Alice Rivlin Admits Chained CPI Is A Benefit Cut To Social Security -- But Loves It Anyway

On MSNBC, Alice Rivlin said implementing a chained CPI is the right thing to do to fix the deficit --even though Social Security has nothing to do with the federal debt.

1 year ago by Scarce
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Alice the Malice Rivlin went on with Andrea Mitchell yesterday to discuss the boring sequester debate and, as usual, she trumpets what every other deficit scold in the Beltway says: Cut entitlements or adopt Simpson-Bowles. At least she admits that switching to a chained CPI is an actual cut in benefits.

Rivlin:... one thing is the reform of the consumer price index which is really a technical adjustment, but it would mean slightly lower social security benefits and other benefits going forward. Now you could offset that with other changes in the law, but it is the right thing to do and his own troops were kind of unhappy about that, but he put it out there and he has certainly put Medicare adjustments, various sorts on the table.

Now, why is cutting benefits to seniors the 'right thing' to do, Alice? Why do we have to pay for the Iraq and Afghanistan war and not the rich? And why do we have to pay for the financial economic collapse and not the rich, Alice? And WTF are these mythical offsets to draconian cuts to Social Security that she speaks of? Is she talking about the proposed 'birthday bump? That's really a horseshit thing to do.

And it doesn't cover anything for like twenty years after you retire, which won't help many people since only the wealthy have seen an increase in life expectancy.

Some propose adopting the chained CPI with an added “birthday bump” – a 1
percent benefit increase for each of years 20 to 24 after initial retirement eligibility. But this supposed “sweetener” only affects those who live until becoming eligible for the birthday bump. Wealthier seniors live longer than their lower-income counterparts, so the “birthday bump” does not adequately protect those who need Social Security benefits the most. Even with it, the birthday bump does not fully compensate for the cut the chained CPI entails.

Digby explains in detail how the chained CPI hurts seniors moving forward.

The problem is not that their private pensions run out. (Not very many people have private pensions anymore.) The problem is that the Chained-CPI reduces the cost of living adjustment down by 0.3 percentage points annually. That translates into a cut in benefits of 3 percent for those who have been retired ten years, 6 percent after 20 years, and 9 percent after 30 years.

The people who have been retired the longest and are, therefore, the poorest, will see the largest cuts. A 1% "bump" isn't going to make much of a difference. This is a cut. And it's substantial. It will affect the poor the most and it's going to take a lot more than "tweaking" to make up for it. Moreover, it's not just the poorest of the poor who will be affected. There seems to be some belief in Washington circles that 70-year-olds who are living on 25k- 35k a year won't feel a cut in their incomes, which just goes to show how distant they are from the way people really live.

And why bring in Social Security at all, since it has nothing to do with the federal deficit? The GOP needs its pound of flesh from the working class, but the Beltway never asks them why? Why be so f*&king cruel and inhumane? I wish we lived in the Land of Oz and we could throw water on the Fix The Debt and Alice Rivkin assholes of the world so that they would all melt away for good.

The entire Beltway cable TV establishment never has on any liberal members of Congress or any other proponents that are against cutting safety net benefits --except when they want a Crossfire-style formatted segment with another deficit scold.
(h/t Scarce for the video)

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