While mainstream media focused on political figures pushing cuts for Social Security programs, the Senate quietly approved an amendment to their budget proposal put forward by Vermont Senator Bernie Sanders (I) that stopped cuts.
The Sanders Amendment denied a proposed change to how cost-of-living increases are calculated, a change that would result in significant cuts for Social Security beneficiaries if ever implemented.
The amendment opposed switching from the current method of measuring inflation to a chained consumer price index (CPI). President Barack Obama favors a chained CPI as part of what the White House calls a “grand bargain” that Obama hopes to reach with congressional Republicans.
Interestingly, with numerous Republicans crying for entitlement cuts during the budget battle, not one senator chose to support the adoption of the chained CPI or went on record supporting the cut to Social Security.
The beauty of a chained CPI is that politicians can sell it to the public as not cutting benefits, per se, but merely “adjusting” the cost of living formula or “restructuring” Social Security.
More than 55 million retirees, widows, orphans and disabled Americans receiving Social Security would be affected by switching to a chained CPI. Social Security benefits will be cut for average senior citizens who are 65 by more than $650 a year by the time they are 75 years old, and by more than $1,000 once they reach 85. Also, there is no basis for the claim that the chained CPI would give a more accurate measure of inflation experienced by seniors.
The typical retiree relies on these payments for two-thirds of their income. Therefore, these cuts would hit them much harder than tax increases put into law this year were to the average rich person.
The proposed change would also affect more than 3.2 million disabled veterans receiving disability compensation benefits from the Department of Veterans Affairs.
Unfortunately, the denial of the CPI shift may not survive negotiations between the House and the Senate when they hash out a final budget.
Ashley Wright is a writer and researcher with Ring of Fire.