Today, Congresswoman Cheri Bustos (IL-17) introduced a resolution opposing the President's proposed use of a Chained Consumer Price Index (CPI) in calculating Social Security benefits. Switching to a chained CPI system, which President Obama proposed in his recent FY2014 budget proposal, could lead to benefit cuts for seniors and veterans across the 17th District of Illinois and across the country.
"I ran for Congress to protect Social Security for the seniors and veterans in our region who rely on it," said Congresswoman Cheri Bustos. "That is why I am opposed to switching to a chained CPI system, and recognize the impact this could have on Social Security benefits for Illinois seniors and veterans. There are ways to move toward a balanced budget that Democrats and Republicans can agree on such as eliminating waste in government. That is why I introduced the Government Waste Reduction Act, a bipartisan common sense bill that would reduce the deficit in a balanced way by cutting down on duplicative services and rooting out waste in government, while preserving crucial programs, such as Social Security."
According to AARP's Public Policy Institute, using chained CPI to replace the existing method of calculating Social Security benefits "would have a detrimental impact on the economic well-being of older and disabled Americans and their family members who receive benefits from Social Security." Over time, these cuts could significantly reduce benefits for seniors -- making it more difficult for those living on Social Security to make ends meet. According to the AARP, chained CPI would reduce the expected benefit increase each year, and reductions would grow larger over time.
In addition, AARP calculates that a 30-year-old veteran of the Iraq or Afghanistan war who has no children and is 100 percent disabled would likely lose about $100,000 in disability compensation by age 75 (calculated in today's dollars), compared with benefits under the current cost-of-living formula. Over a 10-year period, 23 million veterans would lose $17 billion in compensation and pension benefits, according to AARP calculations.