Congressman Elijah E. Cummings Proudly Representing Maryland's 7th District

FOR IMMEDIATE RELEASE
July 8, 2005

FOR ADDITIONAL INFORMATION:
Devika Koppikar
(202) 225-4741 or (202) 225-4025
Trudy Perkins
(410) 685-9199 or (202) 225-4741
Mike Christianson
(410) 685-9199 or (202) 225-9876

Washington, DC -- Today, Congressman Elijah E. Cummings (D-Maryland), released a report detailing how President Bush’s Social Security Progressive Indexing plan would severely reduce benefits for more than 189,000 residents who live in Baltimore City, Baltimore County and Howard County. The report entitled “The Impact of President Bush’s Social Security Proposal in Maryland’s 7th Congressional District,” was prepared by the House Committee on Government Reform - Minority Staff. Congressman Cummings serves on the Committee.

President Bush is proposing major changes to the Social Security program due to its expected shortfall in 2052. One part of this plan calls for progressive indexing of benefits, which involves the distribution of benefits based upon a combination of wage and price inflation.

Currently, Social Security distributions are based upon wage indexing, which guarantees that benefits are pegged to recipients’ standard of living. However, under progressive indexing, benefits would be drastically reduced because distributions would be tied to prices - which rise more slowly than wages.

“This change would not be voluntary, and would result in a lower standard of living for future Social Security recipients and increased poverty among the elderly,” Congressman Cummings said.

The report details the following impact of progressive indexing in the 7th Congressional district:

! The average benefit cut for workers between the ages of 35 and 55 years would be $2,375 per year;

! For workers who are younger than 35, the average benefit cut would be $4,620;

! More than 115,000 workers would see a 10 percent cut, while over 43,000 workers would see a 20 percent cut.

“Since Social Security provides more than half of the income for 60 percent of the program’s beneficiaries, a cut of $2,000 to $4,600 per year would mean that many citizens would have to seek other ways to buy groceries and medicines or pay their monthly bills,” Congressman Cummings said. “If the progressive indexing plan is implemented, a retiree would be forced to suffer through the so-called ‘golden years’ that they have worked all of their lives to enjoy.”

Congress is expected to consider Social Security reform bills this summer.

“On August 14, 2005, Social Security will mark its 70th anniversary,” Congressman Cummings said. “I intend to commemorate this milestone by working with my colleagues to defeat the progressive indexing plan.”

He continued, “From speaking with constituents and hosting town halls, it has become clear to me that people from all parts of my district are united in opposing major changes to Social Security,” Congressman Cummings continued. “I urge both Republicans and Democrats to work together similarly. We should be acting in thoughtful and deliberate ways to strengthen this effective and comprehensive family insurance program.”

A full copy of the report is available here..

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