AARP AARP States Colorado Advocacy

Is so called “Chained CPI” bad for Latinos?

Chained CPI

A recent AARP study shows that about 90 percent of Colorado’s Latino residents, who are 50 and older, said it is “extremely” or “very” important that Social Security benefits are there when they need them.

But some politicians, who have run out of bad ideas, have come up with another deeply troubling one:  Cutting Social Security as a way to fix Washington’s budget problems.

Social Security didn’t cause the budget deficit and it’s not an “entitlement.” You worked for it and it should be there for you when you need it.

But some in Washington are trying to use Social Security and veterans benefits to reduce the deficit. They call it “chained CPI” – which means cutting Social Security benefits by $127 billion over the next 10 years, according to AARP calculations.  This harmful proposal would change the way the cost-of-living adjustment (COLA) is calculated, resulting in a significant benefit cut that would take an especially harsh toll on people with disabilities, older adults and veterans.

In fact, Latinos rely on Social Security to keep them out of poverty at much higher rates than non-Hispanic whites.

While Washington talks about the chained CPI as a “technical change,” to many people, this cut would make it more difficult for them to afford to live independently in their homes and communities as they age.

People with disabilities rely on Social Security payments starting at a younger age and lasting for a longer time than retirees.  Since the chained CPI grows over time, they would experience especially deep cuts.  That’s because the cuts would start today and grow larger and larger every year.  AARP research determines that a 35-year-old disabled worker who receives average disability benefits would see his or her benefits reduced annually by almost $900 at age 65 and about $1,300 at 80.

Social Security keeps nearly 40 percent of people with disabilities who are age 18 and over and their families out of poverty.  These are people already living on tight budgets stretched very thin by rising costs for utilities, groceries, and health care. Under chained CPI, they would more frequently face an awful choice:  Which vital need to meet and which to let slide, according to AARP.

Chained CPI assumes that when the cost of something you typically buy goes up, you purchase a lower cost item instead.

Unfortunately, that theory fails to account for the real life experiences of older adults and people with disabilities.  Many people with disabilities spend much of their income on health care, which rises at a higher rate than inflation and does not have lower cost substitutes.  In fact, Medicare beneficiaries with at least one disability spend more than $4,000 a year on average for health care costs, according to AARP.

Under chained CPI, disabled veterans, who have already sacrificed so much for our country, would suffer a double cut to their benefits. Social Security and veterans’ benefits would both be reduced by a chained CPI.

A 30-year-old veteran with severe disabilities would find that by age 65, his or her veteran’s benefits would be cut annually by more than $3,200 and Social Security by more than $1,600, according to AARP calculations.

For these brave Americans, this is literally adding insult to injury.  How in good conscience should disabled vets be made to pay such a price for our budget problems?

Call your representatives now and say “No” to chained CPI. To find your representatives, visit To see how much money you would lose if chained CPI passes, go to the AARP Chained CPI calculator.

About AARP Colorado
Contact information and more from your state office. Learn what we are doing to champion social change and help you live your best life.