Why the Left Hates 'Chained CPI'
Obama's proposed Social Security changes are not popular with liberals
By Ruth Brown, Newser Staff
Posted Apr 7, 2013 1:31 PM CDT
President Barack Obama gestures as he speaks during an Easter Prayer Breakfast in the East Room of the White House in Washington, Friday, April 5, 2013.   (AP Photo/Susan Walsh)

(Newser) – President Obama is making some concessions to Republicans in his new budget, and there's one that has particularly rankled the Democrats' ranks, reports MSNBC: A proposal to change the way Social Security benefits are determined by linking it to something called "chained CPI." So what is it and why don't liberals like it, asks the Week. Chained CPI is an alternative way of measuring cost of living adjustments to the regular Consumer Price Index. It assumes that when the price of a product or service goes up, people switch to a cheaper option. The result is a lower estimated cost of living adjustment.

"This is, purely and simply, a benefit cut," writes Paul Krugman in the New York Times. The move will reduce the deficit, but also reduce Social Security payments for seniors—a particularly bad kick in the teeth, he says, because they typically have a higher cost of living than average, thanks to medical expenses. By 2030, the median payment would be 3% less than under the standard CPI, reports CNNMoney. AARP has created a handy tool to calculate how much your own Social Security, veterans' disability, or military pension benefits will be cut.

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Showing 3 of 72 comments
Goro
Apr 8, 2013 9:00 AM CDT
Just to repeat, Social Security is self funding and does not contribute to the deficit, so it should not be part of any negotiations. Chained CPI will hit the most vulnerable seniors the hardest. If we were to cut (if only to better maintain the Social Security trust fund, not to make it easier for the rich to hold onto their low tax rate on capital gains) could we not use means testing instead? Let the poorest continue to collect what they need. Cutting money to poor seniors is bad for the seniors and bad for the economy as they spend that money supporting their local economy. Instead, save money by reducing payments to seniors who collect more income from other sources (pensions, annuities, work).
milo7453
Apr 8, 2013 7:02 AM CDT
I say we make cuts to government employee lavish pensions before we touch Soc Sec...
hog_one
Apr 8, 2013 3:55 AM CDT
Here are a few more that aren't taken into consideration, food, gas and utilities. I guess you can get your food out of a dumpster behind the store. Seniors don't need gas, their not suppose to drive. They can take public transportation. If they live where they don't have public transportation, too bad. They don't have to worry about utilities. Their suppose to live in a group home that takes their SSI as payment too cover all cost of living there. But if they don't want to live in one, too bad, we'll force them to.