OK

This is only a Preview!

You must Publish this diary to make this visible to the public,
or click 'Edit Diary' to make further changes first.

Posting a Diary Entry

Daily Kos welcomes blog articles from readers, known as diaries. The Intro section to a diary should be about three paragraphs long, and is required. The body section is optional, as is the poll, which can have 1 to 15 choices. Descriptive tags are also required to help others find your diary by subject; please don't use "cute" tags.

When you're ready, scroll down below the tags and click Save & Preview. You can edit your diary after it's published by clicking Edit Diary. Polls cannot be edited once they are published.

If this is your first time creating a Diary since the Ajax upgrade, before you enter any text below, please press Ctrl-F5 and then hold down the Shift Key and press your browser's Reload button to refresh its cache with the new script files.

ATTENTION: READ THE RULES.

  1. One diary daily maximum.
  2. Substantive diaries only. If you don't have at least three solid, original paragraphs, you should probably post a comment in an Open Thread.
  3. No repetitive diaries. Take a moment to ensure your topic hasn't been blogged (you can search for Stories and Diaries that already cover this topic), though fresh original analysis is always welcome.
  4. Use the "Body" textbox if your diary entry is longer than three paragraphs.
  5. Any images in your posts must be hosted by an approved image hosting service (one of: imageshack.us, photobucket.com, flickr.com, smugmug.com, allyoucanupload.com, picturetrail.com, mac.com, webshots.com, editgrid.com).
  6. Copying and pasting entire copyrighted works is prohibited. If you do quote something, keep it brief, always provide a link to the original source, and use the <blockquote> tags to clearly identify the quoted material. Violating this rule is grounds for immediate banning.
  7. Be civil. Do not "call out" other users by name in diary titles. Do not use profanity in diary titles. Don't write diaries whose main purpose is to deliberately inflame.
For the complete list of DailyKos diary guidelines, please click here.

Please begin with an informative title:

Social Security card with $100 bill
With President Obama seriously considering including a chained CPI in the budget he'll release next week, the National Journal takes a close look at the chained CPI, questioning whether it's the right formula to apply to people on fixed incomes like Social Security beneficiaries and veterans. The article gets to the core problem: These groups aren't regular consumers, and shouldn't lumped in with them.
Seniors spend money differently from the average person. Health care accounted for 13 percent of spending for those 65 or older at the time the Center for Retirement Research wrote its paper. It accounted for 5 percent of spending for the general population. Not only do the elderly spend more on health care, but those costs also grow faster than others. [...]

More research also needs to be conducted on how—and whether—the low-income elderly substitute goods, according to the Center for Retirement Research. For low-income seniors, most of their spending goes to essential items such as food, housing, transportation and health care. Because they are already spending so little, they may not have as much room to maneuver around price hikes.
“With little ability to respond to price changes, the poor have no mechanism to offset the full brunt of a price increase,” the center wrote in its report.

The AARP, which has been at the forefront in trying to educate the public and policy makers about the problems a chained CPI would pose for seniors, writes about [pdf] an alternative CPI indexed specifically for the elderly, CPI-E. The government tested the measure from 1982 to 2010, and found it outpaced standard inflation by 0.27 percentage points annually. That's largely because of the out-sized portion of seniors' budget taken up by health care expenses, which consistently outpaces other areas. The AARP graphed out what a CPI-E versus the chained CPI (C-CPI-U) would look like for the average retirees years on Social Security:
Graph showing differences in Social Security benefits over 30 years with CPI-E vs. chained CPI
So, with the CPI-E, benefits grow as a person ages, and as their health care needs and expenses also grow. The chained CPI does exactly the opposite, shrinking benefits in the years an older person has more out-of-pocket medical expenses. The Social Security Administration estimates that 34 percent of those age 80 or older rely on the benefits for at least 90 percent of their retirement income. That means a third of the really elderly population would be in danger of real poverty, increasing as they age, under a chained CPI.

It's the wrong policy for a population that is already feeling a major financial squeeze, and should not be a part of President Obama's budget plan, or a concession for that ever-elusive grand bargain with Republicans.

Send an email to the White House telling President Obama to give up the chained CPI cuts to Social Security and veterans.

Intro

You must enter an Intro for your Diary Entry between 300 and 1150 characters long (that's approximately 50-175 words without any html or formatting markup).

Extended (Optional)

Originally posted to Joan McCarter on Wed Apr 03, 2013 at 03:55 PM PDT.

Also republished by Social Security Defenders and Daily Kos.

EMAIL TO A FRIEND X
Your Email has been sent.