Yesterday, U.S. Senator Sheldon Whitehouse (D-RI) participated in a press conference with Senator Bernie Sanders, Senator Jeff Merkley, AFL-CIO President Richard Trumpka, and others to oppose the use of a "chained CPI" formula for Social Security and veterans' benefits -- a change that would ultimately result in reduced payments to Rhode Islanders who depend on these programs.
Currently, cost-of-living adjustments (COLAs) for Social Security are determined by a formula indexed to inflation as dictated by a consumer price index (CPI). The chained CPI would alter that formula in a way that would result in reduced COLAs. It was reported that this change was discussed as part of the "fiscal cliff" negotiations last month. Now, with budget discussions ongoing, the Senators gathered to reiterate their opposition.
During the press conference, Whitehouse spoke about a "tale of two cities": Washington, DC, and Pawtucket, RI. "In Washington, there's a bubble," the Senator said, where "if you want to posture yourself as somebody who is serious about the deficit, you have to take your little ticket and get it punched with chained CPI." He continued, "The tale of the city of Pawtucket is very different. Go to Kennedy Manor in Pawtucket, and take a look at the seniors who are living there In their real lives, in the "other' city, in Pawtucket and in all the other Pawtuckets around this country, the real experience is that the COLA isn't good enough for seniors."
Whitehouse also reiterated his position that we should be taking steps to increase Social Security payments, not lower them. He has long argued that the current COLA formula does not appropriately reflect the products that most seniors buy, and has supported legislation to establish a Consumer Price Index for the Elderly (CPI-E) calculation that would result in COLAs that are higher, not lower.
Senator Whitehouse also supports bolstering the long-term solvency of Social Security, which is currently projected to remain solvent through 2033, by raising the cap on Social Security payroll taxes to include income over $250,000. This change would keep the program solvent for decades to come.