Remember just last year when political leaders told us they would not cut Social Security benefits for people currently in the program? That promise may soon be put to the test. President Obama’s budget due out next week will likely include a proposal called “chained CPI,” a fancy Washington term that really means cutting Social Security and veterans’ benefits, and increasing taxes for most taxpayers. The chained CPI would cut the cost-of-living adjustment for Social Security and veterans’ benefits by $146 billion in the first 10 years alone, while also raising taxes by $124 billion.
Fortunately, people in Indiana do remember, and according to a recent AARP survey, 89 percent of us who are 50 and older - across party lines - believe it is very important not to reduce Social Security benefits for current seniors.
Chained CPI represents a shattered promise—at a high cost—to seniors, to people with disabilities, and to veterans. That cost would grow higher year by year, making it increasingly harder to pay for groceries or heat or medicine.
For the average 65+ retiree, the cumulative benefit cut would be more than $5,000 by age 80 and more than $14,000 by age 90. With people living longer, it is easy to see how harmful this proposal is.
Older veterans would be hurt twice by chained CPI because it would cut both Social Security and veterans’ benefits. A 62-year-old veteran would lose $32,000 in total benefits by age 90.
And, chained CPI would take a heavy toll on people with disabilities. Today, 40 percent of people with disabilities are kept out of poverty by Social Security.
Proponents of chained CPI portray it as a more accurate indicator of the cost-of-living. It is based on the notion that when the cost of an item goes up, you simply switch to a cheaper alternative.
The average annual benefit for the 820,232 Social Security beneficiaries in Indiana is $14,700. And, that makes up 67% of their income on average. A disproportionate share of that money is spent on healthcare and utilities. How can one switch to cheaper forms of those necessities?
Chained CPI is not only harmful and illogical; it is also out-of-place in the discussion of deficit reduction. As a self-financed program providing earned benefits, Social Security has not caused the deficit—and it should not be turned into an ATM for politicians trying to address it. We deserve a separate national conversation about how to protect Social Security for today’s seniors and responsibly strengthen it for our children and grandchildren.
When their rhetoric is put to a test, I hope our Members of Congress will remember the following: We don’t have short memories; and, 73 percent of the older Hoosiers surveyed by AARP said they will be less favorable toward their legislator if he or she votes for the chained CPI proposal.