Under Bush's Social Security plan, workers would be allowed to divert up to two-thirds of their payroll taxes into private investment accounts, according to a Social Security expert who was briefed on the plan Wednesday. Contributions would be capped at $1,000 per year, rising each year by $100. Social Security's guaranteed benefits would be reduced to make up for money diverted to the private accounts.

A variety of solutions have been proposed over the years, such as limiting benefits for wealthy retirees, raising the retirement age, indexing benefits to prices rather than wages, discouraging early collection of Social Security benefits and changing the ways benefits are calculated, Bush said.

"All these ideas are on the table," Bush said. "I know that none of these reforms would be easy. But we have to move ahead with courage and honesty because our children's retirement security is more important than partisan politics."

Social Security is expected to start losing money in 2018 or 2020, according to differing estimates from Social Security trustees and Congress' budget analysts, and to be unable to provide full benefits beginning in 2042 or 2052.

"It's wrong to replace the guaranteed benefit that Americans have earned with a guaranteed benefit cut of 40 percent or more," Reid said in the Democratic response to Bush's address.

Bush spoke from the rostrum of the House chamber, with Vice President Dick Cheney and Hastert seated behind him. More than two dozen guests were invited to sit in the first lady's box, including relatives of fallen U.S. troops, a pilot helping tsunami victims and individuals whose presence were meant to underscore Bush's domestic agenda, such as education, Social Security medical malpractice and other areas.

The capital's political establishment, from members of Congress and the Cabinet to the diplomatic corps and Supreme Court justices, gathered for the address. Security was intense, as it was for Bush's inauguration Jan. 20. Police closed off streets surrounding the Capitol and its office buildings.

Calling for major changes in Social Security, Bush said the program was "created decades ago, for a very different era." With financial problems that grow worse each year, he said, the system "on its current path is headed toward bankruptcy. And so we must join together to strengthen and save Social Security."

Trying to calm the concerns of older people, Bush said Social Security is strong and fiscally sound for the more than 45 million Americans now receiving benefits and millions more who are nearing retirement.