Social Security payments to not be chained to CPI

Social Security to not be chained to CPI
image via ssa.gov

Good news for those that rely upon Social Security for their income. Which also means it is good news for those that have loved ones that rely upon Social Security — President Obama’s latest budget proposal will not include his past offer to accept lowered cost-of-living increases in Social Security and other benefit programs.

In other words, Social Security is not going to be chained to the Consumer Price Index (CPI). The president’s budget plan is slated to be released on Tuesday, March 4.

According to Jim Kuhnhenn of the Associated Press,

“Obama is scrapping his previous offer to trim cost-of-living increases in Social Security and other benefit programs. That idea had been a central component of his long-term debt-reduction strategy, even though it was considered odious by many Democrats.

The decision to drop the cost-of-living proposal was essentially an acknowledgement that Obama has been unable to conclude a ‘grand budget bargain’ with Republican leaders, even by including in his previous budget plan a benefit reduction opposed by many Democrats.”

President Obama’s latest publicly announced budget proposal is in accordance with the recent, more modest bipartisan congressional budget agreement. While it does adhere to spending levels agreed to in that budget proposal, it does shift some of the ways the spending will be allocated. Some spending reductions, such as requiring wealthier Medicare patients to pay more, will remain in the president’s latest budget proposal.

Senator Bernie Sanders, I-Vermont, said, “I applaud President Obama for his important decision to protect Social Security. With the middle class struggling and more people living in poverty than ever before, we cannot afford to make life even more difficult for seniors and some of the most vulnerable people in America.”

In support of the opposing point of view, some economists believe the “chained consumer price index” is more fair as it more accurately reflects consumer spending behavior.

What do you say, WiseTribe? Is the president’s decision to set aside this spending cut relied upon by so many millions of seniors good news or an unwelcome blow to our nation’s deficit reduction plans?

 

Julian Rogers is a writer, editor, community manager and marketing communications consultant for high-achieving businesses. He is the senior communications consultant for Juju Eye Communications. Find out what he’s thinking about on his blog: mrturophile.com, or connect with him on LinkedIn, Facebook, Twitter and Google+.

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