Obama has offered to cut Social Security benefits through application of a reducing chained CPI, as part of the fiscal cliff kabuki. Most people find this objectionable. Hiltzik describes the chink in the armor of this CPI caper.
Here are the three lies about the chained CPI that have facilitated the ripoff.
1. It’s a more accurate way of measuring inflation than the CPI. This is untrue as it applied to the elderly, whose cost of living tends to rise faster than the traditional CPI. That’s because more of their expenses are tied to healthcare, which has shown a higher rate of inflation that the traditional market basket of goods and services.
2. It accurately reflects people’s tendency to buy cheaper versions of goods when the brand names rise in price. Untrue for everybody. The traditional CPI already includes this adjustment, which occurs when you shift from Kellogg’s corn flakes to the Vons no-name label. The chained CPI reflects a more stringent substitution — more like that when the price of gas goes up, you spend less onfood altogether. Seniors on fixed incomes can’t easily make those substitutions.
3. We need to cut Social Security to cut the deficit. Biggest lie of all. Social Security does not contribute one penny to the federal budget deficit. It can’t, bylaw, and it doesn’t today — it’s running a surplus.
We need to let our Senators and Representatives know that this is unacceptable to us and that our votes in future elections will hinge on their actions to oppose this unnecessary concession of Social Security benefits (via the chained CPI).
Here is a copy of the graph which shows how the chained CPI negatively impacts SS benefits over time.
Here is a list of Representatives’ email addresses (click on their names) and phone numbers.