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"Chained CPI" Proposal Bad for WI Seniors

Lisa Lamkins,  Associate State Director of Federal Advocacy

Analysis: "Chained CPI" Proposal Bad for WI Seniors
Tim Morrissey, Public News Service-WI   

(03/06/13) MADISON, Wis. - As politicians in Washington discuss proposals to reduce the federal deficit, one of the ideas that keeps coming up is known as the "chained CPI" or consumer price index, a new way to calculate cost-of-living adjustments to Social Security.

This method assumes people will make lower-cost choices to offset any reductions in their Social Security adjustments, said Lisa Lamkins, advocacy director for AARP Wisconsin. However, she added, that doesn't reflect reality.

"Seniors in particular aren't able to make lower-cost substitutions for items that they buy," she said, "like prescription drugs and health care."

For one in five Wisconsin seniors, Lamkins said, Social Security is their only source of income.

The chained CPI proposal would cost Wisconsin seniors nearly $2.3 billion, she said, predicting that it would hit women hardest because they rely on Social Security for nearly all their income.

"They're less likely to have other sources of retirement income, like pensions and savings," she said. "They tend to live longer; they make up a bigger share of the population as it ages. They also tend to have a lower average benefit, since women tend to earn less than men."

According to Lamkins, this proposal would mean a benefit cut of nearly $1,000 a year by the time a person reaches age 85, which she called the worst possible time for a cut in income.

Lamkins described Social Security as a self-financing system that people have paid into throughout their working lives. AARP believes it should not be targeted for cuts in talks about the deficit.

"We deserve to have a separate national conversation about Social Security, about making it stronger for today's beneficiaries, for tomorrow's folks," she said. "Social Security didn't contribute to the deficit, and we need to think about it separately, and not part of these other budget discussions."

Lamkins said people can see exactly how the chained CPI proposal would affect your own Social Security benefits by going online to

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