Next week, President Barack Obama will present his budget to Congress.
There's a lot of speculation about what changes will be proposed for Medicare and Social Security.
Specifically, some analysts are focusing on something called 'chained CPI.'
The term refers to cuts in benefits for Social Security and other social programs. Politico's David Nather has a breakdown of what 'chained CPI' is:
What it does: Chained CPI would lower the cost-of-living adjustments for senior citizens who receive Social Security, veterans’ benefits, and other payments by switching to a different Consumer Price Index that grows more slowly.
What it could save: $130 billion.
How it works: The new measure assumes that people change their buying habits when things become more expensive, so they don’t need their benefits to rise as much every year. If they’re buying groceries, for example, and the price of steak is rising, they could buy chicken or fish instead.
The change could mean less money for Michigan retirees who already dealing with higher tax rates on their fixed incomes.
Nather writes that the White House will include 'chained CPI' as an olive branch to Republicans.
In advance of the budget's unveiling, the American Association of Retired Persons (AARP) is already fighting the idea. They put together an infographic describing how the proposal could hurt those on fixed-incomes who rely on Social Security or veterans benefits. Joan Walsh also writes about the issue today in Salon:
70 percent of voters age 50-plus oppose the use of the chained CPI to cut benefits, and two-thirds of them – including 60 percent of Republicans — say they would be “considerably less likely” to support a congressional candidate if he or she backed a new way of calculating consumer prices. And 84 percent of voters over 50 say Social Security has no place in budget-deficit discussions, since it is self-financed.
On every single question, Republicans lag only a point or two behind Democrats in their opposition to Social Security cuts.
But just yesterday during an in-flight press briefing aboard Air Force One, Press Secretary Jay Carney remained non-committal when asked about the topic:
Q Reports that the White House is telling lawmakers the chained CPI is going to be in the budget. Given that you guys have said that that offer is on the table, is that a pretty safe assumption to make that it will be in there?
MR. CARNEY: You know what they say about assuming.
- Chris Zollars, Michigan Radio Newsroom