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A $19 COLA Hike Too Generous?!?

Only in Washington would you see folks who actually believe that  today's announcement of a 1.5% COLA hike (three out of five years it's been less than 2%) is too generous. This tiny COLA increase means that millions of seniors who rely on their Social Security for the basics like fuel, groceries and medical bills will once again find their expenses outpacing their Social Security benefit.  For the average senior, this COLA will mean about a $19 monthly increase, which incredibly some in Washington consider too generous.   

“Seniors know all to well, their living costs often outpace the COLA increase and a 1.5% increase is anything but too generous.  Proponents of a stingier COLA formula claim the Chained CPI is more accurate; however, in truth it is a benefit cut for millions of current and future retirees, veterans, people with disabilities and their families. Replacing the current COLA formula with the chained CPI will mean the typical 65 year-old, who filed for benefits at 62, would lose about $130 per year in benefits. By the time that senior reaches 95, the annual benefit cut will be almost $1,400, which is a 9.2 percent cut. 

Given that the average senior currently receives just over $14,000 a year in Social Security, it’s hard to imagine how anyone can argue the COLA should be cut.. Yet this is exactly what has been proposed by the White House and in budget negotiations on Capitol Hill.  The American people don’t support cutting Social Security to balance the budget and this annual COLA announcement should remind Washington why adopting the chained CPI is not only bad policy, it’s also bad politics.”...Max Richtman, NCPSSM President/CEO

There is a better way as our President/CEO, Max Richtman, has reported:

The BLS acknowledges the current CPI-W does not "produce official estimates for the rate of inflation experienced by subgroups of the population, such as the elderly or the poor. This is why we need a true elderly index like the CPI-E and not a formula change that will cut benefits and drive more seniors into poverty. A provision in Senator Bernie Sanders's bill to reauthorize the Older Americans Act (S. 1028) would require the BLS improve the CPI-E and should be adopted by this Congress without any further delay. 

Social Security, Medicare and Budget Conferees

Tomorrow, the newly appointed budget conferees meet for the first time to hammer out a budget deal conservatives hope will include benefit cuts to Social Security and Medicare.  In spite of the fact that budget cuts have already paid for nearly 75% of deficit reduction, with only 25% coming from revenue increases, even that’s not enough as some in Congress continue their attack on America’s safety net programs.

The National Committee urges Congress to reject plans to cut Social Security benefits through adoption of a new COLA formula called the Chained CPI.  We explain why in a letter sent to all 28 Budget Resolution Conferees today:

The chained CPI would reduce Social Security benefits for the oldest and most vulnerable Americans who would be least able to afford it.  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.  Moreover, the chained CPI would have a harmful economic impact on every state and congressional district in the country.  In a National Committee report released earlier this month, we found that the COLA cut could result in a $31 billion loss in economic output and the loss of more than 200,000 jobs nationwide in 2023.  For an estimate of how your state’s economy would be affected by the chained CPI, please see our Foundation Report.

Social Security does not face an immediate crisis and is not driving either the short-term deficit or long-term debt. Rather than cutting the already meager benefits, Social Security should be strengthened for the long-term by increasing the current payroll tax cap on earnings.

We’ve also urged the conferees to reject proposals to cut Medicare:

Regarding Medicare, beneficiaries already have high out-of-pocket costs, and because over half of beneficiaries are living on incomes of $22,500 or less, they cannot afford to pay more.  However, if the budget resolution includes Medicare cost shifting proposals, seniors and people with disabilities could be required to pay a $25 increase in their Part B deductible, a $100 copayment per home health episode, and higher Part B premiums for purchasing comprehensive Medigap plans.  And, further means-testing of Medicare would mean middle class seniors would pay higher Part B and D premiums.  These proposals would shift costs to beneficiaries without solving the underlying problem of overall health care inflation, and would make Medicare more complicated and difficult to administer.

Conservatives have said they hope to use these benefit cutting proposals, also included in the President’s budget, as bargaining chips in the budget conference which begins tomorrow.  The National Committee will continue our efforts to stop these harmful cuts including a demonstration next month at the White House reminding the President and Congress that the American people, of all ages and political parties, do not support cutting benefits to balance the budget.

 

 

 

 

Checkout NCPSSM’s “Equal Time”

 

Contrary to the headlines and sound bites coming from America’s newsrooms,  Social Security and Medicare aren’t to blame for our nation’s fiscal woes or our deficit.  In fact, without these vital programs our economy would be in even worse shape and millions more American families would be threatened with economic insecurity. Why do so many journalists and news/talk-show hosts ignore the facts in favor of one-sided propaganda? Why won’t they allow all sides to weigh on these important issues?  Whatever the reasons, the National Committee to Preserve Social Security and Medicare believes the public deserves more balanced research and discussion.  The truth about our nation’s most successful and revered programs deserves EQUAL TIME. 

Our project, EQUAL TIME, busts through the myths and misleading statements in the news about Social Security and Medicare. We will find and correct the factual errors and politically charged perspectives. We’ll use social media like Facebook and Twitter to inform the reporters, pundits and anchors when they’ve been the subject of an EQUAL TIME correction. In this way, we hope to influence the mainstream media to use facts, not fiction, in their coverage of these important programs.   

Have you seen a story in which media got it wrong?  If so, let us know and we’ll track it down and provide the truth about Social Security and Medicare.  

 

House GOP Says --Killing Obamacare Didn’t Work So Let’s Cut Medicare Instead

Congressman Paul “Never Pass Up a Chance to Cut Benefits” Ryan’s latest deficit scheme adds a new set of hostages to the ongoing debt ceiling/government shutdown crises created by House Republicans.  Since the GOP wasn’t successful in withholding health insurance to millions of Americans already benefiting from Obamacare their new fallback position is to cut benefits for middle-class seniors in Medicare. 

Seems their promise that the GOP “has to get something” but they “don’t even know what it is” is still their game plan.  In the meantime our government remains shut down and the threat of default looms. 

While Ryan continues to pretend that his plan to further means-test Medicare only impacts the wealthy the truth (as usual) is quite different.  Further means-testing Medicare would hit 25% of beneficiaries...not just the wealthy.   In fact, a study from the Kaiser Family Foundation found that this would affect individuals with incomes equivalent to $47,000 – meaning it would reach many middle-income Americans. 

According to Ryan’s logic: when it comes to seniors who depend on Social Security and Medicare: $47,000 means you’re wealthy.  But, remember the tax debate?  Ryan and his conservative pals argued then that earning $250,000 didn’t even qualify as being wealthy.  However, now middle-class seniors in Medicare are being threatened by GOP hostage takers with benefit cuts. 

GOP Should Shut Down the Chained CPI

Originally posted on Huffington Post.

Max Richtman, President/CEO

National Committee to Preserve Social Security and Medicare

It took only two days into the latest self-inflicted congressional crisis before Republicans on Capitol Hill resuscitated their zombie-like "grand bargain" scheme. Since their plan to defund Obamacare hasn't worked and the government shut down because of it, the GOP has now pivoted to the next best thing on their ideological wish list, benefit cuts for millions of middle-class Americans who depend on Social Security and Medicare.

The GOP's political gamesmanship and stated goal of "getting something" from this debacle has shifted the House leadership's attention to so-called "entitlement reform," which means benefit cuts targeting seniors including: Social Security Chained CPI, extending means testing in Medicare to the middle class, raising the retirement and eligibility ages, and ending traditional Medicare in favor of Rep. Paul Ryan's "Couponcare" plan. Each of these ideas shares the same fundamental flaw, requiring the still struggling middle-class to pay down our deficit while giving the wealthiest Americans a pass. However, the Chained CPI plan to change the formula which calculates the cost of living adjustment for seniors, veterans and people with disabilities is the most insidious of these proposals. Here's why the Chained CPI is so devastating, not only to seniors but to our economy as well.

While some in Washington portray this benefit cut as nothing more than a "technical tweak," the truth is that it would be a benefit cut imposed on the oldest and most vulnerable Americans who would be least able to afford it. In our new National Committee Foundation report, produced in consultation with economist Dean Baker, we've also clearly shown that the Chained CPI will have a huge impact on local businesses, state economies and our national economic recovery. "The Chained CPI: Shackling America's Economic Recovery," provides a detailed look at what the adoption of a stingier cost of living adjustment really means for communities and states. This study uses the Congressional Budget Office projections for cuts to national spending to estimate cuts that would be made in each congressional district, based on the Social Security Administration's data on Social Security spending by congressional district. It also makes projections for the economic impact on the reduction in output as well as the jobs lost in each district. The results are striking.

The negative impact of the Chained CPI should not be ignored or trivialized. This new analysis clearly illustrates just how harmful this COLA cut will be to seniors as well as state economies and local businesses. Adoption of this so-called "tweak" could mean the loss of $31 billion in economic output and more than 200,000 jobs nationwide. Washington's blind determination to cut Social Security benefits in the name of deficit reduction must be stopped and those who continue to peddle the Chained CPI should now explain to American workers, retirees and their families how losing billions of dollars in economic output and hundreds of thousands of jobs is a 'modest adjustment' we should accept.

While Washington's well-financed austerity lobby has downplayed the economic impact of losing billions in benefits spent in local communities due to the chained-CPI, step outside the Beltway and state lawmakers and business owners alike understand what this benefit cut would mean. That's why this study applies these calculations to each congressional district. It's time members of Congress see in clear dollars and cents what the Chained CPI actually means to their communities and constituents. Many districts with large populations of retirees would be especially hard-hit by these cuts.

In Florida's 16th congressional district, which includes Sarasota and other cities along the Gulf Coast, the benefit cuts would be $6.1 million in 2015, $53.3 million in 2020, and $87.7 million in 2023. This implies a loss of output in the district of $8.9 million in 2015, $80.2 million in 2020, and $127.2 million in 2023. The job loss would be 70 in 2015, 550 in 2020, and 780 in 2023.

In Pennsylvania's 12th congressional district, a largely rural area in the southwest corner of the states, the benefit cuts would be $5.0 million in 2015, $44.9 million in 2020, and $71.3 million in 2023. This implies a loss of output in the district of $7.2 million in 2015, $65.2 million in 2020, and $103.3 million in 2023. The job loss would be 60 in 2015, 440 in 2020, and 630 in 2023.

Given the economy's slow rebound, is this really their plan to strengthen America? Is there any community which can afford to lose millions of dollars and hundreds of jobs over the next decade? This is also at stake if the chained CPI is adopted.

Real dollars, real jobs and real damage to our economy.

Follow Max Richtman on Twitter: www.twitter.com/maxrichtman


 


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