Say NO to Chained CPI

 Posted by at 4:07 am  Politics
Mar 082013

In negotiations between Obama and Republicans for a grand budget bargain, chained CPI appears to be back on that table. I explained chained CPI last month.  In short, it is a method of calculating the increases in Social Security benefits, as well as benefits for disabled veterans and the families of soldiers killed in action, that offsets increases in the cost of living with decreases in the quality of living.  Over time, it is a substantial decrease in the benefits you have earned and are earning by paying your premiums throughout your working lives.  Chained CPI is NOT an option!  Fortunately, Bernie Sanders, and my fellow Oregonian, Peter DeFazio are leading the opposition to it.


As politicians in Washington discuss proposals to reduce the federal deficit, one of the ideas that keeps coming up is known as the "chained CPI" or consumer price index, a new way to calculate cost-of-living adjustments to Social Security.

This method assumes people will make lower-cost choices to offset any reductions in their Social Security adjustments, said Lisa Lamkins, advocacy director for AARP Wisconsin. However, she added, that doesn’t reflect reality.

"Seniors in particular aren’t able to make lower-cost substitutions for items that they buy," she said, "like prescription drugs and health care."… [emphasis added]

Inserted from <Public News Service>

After ten years, annual benefits for current and future seniors, veterans, and military survivors will be hundreds less under chained CPI, by saying that decreases our quality of life are not increases in the cost of living.

Here is Bernie Sanders take on it.  I seldom lift an entire article from a website, but in this case, I’m sure Bernie will not mind.

8BernieSen. Bernie Sanders (I-Vt.) today introduced legislation cosponsored by Senate Majority Leader Harry Reid (D-Nev.) to strengthen Social Security by making the wealthiest Americans pay the same payroll tax that nearly everyone else already pays.

Rep. Peter DeFazio (D-Ore.) introduced the companion bill in the House. He joined Sanders at a news conference in the Capitol to discuss their bill to bolster Social Security without raising the retirement age or lowering benefits.

“Social Security is the most successful government program in our nation’s history. Through good times and bad, Social Security has paid out every benefit owed to every eligible American,” Sanders said. “The most effective way to strengthen Social Security for the future is to eliminate the cap on the payroll tax on income above $250,000 so millionaires and billionaires pay the same share as everyone else.”

Reid said, “I want to thank Sen. Sanders for his outstanding leadership in support of Social Security and the millions of Americans who rely on the program.  His legislation should make people think twice before assuming that the only way to strengthen Social Security is to take away benefits that seniors have earned, or raise taxes on the middle class.”

DeFazio added, “Despite the hype, Social Security is not now, and never was, the cause of our deficit. Those spreading these false claims are the same people who have for years been working with Wall Street to privatize the program. We shouldn’t cut benefits or try to balance the budget on the backs of seniors who have earned these benefits. We can just close a tax loophole that allows millionaires and billionaires to pay a lower percentage of their income into Social Security than everyone else.”

In addition to Majority Leader Reid, the Senate measure is cosponsored by Sens. Patrick Leahy (D-Vt.), Barbara Boxer (D-Calif.), Amy Klobuchar (D-Minn.), Sheldon Whitehouse (D.-R.I.), Al Franken (D-Minn.) and Richard Blumenthal (D-Conn.).

Under their legislation, those with yearly incomes of $250,000 or more would pay the same 6.2 percent payroll tax already assessed on those who earn up to $113,700 a year. Applying the Social Security payroll tax on income above $250,000 would only affect the wealthiest 1.3 percent of Americans, according to the Center for Economic and Policy Research.  Social Security officials say that simple change would yield about $85 billion a year to keep the retirement program strong for at least another 50 years.

The legislation is based on a proposal that President Barack Obama made in 2008 during his first campaign for the White House. (Watch the video.)

Since it was signed into law 77 years ago, Social Security has kept millions of senior citizens, widows, widowers, orphans, and the disabled out of poverty. Before Social Security, about half of senior citizens lived in poverty. Today, less than 10 percent live in poverty and more than 55 million Americans receive retirement or disability benefits.

The most successful government program in our nation’s history has not contributed to the federal deficit. It has a $2.7 trillion surplus, and it can pay out every benefit owed to every eligible American for at least the next 20 years, according to the Social Security Administration.

To read the bill, click here.

For a fact sheet, click here.

Inserted from <>

Photo credit: Daily Kos

Ed Schultz and Bernie Sanders shared more.

Visit for breaking news, world news, and news about the economy

As usual Bernie is spot on, and the solution he proposes is the same one I have supported for years.  This is also the solution Obama proposed while campaigning, when he said that he would not cut Social Security benefits, would not raise the retirement age, and would not decrease the CPI.  Raise the cap!

Contact your President, Representative and Senators. Tell them all to oppose any grand bargain that includes chained CPI.


  25 Responses to “Say NO to Chained CPI”

  1. I always knew the way they computed COLA was skewed but the chained CPI is even worse. I can't imagine getting even less of an inrease than we received this year. It will be impossible to live.

  2. Sometimes I wonder if Bernie Sanders and a few others are the only ones who care about us common folk. It's rather depressing.

    But, it makes me want to fight even harder.

  3. Bernie should be the next pope 🙂 Thanks for posting this TC — I made my 3 calls — didn't know this was still on the table (chained CPI) — another help would be – those same people accepting their SSI and Medicare, who are so opposed to these programs, should forfeit these extra bucks, and m/billionaires should as well – but I can't imagine many of them are quite so "patriotic"!

  4. Chained CPI is a solution for nothing.  At best it extends the time when the trust fund runs out of money, but it still runs out.  And it does nothing to solve the debt or deficit "problem".  SS is funded entirely from the payroll deductions and does not impact the debt or deficit.

    The SS is funded entirely by the participants in SS.  The long term funding shortfall can be solved entirely with an 80 cent per week per year increase in the withholding tax starting now.  (Google NW Plan for Social Security for more information.)  In effect, it raises the SS tax rate by 2% over 20 years so that when the trust funds runs out, the tax rate has been increased sufficiently to cover the then current SS costs.  After the baby boomer bulge passes, it may be possible to reduce the rate again.

    • Your solution is better than chained CPI, but I still prefer raising the cap.

      • The problem with raising the cap is that it moves SS towards a welfare system (people paying for benefits they don't receive), and thus makes it easier for Congress to cut, change, or eliminate.

        • Jerry, that is already true.  Only the poorest reciptents get more in benefits that they put into the system, and most of us are subsizizing their benefits by receiving less than what we put in.  I don't mind.

          • Not really, TomCat.  The benefit you get is based on what you put in, not based on need like a welfare system.  The amount you get per month is based  on your contribution.  The more you contribute, the more you get.  The limit in on the contribution, not on the benefit, like welfare.  Generally, when people talk about raising the cap, they are talking about raising the contribution only, and not the upper end benefit as well.  

            The total amount you get back depends on how long you live.  As stated in <a href="">this article</a>

            The typical worker born between 1951 and 1955 at full retirement age will get back at least 17 percent more in benefits than he contributed in taxes. A worker born after 1956 will get back at least 15 percent more than he contributed."

  5. I just sent a letter to the White House,  I had all ready contacted my senators are representative about the chained CPI> I love Bernie, wish he were my senator.

  6. I have to ask – would chained CPI be back on the table if Obama didn't agree to put it back on the table?  Why would he agree to this?

    • I am so sick of the betrayal by our elected representatives-Some  excellent questions concerning how and why chained CPI is back on the table ? The greedy crowd in Washington realyl do see the rest of us– the 47%? as fools , unable to see what is going on ??

    • Angie, I suspect that Obama intends to demand concessions from Republicans as major as chained CPI would be.  I also suspect that he knows he won't get them, because Republican bipartisanship is an everything/nothing proposition.  In the end, Republicans are seen as the ones who refuse to negotiate in good faith, and rightlty so.  Whether or not my suspicians are correct, our part is to object most strenuously.

      • I sincerely hope you  are right, Tom.  But it seems to me that Obama, the leader of the majority, shouldn't have to pander quite so energetically to these minority lunatics.  Let's face it, to put chained CPI back on the table is to sell us out. Frankly, the GOP base is so ignorant (I am not trying to be arrogant here) that a year from now, they'll be blaming Obama for chained CPI, and all the logic in the world will not convince them otherwise.  Obama's biggest flaw, in my opinion, is his concilatory nature with the republican forces of darkness.  What adds insult to injury is that in all Obama's speeches, he admits that he recognizes how harmful the GOP agenda is to this country.  Why negotiate with lunatics then? 

        • It's not that simple.  Nothing is going to happen that doesn't get through the Republican House and survive Senate minority rule.  If I am correct, this tactic looks ahead to 2014 and establishes in voters' minds that Democtats are trying to find solutions, while Republicand are trying to prevent them.

  7. Chained CPI is not a negotiation tool to use with the Republican/Teabaggers, it is a SELL OUT to the Greedy Old Pharts!

    Even their Saint Ronnie Ray Gun stated that SS had nothing to do with the deficit, that it was completely funded by contributions.  This is just another way, in essence, to tax the middle income and lower income earners, the disabled, the veterans etc. to shift the burden, to try to get blood rom a stone.

    SS, Medicare and Medicaid MUST be off the table.

    • See my reply to Angie.

    • Agree 100% with this statement, Lynn.  

      And I hear what you're saying.  But Obama needs to make sure chained CPI doesn't become the law of the land while rich parasites are still reaping tax free lifestyles.  

Sorry, the comment form is closed at this time.