Monday, 07 October 2013
Naked Old People Dancing in the Street
Oops, sorry – that's a lie. There are no photos of naked old people here. Instead, today's post is about the threats from Congress and President Barack Obama to the Social Security program.
The reason I have resorted to such a hoary old ruse is that when I headline a story with the phrase Social Security, a third or more readers disappear for the day. I can only assume that's because they think it's boring.
Well, it's not going to be so boring when yours or your parents' Social Security checks are reduced. This is important stuff to understand so please pay attention.
As the standoff on the government shutdown and looming debt ceiling deadline of 17 October continue, leaks of backroom Republican offers – another “grand bargain” - are cropping up in which the chained CPI is a prominent feature. From Business Insider:
”[A proposal] is expected to pair an extension of government funding and debt-limit hike with a 'small, but strategically designed menu' of conservative wishes.
“These conservative inclusions could include a 'mechanism' and triggers for talks on tax reform, as well as entitlement reforms like chained CPI and means-testing Social Security.” [emphasis added]
Robert Costa at National Review Online sees the possibility of Democrats exchanging chained CPI for Republican concessions on other issues:
”...if Democrats start to talk about chained CPI, Republicans may budge a little on sequestration and look at trading some entitlement reform for renewed funding.” [emphasis added]
These days, Republican mention of “entitlement reform” always means chained CPI and do not forget that the Democratic president has more than once offered up this cut to Social Security benefits without even being prompted by the Republicans.
As Time magazine Swampland reported on Saturday:
”...both sides know what they can put on the table: entitlement reforms, such as chained CPI (which would slow the rate of increase for social security benefits), and an elimination of the medical-device tax, for fixing sequestration cuts and raising the debt limit.
“These ideas have been floating around Washington for so long that one budget aide said 'we just copy and paste' the language into a new bill, meaning a theoretical deal could go from handshake to signature within a couple of days. [emphasis added]
“In a couple of days” Congress and the president could cut Social Security? Maybe so.
Time magazine describing chained CPI as slowing the rate of increase is not just misleading; it is a lie. Chained CPI is a cut to Social Security benefits - a cut that increases cumulatively over time.
Last week, we got a new picture of how chained CPI would hurt nation's economy and fragile recovery.
A brand new report by the National Committee to Preserve Social Security and Medicare Foundation, in consultation with economist Dean Baker provides a detailed look at what the adoption of a stingier cost of living adjustment really means for communities and states.
”...those who continue to peddle the Chained CPI should now explain to American workers, retirees and their families how losing up to $31 billion in economic output and more than 200,000 jobs nationwide is a ‘modest adjustment’ we should accept,” said NCPSSM President/CEO Max Richtman.
The report, titled The Chained CPI: Shackling America’s Economic Recovery, uses CBO projections to calculate state and Congressional district-level impact if chained CPI is enacted.
This map links to its full-size, interactive counterpart at the NCPSSM. On that page, when you click on your state, a pop-up reveals just how large Social Security's contribution to your area's economy is.
For example, there are 757,029 Social Security beneficiaries in my state, Oregon, who collectively receive $11 billion a year in payments.
Keep in my that almost all Social Security benefits are poured directly back in to local economies and that in addition to retired workers, disabled workers, widow(er)s, spouses and children benefit.
Further information – a breakdown of cuts over ten years for each state - can be found here. (Scroll down to choose your state)
On those pages, the cuts don't seem like much but, as always, it affects the poorest among us most of all. Over the entire country, according to the NCPSSM:
”The nationwide numbers from CBO shows that a shift to the chained CPI would lead to reduction in benefits of $1.6 billion in 2015, $14.5 billion in 2020 and $23.0 billion in 2023, the last year in the CBO budget 10-year budget horizon.”
In fact, rather than decreasing the Social Security benefit, a study last January from the National Academy of Social Insurance reported that in
”...a sharp contrast between what Americans say they want and changes being discussed in Washington, such as cutting benefits by using a 'chained' Consumer Price Index [CPI] to determine Social Security’s cost-of-living adjustment (COLA).
“...Fully 74% of Republicans and 88% of Democrats agree that 'it is critical to preserve Social Security even if it means increasing Social Security taxes paid by working Americans.'”
Did you notice those high numbers of both Republicans and Democrats?
Okay, as today's headline indicates, I know you get impatient when I go all wonky like this with Social Security and Medicare.
But think about it: if your benefit is cut along with the the benefit of others who are less well off than you, do you really want to go to bed at night knowing you didn't do something – however small – to try to stop it?
Contact your Congressional representatives today and tell them two things: End the shutdown now and no chained CPI. There are many websites that help you do that. Here are three:
At The Elder Storytelling Place today, Marcy Belson: Can You Smell It?