There are media reports that President Obama has caved on GOP demands that Social Security benefits be cut as part of a deficit deal. According to the Washington Post:
Obama also gave ground on a key Republican demand — applying a less-generous measure of inflation across the federal government. That change would save about $225 billion over the next decade, with more than half the savings coming from smaller cost-of-living increases for Social Security beneficiaries.
NCPSSM President/CEO, Max Richtman, had this reaction:
“Too many Washington politicians clearly hope middle-class Americans simply won’t notice billions of dollars in Social Security benefit cuts included in proposals changing the current cost of living allowance formula to a stingier chained CPI. I promise you, seniors and their families will notice.
If news reports are correct and the White House is considering this benefit cut, then President Obama has broken faith with seniors and his commitment to keep Social Security out of the deficit debate. The chained CPI would mean an immediate benefit cut of $130 per year for the typical 65-year old retiree and would grow exponentially to a $1,400 cut after 30 years of retirement.
Contrary to the political spin, this chained CPI proposal isn’t a “tweak” or an “adjustment,” it’s designed to cut benefits and raises taxes, largely on the poor and middle class, totaling $208 billion over ten years. $112 billion of those benefits cuts come from Social Security alone with up to $24 billion coming from VA benefits and civilian and military retirement pay cuts.
Seniors will have received an average COLA of 1.3% over 4 years with no increases in two of those years. Arguing that is too generous shows how out of touch some of our political leaders have become with the real-world economic realities facing average Americans. Adopting the chained CPI is nothing more than a political slight of hand targeting our nation’s middle class and poor and should be rejected by the President.” Max Richtman, NCPSSM President/CEO