GEORGE E. CURRY
(NNPA)—Even before President Obama released his budget proposal this week for the next fiscal year that begins Oct. 1, preliminary details about his plan to effectively cut Social Security cost of living increases has caused a firestorm among supporters who now feel betrayed.
Under the plan, Obama would shift the way federal benefits are indexed from the Consumer Price Index (CPI) to the “chained” CPI, gradually reducing benefit payments. Without getting overly technical, the chained CPI — a way of indexing living costs — has grown on average by about 0.3 percentage points per year more slowly than the official CPI. Social Security actuaries assume the gap between the two CPIs will continue to average 0.3 percentage points per year in the future;
Former Clinton Labor Secretary Robert Reich said in a MoveOn.org press release that “Social Security is not driving the deficit, therefore it should not be part of reforms aimed at cutting the deficit.” He added, “The chained CPI, deceptively portrayed as a reasonable cost-of-living adjustment, is a cut to Social Security that would hurt seniors.”
White House officials point out that the chained CPI would not affect initial Social Security benefits because they are based on wages. It is the subsequent cost of living increases that would be affected.