Do you hear a noise like power saws cutting away at your Social Security benefits? That’s the sound of the politicians working on the “Chain Gang.”
They’re promoting the “chained CPI,” Washington’s latest gimmick for tricking voters and cutting their hard-earned benefits to protect the wealthy. That may sound like inflammatory rhetoric, but the numbers don’t allow for any other conclusion. People retiring today could lose more than $18,000 in benefits over their lifetimes – and people who are already retired will feel the pain too.
What’s wrong with this idea?
1) It’s an underhanded way to cut Social Security benefits (its true intent).
2) It’s unnecessary.
3) It’s unfair to women, the poor, minorities, and the very elderly.
4) It reflects a un-American political culture of pessimism and lost faith in the future.
Any politician who signs onto a “chained CPI” approach to Social Security will feel the wrath of the voters – and deserves to.
Although they’re using hocus-pocus to make the idea sound complicated, it isn’t. The government calculates the cost of living in order to do things like determine next year’s Social Security benefits. The “chained CPI” approach would alter that calculation by including changes in the way people spend their money when prices go up.
As a government agency explains, “Pork and beef are two separate CPI item categories. If the price of pork increases while the price of beef does not, consumers might shift away from pork to beef.” So if people can no longer afford pork, they’re spending less. Under a chained-CPI approach cost of living adjustments (COLAs) would then go down.
See where this is going? If not, stick around.
Go read the rest. And then read Dave Dayen.