Sanders warns about ‘chained’ Consumer Price IndexJanuary 31,2013
By EDWARD DONGA
WASHINGTON — Sen. Bernard Sanders on Thursday spoke out against a plan aimed at reducing the federal deficit by changing the manner in which Social Security benefits are calculated.
Sanders, an independent and founder of the Senate’s Defend Social Security Caucus, was joined at a Capitol Hill news conference by Sens. Sheldon Whitehouse, D-R.I., and Jeff Merkley, D-Ore., as well as AFL-CIO President
Richard Trumka and representatives of advocacy groups for senior citizens, women, veterans and those with disabilities..
The news conference targeted a proposal to alter how the federal Consumer Price Index is calculated. The CPI is a measurement of the average change in cost of household items, and it is used to help create cost-of-living estimates that govern benefit increases for programs such as Social Security.
But Sanders noted that some members of Congress, in an effort to reduce the federal deficit, want to adopt what has become known as a chained CPI. According to published reports, this plan was pushed, but ultimately dropped, by some Republicans during discussions last month on ways to avoid the so-called fiscal cliff.
Declared Sanders, “My Republican colleagues in Congress and some Democrats are attempting to use the deficit crisis as an excuse to cut Social Security benefits. That is wrong.”
He added: “Deficit reduction is important, but it must be done in a way that is fair. We must not balance the budget on the backs of the elderly, on the backs of veterans.”
Rather than simply adjusting the cost of living based on changes in the price of basic goods, as is done currently, a chained CPI would factor in the assumption that, as the price of one good increases, consumers will purchase a similar, less expensive commodity instead.
For instance, when the price of apples goes up, the current CPI accounts for the change only in the price of apples; a chained CPI would factor in an assumption that many consumers would buy oranges instead of apples if the former were less expensive.
But Sanders warned that if the government begins basing its calculations on a chained CPI, senior citizens would see a significant cut in their Social Security benefits. Veterans with disability benefits would face the same problem, said Sanders, who is chairman of the Senate Veterans Affairs Committee.
“The chained CPI for seniors who are 65 today, by the time they are 75 years of age they would lose $650 a year (in benefits),” Sander said, noting that Thursday marked the 73rd anniversary of Ida May Fuller, of Ludlow, receiving the first Social Security check ever issued.
Nancy LeaMond, executive vice president of AARP, echoed Sanders’ statement.
“It has been put forward as a relatively easy, relatively harmless solution to reduce the deficit,” LeaMond said of the chained CPI proposal. “However, this policy would have very negative effects on millions of seniors, retirees, working families, women, veterans and the seniors.”
Sanders said 3.2 million disabled veterans in the United States would also see their benefits affected, contending that veterans who started collecting disability benefits at age 30 would see a $1,400 decrease in those benefits by age 45.
“This is unacceptable, and if you support a chained CPI you support breaking your promise that this country made to every single one of those veterans,” declared Tom Tarantino, policy chief for the Iraq and Afghanistan Veterans of America.MORE IN This Just InMONTPELIER — The Vermont Fish and Wildlife Board has voted to ban the possession and use by... Full StoryBURLINGTON — The sound system next door is making it hard for Olga Lopatina to love thy neighbor:... Full Story
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