I mentioned earlier today that Social Security recipients will see a 1.7% cost of living increase in 2013, one of the smallest in the history of the program, which amounts to around $21 a month for the average recipient. This is likely to get eaten up by Medicare premium increases and drug costs. In two of the last four years there has been no adjustment, so the Social Security benefit has really decreased on a real basis over those four years, given the population served by it.
And yet, there are still plenty of people in Washington who look at the COLA calculation and say that it’s too generous, that a “better” calculation like chained CPI, one which results in a cut in benefits from current law, would be more appropriate. By “appropriate” they mean “save money for the government” rather than actual adequacy for senior citizens. Switching to chained CPI would save $112 billion over 10 years, and all of that money would come out of the hands of senior citizens, many of whom can ill afford it.
The release of the 2013 COLA offers a teachable moment on Social Security, and 96 progressive organizations are making the most of the opportunity:
A coalition of 96 organizations representing veterans, the elderly, minorities and labor unions on Tuesday used the occasion of the annual Social Security cost of living adjustment to plead with Congress not to manipulate the measurement as a way to reduce the deficit in coming negotiations over tax and spending policy [...]
The coalition of Social Security defenders argued that such cuts would be devastating to seniors, more than 40 million of whom received Social Security benefits in August, according to the program’s latest monthly statistical snapshot. The average senior on Social Security receives $1,235 per month. The benefits lifted nearly 14.5 million seniors out of poverty in 2011, according to the U.S. Census Bureau [...]
“The cuts that Social Security beneficiaries and others would face as a result of implementing the chained CPI may seem to some like a relatively small sacrifice, but the cuts quickly snowball as they compound, growing deeper every year,” the advocacy groups, led by Washington-based Strengthen Social Security, said in their letter to congressional leaders.
Strengthen Social Security has previously estimated that moving to chained CPI would represent a cut in benefits for an 85 year-old who started on Social Security at 65 by $984 a year. By age 95, that expands to a cut of $1,392. Incidentally, chained CPI would not only cut Social Security benefits, but any benefit that relies on a cost of living adjustment, like food stamps. Because of how tax brackets are derived, it also represents a regressive tax increase.
Now is the time to rally against these proposed benefit changes, when the Obama campaign is on the ropes and needs enthusiasm from the base. I’m not particularly optimistic, but we’ll see if this leads to any change in the baseline pledges on social insurance programs from the Democratic candidate in tonight’s debate.