President Obama’s embrace of chained CPI (consumer price index) — a way of reducing the growth of Social Security benefits — is already drawing fire from liberals and senior citizens’ groups. Chained CPI can seem complicated, but researchers have calculated about how much the method will cost average seniors — and for those living on tight budgets, the numbers are significant.
Chained CPI takes a bigger bite the older a retiree gets — according to analysis by the progressive research and advocacy group the National Women’s Law Center (who based their numbers on Social Security Administration data), someone who retired after chained CPI went into effect would lose 2.3% of his or her monthly benefit at age 70, 5.1% at age 80, and 9.2% at age 95. Obama’s budget plan does include a “bump-up” starting at age 76, and another one at age 95, aimed at making up some of the difference. But they don’t fully do so. The average monthly Social Security check in 2012 was $1,230 — above is the amount BuzzFeed estimates someone getting that level of benefits would lose every month under chained CPI with bump-ups, using data from the NWLC and Obama’s budget proposal.
For reference, the average monthly premium for Medicare prescription drug coverage is $30, about what a 70-year-old under chained CPI could lose. The National Women’s Law Center also calculates that a week of food for a single senior costs about $56, meaning a 95-year-old facing the cuts estimated above would lose the cost of about five days of food. So while the costs of chained CPI to seniors may seem small, for some they could mean the difference between getting by and going without necessities.