Chained CPI: 4 Opinions From the Press

It’s not only politicians who have mixed reactions to a different way of calculating cost-of-living adjustments to Social Security benefits. Newspaper editorial writers and columnists are conflicted, too. The chained consumer price index, included in President Obama’s budget proposal, would mean that seniors’ checks would go up a little slower each year. The chained CPI assumes that as prices go up, consumers buy cheaper substitute goods to make up for it. Here’s how it’s playing among the mainstream press’s opinion …

9 Things to Look for in the President’s Budget

The GOP-controlled House of Representatives approved a budget proposal first. Then came a very different document from the Democratic-controlled Senate. Now thousands more pages of numbers will land with a thud on Capitol Hill on April 10. It’s the president’s annual budget proposal. Unless you’re an underemployed CPA or an incurable policy wonk, you probably won’t want to wade through all that. So here’s a short checklist of what you should watch for in the budget: A chained CPI. This twist on …

5 Reasons Chained CPI Is Bad For Social Security

David Certner is the Legislative Counsel and Director of Legislative Policy for Government Affairs at AARP. Congress and the Administration are considering, as a means of deficit reduction, a legislative change to the consumer price index – the so-called “chained CPI.” This change would have a particularly negative impact on Social Security benefits – here’s why: 1. Chained CPI compounds over time.  As a result of a chained CPI, there will be a 0.3% annual cut in Social Security cost …

Hammering an Idea for Stingier COLAs

This video might leave you with the impression that nobody wants a proposed change for calculating cost-of-living adjustments (COLA). Not older Americans. Not veterans. Not women. Not labor. And certainly not independent U.S. Sen. Bernie Sanders of Vermont. That the so-called chained Consumer Price Index has no support isn’t the case, of course, or these people wouldn’t have met at the U.S. Capitol to take turns bashing the proposal. Though the formula would slow increases in Social Security, veterans and …

Why Inflation Matters for Social Security

One of Social Security’s great strengths is that it offers meaningful protection against inflation. Each year, the program considers how prices are rising [as measured by the Consumer Price Index for Urban Wage Earners and Clerical Workers]. If prices go up, the Social Security benefits people have earned tend to be adjusted as well. For a typical household, this protection is huge – a point I tried to emphasize in my book, “Social Security for Dummies.” It helps people keep …

The Takeaway: Health-Care Costs Rise Faster Than U.S. Inflation Rate

Higher charges by doctors, hospitals and drug companies have resulted in healthcare costs that have risen even faster than the rate of inflation, according to a survey released today by the Health Care Cost Institute, a nonprofit research organization in Washington DC. The study found that health care costs rose 3.3 percent in 2010 even though people actually used fewer services in many categories.  The average price of prescription drugs rose 3 percent; inpatient admissions cost 5.1 percent;  more and …