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Bush Social Security Plan Would Hurt San Fernando Valley Workers

July 22, 2005

Washington, D.C. - Congressman Brad Sherman on Friday released a new report https://node/2 detailing how San Fernando Valley residents would face steep Social Security benefit cuts under a proposal by President Bush.

œThis study brings home the bad news that the presidents plan to privatize Social Security would hurt middle-class workers in the San Fernando Valley, Sherman said. œThe presidents plan would undermine retirement security by cutting guaranteed benefits for future retirees, and his risky privatization accounts wont make up the difference.

The report prepared by the House Government Reform Committee at Shermans request analyzed the impact of the presidents proposal to peg Social Security benefits to prices instead of wages. The study specifically examined the impact on workers in Californias 27th Congressional District, which includes roughly one-half of the San Fernando Valley. The report found that the presidents 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 Shermans 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. œWe have time to come up with a bipartisan solution that will strengthen the Social Security system for generations to come, Sherman said.