Chained CPI Especially Harmful to the Disabled

Just in case you thought that some of our politicians had run out of bad ideas, they’ve come up with another deeply troubling one:  Cutting Social Security as a way to fix Washington’s budget problems.

They call it “chained CPI” – another fancy Washington term that means cutting Social Security benefits by $127 billion over the next10 years.  This harmful proposal would change the way the cost-of-living adjustment is calculated, resulting in a significant benefit cut that would take an especially harsh toll on people with disabilities.

While Washington talks about the chained CPI as a “technical change,” to many people with disabilities, 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.  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.

More than a third of people with disabilities rely on Social Security for 90 percent or more of their family income.   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.

Chained CPI assumes that when the cost of something you typically buy goes up, you purchase a lower cost item instead.  This, proponents say, is a more accurate way of measuring the cost of living.

Unfortunately, that theory fails to account for the real life experiences of 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 over $4,000 a year on average for health care costs.

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 benefits by more than $1,600.

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

Photo by ACLUSocial courtesy of Flickr