October 28, 2011
 

NEWS RELEASE

Super Committee Proposal to Change COLA Punishes Seniors for a Fiscal Crisis they Didn’t Create

“America’s seniors want fiscal sanity returned to Washington; however, there is no justification for cutting Social Security and Medicare benefits as part of deficit reduction. It’s been reported that some Republican and Democratic members of the secretive Super Committee support a plan that would change the way the cost of living adjustment is calculated in order to cut Social Security benefits for current and future retirees. For two years, during the worst economic times of recent history retirees received no cost of living adjustment at all. Yet, apparently even that is considered too much by Washington’s fiscal hawks. Describing billions of dollars in benefit cuts as a simple ‘formula adjustment’ is just the kind of Congressional smoke and mirrors Americans are angry about.

Voters of all ages and political persuasions—82% of Democrats, 73% of Independents, and 58% of Republicans--do not support cutting Social Security and Medicare to reduce the deficit. They know there are ways to reduce the deficit and address the real causes of this fiscal mess without slashing the benefits hard-working Americans have contributed to their entire working lives.” Max Richtman, President/CEO

The Chief Actuary of the Social Security Administration estimates that this reduced COLA, called the Chained CPI, would result in a decrease of about $130 per year (0.9 percent) in benefits for a typical 65 year-old. By the time that senior reaches 95, the annual benefit cut will be almost $1400, a 9.2 percent reduction from currently scheduled benefits. The cumulative effect of these reductions means that the disproportionate impact will be felt by Social Security's oldest beneficiaries. These are often women who have outlived their other sources of income, and rely on Social Security as their only lifeline to financial stability.
Switching to the chained CPI would impact all current beneficiaries.

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