2016 Postmortem
Related: About this forumSocial Security - CPI-W vs. Chained CPI effect on benefits' Cost of Living Adjustments
This graph from the Economic Populist outlines basic changes to annual COLA under the two indexes. COLA are intended to help offset the effects of inflation on the standard of living for Social Security recipients. They are calculated annually and are reflected in benefit increases the following year (some years' calculations result in no COLA increase, as in 2008, '09 and '10). COLA are stated as a % adjustment to a Social Security benefit. They are based on an annual cost of living assessment.
This graph uses $1,000 / month as an example. Proponents of the Chained CPI have stated that there would be safeguards included to minimize the effects a decrease in COLA (or more accurately a base cost of living determination) would mean for the most vulnerable, yet I've seen no specifics on the safeguards or a definition of most vulnerable. AARP has proposed a CPI-E component that would apply to the elderly. I've not read specifics of their proposal. ~ pinto
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http://www.economicpopulist.org/content/chained-cpi-will-reduce-your-social-security-benefits
doc03
(35,336 posts)UCmeNdc
(9,600 posts)reformist2
(9,841 posts)If they change over to "Chained CPI," it will be the biggest cut to SS benefits in the history of the program. No Dem should even be entertaining the idea.
Casandia
(647 posts)joshcryer
(62,270 posts)...I would be for it it. Flame me away, but there are nearly 4 million seniors in this country living below the poverty line and my mom is one of them. She gets $600 a month of which $500 goes to rent. It is insane. (We help her out with money.)
However, here's the deal, I do not think in a million years they would be able to get the poverty exception in there. It'd be just like the public option, discussed, but ignored.
Casandia
(647 posts)Just trying to find the General Discussion forum....
Trying to find any GOOD with this SS CPI....
I was listening to Stephanie Miller yesterday while driving to an appointment, and Hal Sparks was on, saying that this chained stuff was GOOD. I had to go to my destination, and didn't hear WHY Hal thought it was so good... GRRR
joshcryer
(62,270 posts)It has legitimate points every now and again but they're deluding themselves if Chained CPI would come with a poverty exemption. Chained CPI is logical, but it is still an objective reduction in benefits (and potentially a corporate subsidy since people would stop buying brand name stuff). It also ties into the concept of Giffen Goods which are not really a progressive policy. Basically people would change their spending behavior to buy cheaper stuff.
Casandia
(647 posts)I am very upset about SS being cut in any way - and this Chained CPI sounds absolutely terrible. I shake my head in disbelief at what Obama is doing.
joshcryer
(62,270 posts)The Center for American Progress isn't just supporting "approaches exactly along these lines." Their proposal includes Chained CPI but also a lot of other stuff that isn't in this proposal like raising caps on employers. They also want to increase benefits. So it's really being quoted completely out of context. He also cites Krugman as if Krugman is in agreement with him which is preposterous. If you read the cited link Krugman eviscerates Chained CPI.
I will be calling my reps and senators today - and Obama.
bornskeptic
(1,330 posts)It only quotes him on the percentage effect it would have on benefits, and does so correctly.
joshcryer
(62,270 posts)Implying that Krugman agrees with them. Yet Krugman calls it a cut 4 times in his article. It's weasel language, full stop.
reformist2
(9,841 posts)For clarity, that's me mocking them, not a direct quote of them.
joshcryer
(62,270 posts)...and if he does hold to it and all that foldera then I could only conclude that it's a bluff. But I think Obama would accept it without a poverty exemption, therefore I cannot say it is a bluff. As this plays out we'll see though. We're talking about a massive increase in benefits to nearly 4 million seniors currently living below the poverty line.