Social Security Benefits
Thu April 11, 2013
Reaction to "Chained CPI" in Budget
A large contingent of Virginians says it will pressure congressional representatives to vote against a proposal by the Obama administration that cuts into Social Security benefits.
The AARP is part of the group that says the "Chained CPI" proposal breaks the promise made to millions of Americans.
While the Consumer Price Index calculates inflation through the costs of basic goods, the Chained CPI factors in lower demand and the substitutions that consumers make when costs are higher. Thus, it lowers cost-of-living adjustments for inflation.
But Ginger Thompson with AARP of Virginia says the Chained CPI would cut some veterans’ and Social Security benefits deeply over time. She says the younger a person is, the more it would reduce benefits. It cuts as little as $44 at first to more than $9,000 by the 20th year. She says since seniors need every penny, any cut is substantial.
Thompson also says the change affects various groups differently. And since women often live longer but make less than men, they would be hurt most. She adds that it does not account for the rising costs of prescriptions and other necessities.
Social Security trustees report that costs are rapidly exceeding Gross Domestic Product growth and lawmakers need to act soon to reduce them.