THE BLOG
05/07/2013 05:30 pm ET Updated Jul 07, 2013

The Chained CPI: A Bad Deal for Our Seniors and Veterans

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President Obama was absolutely right when he proclaimed in his inaugural address, "we must reject the belief that America must choose between caring for the generation that built this country and investing in the generation that will build its future."

But I strongly disagree with parts of his proposed budget that include cuts to Medicare, Social Security and Veterans' benefits, and a shift toward the Chained-Weighted Consumer Price Index, or Chained CPI, a gimmick to reduce assistance levels relative to inflation.

That is why we must stand up for our seniors and veterans -- in New York and across the country -- and urge our lawmakers to reject any cuts to the benefits on which they rely, including raising the retirement age or slashing cost of living adjustments. 
  
In New York City, which has the highest cost of living in the nation, making ends meet is difficult for people working full-time, but it's even worse for those living on a fixed income.  

The Chained CPI measures costs living differently than the regular CPI by assuming that when the costs of one thing goes up, most people will switch to something else to get by. The problem with this logic is that the bulk of the expenses seniors incur are for things like medication and health care -- which have prices that typically increase regardless of demand. Consumer demand has little to no influence on the prices of those items.

The AARP, which says the Chained CPI could hurt seniors by reducing Social Security payments over time, says 70 percent of voters over 50 oppose using the Chained CPI to cut benefits. While the difference works out to just .3 percentage points lower than the regular CPI, it would compound over time and eventually, could amount to the equivalent of losing a full month of income every year.  

The voice of the people is correct -- as it usually is. Our seniors and veterans deserve more.  Many of them have worked hard and paid into Social Security, and they should not have to rely on their families for financial support.  

That's why UnitedNY and many other progressive groups and advocates will be joining seniors as they take to the streets to tell their Congressional delegates to stand up for them and their well-being. 

Seniors like Vickie Owens want to send a clear message to their representatives about just how know just how different their lives would be if Social Security benefits are cut. Ms. Owens, a Bronx resident, relies on her monthly Social Security check to help cover her rent, food, and transportation expenses.

"I worked hard for over 30 years, and I paid into Social Security because I wanted a safety net when it was time for me to retire," Ms. Owens said. "For these elected officials to try to take what I worked hard for is absolutely wrong."

More than three dozen lawmakers have gotten behind Reps. Alan Grayson of Florida and Mark Takano of California who have written a letter to President Obama vowing to vote against "any and every" cut to Medicaid, Medicare and Social Security, noting, "the best way to reduce our deficit and make our economy grow is to create jobs."

As Ben Veghte noted on The Huffington Post, some 77 million baby boomers have entered or are approaching retirement and most of them will rely on Social Security for the bulk of their income.

Liberals and progressives are not alone in their opposition to the Chained CPI. Writing for the
conservative National Review Online, Andrew Biggs calls the Chained CPI "bad policy that both liberals and conservatives may come to regret."

While I am certainly not in the habit of agreeing with conservatives, Andrew Biggs is right on this point.
The Chained CPI will not work for New York's seniors and we must raise our voices loudly to beat back any attempt to balance the budget on the backs of our parents, and, eventually, ourselves.