|Iowa Federation of Labor, AFL-CIO|
Have you ever heard of the chained CPI?
Have You Ever Heard of the Chained CPI?
Even better - can you explain the chained CPI (Consumer Price Index)?
Whereas Senator Tom Harkin wants to use the CPIE - Consumer Price Index Elderly to determine cost of living adjustments for Social Security, the Ryan Republican budget proposes using the Chained CPI. It is based on the assumption that a lower COLA (Cost of Living Adjustment) is acceptable for people on a fixed income because consumers substitute cheaper products when prices go up.
Where does this idea fail? It creates an immediate and future cut in Social Security. For example, health care costs consume a large amount of seniors' income. These costs cannot simply be substituted with a cheaper version. A senior cannot just substitute triple bypass surgery with a double because it's cheaper. The chained CPI ignores this reality and instead is a back door way of trying to balance the budget on the backs of our nation's seniors.
It is an immediate Social Security benefits cut, a real cut to the benefits you have earned every year into the future.
It hits today's Social Security beneficiaries. Some politicians say their cuts to Social Security will not affect those getting benefits today. WRONG! Switching to the chained CPI would hit all current beneficiaries now! Immediately a 65-year-old senior would lose $106, at age 70 that jumps to $318, at 75-$477, at age 80-$689, at age 85-$848, at age 90-$1060, at age 95-$1219. This looks even worse when considering that the average Social Security income for a single 65+ in Iowa is $13,920, for a couple, $14,710. The average costs for a single w/o a mortgage is $18,576, for a couple, $29,580. So we are already behind, and the chained CPI would put us even further away from attaining economic security in our older years.
We need a higher COLA, not a lower one. The CPIE - Consumer Price Index for the Elderly - is part of Senator Sherrod Brown's (D-OH) bill, called the Consumer Price Index for Elderly Consumers Act, S.1876 that would require the establishment of a price index that accurately reflects costs for Social Security beneficiaries. This would be used when computing increase in the COLA and would consider typical seniors' costs, including medical care and housing costs to ensure that seniors' Social Security benefits keep pace with inflation.
by Midge Slater
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