AARP Executive Vice President Nancy LeaMond has reiterated the Association’s opposition to including a cut to the benefits of current and future Social Security recipients as part of a year-end budget deal via a formula change known as Chained CPI. She offered the following statement:
“Adopting the chained consumer price index for Social Security benefits will take $112 billion out of the pockets of current Social Security beneficiaries in the next 10 years alone, and is neither fair nor warranted.
“Social Security is currently the principal source of income for nearly two-thirds of older American households, and roughly one third of those households depend on Social Security for nearly all of their income, Leamond said. "Half of those 65 and older have annual incomes below $18,500. Every dollar of the average Social Security retirement benefit of about $14,800 is absolutely critical to the typical beneficiary," she concluded.
DC’s seniors count on Social Security benefits earned through a lifetime of work. A total of 75 percent, or 52,578 of older (65+) DC residents, received Social Security in 2011. The average annual benefit was only $12,800, the lowest in the nation. Social Security accounted for 32 percent of the typical older DC resident’s income.
Low- and middle-income seniors in DC are even more reliant on Social Security’s earned benefit, typically receiving 68 percent of their individual income from Social Security.
Social Security plays an important role in DC’s economy. Social Security provided $.9 billion in benefits to all DC residents and $.7 billion in benefits to DC residents 65 and older in 2011.
According to Leamond, “The Chained CPI is a stealth benefit reduction that will compound over time and cut thousands of dollars in retirement income for current beneficiaries." A typical 80-year-old woman will lose the equivalent of 3 months worth of food annually. The greatest impact of Chained CPI would fall on the oldest, eventually resulting in a cut of one full month’s benefit annually. This dramatic benefit cut would push thousands more into poverty and result in increased economic hardship for those trying desperately to keep up with rising prices.