a loved one in the theater, or has a loved one in the theater today, you got to know that the Iraqi people appreciate our sacrifices. And I believe generations of Americans to come will appreciate the fact that this generation not only stood strong in the face of a Saddam Hussein, but stuck it out and helped the Iraqi people develop a democracy. Democracies lead to peace. And we have a duty -- we have a duty to help this world become more free so our children and grandchildren can grow up in a peaceful world. (Applause.)

We have a duty to make sure there's a retirement system for our children, too. And that's what I want to talk about. (Applause.) First of all, it's pretty interesting we're talking about Social Security, isn't it? It used to be called the third rail of American politics -- if you touched it, you would be shocked. (Laughter.) Sometimes shocked out of politics. (Laughter.) I campaigned on the issue because I thought it was important to do so. I also believe the role of a President is to confront problems -- not to pass them on to a future President, future Congress, or a future generation. (Applause.)

So the question you ask is, do we have a problem. Well, here it is. When Social Security was designed, the life expectancy was about 60 years old. In other words, you were expected to live that long. Today, life expectancy is 77 years old. In other words, people are living longer.

Thirdly, benefits are going up dramatically. So you've got a lot of people living longer, getting greater -- with greater benefits promised.

Once people recognize there's a little bit of denial in Washington -- they'll say there's not a problem. There's a fair number of people who say, it isn't a problem. If that's the prevailing view, nothing is going to happen, I fully recognize that. So step one is to say, we have a problem. And step two is to start coming up with a solution. And I have a responsibility to be involved with that, as well. It's one thing for a fellow to say, you've got a problem, you all go figure it out. That's not my style. My style is to say, we've got a problem, and we're going to figure it out. (Applause.)

All ideas are on the table except running up the payroll tax. And I don't care whether it's a Democrat idea, Republican idea, independent idea, I'm interested in ideas. And so I'm going to say, like I have been saying before to the United States Congress, bring them up. Let's see what you think we ought to do to solve the problem, and I'll work with you.

The way the system works is that you write a check -- you don't write a check -- they take it out of your check, a payroll tax, and it immediately goes to pay somebody's benefit. That's the way it works.

And why that is important is because with a conservative mix of stocks and bonds, you will be able to get -- your money will be able to get a better rate of return than the money inside the Social Security trust. And by getting a better rate of return inside the Social Security trust, your nest egg will grow big enough to help you when it comes time to retire. Not fully take care of all your retirement obligations, because you'll still have money in the Social Security trust, which you'll be able to receive at the appropriate time, but it will help complement the money. And that's important. And that's an important aspect of making sure that the promises made to the younger workers are more likely, or more closely to be delivered.

Secondly, I like the idea of promoting an ownership society. I think it makes sense to have people feel a stake in the future by owning something. I like the concept of people getting a quarterly statement about how their stocks and bonds are doing in their own personal account.

Now, there's some rules, and it's important for you to know the rules. One, you can't take your money that you set aside in the personal account and go to the race track. (Applause.) Or take it to the lottery. You can't do that. There will be a prescribed mix of conservative stocks and bonds into which you can invest, similar to the employee thrift plan at the federal government level. See, this already exists, by the way. I haven't invented this. Federal employees now get to do that. They get to take a portion of their money and put it in a conservative mix of stocks and bonds, five different programs they get to choose from, so they get a better rate and more money.

Thirdly, there are ways to make sure that you can invest in very safe certificates as you head into retirement. People are going to say, well, what happens if the stock market goes down the year I'm going to retire? Well, first of all, you've had your money in the market over an extended period of time. But if you're worried about that, there are ways to invest the money prior to retirement to help kind of shield from a cyclical market. What I'm telling you is these investment vehicles will be safe. There's all kinds of rhetoric about, well, you're not going to let people gamble their money. Well, if things are done in a conservative fashion, you will be able to achieve the objective of getting a better rate of return on your money and have more money available for you on retirement than if it had sat in the Social Security trust. In other words, that money will grow better.

This is -- what we're talking about here is, we're talking about a plan for everybody. This isn't just a management plan, this is an everybody plan. This is an idea that we've all got to come together. Whether you're union or management, Republican or Democrat, people from all walks of life must put their minds together to get something done, so our youngsters are not strapped with a system that's going to make it hard for this country's economy to continue to remain the best in the world, where people are going to be able to realize their dreams. That's what we're talking about.

By the way, people say, can you afford to do this? Well, first of all, I don't think you can afford not to do it. But we have got a plan; our idea is that we phase in these accounts slowly so that the transition cost is manageable in the budget process. In other words, these things just don't start all at once. You can start by putting $1,000 aside, or up to 4 percent, which is ever [sic] less, and over time that grows $100 a year, so eventually, you get to the 4 percent cap -- 4 percent of your income. So if you're making $90,000, you can have an account of $3,600 a year. But it's going to be phased in so that the transition cost is manageable.

Q -- really understand how is it the new plan is going to fix that problem?

THE PRESIDENT: Because the -- all which is on the table begins to address the big cost drivers. For example, how benefits are calculate, for example, is on the table; whether or not benefits rise based upon wage increases or price increases. There's a series of parts of the formula that are being considered. And when you couple that, those different cost drivers, affecting those -- changing those with personal accounts, the idea is to get what has been promised more likely to be -- or closer delivered to what has been promised.

Does that make any sense to you? It's kind of muddled. Look, there's a series of things that cause the -- like, for example, benefits are calculated based upon the increase of wages, as opposed to the increase of prices. Some have suggested that we calculate -- the benefits will rise based upon inflation, as opposed to wage increases. There is a reform that would help solve the red if that were put into effect. In other words, how fast benefits grow, how fast the promised benefits grow, if those -- if that growth is affected, it will help on the red.

Okay, better? I'll keep working on it. (Laughter.)