For Immediate Release
July 22, 2005
Bush Social Security Plan Would Hurt San Fernando Valley Workers
Benefits Would be Cut for 190,000 Wage Earners in 27th District
Washington, D.C. - Congressman Brad Sherman on Friday released a new report http://sherman.house.gov/27thDistrictReport.pdf detailing how San Fernando Valley residents would face steep Social Security benefit cuts under a proposal by President Bush.
"This study brings home the bad news that the president's plan to privatize Social Security would hurt middle-class workers in the San Fernando Valley," Sherman said. "The president's plan would undermine retirement security by cutting guaranteed benefits for future retirees, and his risky privatization accounts won't make up the difference."
The report prepared by the House Government Reform Committee at Sherman's request analyzed the impact of the president's proposal to peg Social Security benefits to prices instead of wages. The study specifically examined the impact on workers in California's 27th Congressional District, which includes roughly one-half of the San Fernando Valley. The report found that the president's plan would:
Cut benefits for more than 190,000 wage earners, 67 percent of all workers in the district.
Cut benefits by an average of $2,340 per year for wage earners between 35 and 55 years old, and by an average of $5,000 per year for younger wage earners. More than 49,000 wage earners in the district would face benefit cuts of more than 20 percent a year.
Reduce lifetime benefits by more than $15 billion for current wage earners in the district.
The analysis shows that middle-class families in Congressman Sherman's district would be hit hardest by the benefit cuts. According to the report, more than 72 percent of the cuts will come from middle-class workers who earn between $30,000 and $90,000 annually.
The Social Security Trust Fund has accumulated more than $1.7 trillion in reserves that are held in Treasury bonds. According to the Congressional Budget Office, even if no changes are made Social Security will be able to pay full benefits for the next 50 years. "We have time to come up with a bipartisan solution that will strengthen the Social Security system for generations to come," Sherman said.