“A new analysis by Social Security Works finds that if the Administration’s proposed switch to the chained CPI for Social Security were enacted, the average worker retiring today at age 65 would see his or her Social Security benefits cut cumulatively by $15,615 by age 95.
Of course, many will not live that long. By age 75, the cumulative cut would be $4,642; and by age 85, $9,521, the report finds.”
“Chained CPI” is a phrase floating around the Social Security debate that is important to current and future Social Security beneficiaries. Chained CPI would change the way cost of living adjustments (COLA) for Social Security and other other government programs are calculated. The COLA increase that is applied to Social Security, food stamps, Supplemental Security Income, and other programs is determined by the increase in the consumer price index (CPI). The formula has been changed over the years to attempt to make it a more realistic reflection of increases in the price of consumer goods, according to economists. The chained CPI assumes that when prices increase for one product, people substitute a less expensive product.
Chained CPI = Cut to Social Security. That simple.
Chained CPI for Social Security means forcing seniors, veterans onto food stamps.
If you follow this blog, you already know the Chained CPI – a proposed change to Social Security’s annual cost-of-living adjustment (COLA) – is really just backdoor attempt to cut Social Security benefits. A retiree who lived to age 85 would see a cumulative benefit cut of nearly $14,000.
Chained CPI will devastate seniors, veterans, and the disabled.
Here are some additional resources that go into depth about Chained CPI: One, two, and three!
The “chained CPI” has become one of the linchpins of the debate in Washington over what to do about the cost of Social Security. The idea is to ratchet back the annual cost-of-living adjustment provided to recipients by basing them no longer on the standard consumer price index, but this new creature. Its virtue, supposedly, is that it points to a slower inflation rate than the unchained index, by about .3% a year.
The Chained CPI = benefit cut to Social Security.
Chalk it up to Republican obstinacy , Democratic opposition , or just plain common sense, the White House has dropped the noxious chained CPI from its Social Security proposals for the upcoming federal budget.
Don’t mind us as we take a Social Security victory lap.
Chained CPI would take food out of seniors’ mouths.
Iowa Sen. Tom Harkin heard from Iowa seniors about their opposition to chained CPI at a townhall event yesterday. For those who aren’t familiar, the report explains chained CPI as “a less generous way of calculating Social Security cost-of-living increases that assumes seniors will change their buying habits as certain items become more expensive.” The problem, of course, is that Social Security benefits are hardly generous for many seniors and the assumption discounts the notion that they’re already buying the cheapest items they can find.
"Compared with the current model, advocacy group Social Security Works has said that a person who began drawing Social Security at the age of 62 would be receiving 7.32 percent less in benefits per year by the age of 88 under chained CPI,” the report goes on.
Pres. Obama has signalled that he would be open to chained CPI, despite the fact that much of the left is opposed to the idea. Obama originally conceived of it as part of a “grand bargain” with Republicans. He’s since stopped talking about it, but the fact that he hasn’t ruled it out in the future is extremely disturbing.
"I’m sorry to say that the president of my own party has advocated this and he’s wrong," Harkin told seniors at the town hall. "I’m so tired of people saying we’ve got to cut Social Security. I thought, we got to come back and say something, no, you’ve got to increase Social Security."
And then we get the instructive moment:
Many attendees also spoke out against the plan, but one woman, Sheryl Tenicat, became emotional as she begged for Social Security not to be cut.
“I have $624 a month, that’s what I’m living on,” Tenicat explained. “Ninety-nine [dollars] of that goes to Medicare Part D and B. After I get my check, in two weeks, it’s gone. I have nothing. I live with what I eat here. And I just do not want my cost of living cut because I’ve paid in since I was 16 to the government. I’m looking for work in my retirement years so that I can exist. I do own my house, but I don’t know how long that will go because I have property taxes to pay.”
Tenicat added that her car had broken down and she now had to take the bus to the retirement center to receive her free meals.
“There is no way for me to eat less,” she said.
There is no more money in many seniors’ budgets to cut. They can’t decrease spending as costs rise, because they’re already paying rock bottom now.
The fact is that cutting Social Security is a scam to avoid rasing taxes on those that can afford it. Social Security adds nothing to the deficit, so cutting benefits to pay down deficits is actually a transfer of wealth from the bottom to the top. If the president agrees to chained CPI, it’ll be a deep betrayal of Democratic values and it will literally put people like Sheryl Tenicat out on the street — the very situation that Social Security was designed to prevent.
Chained CPI is a cut to Social Security which will affect seniors, veterans, and the disabled.
Some in Washington want to use the Chained CPI. The Chained CPI is a benefit cut to Social Security, plain and simple. It will affect seniors, veterans, and the disabled. Tell your Member of Congress not to support the Chained CPI.
1. Chained CPI is a significant benefit cut that compounds over time, hitting late old-age beneficiaries and the long-time disabled hardest. For a worker with average earnings retiring at age 65 in 2015, chained CPI would cut benefits $653 a year (3.7 percent) at age 75, $1,139 a year (6.5 percent) at age 85 and $1,611 a year (9.2 percent) at age 95.
Below in the comments, tell us what you think of the Chained CPI in three words or less.
Some information about the Chained CPI:
Three years after enactment, the chained CPI would cut the Social Security benefits of a typical 65 year-old by about $130. By age 95, the same senior would face a reduction of almost $1,400 per year.
Max Richtman Discusses the President’s Budget and Chained CPI on Fox News:
NCPSSM President and CEO, Max Richtman discusses the President’s Budget and the Chained CPI on Fox News. The Chained CPI is a Social Security benefit cut affecting seniors, veterans, and the disabled.
Meet CPI-E, the progressive alternative to chained CPI
One frequent progressive response to proposals like the Obama administration’s to tie cost-of-living adjustments (COLAs) for Social Security to chained CPI, which rises less quickly and would make COLAs costless, is that he really ought to use CPI-E.
Tell your Member of Congress NOT to support the Chained CPI.
