From National Women's Law Center, from WH transcript..about Chained CPI.

[madfloridian]

Last edited Sun Dec 30, 2012, 01:44 PM - Edit history (1)

There is no doubt that it is on the table being negotiated as part of fiscal cliff talks. Jay Carney was quite clear about that, and here are his words from the White House trancript.

Press Briefing by Press Secretary Jay Carney, 12/18/2012

Q Yes, Jay, a lot of top Democrats on the Hill, and I think President Obama, spent the campaign season saying, let’s not touch Social Security -- it doesn’t add to the deficit; we can resolve this issue without going to that entitlement program. What is the President’s message to those lawmakers who promised constituents that Social Security would not be touched after the President now has put chain CPI on the table for Republicans?

MR. CARNEY: Well, let’s be clear about one thing: The President didn’t put it on the table. This is something that Republicans want. And it is --

Q But the Republicans --

MR. CARNEY: -- part of his -- if I could please answer Sam’s question, I’d appreciate it. And the President did include it in his counterproposal, his counteroffer, as part of this process, as part of the negotiation process. I would note that this is a technical change -- would be if instated -- to the way that economists calculate inflation, and it would affect every program that has -- that uses the CPI in its calculations. And so it’s not directed at one particular program; it would affect every program that uses CPI. There are also -- as part of the President’s proposals, he would make sure that the most vulnerable were exempted out from this change.

But let’s be clear, this is something that the Republicans have asked for, and as part of an effort to find common ground with the Republicans, the President has agreed to put this in his proposal -- agreed to have this as part of a broad deficit reduction package that includes asking the wealthiest to pay more so that we can achieve the kind of revenue targets that are necessary for a balanced approach to deficit reduction.

One of the most respected contributors at Daily Kos, Joan McCarter aka McJoan has an article posted about the promises supposedly being made to keep the chained CPI from hurting the most needy.

The fallacy of protecting the 'most vulnerable' from Social Security cuts

The White House has gone to great lengths to stress one thing in response to the backlash against the unforced error of throwing Social Security into the fiscal cliff curb: They'll just reduce benefits for some people on Social Security, not all of them. Here's what Greg Sargent heard from the White House.

However, according to an official familiar with the talks, the White House continues to insist on various ways of softening the blow of “chained CPI” that are supported by progressive economists, though the details are still unclear.

White House Press Secretary Jay Carney insists that President Obama's proposal "would protect vulnerable communities including the very elderly when it comes to Social Security recipients."

This does some pretty damaging things, at the outset. First, it pits certain Social Security recipients against others. People on Supplemental Security Income, a program from the disabled, are protected from cuts in benefits, but what about people on Social Security Disability? A 70-year-old won't be protected from the cuts, but an 80-year-old will be? And what about the point that digby makes, as usual brilliantly, that "a vast number of the elderly are barely getting by already." Most of the people on Social Security are exceedingly vulnerable

The National Women's Law Center has several articles on this, and they have done some clear graphics that are self-explanatory.

The Chained CPI: What It Is and What It Means For Women

[madfloridian]

1. Correction: It is National Women's Law Center

Sorry about that.

[Jackpine Radical]

28. You an edit your subject line. There is no time limit.

Thanks for the post.

BTW, I know you feel that you've been catching hell around here lately. You should know that a lot of us stand with you in daring to question the stances of certain center-right politicians who need not be named.

[madfloridian]

34. Thanks, I keep forgetting there is no time limit now.

I just fixed it.

[forestpath]

2. Old people first. Who's next?

[madfloridian]

43. Don't forget this includes veterans. I find it all shameful..

to use this as a negotiating tool.

[MannyGoldstein]

3. These are not the droids you are looking for

Regards,

Third-Way Obi Wan Kinobe

[TDale313]

4. Thank you. Great info. n/t

[madfloridian]

6. Thanks. I thought they were very good sources.

[hay rick]

5. K&R

[madfloridian]

9. Hey.

and thanks.

[Overseas]

7. K&R. No more cuts to SSI period. Hurts too many people. Too arbitrary.

Really hurts the people of very modest means who may be just above being in "the poor" who are to be exempted.

SSI didn't create the deficit. It shouldn't be in that bargaining basket at all.

Income inequality is so extreme in the USA, it shouldn't have to be-- More Billions from the 98% as a quid pro quo for any more equitable contributions from the top.

Social programs have already taken enough of a hit. Millions of us voted in recognition of that and in favor of a Democratic president who said he would not cut Social Security, Medicare or Medicaid.

It should not be considered equal that if Republicans give up their relatively new pledge to the pompous Norquist (and Koch Brothers' "genuine grass roots" armies) not to impose a 3% tax on millionaires who will hardly feel it, then Democrats make cuts to programs that have kept millions out of poverty for forty years

[madfloridian]

11. Good post. It doesn't need to happen.

Your quote:

"Income inequality is so extreme in the USA, it shouldn't have to be-- More Billions from the 98% as a quid pro quo for any more equitable contributions from the top."

[duffyduff]

38. It's Social Security. SSI is Supplemental Security Income which is a disability benefit n/t

[1StrongBlackMan]

8. Finally some truth ...

This does some pretty damaging things, at the outset. First, it pits certain Social Security recipients against others.

Yes ... It pits those exempted against those that aren't exempted. IOW, those that can afford to pay more (receive less) against those that can't.

Where have I heard that argument before?

Oh yeah ... That's what everyone was arguing when we were talking about taxing the wealthy. I guess the "Tax Them Crew", mean just that!

[Dragonfli]

13. It is indeed true, they like us at each others throats

The idea of the aged and the disabled fighting over meager scraps has always brought amusement to the well to do.

Disgusting isn't it? Lying about the cost of living just to screw some old people out of some of their retirement money. Sounds like something a con man that preys on widows would do.

Don'tr let them lie about it, make them own their SENSELESS cruelty.

[Bluenorthwest]

20. So you are actually claiming that elderly and sick people equte to 'the rich' and should be treated

not as honored elders and those in need but as rich folks who can afford to pay? Well then perhaps you can explain why we hear so much rhetorical defense of low tax rates for the super rich, and so much offered compromise about wealthy incomes and we don't hear comparable wails about protecting their equals, the sick and the elderly?
The fact that you are comfortable with equating a few dollars for Social Security beneficiaries with taxing the rich shows much about your thinking. Please note, all readers, that this year's COLA raise for Social Security averaged $21 dollars per person. This post is advocating taking a few bucks out of that $21 AND is equating that to taxing those who make hundreds of thousands of dollars a year. $21 is what these folks want to dip into to protect low taxes for the very well off and healthy.
$21. And even that pittance they see as theirs to take from the least among us.

[1StrongBlackMan]

25. Which part of ...

"the elderly, the poor, the disabled and veteran were to be exempted in the rumored proposal" do you not understand?

[cer7711]

10. Senator Bernie Sanders: "Do not adopt the so-called Chained CPI."

STATEMENT BY SENATOR BERNARD SANDERS ON THE CHAINED-CPI

December 19, 2012

Let me begin by thanking the American Legion; the Veterans of Foreign Wars; the Disabled American Veterans; the Iraq and Afghanistan Veterans of America; the Paralyzed Veterans of America; the Blinded Veterans Association; and the many other veterans’ organizations who are here this morning and who have spoken out on this issue. Some of the full statements from the veterans’ organizations are available here today.

We are here today to tell the White House and the leadership in Congress: do not balance the budget on the backs of disabled veterans who have lost their arms, legs, and eyesight defending our country.

Do not balance the budget on the backs of the men and women who have already sacrificed for us in Iraq and Afghanistan.

Do not balance the budget on the backs of the wives, husbands, and children of those who have made the ultimate sacrifice.

And, do not balance the budget on the backs of the men and women who served our country in World War II, the Korean War, and the Vietnam War, and other conflicts by cutting Social Security benefits.

Do not adopt the so-called chained-CPI.

My Republican friends and some Democrats have said that lowering Cost-Of-Living Adjustments (COLAs) through the adoption of a chained-CPI would be a “minor tweak” in benefits.

But, let’s be clear: for millions of disabled veterans and seniors living on fixed incomes, the chained CPI is not a minor tweak. It is a significant benefit cut that will make it harder for permanently disabled veterans and the elderly to feed their families, heat their homes, pay for their prescription drugs, and make ends meet. This misguided proposal must be vigorously opposed.

Supporters of the chained-CPI want the American people to believe that the COLAs that disabled veterans, senior citizens, and the surviving spouses and children who have lost loved ones in combat are too generous.

That is simply not true. In two out of the last three years, disabled veterans and senior citizens did not receive any COLA. And, next year’s COLA of 1.7% is one of the lowest ever. Lowering COLAs even further through the adoption of a chained-CPI would be an absolute disaster.

This nation has made a commitment to our military and our veterans: if you get permanently disabled defending this country, if you get seriously wounded in battle, we will always be there for you. The Veterans Administration will provide you with the disability compensation benefits you need to live in dignity and those benefits will keep pace with inflation.

Today, more than 3.2 million disabled veterans receive disability compensation benefits from the Veterans Administration.

Under the chained CPI, a disabled veteran who started receiving VA disability benefits at age 30 would have their benefits cut by more than $1,400 at age 45; $2,300 at age 55; and $3,200 at age 65.

I challenge anyone who supports a chained-CPI, to go to Walter Reed. Visit with the men and women who have lost their legs, lost their arms, lost their eyesight as a result of their service in Afghanistan or Iraq. We made a promise to these veterans. Cutting their COLA’s would be reneging on those promises and we cannot let that happen.

We have also made a commitment to the surviving spouses and children who have lost a loved one in battle by providing them with Dependency Indemnity Compensation benefits that average less than $17,000 a year.

Like many of my colleagues in the Senate, I have attended the funerals of brave soldiers killed in both Iraq and Afghanistan.

I remember telling their grieving spouses and young children that our country would never forget their sacrifice and loss. It would be absolutely immoral to cut the very modest benefits they receive by adopting a chained-CPI.

Further, we have made a promise to every American: Social Security will be there for you in your old age, or if you become disabled. And, those benefits will also keep up with inflation.

Today, over 9 million veterans receive Social Security benefits; and more than 770,000 veterans receive Social Security disability benefits. We’re talking about those who served in World War II, the Korean War, the Vietnam War and many others.

Under the chained CPI, average seniors who retire at age 65 would see their Social Security benefits cut by about $650 a year when they reach 75 and more than $1,000 a year once they turn 85.

We simply cannot renege on the promises we have made to our nation’s veterans by cutting the very modest benefits that they have earned. That’s exactly what the chained-CPI would do and that is exactly why it does not belong in deficit reduction.

And, let me be very clear: the American people strongly support the position we are advocating for today, including the AARP, the AFL-CIO, the National Committee to Preserve Social Security and Medicare and many other groups representing senior citizens, working families, and the disabled.

In poll after poll, including one that appeared just yesterday in the Washington Post the American people have been extremely clear: do not cut Social Security, do not cut Medicare, do not cut Medicaid benefits, and do not lower COLAs.

It’s time that Congress and the White House listened to the people who have put their lives on the line defending this country and to the American people.

[madfloridian]

22. The main person speaking out strongly is an Independent senator.

That's amazing. He is consistently opposing it. No wishy washy stuff.

[1StrongBlackMan]

26. Yep ...

read it again ... STILL no mention of the exempting of the groups that he based his objection on.

[CranialRectaLoopback]

12. We need to have the President's back.

He's done so much doing so little.

[Dragonfli]

14. No, he needs to have our backs for once /nt

[newfie11]

15. Damn right

I feel betrayed.

[Demo_Chris]

16. Question on chained CPI

Most of these articles are saying things like: a 70 year old loses 3 days food, an 80 year old loses 7 days food, and so on...

Question: I am correct in my understanding that what they are REALLY saying is that the benefits paid to everyone will be reduced by this amount in ten years time. In other words, a person turning 70 a decade from now will be recieving this much less than a 70 year old today.

Thanks in advance.

[madfloridian]

23. Yes, benefits will be reduced and the cost of stuff won't.

Here's a good article from Huff Post's Daniel Marans.

Ten Reasons Why the Chained CPI Is Terrible Policy
http://www.huffingtonpost.com/daniel-marans/social-security-fiscal-cliff_b_2363997.html

Here are the first four listed. Note how very hard it would be to pick out which ones are the most needy and then exempt them.

Now that Christmas is over, President Obama and Speaker Boehner will soon resume talks to cut Social Security as part of a deal to avert the fiscal cliff. Here are 10 reasons why the chained CPI -- the Social Security cut they are considering -- is terrible policy.

....1. Chained CPI is a significant benefit cut that compounds over time, hitting late old-age beneficiaries and the long-time disabled hardest. For a worker with average earnings retiring at age 65 in 2015, chained CPI would cut benefits $653 a year (3.7 percent) at age 75, $1,139 a year (6.5 percent) at age 85 and $1,611 a year (9.2 percent) at age 95.

2. Chained CPI hits current beneficiaries. Even Paul Ryan tried to hold people ages 55 and older harmless from his plan to privatize Medicare (and Social Security before that). Seriously. Check out page 52 of his 2013 budget, and every speech he ever gave on the topic. The theory is, if you're gonna burn people, give them some time to adopt a Spartan lifestyle for several years so they can make up for the lost pension money in time for retirement.

3. Chained CPI cuts benefits for veterans. At least 771,000 veterans receive both Social Security and VA disability benefits. Under chained CPI, both would be cut. A fully disabled veteran claiming benefits at age 30 in 2012 would see a cut in VA benefits alone of $1,425 a year (4.3 percent) at age 45, $2,341 a year (7 percent) at age 55, and $3,231 a year (9.7 percent) at age 65.

4. Chained CPI cuts benefits for the indigent elderly and disabled on Supplemental Security Income (SSI). Do I need to add detail here? These are the poorest of the poor.

[1StrongBlackMan]

27. Yes ...

that is exactly what it does assuming inflation.

[xchrom]

17. du rec. nt

[Demo_Chris]

18. If you have to "soften the blow" then there's a blow there to soften. Right?

[madfloridian]

19. Ah, yes.

And only some will have that blow softened.

[Bluenorthwest]

21. Even Richard Nixon knew better than to cut benefits:

"I have today signed [legislation which]. . . constitutes a major breakthrough for older Americans, for it says at last that inflation-proof Social Security benefits are theirs as a matter of right...."
-- Richard M. Nixon, July 1, 1972

[madfloridian]

24. Thanks for the Nixon quote.

[jwirr]

29. Am I mistaken or do other parts of the government also get the cuts that are called COLA? For

instance I think the military gets raises under the COLA and government workers, etc.

[hay rick]

30. Maybe.

That seems to be part of the discussion. The Bureau of Labor Statistics issues several different measures of inflation. The CPI-U (Urban Consumers) and CPI-W (Urban Wage Earners and Clerical Workers) are most commonly used to determine COLAs. Additional legislation would be needed to change statutes governing COLA determination to use chained CPI. Social Security COLAs are currently based on CPI-W. Some government workers are paid on a contractual basis- and those contracts would also have to be modified (negotiated in the case of union contracts) before they could be switched over to chained CPI.

Article that touches on some of the possible effects of a proposed switch to broader use of the chained CPI here: http://www.salon.com/2012/12/19/the_progressive_case_for_the_chained_cpi/

From the article:

First of all, it’s important to note that the CPI formula doesn’t affect just Social Security. Rather, it appears in hundreds of different places on both the revenue and spending side of government. Almost every government retirement, disability and income-support program pays annual cost of living adjustments that are linked to the CPI. On the tax side, dozens of elements, from the standard deduction to limits on contributions to 401K plans to the earned income and child tax credits, are adjusted every year based on the CPI.

The whole point of the CPI is make sure benefits keep pace with inflation on the one hand, and to ensure that people are paying enough taxes as inflation changes on the other hand. So while the chained CPI cuts benefits, it also raises revenues in a way that’s palatable to Republicans. The change is estimated to save about $220 billion over 10 years, $72 billion of which would come from increased tax revenue.

Top limits on tax brackets would rise more slowly, with the result that more income would fall into higher tax brackets. Deductions and credits would be affected in the same way.

[liberal_at_heart]

31. I've always wondered why there were any limits on how much you could

contribute to 401(k)s. How is it that millionaires and billionaires are able amass such wealth? Are they exempt from such limits on contributions? For those of us who are behind on saving for retirement how are we ever suppose to catch up if there is a limit on how much we can contribute?

[jwirr]

32. Thank you.

[madfloridian]

33. It will be other programs as well. I just posted this article...includes veterans, military.

http://www.democraticunderground.com/?com=view_post&forum=1002&pid=2096044

There are 6 others listed at the link that I didn't post because of copyright.

[Starry Messenger]

35. k&r

[madfloridian]

36. It will affect veterans.

3. Chained CPI cuts benefits for veterans. At least 771,000 veterans receive both Social Security and VA disability benefits. Under chained CPI, both would be cut. A fully disabled veteran claiming benefits at age 30 in 2012 would see a cut in VA benefits alone of $1,425 a year (4.3 percent) at age 45, $2,341 a year (7 percent) at age 55, and $3,231 a year (9.7 percent) at age 65.

http://www.democraticunderground.com/?com=view_post&forum=1002&pid=2096044

[madfloridian]

37. Obama said it himself today. He has agreed to it.

http://www.democraticunderground.com/10022097448

[Enrique]

39. the 'fallacy' part is very important

now that the effort to cut Social Security is no longer deniable, they have shifted from denying it to selling it. And those supposed protections are their main selling point.

[madfloridian]

40. It's amazing. They will protect the poorest while making the rest of us poorer.

And they have the nerve to brag that it's a good thing.

[MFrohike]

41. What I really find distasteful

The claim that those who are "most vulnerable" will be protected. That's the biggest load of bullshit I've ever heard. If you want a program to survive, you tie it to benefits for the middle class. That's political reality in this country. If you don't really give a damn if it fails or not, then you explicitly tie it to the poor. The poor have a weak constituency at best and benefits to them can readily be damned as waste and examples of how the "competitive spirit" are being sapped. When I see proposals like this, I have to conclude that the administration is either stupid or full of shit. There really isn't a middle ground because this really is American politics 101.

[madfloridian]

42. I find that distasteful as well. Protect poorest, let the rest get poorer.

This whole thing is repulsive to me.

[madfloridian]

44. About that "birthday bump" for the oldest and poorest...oh come on!

10. "Birthday bump" and other sweeteners are inadequate. The chained CPI's apologists say they will hold the poor and people in late old age harmless through a "birthday bump" in the 20th year of benefits eligibility. As the graphs here and here show, however, this only offsets the benefit cut significantly if you live past 90, and even then doesn't make up for the chained CPI.

http://www.huffingtonpost.com/daniel-marans/social-security-fiscal-cliff_b_2363997.html

Here are the graphics to which he referred:

http://www.nwlc.org/sites/default/files/pdfs/chainedcpibirthdaybumpup.pdf

One is posted in the OP.

I think some politicians up for election in the near future need to quiver in their boots a little.

[bhikkhu]

45. The sentence you don't bold is the more important one:

"There are also -- as part of the President’s proposals, he would make sure that the most vulnerable were exempted out from this change. "

Which, in practice, isn't hard to do, as the change is so small and cumulative over time. A tiny change to how taxes are applied would offset the change, and make the chained cpi adjustments, in effect, means-tested.

If SS can be strengthened without changing the actual money-in-pocket of those who depend on it for income, then that's fine with me. Raising the contributions cap would be a better way, I think, but the arguments for and against that revolve around the same kind of means testing arguments - whether people should only pay in what they will draw out, regardless of need.

[madfloridian]

46. I didn't bold it because it means nothing at all. Exempt poorest but hurt the rest of us?

Did you see this in the middle of the OP, did you read it? What do you think will happen to the ones not exempted as their cost of living is cut? That's right, they will get poorer.

It's all a big charade.

"White House Press Secretary Jay Carney insists that President Obama's proposal "would protect vulnerable communities including the very elderly when it comes to Social Security recipients."

This does some pretty damaging things, at the outset. First, it pits certain Social Security recipients against others. People on Supplemental Security Income, a program from the disabled, are protected from cuts in benefits, but what about people on Social Security Disability? A 70-year-old won't be protected from the cuts, but an 80-year-old will be? And what about the point that digby makes, as usual brilliantly, that "a vast number of the elderly are barely getting by already." Most of the people on Social Security are exceedingly vulnerable

I guess now that we have the words from the mouth of the president that now people will be forced to justify cutting Social Security.

That's a crying shame.

[bhikkhu]

47. But raising the cap does the same thing

It changes nothing for those most in need, while "hurting the rest of us".

The president's proposal (without seeing the exact details) was to slightly increase tax rates for retirees who had more income - pensions, IRA's, investment income, etc, while lowering it slightly for those who relied on SS for their sole income. This is "exempting the poor, while hurting the rest of us".

The alternative is to raise the contribution cap, so that those who make more money contribute more to the program, regardless of how much they will draw out. This also exempts the poorest from changes, but "hurts the rest of us".

Pretty much any sound suggestion I've seen anywhere exempts the poorest, but hurts the rest of us. I suppose it depends on who "the rest of us" is, but in the president's proposal, "the rest of us" is those who are most able to shoulder their fair share - those with pensions, IRA's, investment income, etc.

[madfloridian]

48. So you are saying it's fair to hurt those with other income? Those who prepared?

First off, I don't think they should even raise the cap. It's not causing the deficit, it doesn't belong in the fiscal deficit talks.

But this argument that it's okay to cut SS if they exempt the poorest? That is just ridiculous. There is no need to hurt anyone.

It's an embarrassing stance for Democrats to take.

[bhikkhu]

49. In essence, that's what our progressive income tax system does

...and the opposite of "progressive" is "regressive" - as in, a system that distributes resources regardless of need.

Resources are finite. Some people live on the edge of utter deprivation, while other people have far more than they have any need or use for. An embarrassing stance would be to say that that's fine.

If Social Security needs strengthening, would you oppose means testing of any sort - such as raising the contributions cap? If it were a matter of increasing benefits, from where should the funds for the increase be sourced?

[madfloridian]

50. Right now to me it's all a bunch of baloney.

I have seen too much of Democrats taking Republican positions and never going back to the traditional stances.

Right now to me it is nothing but political word games, with no one standing up for the traditional constituents of the Democrats.

I am sickened they put Social Security on the table during fiscal deficit talks.

There is no need for it.

I am sick of talking points, sick of people defending the indefensible.

[Wilms]

51. ^