Archived Messages From the President
August 05, 2013
The sudden re-introduction of the chained Cost of Living Adjustment (COLA) into the “fiscal cliff” discussions is more evidence that politicians will throw anyone under the bus as it careens down the road toward revenue city.
Washington can talk about complicated things like chained COLAs, market baskets, propensity to consume and CPI-E but older Americans know one thing, year after year, their Social Security check buys less and less. Over the last 16 years I have asked seniors over and over if their Social Security check has kept up with inflation and they almost universally answer no. These seniors are not a bunch of greedy geezers looking for every dollar they can squeeze out of the government; these are members of the greatest generation who are answering an honest question with an honest answer. The cause of this inequity, that is manifested year after year, is a flawed Consumer Price Index (CPI) that is used to calculate the COLA for Social Security recipients and our military retirees.
Let’s be clear, the introduction of the chained COLA into the fiscal cliff discussion is NOT an attempt to fix this flawed CPI and move to a fair and accurate COLA, but rather a move to obtain revenue by further reducing Social Security benefits. Andrew Biggs, resident scholar at the American Enterprise Institute and a former principle deputy commissioner of the Social Security Administration says, “I’m not sure you want to go (to a) wholesale change to the chained CPI. One reason is, it’s not based on the purchasing habits of the elderly. The consumption patterns of a working household aren’t the same as the consumption patterns of, say, an 85-year-old Alzheimer’s patient living on a fixed income.”
We don’t have the time to sugar coat the facts, let’s be blunt and accurate – a COLA based on the chained CPI (and thus a chained COLA) will reduce Social Security benefits and have the most disastrous impact on the oldest and poorest seniors. It will be the chain that will insidiously, year after year, drag them deeper and deeper into poverty.
The Congressionally created fiscal cliff is not a reason to break our government’s implicit promise to older Americans that their Social Security check would forever maintain its purchasing power. We can’t let Congress and the White House hide behind the complexity of a chained COLA. It’s a broken promise, a cut in benefits, and it hurts the poorest seniors the most. These are the facts and we can’t let the fog of the political war hide the facts.