Draft legislative language released by the House Social Security Subcommittee last night would cut benefits for millions of middle-class and poor Americans still struggling in this economy by adopting a new formula to calculate cost of living adjustments. NCPSSM President, Max Richtman, reacted this way:
“Contrary to claims by some in Washington, the chained CPI is not a ‘technical tweak,’ and no amount of rationalization can make it so. In reality, the chained CPI is a benefit cut for the oldest and most vulnerable Americans who would be least able to afford it.
Cutting benefits by adopting the chained CPI would cut the COLA by 3% for workers retired for ten years and 6% for workers retired for twenty years. This cut targets both current and future retirees. Three years after enactment, this translates to a benefit cut of $130 per year in Social Security benefits for a typical 65 year-old. The cumulative cut for that individual would be $4,631 or more than three months of benefits by age 75. While supporters claim the chained CPI is more accurate; you have to ask yourself, if this chained CPI really is more accurate, then why the need to offer an incremental benefit “bump” to some beneficiaries? The answer is simple. The chained CPI does not accurately measure these groups’ expenses; in fact, it makes most of the same errors as the current formula and adds a few. Adoption of this new formula is really about cutting benefits and raising taxes on average Americans to reduce the deficit.
While supporters, including the White House, have attempted to wrap this benefit cut in promises to ‘preserve or protect’ Social Security, the stark truth is it’s actually a direct assault on the safety net millions of middle-class and poor seniors and their families depend on.”
Seniors won’t be fooled by Orwellian language which attempts to portray austerity as “accuracy”.
“The current formula, the CPI-W, reflects the expenditures of about 31 percent of households nationally; specifically, wage and clerical households in urban areas. By definition, this population is employed, unlike most retired Social Security beneficiaries. Research has shown that spending patterns differ between the elderly and the general population, especially on health care. Seniors 65 and older spend more than twice as much on health care, and those 75 and older spend nearly three times more than younger consumers. Not only do health care expenditures steadily increase with age but health care costs consistently rise much faster than general inflation. The current price index (CPI-W) does not take these critical differences in the elderly population into consideration. The chained CPI doubles-down on that flaw. Even worse, the proposed chained CPI will cut COLAs immediately for current and future retirees, veterans, the poor and people with disabilities.
For millions of seniors living on fixed incomes and the average $14,000-per-year Social Security benefit, it’s frankly unimaginable that some in Washington believe those benefits are too generous. Our nation faces an impending retirement crisis yet rather than address that issue head-on, Washington is instead proposing cuts to the only guaranteed source of income for many retirees, Social Security. It simply makes no sense — unless your true goal is austerity not accuracy.” Max Richtman, Huffington Post
This chained CPI proposal is just the first of many benefit cutting proposals the House Social Security subcommittee is expected to release in coming weeks. Incredibly, Chairman, Rep. Dave Camp (R-MI) says he wants your feedback. So we say, let’s give it to him. Email Chairman Camp at:
Tell him how losing thousands of dollars in Social Security benefits will hurt you and your family. Tell the House GOP leadership “NO” to the chained CPI.