The Chained CPI — Still a Stealth Benefit Cut

(January 2013)

The proposal to cut benefits by using the  Chained Consumer Price Index (CPI)calculate the annual cost of living adjustment (COLA) for Social Security, Supplemental Security Income (SSI) or other federal benefits programs remains alive.

The good news is that it is not part of the fiscal cliff agreement. The bad news is that some policymakers still think it’s worth considering.

Exactly a year ago, NSCLC worked with partners to call the chained CPI what it is – a stealth benefit cut. Throughout 2012, we met with members of Congress, the White House and key policymakers to explain the particularly harmful impact adoption of the chained CPI would have on Social Security beneficiaries and the especially disastrous impact it would have on those receiving SSI because of the unique way in which the annual COLA is applied to the SSI program.

NSCLC proposes that a fairer and better way to handle the COLA for both SSI and Social Security would be using a measure of inflation based on expenditure patterns of older people, i.e., the Consumer Price Index for the Elderly (CPI-E). With the CPI-E, program beneficiaries would at last receive benefits that keep up with the level of inflation actually experienced by older people and people with disabilities.

The Chained CPI remains poor public policy and should be shelved.


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