Social Security benefits (as well as veterans benefits, and many other government programs) increase with the consumer price index, which measures the increase of the prices of products as a way to keep benefits up with inflation. This is called the Cost-of-Living Adjustment, or the COLA. The current COLA is not considered a benefit increase, rather it is an insurance that the purchasing power of Social Security benefits will not erode.
The chained-CPI is a new way to measure the cost-of-living adjustment. The chained-CPI measures the growth of products differently, by assuming goods can be substituted. As a result, the chained-CPI increases at a slower rate than the current CPI. This is a cut in benefits that snowballs over time, so the younger the beneficiary and the longer they live, the more their benefits are impacted.
→ Fact Sheet: Social Security COLA Cut: A Benefit Cut Affecting Everyone
→ Social Social Security COLA Cut Statement of Nancy Altman, Co-Chair, Strengthen Social Security Campaign
→ One-Page Fact Sheet with Talking Points
→ Strengthen Social Security Campaign Analysis of Chained CPI Tax Increase's Effect on the Middle Class
→ Social Security and SSI COLA Cuts WIll Have a Big Effect on People with Disabilities
→ Social Security and VA COLA Cuts Will Have a Big Effect on Veterans and Their Families
→ Politicians and Leaders Against Cutting Social Security to Reduce the Deficit?
→ Strengthen Social Security Campaign Members Collected Statements Against COLA Cut
→ The COLA Conundrum: Op-ed in the New York Daily News by Eric Kingson, Co-Chair, Strengthen Social Security Campaign, and Michael Gecan
→ National Women's Law Center Report: Chained-CPI Will Hurt Women More?
→ National Academy of Social Insurance Report: Chained-CPI for Social Security
This is often presented as an alternative to benefit cuts, but an increase in the retirement age IS a benefit cut. The retirement age, already set to increase to 67 by 2022 is another stealth way to reduce the amount of benefits that Americans receive.
→ Cuts in Benefits Resulting from Raising the Retirement Age to 69
→ EPI Briefing Paper: Can Workers Offset Cuts Social Security Cuts by Working Longer?
→ Table: Cuts to Benefits from Raising the Retirement Age
Medicare and Social Security are intricately linked and a policy change to one will inevitably affect the other. Policy recommendations to raise the Medicare retirement age, currently at 65, would result in higher out-of-pocket health costs, consuming an even larger portion of Social Security checks.
→ Raising the Medicare Retirement Age is a Cut to Social Security
→ Raising Medicare Plan's Increased Costs to Seniors will Consume Social Security Benefits Needed to Live
→ Ryan Budget Hides Radical Proposal to Raise Medicare Eligibility Age, Indirectly Cutting Social Security Benefits by as Much as 45 percent
→ Why the Bowles-Simpson "Hardship Exemption" Won't Work
Means-testing might sound more fair, but the premise of means-testing undermines the fundamental promise of Social Security. Social Security is meant to be a wage insurance program, not an income transfer program. There are already several progressive elements of the program--the replacement rate is higher for low-income workers, and the benefits of high-income earners are subject to an income tax that helps to fund Medicare. Changing the structure of Social Security would weaken the promise of a baseline retirement to many Americans.
The Bowles-Simpson Plan: In 2010, President Obama convened the National Commission of Fiscal Responsibility and Reform to consider a plan to address the debt. While the members of the commission never achieved the super-majority necessary to approve a plan, its two co-chairs, former Republican Senator from Wyoming Alan Simpson and Erskine Bowles, a Morgan Stanley CEO and former chief of staff of President Clinton, wrote their own plan that has recently been reinvigorated over the past year. The plan contains a draconian plan to cut Social Security under the auspices of "shared sacrifice."
→ Fact Sheet: The Bowles-Simpson Plan Would End Social Security as We Know it.
→ Ten Reasons the Fiscal Commission's Social Security Proposal Should Be Dead on Arrival
→ Majority of "Very Low" Earners Will Have Benefit Cuts Under the Bowles-Simpson Proposal
→ Graph: High earner cut under Bowles-Simpson
→ Graph: Medium earner cut under Bowles-Simpson
→ Graph: Maximum earner cuts under Bowles-Simpson
→ Alan Simpson: The Man Behind the B-S Plan to Cut Social Security
In early 2012, Reps. Jim Cooper (D-TN) and Steven LaTourette (R-OH) introduced a budget alternative that they labeled as a "Simpson-Bowles" budget, although this amendment was significantly to the right of Bowles-Simpson. This alternative only received the support of 38 House members. It marked the resurgence of the Bowles-Simpson narrative and shows how tempting this framework is to lawmakers despite its damaging and unpopular components.
Republicans have been eager to cut Social Security over the past decade, and under the guidance Rep. Paul Ryan (R-WI), the Republican party has endorsed numerous budgets that would bring down the Social Security system brick by brick. As a ranking member and then Chairman of the House Committee on Budget, Ryan has put forward several proposals that damage Social Security in all of the ways listed above and more.
→ Quick Facts about Congressman Ryan's Budget
→ Ryan Medicare Plan Would Effectively Cut Social Security Benefits.
→ Ryan Budget Hides Radical Proposal to Raise Medicare Eligibility Age, Indirectly Cutting Social Security Benefits by as Much as 45 percent.
→ Republican Budget Creates a Fast Track to Cut Social Security and Ends Medicare as We Know It.
→ House Republicans' 2011 Budget Would Impose Devastating Cuts to Social Security, Impacting Millions of Beneficiaries.
→ Center on Budget and Policy Priorities: Chariman Ryan Gets 62 Percent of His Budget Cuts from Programs for Lower-Income Americans.
→ Center on Budget and Policy Priorities: CBO Shows Ryan Budget Would Set Nation on Path to End Most of Government Other than Social Security, Health Care, and Defense by 2050.
→ Huffington Post: How the GOP-Backed Ryan Plan Threatens Middle-Class Retirement Security.