Chained CPI is stealth cut to Social Security benefits. Not acceptable.

[madfloridian]

How the Chained CPI is a stealth cut to Social Security benefits

The Center for Economic Policy Research (CEPR) has published a brief on one of the proposed changes to Social Security under the “fiscal cliff” deal – this one known as the “Chained CPI.” The Chained CPI is a bit complex, but here’s the bottom line: it would cut benefits for Social Security recipients by shrinking annual cost-of-living adjustments.

CEPR calculates that it would equal a 3% benefit cut over 10 years, a 6% benefit cut over 20 years, and 9% after 30 years. For the average worker retiring at age 65, this would mean a cut of about $650 each year by age 75 and a cut of roughly $1,130 each year at age 85. This is especially significant given 3-out-of-5 seniors rely on Social Security for more than half of their income.

Some argue the Chained CPI is a more accurate calculation of inflation, but this is not the case for seniors. As we reported in an earlier post, seniors tend to spend more money on health insurance, hospitals, prescription drugs, and nursing care – expenses that are not taken into account by the current CPI calculation. The Bureau of Labor Statistics, which manages the CPI indices, has created an experimental index called the CPI-Elderly, which more accurately reflects the costs faced by seniors. The CPI-Elderly shows a rate of inflation about 0.3% higher than the current CPI calculation.

CEPR also reports the Chained CPI amount to a stealth tax increase on all Americans, but especially those at middle and lower incomes: “For example, workers with incomes between $10,000 and $20,000 would experience an increased tax burden of 14.5 percent, while those with incomes over $1,000,000 would just see an increase of 0.1 percent.”

This is the deal on the table right now, offered by Obama.

It is wrong.

[Summer Hathaway]

1. Any links available that confirm

that "this is the deal on the table right now, offered by Obama"?



TIA!

[madfloridian]

8. Yes.

http://www.washingtonpost.com/politics/potential-fiscal-cliff-concessions-draw-fire-from-left-and-right/2012/12/18/1dc111de-4896-11e2-b6f0-e851e741d196_story.html?tid=pm_politics_pop

[Egalitarian Thug]

2. Of course it is. They've been screwing with the CPI to hold down benefit increases for decades

but now they really need to allow inflation to return in order to keep the fraudulent financial charade going and that's a problem because it would mean poor and old people getting more money.

So this is their solution, instead of raising benefits by the 3 tenths that reflect real costs, chain the people's benefits to a fictitious index that cuts their benefits by 2 tenths.
& R

[HiPointDem]

3. kr. as another poster said, it's not even a measure of inflation, it's a measure of how consumers

react to inflation.

it's just a benefits cut, pure & simple.

[madfloridian]

9. Exactly. A benefits cut.

[AnnieK401]

4. I went on SS disability this yr. at 55.

My cost of living increase for next yr. was $20 per month!hat's $240 pr. yr. How much lower can they go?

[djean111]

6. Oh, much lower. They can cheerfully plan this while eating filet mignon, too. At our expense.

Chained CPI - as I understand it - if decent beef is on the list of things considered for inflation, well, beef can be replaced with cheaper beef. Cheaper beef can be replaced with cheaper chicken (still protein, you know!). And then cheaper chicken (when the necks become too expensive, I assume) can be replaced with the equivalent of canned cat food. Thus the "Cat Food Commission".
Maybe they can borrow an existing list of how many calories will stave off outright starvation from some other country.

If Obama agrees that the current rate of COLA for Social Security is too high - well, I will just go quietly from political forums and such.
I hadn't really considered what voting for a lesser evil meant. Shrug.

(edited because proper spelling is always nice.)

[Babel_17]

5. This would be a sellout of our victory at the polls

Democratic legislators need to dig in their heels and loudly repeat their opposition to this.

[aandegoons]

7. Seems all good cop bad cop to me.

We cannot win in this light. The two party system is a failure and really needs to be changed.

[spanone]

10. 'This is the deal on the table right now, offered by Obama'. ....not true

http://www.democraticunderground.com/10022021289

[madfloridian]

12. Yes, it is true. From last December:

http://www.democraticunderground.com/10022417077

[Triana]

11. Tweet him here: @ChrisVanHollen

I just did:

@ChrisVanHollen - NO! We're NOT BUYING IT! Chained CPI is stealth cut to Social Security benefits. Not acceptable! http://www.eoionline.org/blog/how-the-chained-cpi-is-a-stealth-cut-to-social-security-benefits/