Chained CPI Could Cut Social Security Increase Benefits
KREX News Room
GRAND JUNCTION, Colo.- Benefits for Seniors and Veterans could be in jeopardy.
The cost of living adjustments may be measured in a new way, which could slash social security increase benefits for seniors, veterans and the disabled.
The cost of living adjustments are determined by CPI, which stands for Consumer Price Index.
"AARP firmly believes that the President of Congress should not go and try to reduce the deficit on the backs of seniors by cutting social security increase benefits that they've earned during a lifetime of hard work," said Terri Potente, AARP State president.
The federal government is proposing to change the way they calculate the cost of living adjustments to a new system called Chained CPI.
"The Chained CPI takes into account the change in spending habits when prices change," said Barbara Traylor Smith, president of retirement outfitters.
With the Chained CPI, seniors, veterans and disabled folks social security may not go up as much.
"Seniors and veterans have been getting a cost-of-living adjustments based on the CPI-W and it's a higher inflation rate than this Chained CPI, so it means that the increases that they get in a given year are going to be less than what they've been getting in the past," said Smith.
AARP believes this could force seniors to chose, food or their medication.
"Senior costs are higher, seniors have health care costs, and health care costs rise faster than the rate of inflation," said Potente.
Experts say the Chained CPI would help reduce the deficit, which is needed to fix an even bigger issue.
"We have a system of social security, that we know is going to fail. There is going to have to be some changes made over the next 20 years, or we're not going to have enough to pay 100 percent of the benefits that people are expecting. There's going to have to be some
changes somewhere and this is just one of the ways that they're looking to help out that system," said Smith.
President Obama's expected to announce his 2014 Budget Wednesday, and the Chained CPI is expected to be discussed.
To find out how much money seniors could lose if the Chained CPI is implemented head to aarp.org/whatyoulose.