News Release
Congressman Bob Etheridge
North Carolina

August 16, 2005

                                       Contact: Joanne Peters
                                       Phone: (202) 225-4531

RALEIGH - On the week of the Social Security Act's 70th anniversary, U.S. Rep. Bob Etheridge (D-Lillington) released a report commissioned by the U.S. House of Representatives Committee on Government Reform showing that the President's Social Security plan will reduce guaranteed benefits for thousands of workers in North Carolina's 2nd Congressional District and throughout the state. President Bush has proposed that the current Social Security system be replaced with a system where workers can divert a portion of their payroll taxes into private accounts.

"Instead of celebrating 70 years of keeping the 'security' in Social Security, the President has proposed a plan to dismantle one of our nation's most successful domestic initiatives. Privatizing Social Security is like tearing down the barn to patch the roof - it adds trillions of dollars to the national debt and does nothing to fix the long term challenges facing Social Security," said Rep. Etheridge.

"The problem with privatization is that it hands future generations a triple burden: a reduction in guaranteed benefits, a hefty transition cost and a Social Security system that is no closer to solvency. This is a classic bait and switch maneuver, and North Carolina workers and retirees who rely on Social Security will not be fooled by tricky political schemes to line the pockets of Wall Street bankers with their retirement savings."

The report found that under the President's plan:

• Guaranteed benefits would be cut for 70%, or 199,000, of the wage earners in the 2nd Congressional District.
• Wage earners between 35 and 55 can expect an average benefit cut of $1485 per year. Wage earners under 35 can expect an average benefit cut of $3,600 per year.
• Wage earners in the 2nd Congressional District who are currently contributing to Social Security will lose $14 billion in benefits over their lifetimes. More than 69% of this cut will come from middle-class workers who earn between $30,000 and $90,000 annually. Across the state, workers can expect to lose $186 billion over their lifetimes.
  
• The President's plan could also cut benefits for widows and surviving children in Rep. Etheridge's district.
  

Etheridge was joined by North Carolinians concerned about saving Social Security. Charles King, a semi-retired grandfather from Raleigh, also spoke about how Social Security privatization would impact his life.

In 2005, more than 47 million Americans, including 97,612 people in the 2nd Congressional District, will receive nearly $510 billion in Social Security benefits. The average benefit for a retired worker is $950 a month. For nearly two-thirds of retirees, Social Security provides more than half their income. In addition, Social Security provides assistance to more than 6 million disabled workers, nearly 5 million widows and 4 million children.

To read the full report, please click here.

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