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In reply to the discussion: Obama May Do Social Security Reform During Lame Duck Session, Senate Democrats Worry [View all]Samantha
(9,314 posts)right after the Bowles-Simpson recommendations. Here is a link (it is in the older DU Journals):
http://journals.democraticunderground.com/Samantha/57
here are some pertinent paragraphs:
"Switching to the chained CPI would reduce Social Security COLAs by about 0.3 of a percentage point each year, the Congressional Budget Office estimates, saving the federal government more than $200 billion over the next 10 years. Most of the savings would come from lower Social Security benefits and lower retirement benefits for federal employees, whose increases also are tied to the CPI.
The Senior Citizens League calculates that such a change would reduce Social Security benefits by an estimated 7 percent over a 25-year retirement. For a senior who retires in 2011 and receives the average Social Security benefit -- about $1,100 per month -- this would reduce benefits over 25 years by $18,634. The cuts would be very small in the beginning but escalate as recipients age." (emphasis added)(see http://www.tscl.org/action/emergencycola.a... .)
Additionally, the Senior Citizens League issued a emergency petition, the first three bullet points of which are:
" The Social Security COLA should not be calculated from the consumer price index (CPI), since the CPI is based on the purchases of young urban workers and does not reflect the actual expenses of senior citizens.
Even when CPI-based inflation is very low, the expenses that form the backbone of senior citizens budgets medical insurance, prescription drugs, fuel continue to rise alarmingly.
The federal government itself recognizes the inequity of a CPI-based COLA by calculating a senior-specific CPI formula, which it never uses, that shows our cost of living rises faster than that of most young people."
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Two days after Senator Sanders' office received the information, he stepped out and made a public issue of this. He has not let up. The chained COLA is not a good thing. Over a period of time, it very adversely impacts seniors' benefits.
Sam