Thursday, 03 January 2013
Social Security Survives – This Time
After an offer from President Obama to throw elders under the economic bus by changing the way Social Security cost-of-living adjustments are made from the current CPI-W to the chained CPI which would reduce increases, the fiscal cliff bill finally passed Tuesday night without that provision.
But not without scaring Social Security beneficiaries nearly into early graves, particularly those whose monthly income is in the hundreds of dollars – nowhere near adequate to feed, clothe and shelter oneself.
Republicans, who like to say that the deficit is all due to old people for being so greedy as to want to eat and be warm in winter, love the chained CPI.
Ruth Marcus, an Op-Ed columnist at the Washington Post, is typical of that belief. As she said in her best Marie Antoinette style on Christmas day, the current method overstates the inflation rate and [emphasis added]
”...fails to account for what economists call upper-level substitution bias, and what my mother would call plain common sense: If the price rises for a certain commodity in the basket of goods used to measure inflation, consumers will choose a cheaper alternative. In my house, when the price of beef soars, we substitute chicken.”
I could go on about all the things that are wrong with Marcus's point of view (and her “facts”), but Susie Madrak at Crooks and Liars has already done an exemplary job of that.
Here's why I mention it: With the fiscal cliff having been averted, the next “emergency” for Congress is the debt ceiling, coming due in a couple of months. And now that the president himself has floated the chained-CPI idea, the Republicans feel even more confident about sticking it to old people, the poor and veterans:
“'We do expect [the chained CPI] to be part of the debt ceiling negotiations,' said Sen. Bob Corker (R-Tenn.).”
There is no reason to disbelieve Senator Corker and we know now that we cannot depend on the president to bar the door against Social Security cuts. Plus, it is obvious that Vice President Joe Biden's August 2012 campaign promise is no longer in play:
“Number one, I guarantee you, flat guarantee you,” Biden said at The Coffee Break Cafe in Stuart, Virginia,” there will be no changes in Social Security,” Biden said, per a pool report. “I flat guarantee you.”
So much for VP guarantees. And forget the old Republican talking point that any cuts to Social Security would not affect current beneficiaries. Chained CPI affects everyone from day one. Social Security Works
”...estimates that a person age 75 in the future will get a yearly benefit that’s $653 lower after ten years of chained CPI than that person would get under the current formula. An 85-year-old will have $1,139 less to live on. While this doesn’t seem like a princely sum to an investment banker, it is to the very old.”
As we've discussed here in the past, for people with $800 a month income, $54 less means going hungry some days.
This is wrong. It is deeply wrong to keep old people wondering month after month, year after year if, when or by how much their income will be cut. I'll have more to say about that cruelty in particular in a future post but for now, let's take a little breather before we need to fight these rich pols again.
At The Elder Storytelling Place today, Marc Leavitt: On Age
Posted by Ronni Bennett at 05:30 AM | Permalink | Email this post
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I remember years ago pictures of grandma roaming the pet food section of the grocery store. Canned cat food was the new 'thing'.
"Just as good for you", they said.
Is this where we are headed - AGAIN?
Posted by: Yellowstone | Thursday, 03 January 2013 at 06:47 AM
Scarey. But a breather is good. Time to regroup and order in plenty of bootstraps. Now, if we just had some boots . . .
Posted by: Cathy | Thursday, 03 January 2013 at 07:55 AM
God forbid, Yellowstone; although I'd venture that canned cat food is no less expensive today than canned tuna! :)
Not sure how we make the politicians understand what it is to live on a monthly sum that probably doesn't equal pocket change for many of them. I am very weary, too, of their misuse of the term "entitlement."
Posted by: Karen | Thursday, 03 January 2013 at 07:57 AM
There are those supporters of the President who try to mollify this issue by blasting what they refer to as "screaming liberals" for disparaging what in total was a pretty good deal. Part of their argument on the chained CPI is that it does not "cut" benefits, pointing out that this not the formula used initially to determine SS benefits.
I had this argument with a liberal acquaintance on my recent blog post and pointed out that this is merely a semantical maneuver. The bottom line is 1), monthly payments will in effect be reduced over time and 2), what seems like a "fair" contribution for the elderly poor's share of reducing the deficit is hardly fair when compared to what the wealthiest 2% still wound up with after their tax rate increases.
Lambert Strether aptly expressed this on his blog:
"A 'sacrifice' where some give up luxuries and others give up necessities is in no way "shared." A marginal sacrifice for the rich is not commensurate to core sacrifices for the rest of us. But the tropes of official Washington carefully brush this reality away."
Posted by: Larry | Thursday, 03 January 2013 at 08:05 AM
I'm one of those who gets less than a thousand a year. I was terrified. It's why I worked for Obama so hard. Needless to say, I've been a wreck through this whole debacle. As it is, I still don't have enough to live on properly but I can breathe -- until the next time.
Posted by: Kay Dennison | Thursday, 03 January 2013 at 08:23 AM
It'd getting very wearying to have to fight the same battle over and over again. But fight we must and continue to do so for our children and grandchildren, if not for ourselves.
Posted by: Darlene | Thursday, 03 January 2013 at 08:28 AM
They are a shameful bunch of men, masquerading as leaders! Can they really believe their rhetoric? If it weren't so sad it would be laughable. Dee
Posted by: Dee | Thursday, 03 January 2013 at 08:49 AM
I can feel my blood pressure rising on this Chained CPI issue. They did this once before in the early 90s, from the Boskin Commission if I recall it correctly where the substitution of lower priced items for higher (hedonic adjustments) was part of the calculation. Inflation therefore came in at a lower figure and impacted Social Security recipients. This was 20 years ago--they don't give up.
Posted by: Marge | Thursday, 03 January 2013 at 08:53 AM
I wrote a comment, pressed the wrong button, and it vanished. You've been saved. lol
Posted by: Mage B | Thursday, 03 January 2013 at 08:58 AM
My blood pressure spikes every time I read something like "consumers will choose a cheaper alternative" to compensate for higher prices. I opted for all those "cheaper alternatives" years ago! How dare they include something like that in their calculations. How dare they assume we haven't already cut back, or that we should cut back even more to accommodate their inability or unwillingness to negotiate other solutions.
Posted by: PiedType | Thursday, 03 January 2013 at 09:33 AM
My fear is for our children and grandchildren. In our circle there are many adopted children, some with special needs. Those that can work are unlikely to build great financial reserves on their own, not to mention the college degree holders in our family who are underemployed from lack of good jobs, and lack savings because of poor or no health insurance. Beef was replaced with chicken years ago. And I now cook with little meat at all and more veggies for both health and economy. Really makes me angry. I suggest writing to more than just your own congress people. If you can contribute to the campaigns of those in other states with views that line up with yours. Check the Federal Elections for 2014 http://en.wikipedia.org/wiki/United_States_elections,_2014 for starters. It's never to soon to know who you're up against.
Posted by: Celia | Thursday, 03 January 2013 at 10:48 AM
And the lobby representing us? AARP?
Posted by: naomi dagen bloom | Thursday, 03 January 2013 at 12:48 PM
I am terrified for myself. My grandchildren either have their degrees or are nearly there, so I don't worry too much about them. My daughter is doing well and she and her husband both have their degrees. But I get a measly $832/mo. Luckily I have some savings, but the rate of interest on that wouldn't feed a church-mouse.
I am so angry with Obama for offering to chain the COLA. I sent him emails every day since the election telling him why we re-elected him and encouraging him to stand up for us -- obviously many other people did this as well, to no avail. Who owns him now? Not us.
Posted by: Classof65 | Thursday, 03 January 2013 at 01:28 PM
We saved a modest sum for retirement by doing without many luxuries. Now our money that we saved is "Safe?" in CD's and making nothing. I dread when we have to touch the principal the way the prices keep going up it won't be long then what?
I'm afraid our representatives do not live in my real world.
Posted by: Patricia Lee | Thursday, 03 January 2013 at 04:37 PM
Like Patricia, most of us KNOW that "our" representatives live in a far different world than we do, with their chaffeured limousines, free health care, ample salaries plus various allowances that cover expenses, and incredibly generous retirement plan. For many, once they've experienced the perks of office (plus the tremendous power and influence that accompany the position) of course their primary consideration becomes doing what is necessary to get re-elected! Who wouldn't?
I totally agree with Larry and others on the meaning of "shared sacrifice". In my book luxuries (see "chauffeured limousine" above) do not equate with core necessities (shelter, food and utilities) for the rest of us. Most Congress-persons were wealthy before arriving in WA D.C. and many are even wealthier by the time they finally leave (or get voted out).
Well, I suppose the cat food option may not be so bad if it comes to that. At least my two cats and I can eat dinner together!
Posted by: Elizabeth Rogers | Thursday, 03 January 2013 at 06:33 PM
Taegan Goddard's Wonk Wire had this today:
http://wonkwire.com/2013/01/04/we-dont-have-a-spending-problem/
To quote the last line: “We don’t have a spending problem. We have an aging problem and a taxing problem.” "An AGING PROBLEM"? what a bunch of b.s.!
Posted by: M.E. | Friday, 04 January 2013 at 05:04 PM