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Public Statements

The Supercommittee

Floor Speech

By:
Date:
Location: Washington, DC

BREAK IN TRANSCRIPT

CHAINED CPI

Mr. BROWN of Ohio. Mr. President, the supercommittee we all talk about--and it meets mostly in secret--is putting out plans and ideas to deal with the deficit--some, I am sure, good; some a little less good. I am concerned about one thing the supercommittee has been talking about--the stories that have come out that I know about, and that is something called the chained Consumer Price Index.

I know that many conservative politicians in this body and down the hall in the House of Representatives have advocated that we change the Consumer Price Index to something called the chained Consumer Price Index.

The way the Consumer Price Index is calculated is especially important for senior citizens because their Social Security cost-of-living adjustment--called the COLA--is predicated on how the cost of living is calculated.

Right now, the cost-of-living adjustment is based on the Consumer Price Index-W, which means it is determined by wages, the cost of living for people in the workplace. It is not determined by the cost of living for retirees even though it affects what retirees get in their cost-of-living adjustment.

That sounds like a lot of words, but here is what that means. It means that when you figure the average increase in the cost of living for the American people--and you are only looking at those who are employed, so they are more likely to be in their twenties, their thirties, their forties, their fifties, maybe in their early sixties or a little older. So if you are only looking at that, the cost of health care is a less significant cost for them in their daily expenses and their monthly expenses and their annual expenses than for someone who is retired.

So I am going to introduce legislation soon that will change the Consumer Price Index-W--wages--to the Consumer Price Index-E, for elderly. The reason is because if you are 70 years old, your cost of living is much more fueled by the cost of health care than if you are 30 years old.

I know Senator Mikulski has been a real leader in this, and she is one of the immediate prime cosponsors of our legislation. She has had a terrific record here in the Senate, the senior Senator from Maryland, in fighting for fair play, a fair, strong Social Security and Medicare system, against these plans from conservatives around here to take Social Security and turn it over to Wall Street, to take Medicare and turn it over to the insurance companies.

But our legislation would make it fairer so that seniors would actually have a cost-of-living adjustment based on their cost of living. What is wrong with that? Instead, conservatives around here want to go the other direction, which would reduce the cost-of-living adjustment by this thing called a chained CPI.

The way this chained CPI works in a nutshell is this: If your cost of living is $100 a week, and the chained--instead of eating beef, you could save money by changing to chicken. So they are saying, under this chained CPI, that you should change to chicken and save X number of dollars so your costs would be less.

What this would mean--and I want to read you some statistics--if they get their way, if anti-Social Security conservatives around here get their way, it will mean that senior citizens will get significantly less than they would under the way it works now, let alone the way that we want to change it to, that Senator Mikulski and I want to change it to, this CPI-E. It would mean that seniors, by the age of 85, would be getting about $1,000 less in their Social Security. That is just not something we can do.

Here are the exact numbers. Under the chained CPI, a typical 65-year-old would get $136 less today than they would get under the CPI as calculated today. A typical 75-year-old--this is calculated each year, so it is a little bit like the reverse of compounding interest--a typical 75-year-old would get $560 less a year. A typical 80-year-old would get $984 less per year. A typical 95-year-old would get $1,392 less a year.

So what conservative politicians around here want to do--I know you have been on the right side of this, Mr. President, from Minnesota your whole career and before you came to the Senate too--what the conservatives want to do is cut the cost-of-living adjustment even more.

The last 2 years, there was no COLA, there was no cost-of-living adjustment for seniors. What conservative politicians--the ones on the supercommittee who want to do the chained CPI--what they are arguing is that you should have gotten a cut; that instead of no COLA, you should have gotten even less; that this way we do the COLA now is too much money for seniors.

Social Security is not part of the budget deficit. It is not the problem. It does not need fixing. Of course, we always need to make sure Social Security is viable, and it will be for decades in the future. We can make some minor adjustments. But in the name of cutting the budget, cutting Social Security cost-of-living adjustments really affects poor seniors and middle-income seniors. We know that in my State of Ohio and the Presiding Officer's State of Minnesota, Social Security--more than half of the people in my State get more than half of their income from Social Security. So we have no business cutting Social Security.

My legislation would actually be a fairer reflection of the cost of living and is preferable to what some people in this body and some people in the House of Representatives and in the supercommittee want to do--the so-called chained CPI. It is a terrible idea, the chained CPI. It is not fair to our seniors. It is not fair to our country. It is something that should be rejected out of hand.

Then, as we figure this out and move forward, we should think about, do we want to do the CPI-E based on the elderly cost of living, not the CPI-W, based on a 35-year-old's cost of living and how that is reflected.

I yield the floor, and I suggest the absence of a quorum.

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