Many of what would be described as the liberal left of Congress have weighed in against using the chained CPI to calculate cost of living increases in Social Security benefits. Here’s a representative sample from Sen. Jeff Merkley:
We had an election, and the voters sent a message to Congress to focus on jobs and fairness — not cutting benefits for people who have worked all their lives and are now making ends meet on fixed incomes. The formula we use to adjust cost-of-living changes for seniors needs to reflects the real costs they face, not the budgetary fantasies of Washington.
I mean that’s precisely it. You will hear virtually nobody claim that chained CPI represents a more accurate way of determining the cost of living for senior citizens on Social Security, because if they were honest about it, they would tailor an inflation index to the real costs of seniors. The only benefit to chained CPI is that it saves the government money at the expense of senior citizens. That’s it. It’s a back-door way of lowering the benefit. Even if you agree with the methodology of the substitution effect, that people will manage the cost of living by purchasing less expensive products, you have to ask yourself if seniors have been getting away with murder all these years under the old rules. And considering they get an average annual benefit of just $13,000, and that almost half of them use that as their only form of income, without savings or anything else to fall back on, the very idea is preposterous. And the public, who has a working knowledge of Social Security benefits and how far they stretch, agrees.
Regardless of the carping of a few of those liberals and the majority of the country, however, Nancy Pelosi basically gave the game away: she will force her charges to stick with the President.
Despite these changes, Pelosi said she could convince her caucus to get behind such a plan, if need be.
“Do you think you could sell it to your caucus?” MSNBC host Andrea Mitchell asked Pelosi in an interview on Tuesday.
“I do,” replied Pelosi, adding, “Yes, the Democrats will stick with the president — and maybe not every single one of them.”
Pelosi tried to emphasize the unformed idea that there would be “protections” for the most vulnerable. For example, the disabled on Supplemental Security Income might not be subject to chained CPI, and there could be a “bump-up” for people aged 80, to compensate for the cumulative effect of the benefit cut. Again, the vulnerable are a massive part of this population. This is almost the entire income source for almost half of seniors, and for 3/4 of widows or unmarried women. And 15.1% of seniors live in poverty. And if you hold all of them harmless, you erode the actual savings you can derive from this. The three-legged stool of retirement has withered away, especially since the dot-com bust and the Great Recession. This argues strongly for increasing Social Security benefits, not cutting them and not even mitigating cuts.
White House Press Secretary Jay Carney called this a “technical fix” to better calculate inflation. Bullshit. If this were just a technical fix, you would adjust so that the fix wouldn’t hit beneficiaries in a regressive fashion, with the most pain at the bottom. This plan doesn’t, to any real degree. The goal isn’t to properly measure inflation, it’s to save money for the federal government. It always has been: