Maloney’s Constituents Face ‘Disastrous’ Benefit Cuts Under Bush S.S. Plan, New Report Says
Congressmember Carolyn Maloney says that according to a new report on President George W. Bush’s proposed Social Security changes, many of her constituents would suffer benefit cuts amounting to billions of dollars.
“The more people learn about the Bush Social Security plan and its effects, the more they reject it,” Maloney said. “I am first and foremost concerned about the effects the plan would have on my constituents in New York, and it is clear that the effects would be disastrous.
“I hope the president would give up this risky privatization scheme and come to the table to talk about sensible and more subtle adjustments to help strengthen Social Security well into the future.”
The new report that Maloney (D–Queens/Manhattan) cited was produced by the Special Investigations Division of the House Government Reform Minority Staff.
According to the report, Maloney said, 79 percent of wage earners under 55 in her district, totalling 269,000 constituents, would face benefit cuts due to the shift from wage to price indexing of benefits under the Bush plan.
In addition, the cuts would be significant: more than 133,000 wage earners under 55 in the district would face cuts of more than 20 percent, wage earners under 35 would face an average benefit cut of $10,260 per year and for wage earners between 35 and 55, the average benefit cut would be $3,600 per year.
Instead of indexing benefits to the rate of wage increases, Maloney said, the president’s plan would index them using a combination of the increase in wages and price inflation, leading to the benefit cuts measured by the Government Reform report.
According to the report, she continued, the middle class in her district would be particularly hard hit under the president’s plan, bearing 64 percent of the cut. In total, the lawmaker said, her constituents would lose $32.2 billion in benefits just from the indexing change.
The report also indicates, Maloney said, that additional reductions in benefits would result from the “clawback” provisions of the administration’s plan for private accounts. The clawback she explained, reduces Social Security benefits by the amount deposited in private accounts plus interest.
Furthermore, she noted, the report concludes that a large number of widows and surviving children in the district would see a reduction in benefits since Social Security benefits for survivors are tied to the benefits of the deceased wage earner.
Maloney’s district includes parts of Midtown and the East Side of Manhattan, as well as Astoria, Sunnyside and Long Island City in Queens.