AARP AARP States Colorado Advocacy

Chained CPI is bad for Veterans

By A.W. Schnellbacher

AARP Denver Photography by DigPicPhoto, All Rights Reserved

My fellow veterans and I are proud that our country was able to count on us.  Now we’re counting on the benefits we earned through our service.

I know these benefits don’t add up to a lavish lifestyle.  We’re all living on a tight budget.

That’s why I find it deeply troubling that some in Washington are considering a plan to cut veterans’ benefits.  The proposal sounds innocent enough.  It is called a “chained CPI” and is described by supporters as a more accurate means than the current inflation index for calculating cost-of-living adjustments.

The chained CPI assumes that when the cost of something you typically buy rises, you just switch to another product.  But as so many veterans and seniors understand, this assumption is deeply flawed.  Many veterans and seniors spend much of their money on basic goods such as health care and utilities that don’t have lower cost substitutes.  Many who qualify for VA health coverage are paying an increasing amount out-of-pocket for rising health care costs.

For many veterans and people with disabilities, a chained CPI means we won’t be able to keep up with inflation.  In other words, this proposal is not only illogical but also unfair.

The chained CPI would cut benefits more each year, so that over our lifetimes, veterans, seniors, and our nation’s most vulnerable citizens would lose thousands of dollars.

Take the example of a 30-year-old veteran with severe disabilities.  According to the Congressional Budget Office, this individual’s VA benefits would fall by more than $1,400 a year at age 45, by more than $2,300 at age 55, and more than $3,200 at 65.

Across the country, 23 million veterans would lose $19 billion in compensation and pension benefits over 10 years according to AARP’s estimates based on data from Departments of Veterans Affairs and Defense.

According to the Department of Veterans Affairs, Colorado was home to 400,000 veterans in 2011. Using data from the Departments of Veterans Affairs and Defense, AARP calculates that adoption of the chained CPI would result in Colorado’s veterans losing $342 million over a 10-year period.

For millions of veterans, Social Security represents the cornerstone of financial well-being in our later years.  The “longevity penalty” that is central to a chained CPI would hit Social Security recipients hard.  Under this proposal, a 92-year-old retiree would suffer a cut of one month’s worth of benefits.  That’s a far cry from the compassionate action of a grateful nation.

When you consider the misguided assumptions behind a chained CPI and the considerable harm it could inflict, it is no wonder that the American Legion, Disabled American Veterans, Iraq and Afghanistan Veterans of America, and virtually all other veterans’ organizations oppose this plan.

We all appreciate the compliments public officials send our way.  But we veterans know that both on the battlefield and in the political field, what matters most is not what people say but what they do.  You can bet many veterans will be watching closely to see if our representatives cut our benefits through a chained CPI.

A.W. Schnellbacher served three years with the US Army (1963-1966) and is currently a volunteer with AARP Colorado. He volunteers as a member of the State Executive Council, is a Congressional Liaison, and Legislative Advocate. He retired after 30 years with the U.S. Government. Of the 30 years, 27 were spent with the Federal Medicare and Medicaid Programs. During those years, he served in several management, operational, financial, and policy positions.

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