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Showing Original Post only (View all)Dems Back Bigger Social Security Increases--(See what happens when the Dem LEFT Yells Louder ) [View all]
Dems back bigger Social Security increases
By Matthew Heimer
At various times over the last couple of years, it looked as though Democrats and Republicans might agree on a plan to slow the growth of Social Security benefits. Earlier this month, President Obama officially backed away from that proposal. And now, some of his fellow Democrats are tacking in the opposite directionrallying behind a plan that would most likely increase the annual inflation adjustments for retiree benefits.
The proposal got more exposure this week when Sen. Jeff Merkley of Oregon endorsed it, after chairing a hearing on the topic in the Senate Subcommittee on Economic Policy.
At issue is how to calculate the annual cost-of-living adjustment (COLA) for Social Security beneficiaries. Annual increases are currently linked to the standard Consumer Price Index. But some economists and legislators have argued that retirement-age peoples cost of living has consistently risen faster than inflation in recent years, thanks predominantly to expenses related to health care and assisted housing. Theyve argued in favor of pegging COLAs to a so-called CPI-E (the E is for elderly) that would translate, in most years, into a bigger inflation raise for retirees than standard CPI would dictate.
Sen. Mark Begich, an Alaska Democrat, introduced a bill in 2012 that would adopt the CPI-E. The bill proposes to pay for the expanded benefits by making Social Securitys payroll tax applicable to all of the earnings of higher-income taxpayers. (Currently, only the first $117,000 of income is taxed.) The Washington Posts Greg Sargent reports this week that the bill has the backing of seven other Democratic senators and about 70 Democrats in the House.
The odds of passage in todays Washington, of course, are teensy. Many GOP leaders have backed the use of a chained CPI, which would result in a lower annual inflation increase than traditional CPI. (The president had previously supported this idea, but dropped it from his most recent budget proposal.) Sargent notes that both Merkley and Begich face reelection this year, and that a proposed expansion of Social Security could provide a way of rallying progressives and retirees in a year when GOP candidates are perceived by many to have the electoral upper hand.
http://blogs.marketwatch.com/encore/2014/03/14/dems-back-bigger-social-security-increases/