Change you cannot believe in: Restructuring the Social Security COLA formula

[Samantha]

Passing a portion of the deficit hot potato is the easiest way to avoid an obligation at hand. Just pawn that obligation off onto whomever is unfortunate enough to have no power or influence with politicians who are in decision-making roles.

Several websites suggest the ramifications which will impact seniors if the Social Security COLA is indeed restructured in order to save the Federal government money will be severe. The consequences will dramatically impact Social Security benefits for both participants of that program and Federal employment retirees. Here is an informative article posted at Bankrate.com at http://www.bankrate.com/financing/retirement/cut-social-security-colas/:

"The classic CPI is used to measure the cost-of-living adjustments for Social Security recipients. If Social Security is required to adopt the chained CPI instead, cost-of-living increases to Social Security will be lower, a factor for anyone doing retirement planning.

(***)

"Switching to the chained CPI would reduce Social Security COLAs by about 0.3 of a percentage point each year, the Congressional Budget Office estimates, saving the federal government more than $200 billion over the next 10 years. Most of the savings would come from lower Social Security benefits and lower retirement benefits for federal employees, whose increases also are tied to the CPI.

The Senior Citizens League calculates that such a change would reduce Social Security benefits by an estimated 7 percent over a 25-year retirement. For a senior who retires in 2011 and receives the average Social Security benefit -- about $1,100 per month -- this would reduce benefits over 25 years by $18,634. The cuts would be very small in the beginning but escalate as recipients age." (emphasis added)(see http://www.tscl.org/action/emergencycola.asp.)

Additionally, the Senior Citizens League issued a emergency petition, the first three bullet points of which are:

"• The Social Security COLA should not be calculated from the consumer price index (CPI), since the CPI is based on the purchases of young urban workers and does not reflect the actual expenses of senior citizens.

• Even when CPI-based inflation is very low, the expenses that form the backbone of senior citizens’ budgets – medical insurance, prescription drugs, fuel – continue to rise alarmingly.

• The federal government itself recognizes the inequity of a CPI-based COLA by calculating a senior-specific CPI formula, which it never uses, that shows our cost of living rises faster than that of most young people."

http://www.tscl.org/action/emergencycola.asp

While it seems apparent that seniors and retirees are targets to be adversely impacted in the name of shared sacrifice, the question remains, where is the sacrifice of Wall Street and in the banking community delineated in these negotiations? The very same institutions which played a lead role in causing this deficit crisis are realizing unprecedented profits in these times but are left untouched in these negotiations.

Thinking of the trite truism to be forewarned is to be forearmed, the question is will we as progressives remain silent as this outrage is perpetrated? What is your response?

Sam

[Dappleganger]

1. Smoke and mirrors.

They want to fool the average american to avoid negative publicity. It's like shrinking the package of ice cream and putting a bubble in the bottom while keeping the same price. You're still getting screwed.

[Emelina]

3. Our politicians are treating us like it is a prison shower scene!

Maybe the ones who really care are such a minority that they cannot change things. I am getting really frustrated that the more you hear them talk on the news, the more it sound like BS to keep Their jobs.

http://www.youtube.com/watch?v=_MZCHjGkTPg&feature=related

[Samantha]

11. Well you are right -- it is just so much BS until you look beneath the surface

and what lies there smells much worse. It is the economic kiss of death to the poor and middle class who are struggling to keep their heads above the rising economic waters while the very wealthy sail their yachts (with their tax deductions intact for their second "homes") above us.

Sam

[Samantha]

7. Exactly

I had to do a lot of reading before I posted this thread. But when I finished, I felt like while hearing someone say, Look over there at what those dirty Republicans are doing," someone slipped a hand into my pocket and picked it.

Sam

[russspeakeasy]

44. Unfortunately, the decisions have already been agreed to.

This display of professional wrestling is for our entertainment.

[truth2power]

46. Yes sirree!! n/t

[Raven]

2. K&R.

[Samantha]

21. I just read your thread

and really appreciated your posting it. Thanks for your recommendation.

Sam

[mrmpa]

4. There hasn't been a social security and federal pension COLA...

increase for the past 2 years. What's the difference??????

[WinkyDink]

10. None in the future, would be the obvious answer.

[Samantha]

13. The way they calculate the cost of living with the current CPI

does not exceed the increase in inflation. But as I believe I have learned, once wading past all the argument over whether food, medicine and gasoline are included in the current formula, the formula now used does not include the more costly expenses of seniors. Economics is not my strong suit, but this seems to be the case. How indeed can one in all candor look seniors in the eye today and say there will be no cola when everyone knows the rise in the cost of food, gasoline and prescription drugs are causing many to make hard choices already between buying their medicines and eating everyday.

It is a sad day in these United States, and from the looks of things, our future days will be even more impoverished.

Thank you for your response.

Sam

[Aerows]

17. Yet the price of everything has gone up.

The CPI is a pack of lies to begin with. So prices will just keep going up, and your social security payments stay the same. There has been inflation in the last two years as anyone who grocery shops can tell you.

[mrmpa]

22. My mother lives off of her Post Office Pension and what little Social Security....

she had earned was off set by Draconian Reagan Policy of 2/3 rds. He SS after medicare is paid is $25. She lives in my home and her contribution is that she pays for groceries for 2 of us. We do Costco every 6 weeks. We scour for all the coupons we can find and only buy it when it's on sale and at a grocery store that offers double coupons. What we could afford 2 years ago, we can't afford now, and often it's fresh produce. $2.50 for lettuce??? $3 for a pound of tomatoes, which is often is just 2 tomatoes???

It is insanity.

[Samantha]

26. Yes, it is and I am sorry you and your Mom are going through this

At the very least, she should have been getting fair COLA increases which would have helped with the cost of food (somewhat). This should never have happened to the two of you.

Sam

[mrmpa]

36. I posted the following in 2009

My mother lives with me, she is 79. I turned her onto Costco a few years back. She does all the shopping and cooking for us. About every 6 weeks she spends about $150-200 at Costco. She uses a lot of coupons and shops at the grocery stores that have the deals and spends about $50-75 a month.
In the summer we go to the farmers market every two weeks. She freezes our leftovers meals and vegetables. She uses the vegetables for her homemade soups. There's nothing like living with a Depression era kid, who knows how to stretch the dollar.

We are now up to about $350 @ Costco and $125 at super markets. Here in PA, seniors receive $20 from the state in the form of coupons to use at Farmer's Markets and Stands. That's for anyone over 60.

We're doing our best.

[jwirr]

43. Just a suggestion: I live with my grandson and share costs. I get

food stamps because we are separate households living in one apartment. This means that I claim that I buy my groceries and cook separate from him. This may help in your case. Depends on incomes and how good your social services department is - some workers work for the people - some work for the rich.

[Lugnut]

58. Exactly!

How do you take something away from nothing?

[Autumn]

5. People on SS aren't getting them anyway

the CPI is a joke, and I seriously doubt they will improve it.

[Samantha]

15. No, they will not improve it

they seek to make it worse.

Thank you for your response.

Sam

[Bluenorthwest]

6. Anyone who does this should be politically finished

mocked and derided openly, shunned by not just voters, but American society as a whole.

[Samantha]

16. And that is what I call a h*ll of a good response

Thank you for posting it.

Sam

[Autumn]

19. Thank you for that

That is exactly what should happen.

[gkhouston]

24. +1. It's not decent. It's not American. n/t

[Samantha]

31. It is also extremely unethical to be so deceptive about how

little the change will impact seniors' benefits, but, hey, since when does ethics or morality have any influence in what comes our political way....

[gkhouston]

32. It *is* unethical to be deceptive about how changes will affect

seniors. For example, the current COLA calculations already do a poor job of modeling actual cost-of-living increases. The notion that the proposed restructuring will only have a miniscule impact is laughably naive. There's no point in doing it if the change is so small. Compare the alleged proposed savings to a single weeks' worth of war expenses. Either the proposed change is much greater than stated or debt reduction is not the goal, or both.

[Samantha]

33. Oh, I don't think for a moment the Republicans are concerned about the deficit

Where were they when Bush* drove up an 11.5 trillion dollar deficit? They were silent, and four times they voted to raise the debt limit without voicing a concern about the size. Additionally, Bush* kept the cost of the Iraq war off the general ledger, so the public at large would have no idea what the true cost of that war was. When President Obama was sworn into office, he made a statement early in his term that he was taking that cost and putting it with the rest of our debt so the American people could see actually where we stood. It was not too long after that that the Republicans started screaming about how much President Obama was spending.

It is simply political theater at its worst.

Sam

[Faryn Balyncd]

8. K and R

[WinkyDink]

9. Old people are old; they're not math-challenged. Chicanery will out.

[ProfessionalLeftist]

12. UNACCEPTABLE. It's a cut. n/t

[Samantha]

20. It is a cut

It is just my opinion (no facts, no links available) that over the long haul Social Security will continue to decrease its payments to participants while health insurance costs continue to rise. If we don't recognize this, eventually we will have to use most if not all of our Social Security benefit to pay our monthly Medicare expenses. THAT I BELIEVE IS THE GOAL, AND THAT IS EXACTLY HOW SOCIAL SECURITY ITSELF WILL BE PUT OUT TO RETIREMENT. It will be neutralized by seniors using their Social Security monies to pay for their own health insurance.

Sam

[Faryn Balyncd]

14. That's a good link discussing the need for INCREASING the COLA to match actual "Senior CPI", instead

....politicians are trying to con Americans with accounting fraud, and expect the gullible to believe that our current "no inflation" calculations are "OVER-estimating CPI". How stupid do they think Americans are?





:kick:

[Samantha]

18. They think we are VERY stupid

And that is exactly one reason I just spent a couple of hours reading different websites to get an accurate picture of the ramifications of these proposals.

I CAN read; I can WRITE; I can POST a thread on a progressive website so that readers will know exactly what our leaders are agreeing to do to our great detriment in the name of shared sacrifice. But once again, what is Wall Street and the banking community sacrificing?

Thank you for your response.

Sam

[WillyT]

23. HUGE K & R !!! - Thank You !!!

:kick:

[Samantha]

27. Hey, you are very welcome

It is a tough proposition writing a thread and hosting it here, but this is too important an issue for us not to get alerted to the possible consequences of actions which could impact us the rest of our lives. So information I gain and can share with my fellow DU'ers, I am happy to do.

And thank you for your response. That makes it so much more worthwhile, WillyT.

Sam

[scarletwoman]

25. Great OP! Here's my kick and rec. Thank you for doing the research & reading.

My apologies, I'm too pissed off to formulate a coherent comment. I just want to say "thank you".

:yourock:
sw

[Samantha]

28. And I appreciate your thanks

This is a complicated subject, and I had to do a lot of reading, but once I realized the implications, there seemed no other alternative but to share it with fellow DU'ers. So thank you for your response. It makes the time investment so much more worthwhile to see people respond.

Sam

[scarletwoman]

29. I just feel like there's a juggernaut rolling over us. And there's no one in power

who's on our side.

Thank you again,
sw

[Samantha]

30. Feel encouraged, Bernie Saunders is on our side

He's worth 20 of most of the rest! Just saw him on Countdown. He was great. Hopefully, tomorrow will be a better day, scarletwoman.

Sam

[Starry Messenger]

34. k&r

[sad sally]

35. Hey, if it keeps the rich getting richer, that's all that matters.

If your income can't keep up with what it costs to live, too bad. Wealthy people, corporations and the war machines NEED all the money they can get their hands on - if you're hungry, too bad. If you're homeless, too bad. suck it up :sarcasm:

[ProfessionalLeftist]

37. My response:

Sent to http://www.whitehouse.gov/contact today. . .



Dear Mr.President,

This is to inform you that if you in any way touch Social Security or Medicare in the form of cuts, including any more "tax holidays" (those are cuts) - you WILL lose my vote.

You may call the cuts something else, such as implementing "chained CPI" - or you may call them "tax holidays" - but they're still cuts.

Cut these programs in any way, anymore and lose millions of votes, mine included. It's that simple.

Most Americans *know* that it is simply unnecessary to touch these programs other than expanding and increasing them. It's morally reprehensible to cut them and economically unnecessary when the richest do not pay their fare share, when we spend trillions of dollars on multiple unnecessary wars, and when corporate tax loopholes and subsidies eat up billions if not trillions more of our tax dollars.

OUR money is being stolen and given away to the rich and big corporations while our own lives, health, and retirements are sacrificed.

I know that Republicans have been chomping at the bit to decimate and eliminate these programs ever since they were created.

The way they can do that without taking the fallout for it themselves from voters -- is to get a "Democrat" to do it. And you are falling right into their trap. I had considered you more intelligent than that.

From you and every other Democrat on Capitol Hill without exception, I EXPECT a strong, principled stance on this. Absent that, I've no reason to vote for you - any of you.

Democrats do *not* cut Social Security or Medicare. Ever. And I will not vote for a Republican hiding behind a "D".

I've written a similar message to you before. I presume you or your staff received it and that they are tallying these responses.

I'm not alone in this sentiment, I assure you, whether you hear from all who share my feelings or you don't, know that I am certainly not alone.

Touching these programs in any way other than expanding and increasing them ie: raising the 106,000 cap on social security - is unnecessary and unforgivable. Period.

And I'm sorry to say that if you do so you will absolutely lose my support, my small financial and time contributions to your campaign, and my vote.

After all, if these programs are to be cut and decimated in myriad ways, privatized, vouchered, turned into block grants, or otherwise strangled, we may as well let the Republican candidate win. No difference.

Good Day Mr. President,

[Samantha]

38. Well, I applaud you for taking the time to write your letter and

send it off. Many people will just wait to see what happens, and by then it will be too late to do anything. I hope many here reading this thread are inspired to consider what they will do as events unfold.

Thank you for posting your letter for us to read.

Sam

[ProfessionalLeftist]

39. That's the thing - we cannot 'wait to see' what happens

'We the People" need to ACT NOW and make our voices heard on this. No matter what the politicians in DC or the media says. Politicians often don't DO what they SAY and the media constantly gets the story completely wrong -- and feeds the public a constant stream of misinformation.

We don't know what Obama means by "cuts" and we can't count on their promises. Their "outrage" could be theater. We have to use our voices and our votes to at least try - BEFORE any decisions are made - to prevent cuts in these programs. They all must be put on notice.

If Obama won't draw any lines in the sand, (and even if he would), we must (also). We can't do it AFTER backroom deals are made. We have to do it now.

We have two things at our disposal to influence the outcome: Our voices and our votes. NOW is the time to use BOTH.

[Samantha]

40. Last night, Adam Green (Bold Progressives) started his comments

on this subject with the words, "This is change you cannot believe in."

I thought it was ironic he assigned the same words to this topic as I did in this thread. I believe many people agree if we are going to do anything, we must stand up and do it now.

Thank you for your responses to this thread. Your contributions are greatly appreciated.

Sam

[JDPriestly]

48. What do you mean by using our votes now.

I don't get to vote in a national election until 2012. And when I vote, I assure you, no one who has cut Social Security or voted to cut them will receive my vote. And I think most seniors feel the same way. Only the very wealthiest or people who think they have say teachers' pensions that are not related to Social Security won't care.

This is utterly shameful. The same people who voted so much money to "rebuild" Iraq are ready to cut Social Security and Medicare for their own constituents. That is not going to sell, not to rank-and-file Democrats or Republicans.

[roxiejules]

45. You are correct.....many are waiting to see what happens

and it will be way too late.

I've been asking everyone in my extended family to please contact the White House and their Representatives ASAP.

[Faryn Balyncd]

41. Why "cut" anything when it's (SL)EASIER to just cook the books (again)?

K and R)


After the Boskin Commission in the 90's, the CPI/COLA calculations were rigged, resulting in our current "no inflation" figures (which have already reduced COLA'S to zero for at least 2 years.

The "chained CPI" concept is, by definition, extremely flexible, depending on at what point manipulators decide that a "substitution effect" should be inserted. Since they are no ;onger required to compare apples to apples, the "chained CPI" substitution effect allows manipulators virtually infinite ability to FURTHER rig the CPI/COLA figures downward in the future without new legilation.








:hi:





:kick:

[Samantha]

42. Exactly, and that is how the Federal Government predicts

it will save billions of dollars over the long haul. And the monies it saves, are monies recipients of Social Security as well as Federal retirees will have to absorb in their budgets.

Thanks for your response.

Sam

[Samantha]

47. Here is some additional information I just posted in another thread

which asked the question what is the source of this suggestion. The answer to that question is that it was one of the ideas the original Deficit "Cat Food" Commission submitted. That suggestion has generated a lot of controversy in high places and all over the Internet. Here is a link which further discusses the ramifications of applying a chained CPI to the Social Security program and to the retirement program of the Federal Government and further discussion from that source:

*****************

http://www.usnews.com/news/articles/2011/06/28/debt-cei...

"That doesn't mean it wouldn't spark controversy. Although the cuts wouldn't be much at first, as time goes on they would grow, to as much as 5 percent for older retirees two decades from now. As poorer retirees are less likely to be able to adjust their living habits, they could be affected most by such changes. The president's fiscal commission recommended using the chained CPI for Social Security benefits, but also included increased payments to older and poorer workers to help with the effects. The senior advocacy group AARP has denounced the proposal, at least as part of a debt ceiling deal. "Any discussion around proposals that would impact Social Security must only happen in the context of strengthening retirement security, not balancing the budget," said Barry Rand, CEO of AARP. The long-term effect of the income tax adjustments could be even greater than the adjustments for Social Security. Eventually, the adjustments would mean that millions of Americans might find themselves in higher tax brackets, which could affect their career earnings." (emphasis added.)

Sam

[Bluebear]

49. .

[defendandprotect]

50. Imagine how immense the CPI increases would have been ... every $1 anyone had ...

pre-W Bush is now worth about 50 cents --

has anyone noticed?

They'll actually be paying down the debt with cheaper dollars due to inflation --

[Samantha]

51. Yes, they will

Right now, I am waiting to hear more about that chained CPI index and whether the Dems will support it. There is one link above which discusses the different types, and it is suggested there should be an index tailored to seniors because their spending habits differ greatly from younger people. I think if there is a change, a formula of that nature should be applied. Will it? Of course not.

Thank you for your response.

Sam

[defendandprotect]

52. Recall that I used to hear Orrin Hatch talk about the "wisdom" of seniors in dealing

with lower Social Security benefits!!

How even his wife could see how easily an older person could cope with less!!

It's all BS -- and its seriously effectiving everyone's lives negatively


We should be discussing how we could be enriching our lives in non-material ways every day

rather than worrying about MIC, atomic era, nuclear reactors and Global Warming --

while the government and Congress have moved into corporate hands.


Just my thoughts on it -- !! :evilgrin:

[Samantha]

53. Thank you for sharing your thoughts

While I do think about enriching my life in non-material ways, and I have made some movement in that direction, I do not think I can put these serious issues aside as most of my friends and family do to effectuate being a happier person. I do more than ever understand that phrase "ignorance is bliss" watching some many people around me on perpetual vacation and being happier for it, but I have been involved in politics, environmental issues and civics for a long, long time, and I don't predict that will change. It is frustrating not to be able to do more to help effectuate positive influences on these areas, but like so many here, I guess we all do the best we can do and hope the rest of the Country at some point understands the seriousness of these problems and joins in the efforts.

On the Social Security issue, I am sending notes to progressive representatives on the negative impact a chained CPI will have over time and asking them to look at the statistics and say no to this compromise.

Thanks again,

Sam

[defendandprotect]

54. Agree -- we all have to keep at it -- without doubt -- !!

[Samantha]

55. I posted this in another thread this evening

I wrote Senator Sanders yesterday at his website. I asked him to look into the Chained CPI index and the ramifications it would have over time on Social Security participants as well as Government retirees. I gave him a link to this thread and another DU thread. I said I needed no written response; I just asked for his assistance in opposing this.

A short while ago, I saw the Breaking News his office submitted, discussing poverty and this issue as well. I am thrilled. I don't think my modest request prompted this; but either way, I am so happy to see him throw out his response. Check it out if you can.

Thanks for your participation on this thread.

Sam

[defendandprotect]

56. Agree -- Sen. Bernie Sanders is great and does great work for us all -- !!!

I'd love to see him drafted to run in 2012 for president --

One of the wonderful things he and his office has been doing is researching

ciizen experiences with health care, illness -- and medications!!

And needless to say their experiences with health care insurance companies.

Invaluable service to the nation at a time when that seems to have been completely

forgotten by our elected officials!!


:)

[Samantha]

57. That is exactly what I was thinking -- he must have an incredible

research staff, and his office as a whole gets things done quickly and efficiently. Why can't all Senators and members of Congress do this?

Sam

[defendandprotect]

59. Because Sen. Bernie Sanders' research/info is not healthy for corporations ....

which own most of our representatives --

And the party is still encouraging the rounding up of corporate $$$ --

In fact, Al Gore in his Rolling Stone article tells us that the Congress is setting

its schedule around members daily need to run fund raisers!!