Controversial chained CPI appears in President’s budget proposal
24th April 2013 · 0 Comments
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As the prospect of chained CPI remains a part of President Barack Obama’s budget proposal this week, the threat of reduced Social Security benefits has many Louisianians up in arms.
CPI stands for “consumer price index” and is a way for the government to account for the impact of inflation on benefits programs and tax rates. The plan would result in lower annual adjustments to payments from benefits programs. In addition, taxpayers would be herded into higher tax brackets at lower incomes.
“Louisiana residents will find their benefits payments reduced over time relative to what recipients would otherwise expect,” said Jaye Calhoun, an attorney and tax law expert at McGlinchey Stafford.
AARP Louisiana is not happy with the proposed plan, and released a survey of 808 Louisiana voters over age 50 showing that 87 percent of them oppose the idea of reducing Social Security benefits to reduce the deficit. 75 percent of surveyed voters oppose reducing the annual benefit increase retired and disabled veterans receive by changing the way the cost of living increase is calculated for veterans’ benefits.
“This cut to Social Security would break the promise to Louisiana seniors and hurt veterans who’ve sacrificed so much for this great country,” said AARP State President Brenda Hatfield. “The chained CPI reduction snowballs over time and would increase taxes for most Louisiana taxpayers – at the same time that it cuts benefits things to remember while taking personal loan for children, veterans, widows, retirees and people with disabilities.”
According to the survey conducted by Woelfel Research, opposition to these plans comes from across the political spectrum. 77 percent of Democrats and 77 percent of Republicans surveyed, as well as 70 percent of Independents, opposed reducing the annual benefit increase via the chained CPI.
Voters over 50 not included in the survey also oppose the chained CPI for a variety of reasons. One is that it will greatly affect the quality of life for retirees on a fixed income.
“For a lot of people, Social Security is their primary means of support,” said Dr. William Hammel. “Medicine and medical care costs have gone up way more than any index of inflation.”
Some aging Louisianians feel that they shouldn’t have benefits reduced, as they’ve dutifully paid into Social Security for their adult lives.
“The government and the news media is attempting to convince people Social Security is an entitlement, which it’s not,” said Roland Hymel, Jr. “They’re not giving us something we didn’t earn.”
Local resident William Schneider objects to the reduction in benefits by noting that the 2008 stock market crash left many Americans with their retirement funds drastically reduced. Combined with an increased life expectancy for Americans, some senior citizens could face dire financial situations with a reduction in benefits.
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Even voters who think spending reductions should be made voiced concerns over the current proposal.
“I believe we all have to sacrifice to get our country back on track, but I would not like only the retirees to make the sacrifices and bear the burdens,” said Richard Yeadon.
How Louisiana Congressmen vote on the proposed budget could potentially affect their standing when they come up for re-election. 66 percent of surveyed voters (70 percent of Democrats, 70 percent of Republicans, and 61 percent of Independents) admitted they would be less favorable to a representative or senator who voted for a chained or superlative CPI.
Other voters don’t view the chained CPI as a vote-changing issue. Robert Friedrich said he and his wife never planned on Social Security being a major part of their retirement plan, although he does count on Medicare being around due to a lack of other alternatives. As a result, he said his vote won’t be affected by the CPI issue.
Senator Mary Landrieu voiced some objections to the budget proposal, but still feels it’s worth pursuing.
“The president’s budget will need many revisions, but on the whole it is a balanced approach to move our country forward,” Landrieu said.
This article originally published in the April 22, 2013 print edition of The Louisiana Weekly newspaper.