As expected, President Obama’s FY 14 budget includes a proposal to use the “chained Consumer Price Index” – a slower-growing measure of inflation that would cut Social Security benefits by reducing annual cost-of-living adjustments. This is not just a technical change – but a benefit cut that would cause real hardship to the elderly and the poor. The President’s budget recognizes this threat and proposes some protections for vulnerable beneficiaries from the chained CPI – but NWLC analysis shows that this strategy is not adequate.
The budget proposes a bump-up in benefits for long-term beneficiaries, who would experience the worst cuts because the cuts grow deeper every year. In addition, the budget would not apply the chained CPI to needs-based benefit programs, such as Supplemental Security Income, or use it to determine eligibility for programs like SNAP (Food Stamps).
NWLC’s analysis finds that the small and gradual benefit increases from the bump-ups wouldn’t restore the monthly benefit of the typical single elderly woman to current-law levels—unless she lives to 104. Read more »
No, the threat to women’s Social Security benefits from the chained CPI hasn’t gone away. After the House and Senate finish voting on their separate budget resolutions this week, the real bargaining begins. And the proposal to cut Social Security benefits by using a lower measure of inflation — the chained Consumer Price Index — to reduce annual cost-of-living adjustments is still very much on the table. Indeed, it's part of the President’s announced plan for deficit reduction, if increased revenues are also part of the deal.
The bill would improve Social Security’s minimum benefit — a change that would be especially valuable to women, who are a majority of low-wage workersand are more likely than men to take time out of the paid labor force to raise children. And, it would recognize the value of childrearing work by allowing credits of up to five years toward the minimum benefit when a parent was raising a child under age six. Read more »
What does it mean to live to 100? People turning 100 in 2012 have witnessed a lot of amazing events. Four states have entered the union – New Mexico and Arizona the year they were born and Alaska and Hawaii when they were 47. Humans landed on the moon for the first time when they were 57. And when they were 23 – right when they entered the workforce – Social Security was created. That means many of today’s centenarians paid into Social Security their whole working lives – and have relied on it for many decades as well. This reliance is particularly true for women, who are the majority of elderly Social Security beneficiaries – and especially very old beneficiaries. A new Census report released today (PDF) shows that women were a whopping 82.8 percent of all people who were age 100 and older. Social Security has been there for these women and their families for almost all of their lives.
The Social Security Administration just made its annual announcement of what the cost-of-living adjustment (COLA) for Social Security would be in 2013. Drumroll, please: benefits will increase by 1.7 percent starting in January. For the typical single elderly woman whose monthly benefit is only $1,100, that amounts to $19 per month to meet the rising costs of food, gas – and health care.
No one who tries to make ends meet just on Social Security benefits – as millions of women do – would think that was too much.
The COLA is an important part of Social Security. It helps prevent the value of Social Security benefits from being eroded by inflation over time. But even the current COLA underestimates inflation for the elderly and people with disabilities because it doesn’t take account of their greater health care spending. Read more »
Policy makers have been talking about deficit reduction for months and one proposal keeps cropping up - changing the way that the cost-of-living adjustment (COLA) is made for Social Security and other federal programs. These policy makers would replace the current cost of living index with another one that will grow more slowly – the chained CPI.
Here are five things you need to know about the chained CPI:
It cuts Social Security benefits. Adjusting benefits for inflation maintains their value over time. Using the chained CPI would reduce the value of benefits by about 0.3 percent each year.
Cuts get deeper every year. A reduction of 0.3 percent a year really adds up over time. The cut in the value of benefits would equal the cost of a week’s worth of food each month by age 80 and nearly two weeks’ worth by 95 for the typical single elderly woman.