Social Security

Budget Battles Continue

Apr 12, 2013

President Obama's new budget has of course sparked a battle on Capitol Hill.

We know Republicans aren’t happy with the president’s newly unveiled budget, but neither are some Virginia Democrats.

In his budget the President is embracing a new way to tie Social Security payments to the rate of inflation. It’s called the “Chained CPI” but let’s get past the Washington jargon. What it amounts to is less money in those Social Security checks for future generations of seniors.

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.