New Calculator Shows Dangerous Cost of Privitizing Social Security

By:  Howard Berman
Date: March 7, 2005
Location: Washington, DC


Washington, D.C. - U.S. Rep. Howard Berman today expressed concern over proposals to privatize Social Security and unveiled a new feature on his website designed to demonstrate how much the people of California could lose under privatization.

The GOP privatization proposal means benefit cuts of up to 46 percent in the years to come. Rep. Berman's new calculator will help people in California learn how this plan will affect them.

According to the Center on Economic and Policy Research, under current proposals being considered to privatize Social Security, an average worker in their early 20s entering the workforce today would loose an estimated $152,000 in benefits over their lifetime.

Rep. Berman's Social Security calculator compares annual benefits under the current Social Security program with that of benefits under the plan favored by President Bush and most Congressional Republicans to privatize the system. The web calculator determines expected losses in Social Security benefits based on individuals' age and annual income. Expected outcomes are based on inflation rates as suggested by the Congressional Budget Office's (CBO) economic assumptions.

"Social Security is facing a challenge, not a crisis," said Rep. Berman. "There are many people in our district alone who rely on Social Security benefits. These are not just retired Americans, but also people with disability and those who have lost a parent. Instead of privatizing and enacting a plan that will gamble benefits in the stock market we should be working on a plan to make Social Security solvent for the long term."

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