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Thursday, October 13, 2011

COLA Lite? There's a rumor that the supercommittee may push for the chained CPI

Virginia P. Reno, National Academy of Social Insurance

Rumor has it that the Joint Select Committee on Deficit Reduction, aka “supercommittee,” is considering a switch from the present Consumer Price Index (CPI) to a “chained CPI” to determine Social Security’s cost-of-living adjustment (COLA). While proponents describe the change as a “technical correction” (because the present CPI is believed to overstate the inflation experienced by average consumers), the chained CPI would understate the inflation experienced by older Americans, largely because of their relatively high out-of-pocket healthcare costs and their limited ability to make substitutions (such as fuel for food) when prices rise. Switching to a chained CPI would mean cutting Social Security benefits by gradually eroding their purchasing power – a cut that would compound over time, becoming more and more severe as beneficiaries grow older.

Two NASI fact sheets discuss the consequences.

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Posted on October 13, 2011  |  Write the first comment
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Tuesday, October 11, 2011

A Midsummer Policy Sonnet

Erik Shive, Former Intern, National Academy of Social Insurance

The piece was written in August 2011 

Now is the summer of our blasted dissent,
With our eyes cast upward at the debt ceiling,
And no one seems even remotely content.
Will this fallout leave us fiscally reeling?

Into this bloodless, ever-present, hot fray,
Come bright-eyed, eager interns ready to learn.
They are told for social insurance to pray,
For nothing it will give and take all we earn.

Unemployment is in federal error,
The Class Act has been passed but still needs a fix,
Medicare is causing the old to terror,
Social Security’s done by ‘thirty-six.

But UI’s computers will be updated,
A tweak here, one there, and the Class Act will roll,
By healthcare reform, Medicare is sated,
Though Social Security still has a toll.

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Posted on October 11, 2011  |  1 comment  |  Add your comment
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Monday, July 11, 2011

How Would Shifting to a Chained CPI Affect Elderly and Disabled Americans and the Federal Budget?

Virginia P. Reno, National Academy of Social Insurance

Shifting to a new CPI to lower future Social Security benefits is part of current debt ceiling negotiations. Some call for using the new consumer price index to make cost-of-living adjustments (COLAs) in Social Security and other federal benefits and to adjust brackets in the federal income tax code. Proponents of the new index – the chained CPI-U – describe it as a technical correction that would make the benefit adjustments more accurately reflect the cost of living experienced by average consumers. In fact, the chained CPI-U falls short of reflecting the living costs of the elderly and disabled because it does not take account of their higher out-of-pocket spending for health care. NASI has two fact sheets on this topic.

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Monday, June 20, 2011

The Case Against Cutting Social Security

Virginia P. Reno, National Academy of Social Insurance

The case against cutting Social Security is strong.

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Posted on June 20, 2011  |  2 comments  |  Add your comment
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Wednesday, April 6, 2011

Look Before We Leap: Ryan’s Plan Would End Medicare’s Basic Guarantee of Access to Care

Lee Goldberg, National Academy of Social Insurance

Representative Paul Ryan, chairman of the House Budget Committee, yesterday released a plan entitled Path to Prosperity that would fundamentally restructure Medicare, the program that has provided health care and financial security for America’s elderly and disabled population since 1965.

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Posted on April 6, 2011  |  4 comments  |  Add your comment
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