The chained CPI is no minor technical change – it is a benefit cut that compounds to become very large over time. The chained CPI would cut the annual benefit of the average earner (someone making $43,518) by $658 at age 75, $1,147 at age 85, and $1,622 at age 95. The cumulative cut for that individual would be $4,631 – more than three months of benefits – by age 75; $13,910 – nearly a year of benefits – by age 85; and $28,004 – more than a year and a half of benefits – by age 95.
Given the severity of the chained CPI benefit cut, many have proposed exempting segments of the beneficiary population from its impact. While exempting these groups sounds good, one discovers, upon closer examination, that the goal is unworkable in reality. The following fact sheet explains why exempting these vulnerable populations is ultimately infeasible, and would require foregoing most of the savings that would be generated by the chained CPI.