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A Chained CPI for Social Security
is this where we are actually headed?
Transcript: Dr. Eric Kingson on cost of living adjustments for Social Security recipients
"
T)he chained CPI or also called the superlative CPI that’s being proposed by some members of the “super committee” and has been discussed in the deficit reduction discussions, that alternative simply does not pass the smell test. It would only make a situation we have today worse. We are not adequately in my opinion and in the opinion of others adjusting for inflation. Today the chained CPI, if it’s implemented, will further reduce benefits. A woman who retires at age 65 living ’til age 75 will get a benefit of about $600 less in real dollars 10 years later at age 85, about $950 or so less at age 95 – if she lives so long – it would be roughly $1,400 less than it would have been if the chained CPI is put into effect.
“The consumer price index for the elderly which the Older Americans Act asked to be developed by the Bureau of Statistics. CPI-E for Americans over 62 is a far superior measure of inflation, but it too is less than perfect but it’s certainly better than what we have in play today.
“In terms of the impact of inflation on older households and on persons with disabilities, the public would be very well served if initially the CPI-E were to put into effect and if Congress requested further development and testing of price indices.
“We all have an interest in an accurate CPI. Democrats and Republicans all have an interest in that. The problem I think we have today is we do not have an accurate CPI. I think if we get a more accurate CPI, it would in fact not increase but adjust benefits. We don’t want a national policy that says the longer you live the less purchasing power your Social Security has. That’s what we will have if we implement the chained CPI. It is also arguably what we still have today because the current CPI does not fully adjust for it.
“The implications, by the way, of the chained CPI on the SSI program are even more deleterious, because it would both cut benefits in the beginning – before people get benefits – and it will also be cutting their benefits after that. Whether implemented in 2011 or 2021, the chained CPI will violate promises that Congress and the president have made that there would be no changes to Social Security benefits affecting people 55 and over. It’s bad policy, and it’s also terrible public relations.
“Social Security is a promise. It’s a promise Americans expect their government to keep. This is true across all political spectrums. It’s true for Tea Party households and union households.
“Americans are not easily deceived. If Congress chooses to implement the [chained]CPI, ultimately they’ll understand that in terms of Social Security over 10 years, it’ll take $121 billion directly out of the pockets of Social Security beneficiaries. They will understand that their government has let them down.
“So it’s very important that you’re casting light today on this issue. It’s very appreciated that you’ve put this panel together, and we are delighted to assist in any way possible.”
"
T)he chained CPI or also called the superlative CPI that’s being proposed by some members of the “super committee” and has been discussed in the deficit reduction discussions, that alternative simply does not pass the smell test. It would only make a situation we have today worse. We are not adequately in my opinion and in the opinion of others adjusting for inflation. Today the chained CPI, if it’s implemented, will further reduce benefits. A woman who retires at age 65 living ’til age 75 will get a benefit of about $600 less in real dollars 10 years later at age 85, about $950 or so less at age 95 – if she lives so long – it would be roughly $1,400 less than it would have been if the chained CPI is put into effect.
“The consumer price index for the elderly which the Older Americans Act asked to be developed by the Bureau of Statistics. CPI-E for Americans over 62 is a far superior measure of inflation, but it too is less than perfect but it’s certainly better than what we have in play today.
“In terms of the impact of inflation on older households and on persons with disabilities, the public would be very well served if initially the CPI-E were to put into effect and if Congress requested further development and testing of price indices.
“We all have an interest in an accurate CPI. Democrats and Republicans all have an interest in that. The problem I think we have today is we do not have an accurate CPI. I think if we get a more accurate CPI, it would in fact not increase but adjust benefits. We don’t want a national policy that says the longer you live the less purchasing power your Social Security has. That’s what we will have if we implement the chained CPI. It is also arguably what we still have today because the current CPI does not fully adjust for it.
“The implications, by the way, of the chained CPI on the SSI program are even more deleterious, because it would both cut benefits in the beginning – before people get benefits – and it will also be cutting their benefits after that. Whether implemented in 2011 or 2021, the chained CPI will violate promises that Congress and the president have made that there would be no changes to Social Security benefits affecting people 55 and over. It’s bad policy, and it’s also terrible public relations.
“Social Security is a promise. It’s a promise Americans expect their government to keep. This is true across all political spectrums. It’s true for Tea Party households and union households.
“Americans are not easily deceived. If Congress chooses to implement the [chained]CPI, ultimately they’ll understand that in terms of Social Security over 10 years, it’ll take $121 billion directly out of the pockets of Social Security beneficiaries. They will understand that their government has let them down.
“So it’s very important that you’re casting light today on this issue. It’s very appreciated that you’ve put this panel together, and we are delighted to assist in any way possible.”
Link: http://www.whatthefolly.com/2011/10/20/transcript-dr-eric-kingson-on-cost-of-living-adjustments-for-social-security-recipients/
I suspect it is...do you?
17 replies
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