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Trump is working on a stealth plan to cut Social Security benefits and avoid 2020 backlash.
https://www.rawstory.com/2019/05/trump-is-employing-this-insidious-strategy-to-attack-social-security-and-avoid-a-massive-2020-backlash/
Last week, the Trump administration revealed that it is planning to employ the so-called chained Consumer Price Index (CPI) in a way that does not need congressional approval. “Chained CPI” might sound technical and boring, but anyone who has closely followed the Social Security debate knows better. It has long been proposed as a deceptive, hard-to-understand way to cut our earned Social Security benefits.
Trump plans to switch to the chained CPI to index the federal definition of poverty. If he succeeds, the impact will be that over time, fewer people will meet the government’s definition of poverty—even though in reality, they will not be any less poor. The definition is crucial to qualify for a variety of federal benefits, including Medicaid, as well as food and housing assistance. The announcement was written blandly about considering a variety of different measures, but anyone who knows the issue well can easily read the writing on the wall.
So, what does this have to do with Social Security? Like the poverty level, Social Security’s modest benefits are automatically adjusted to keep pace with inflation. If not adjusted, those benefits will erode, slowly but inexorably losing their purchasing power over time. These annual adjustments are already too low, but they are better than no adjustment at all. The chained CPI would make these adjustments even less adequate. The top line of the following chart shows what a more accurate adjustment would look like. The line below it shows what the current adjustment does to benefits, and the bottom line shows what the stingier chained CPI would do:
Proponents of the chained CPI say that it is better at measuring “substitution,” but don’t be fooled. The current inadequate measure already takes into account substitution of similar items. This is the idea that if the price of beef goes up, you can substitute chicken. In contrast, the chained CPI involves what are called substitutions across categories. If your planned vacation abroad goes up, you can stay home and buy a flat screen television and concert tickets instead.
Last week, the Trump administration revealed that it is planning to employ the so-called chained Consumer Price Index (CPI) in a way that does not need congressional approval. “Chained CPI” might sound technical and boring, but anyone who has closely followed the Social Security debate knows better. It has long been proposed as a deceptive, hard-to-understand way to cut our earned Social Security benefits.
Trump plans to switch to the chained CPI to index the federal definition of poverty. If he succeeds, the impact will be that over time, fewer people will meet the government’s definition of poverty—even though in reality, they will not be any less poor. The definition is crucial to qualify for a variety of federal benefits, including Medicaid, as well as food and housing assistance. The announcement was written blandly about considering a variety of different measures, but anyone who knows the issue well can easily read the writing on the wall.
So, what does this have to do with Social Security? Like the poverty level, Social Security’s modest benefits are automatically adjusted to keep pace with inflation. If not adjusted, those benefits will erode, slowly but inexorably losing their purchasing power over time. These annual adjustments are already too low, but they are better than no adjustment at all. The chained CPI would make these adjustments even less adequate. The top line of the following chart shows what a more accurate adjustment would look like. The line below it shows what the current adjustment does to benefits, and the bottom line shows what the stingier chained CPI would do:
Proponents of the chained CPI say that it is better at measuring “substitution,” but don’t be fooled. The current inadequate measure already takes into account substitution of similar items. This is the idea that if the price of beef goes up, you can substitute chicken. In contrast, the chained CPI involves what are called substitutions across categories. If your planned vacation abroad goes up, you can stay home and buy a flat screen television and concert tickets instead.
7 replies
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= new reply since forum marked as read
the uproar when the Obama admin thought about doing this. That rat Geitner was involved i think...
