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Five Things to Know About the Stealth Cuts to Social Security That Policy Makers Are Talking About

Social Security COLA GraphicPolicy makers have been talking about deficit reduction for months and one proposal keeps cropping up - changing the way that the cost-of-living adjustment (COLA) is made for Social Security and other federal programs.  These policy makers would replace the current cost of living index with another one that will grow more slowly – the chained CPI.

Here are five things you need to know about the chained CPI:

  1. It cuts Social Security benefits.  Adjusting benefits for inflation maintains their value over time.  Using the chained CPI would reduce the value of benefits by about 0.3 percent each year.
  2. Cuts get deeper every year.  A reduction of 0.3 percent a year really adds up over time.  The cut in the value of benefits would equal the cost of a week’s worth of food each month by age 80 and nearly two weeks’ worth by 95 for the typical single elderly woman.
  3. It cuts benefits for today’s beneficiaries.  Switching to a new COLA will affect everyone receiving benefits – as soon as it goes into effect.
  4. It particularly hurts women.  The chained CPI is a triple whammy for women – because they typically live longer, rely more on income from Social Security, and are more likely to be poor than men.
  5. It is less accurate. While some policy makers have billed the chained CPI as a “technical fix” even the current measure of inflation underestimates the increased cost of living the elderly face because it doesn’t account for their higher health care spending.

Women can’t afford cuts to Social Security.  If you agree, please share our new graphic on Facebook, Twitter, or Pinterest.

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