Rep. Ted Deutch (D-FL) has sent a letter to the Chairman and Ranking Member of the Social Security Subcommittee requesting a hearing to examine the social impact of adopting the chained consumer price index (C-CPI) to calculate Social Security cost of living adjustments (COLA). While the proposal has been frequently floated by various deficit reduction committees and is rumored to be under consideration by the Joint Select Committee on Deficit Reduction, the chained CPI has undergone little scrutiny in Congress.
"While this broad-based reduction in monthly benefits has been described as "painless' by the national media, Congress has yet to examine its real impact on America's retirees," writes Rep. Deutch. "In the rush to meet deficit reduction targets, I fear Congress may be asked to vote on a permanent Social Security benefit cut without doing the due diligence our constituents deserve."
The proposal in question would replace the current price index used for calculating Social Security benefit adjustments with the chained CPI. Despite the fact that cost of living adjustments already fail to keep pace with seniors' and disabled Americans' rising health care costs, the chained CPI would make such adjustments even more meager. Rep. Deutch's letter highlights several aspects of the chained CPI that would typically warrant further examination by Congress.
* Adoption of the chained CPI to determine Social Security COLAs would reduce benefits by $112 billion, and 97% of these cuts would come from current retirees or those approaching retirement.
* Analysis from the Congressional Budget Office indicates that cutting benefits for our lowest income seniors would actually lead to increased government spending on nutritional assistance programs.
* Social Security has successfully reduced elder poverty from 50% to 10%, yet the index's impact on poverty has not been explored.
* The chained CPI's benefit reductions increase with age, adversely impacting our most vulnerable, elderly beneficiaries.