Chained CPI Is a Vote to Cut Social Security Benefits

The following letter was co-authored by Eric Kingson and Nancy Altman, co-chairs of the Strengthen Social Security Coalition, and sent to every Congressional office.

Our coalition of 320 organizations representing a broad cross-section of the American people respectfully urges you to reject the use of the less-generous and less-accurate chained-CPI as the basis for Social Security's cost of living adjustments for current and future seniors, people with disabilities, and other beneficiaries.

A vote for the chained-CPI is a vote to cut your constituents' Social Security benefits. The chained-CPI would pull $112 billion directly out of the pockets of beneficiaries over the next 10 years and much more thereafter. A typical Social Security retiree would lose roughly $500 in benefits at age 75 under the chained CPI as compared to the current law; $1,000 in their 85th year and $1,500 at age 90.

This may not sound like a lot of money, but two-thirds of seniors rely on Social Security for half or more of their income; one-third rely on Social Security for ninety percent or more of their income. Those benefits are modest, averaging just $14,900 a year for retirees, just $13,600 for all beneficiaries. A member of our coalition, the National Women's Law Center, has calculated that the cut translates to two weeks of food per month for an average widow who survives to age 95.

Some have suggested ways to shield the most vulnerable populations from the impact of the chained-CPI. The need to shield some from the harsh impact of the change underscores that it is simply a disguised benefit cut. Those proposals merely soften the blow to some, but by no means all, of the most vulnerable among us. For example, a bump-up in benefits after twenty years does nothing for those who are in their late seventies and early eighties. Even for those receiving the bump-up, most beneficiaries are never restored to where they would have been under current law. While exempting, or making off-setting changes in, the Supplemental Security Income program softens the blow for some very poor seniors and people with disabilities, the vast majority of Social Security beneficiaries, many of them with low or modest benefits, living in or near poverty, are not held-harmless.

Because current seniors are on limited, fixed incomes, the president, the vice president and many members of Congress have assured the public that they would not cut Social Security benefits for today's seniors. Voting for legislation that includes the chained-CPI repudiates that promise. Those supporting the chained-CPI are implicitly saying that they consider Social Security benefits too high, and that this year's 1.7 percent COLA adjustment is too generous.

If you oppose the chained CPI but believe it is necessary in order to obtain agreement on a deficit reduction deal, we remind you that Social Security has not and cannot by law contribute to the federal debt. The program is too important to be used as a bargaining chip in fiscal cliff negotiations.

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