don't get sucked into the "only 14 cents a month cut" calculations

[DrDan]

Note:

If implemented, the chained CPI would cut benefits more with each passing year. After ten years, average retiree benefits will be cut by about $600 a year, and after 20 years they will be cut by about $1,000 a year, according to Social Security Works’ analysis of the Chief Actuary’s estimates. And to get the savings in the next decade that politicians are surely seeking, the chained CPI would begin almost immediately—falling on current and future beneficiaries alike.

...

The Congressional Budget Office estimates that the chained CPI would save $217 billion from 2012 to 2021. $145 billion, or two-thirds of those savings, would be from benefit reductions, and $112 billion, or 52 percent of those savings, would be from Social Security benefit reductions alone. (

http://socialsecurity.ourfuture.org/blog-entry/2011072707/social-security-cuts-look-chained-cpi


I would guess that the calculation of a cut of 14 cents a month does not take into consideration the power of compounding.

This is a cut in benefits! There is no doubt about it.

[msongs]

1. thieves at SS are already whacking back and violating their contractual agreements nt

[Shrek]

5. SS is not a contractual agreement

http://www.ssa.gov/history/nestor.html

He appealed the termination arguing, among other claims, that promised Social Security benefits were a contract and that Congress could not renege on that contract. In its ruling, the Court rejected this argument and established the principle that entitlement to Social Security benefits is not contractual right.

[Raven]

2. You said the magic word..."compounding". n/t

[Marr]

3. Thanks for that.

This is one of those weird arguments that just don't make sense. The political establishment wouldn't put this much energy into touching the third rail of politics just to take a little pittance.

I still don't see what SS has to do with the deficit, either-- so it seems to me that anyone who would even put it on the table in deficit talks has to have an anti-Social Security agenda.

[mopinko]

4. like how they want to have it both ways.

this is not a cut in benefits, but taking away exxon's tax breaks is tax increase. got that?

[muriel_volestrangler]

6. Not, it's not about compounding - it just should be $4/month

What the ex-DUer got wrong was he took "0.4 percentage points" difference between chained and unchained CPI to mean 0.4% of the increase. It isn't - it's 0.4% of the index itself. So rather than, say, getting a 2% increase in a $1000/month payment (ie $20), you'd get a 2-0.4=1.6% increase (ie $16) - $4 less.

See eg http://www.democraticunderground.com/discuss/duboard.php?az=show_mesg&forum=433&topic_id=703173&mesg_id=703427

[ChairmanAgnostic]

7. nice one. See what I wrote today about this

it is like pandora's box. once the GOP get in even a little, the whole program will be under attack.

[sad sally]

8. Do the math.

Take your income - whether as a retiree on SS or as a govt one, or if you're still working and have taken wage cuts in order to keep your job - and do the math.

Since January 2009, using 3% inflation index, how much income have you "lost?"
How much have your utility bills gone up?
How much has your food bill gone up?
How much has your insurance (health, auto, home-if you're fortunate enough to still own one) gone up?
How much have state and local fees gone up?
How much has your savings and/or investments gone down?
How much smaller, or are there any, gifts to family and friends?
If you have adult children, have they had to move back home due to job losses or medical bills?
If you have grandchildren, is it becoming more and more difficult to help fund college for them or encourage them to rack up hundreds of thousands of dollars in college costs knowing the jobs after a degree are harder to find?

As a retiree, it's starting to feel like there's a concerted effort to pit the young against the old. It shouldn't or doesn't need to be that way. What happened to the pathway of a better life for the next generation? We are going backwards and it's being sold as the new normal.

[Chimichurri]

9. 2 billion dollars a week on war and no end in sight. This argument has chasing our own tails

on purpose! And everyone falls for it. As usual.