President Obama doesn’t like the Republican plan that would keep Social Security benefits for current seniors with no changes and make adjustments potential social security recipients under 55. Instead, wants to change how cost of living adjustments are performed throughout several government programs.
The one program that would be changed is attach chained-CPI to Social Security. A program that Obama said he wouldn’t touch. According to the Washington Post, Chained CPI will cause current seniors who retired in 2001 at age 65 to lose up to $849 dollars.
Guess we will just add that to the promise not to raise taxes on the middle class.
To hear critics tell it, President Obama’s plan to cut Social Security by adopting a new inflation measure is a major attack on the elderly. Rep. Greg Walden (R-Ore.), the head of the National Republican Congressional Committee, called it a “a shocking attack on seniors,” while Sen. Elizabeth Warren (D-Mass.) sent an e-mail to supporters declaring, “‘chained CPI’ is just a fancy way to say ‘cut benefits for seniors, the permanently disabled, and orphans.’”
Here are the facts. Chained-CPI does mean that Social Security beneficiaries will see their benefits cut. Imagine a person born in 1936 who retired in 2001, at age 65. For simplicity, let’s assume they’re eligible for the maximum benefit. Given that the cap was below $30,000 a year as recently as 1980, it’s not inconceivable that a middle or upper-middle class person with steadily increasing earnings since 1958 would be in this situation.