Cummings Issues Statement in Response to CPC Release on Chained CPI
FOR IMMEDIATE RELEASE
December 19, 2012
I stand with my fellow CPC members in strongly opposing any move toward chained CPI that would greatly reduce the long-term benefits of every single Social Security recipient and their families. These are our family members, our friends and neighbors who worked hard, played by the rules, and paid their fair share. Now the government must uphold its end of the deal and protect their Social Security benefits.
It is fundamentally unfair to ask our most vulnerable citizens – our elderly and our poor – to shoulder the burden for our country; it is morally wrong and unacceptable. We must do better.
The Center for Economic Policy and Research estimates that, for the average worker retiring at age 65, a change to chained CPI would mean a cut of about $650 each year by age 75 and a cut of roughly $1,130 each year at age 85.
Calculated by the Bureau of Labor Statistics, the Consumer Price Index, or “CPI,” is often referred to as a cost-of-living estimate. Chained CPI changes the formula used to calculate inflation by taking into account changes in spending patterns, not just the price of goods, over time. This different calculation lowers the annual cost-of-living adjustment Social Security recipients receive therefore reducing their total benefits over time.