Critics of Chained CPI Call It a “Flawed Policy”

Published in the Pawtucket Times, July 5, 2013

With President Barack Obama’s fiscal blueprint unveiled almost three months ago, on April 10, 2013, that included a chained consumer price index (CPI) for the purpose of calculating Social Security cost-of-living adjustments (COLAs), Rhode Island aging advocates go on the offensive opposing the suggested way as to how the federal government would calculate inflation.

In June 12, 2013, Rhode Island AARP State Director, Kathleen S. Connell, a former secretary of state and one-time teacher, and State President Alan Neville, of Cumberland, along with AARP staff and volunteers from every other state in the nation, traveled to Inside the Beltway to Capitol Hill, on June 12, 2013, to urge Congress to just say “No” to a tying a chained CPI to Social Security.

Continuing to protest, early this week Connell, Senator Whitehouse and Congressman Langevin and Cicilline, joined over 150 people who voiced strong concerns over Congress’s consideration of a chained CPI. The Rhode Island Alliance of Retired Americans, the organizer of Tuesday’s protest, called it a “flawed policy,” charged that “switching to a chained CPI would compound benefit reductions dramatically over time, resulting in an annual benefit cuts.”

AARP Rhode Island is also planning to host “You’ve Earned a Say” discussions at seniors centers across the state this summer and into the fall to get its membership to rally against changing how Social Security cost of living adjustments are calculated.

Critics Take Aim at Chained CPIs

President Obama’s push in his proposed budget request to rein in Social Security costs (a concession to GOP leadership), through the use of the chained CPI, pushed liberal Democratic lawmakers, including Rep. David Cicilline, representing Rhode Island’s 1^st Congressional District and Senator Sheldon Whitehouse, to strongly oppose President Obama or any Congressional efforts to put Social Security on the chopping block to lower the nation’s federal deficit, through changing the way COLAs are calculated.

Rather than tinkering with the CPI linked to Social Security to rein in the nation’s huge federal deficient, Rep. Cicilline called for reforming the nation’s tax code by ending subsidies for “Big Oil,” along with “making responsible target spending cuts,” to slash the nation’s huge federal deficit

Referring to the Social Security’s 2012 Annual Report in April (see my June 1, 2012 Commentary in the Pawtucket Times) , Sen. Whitehouse stated that Social Security is fully solvent for the next 20 years and has not contributed to the nation’s budget deficit and has no place in the debate over federal spending.

Senator Whitehouse called it “a [Social Security] benefit cut disguised behind technical jargon.” The Senator and other critics argue that the current CPI shortchanges older persons by placing too much emphasis on products that these individuals are less likely to buy, like “smart phones” and “computers.” He noted that in 2010 and 2011, Social Security beneficiaries did not receive a COLA, even though prices for food and beverages, medical care, gasoline and fuel oil increased.

According to the Washington, D.C.-based, National Committee to Preserve Social Security and Medicare (NCPSSM), the Obama Administration sees this [chained CPI] switch as just “a technical adjustment.” Aging group warn that using the chained CPI will substantially reduce the Social Security benefits of current and future beneficiaries. “If it is adopted, a typical 65 year-old would see an immediate decrease of about $130 per year in Social Security benefits. At age 95, the same senior would face a 9.2 percent reduction—almost $1,400 per year,” notes NCPSSM.

While all beneficiaries will feel the impact of this change, its effect will be greatest on those who draw benefits at earlier ages (e.g., military retirees, disabled veterans and workers) and those who live the longest, says NCPSSM, especially “women who have outlived their other sources of income, have depleted their assets, and rely on Social Security as their only lifeline to financial stability.”

What’s the Impact???

Washington-DC-based, AARP, representing 40 million members, has rolled out an educational campaign, to put the face who loses most if changes are made in how COLAs are calculated.

Fact Sheets, placed on AARP’s heavily traveled website (http://www.aarp.org/politics-society/advocacy/info-04-2012/youve-earned-a-say.html), tells how a federal policy shift would impact specific demographic groups in their pocketbook.

Retired women can least afford using the chained CPI calculation because they earn less on average than men (that is $4,000), are more likely to have a part-time job and have gaps in their employment due to leaving the workforce to take care of their children. With women living longer the chained CPI would slash their benefits more with every year they live. Older women also rely on their Social Security Pension checks because they are less likely to have other sources of retirement income, this check even keeping 38 percent of them out of poverty compared to 32 percent of older men, the says the AARP fact sheets.

AARP’s fact sheets, also details the impact on older disabled Americans, noting that 37 percent are dependent on Social Security benefits for nearly all their family income, that is around $13,560 annually. Many begin getting Social Security checks at a young age. For instance, a 35-year-old disabled worker who receives average disability benefits would see his or her benefits reduced each year by $886 at 65 and $1,301 at 80. Finally, Social Security keeps about 40 percent of people with disabilities age 18 and over and their families out of poverty. Cutbacks in benefits due to tying the chained CPI to the Social Security program would force the persons already living on a very tight budget impacted by rising drug costs, increased utilities and health care expenses to cut back on vital needs.

Finally, one of AARP’s fact sheets charge that older veterans would be financially slammed, sort of a double whammy. With almost 1.5 million veterans living below the poverty level, each dollar cut, like older person’s who are disabled, will get hit hard in their pocket book as the years roll by. Because a chained CPI would cut both Social Security and Veterans’ benefits, this group gets the budget ax thrown at them twice. “A veteran who’s 65 today would have veterans benefits reduced annually by $1,029 and Social Security benefits by $1,422 at 95, when benefits are needed the most,” states the fact sheet.

Congressional Fight Looming

Rhode Island’s Senator’s Jack Reed and Sheldon Whitehouse have signed on as co-sponsors of SR 15, with over a dozen Senators, a Resolution Rejecting the chained CPI expressing “the sense of Congress that the chained CPI should not be used to calculate cost of living adjustments for Social Security and Veterans benefits.”

Meanwhile, in the House of Representatives, a resolution, HR 34, was introduced by Rep. Cicilline, cosponsored by Rep. James Langevin along with 111 other Democrats, also opposing President Obama and GOP attempts to rein in the Social Security budget through the use of a chained CPI calculation.

With nonbinding resolutions expressing opposition to the use of a chained CPI index now introduced in both chambers of Congress, union and aging groups are urging rallying support for passage.

AARP’s Kathleen S. Connell and her colleagues around the nation are gearing up to send a message loud and clear, once and for all to Congress. Simply put, Connell says: “Chained CPI is not only harmful and illogical; it is also out-of-place in the discussion of deficit reduction. As a self-financed program providing earned benefits, Social Security has not caused the deficit—and it should not be turned into an ATM for politicians trying to address it. We deserve a separate national conversation about how to protect Social Security for today’s seniors and responsibly strengthen it for our children and grandchildren.”

Congress might well choose to tread lightly on giving the thumbs up to using a chained CPI in calculating Social Security Colas. The anticipated fiscal impact (detailed by AARP and aging group critics, along with the Rhode Island Congressional delegation) resulting from this federal policy change will hit the nation’s elderly right where it hurts, the most, in their wallets. Increased bipartisan efforts can find better solutions to trimming the nation’s huge federal deficit and improving the fiscal viability of the nation’s Social Security Program.

Herb Weiss, LRI ’12, is a Pawtucket-based freelance writer covering aging, health care and medical issues. He can be reached at hweissri@aol.com.

Aging Groups Consider Obama’s Fiscal 2014 Budget Proposal a “Mixed Bag”

Published in Woonsocket Call, April 21, 2013

President Barack Obama, missing the federal mandated budget submission deadline by over two month, finally unveils his fiscal blueprint on April 10, giving Capitol Hill a peek as to how he would fund the nation’s federal agencies, programs and services.

The President proposed a $3.8 trillion budget plan for fiscal 2014, that seeks to slash the huge federal deficit by a net $600 billion over 10 years, raises taxes on the wealthy, and puts the breaks to rising costs of two very popular senior programs, Social Security and Medicare.

Senior groups call President Obama’s the first budget proposal of his second presidential term, a “mixed bag.” His fiscal blueprint would eliminate the draconian cuts of the sequester, that is the arbitrary, across the board cuts Congress imposed this year. However, Obama seeks to reduce the federal deficit by calling for another $200 billion in cuts to discretionary programs – half from defense programs and half from domestic programs.

Braking the Rising Costs of Social Security Despite the Social Security Trustee’s 2012 Annual Report that the entitlement program has the financial resources to pay all benefits through 2033 (see my June 1, 2012 Commentary in Pawtucket Times), Social Security benefits are targeted in the recently released budget plan for substantial cuts by adopting the “chained” consumer price index (CPI) for the purpose of calculating Social Security cost-of-living adjustments, or COLAs.

According to the Washington, D.C.-based, National Committee to Preserve Social Security and Medicare (NCPSSM), the Obama Administration sees this switch as “a technical adjustment.” Aging group warn that using the “chained” CPI will substantially reduce the Social Security benefits of current and future beneficiaries. “If it is adopted, a typical 65 year-old would see an immediate decrease of about $130 per year in Social Security benefits. At age 95, the same senior would face a 9.2 percent reduction—almost $1,400 per year,” notes NCPSSM.

With Republican Congressional lawmakers generally supportive of Obama’s push to rein in Social Security costs, through the use of the “chained” CPI, liberal Democratic lawmakers, including Rep. David Cicilline, representing Rhode Island’s 2nd Congressional District, strongly oppose the President or any Congressional efforts to cut Social Security to lower the nation’s federal deficit.

Rep. Cicilline calls for reforming the nation’s tax code by ending subsidies for “Big Oil,” along with “making responsible target spending cuts,” to slash the nation’s huge federal deficit .

AARP Poll Says, Keep Your Hands Off Social Security
In a statement, AARP Executive Vice President Nancy A. LeaMond, quickly reacted to the Democratic President’s efforts to use the “chained” CPI to control rising Social Security program costs.

While AARP recognizes the need for the President and Congress to confront budget challenges facing the nation, the nation’s largest aging advocacy group calls for “responsible solutions, not harmful proposals” that would hurt older beneficiaries or threaten the retirement security of the generations that follow, says LeaMond.

LeaMond said, “AARP is deeply dismayed that President Obama would propose cutting the benefits of current and future Social Security recipients, including children, widows, veterans and people with disabilities, to reduce the deficit. Social Security is a self-financed program that doesn’t contribute to the deficit, so it shouldn’t be cut to reduce it.”

AARP’s polls indicated that older Americans, across the political spectrum, agree with nonprofit group’s opposition to the “chained” CPI. LeaMond, notes. The recently released national survey found that “fully 84% of voters age 50 and over oppose cutting Social Security benefits to reduce the deficit.”

“Instead of making harmful cuts to Medicare or shifting additional costs onto beneficiaries, we need to look for savings throughout the health care system, including Medicare,” suggests LeaMond. She says that also “lowering the costs of prescription drugs, innovations that promote better care, reward improved outcomes and make health care programs more efficient and less wasteful have the potential to hold down systemic high health care costs, including costs in Medicare.”

Finally, LeaMond adds, “We know that prescription drugs are one of the key drivers of escalating health care costs, so we appreciate the President’s inclusion of proposals to find savings in lower drug costs. And we applaud his plan to accelerate closure of the ‘donut hole’ in Medicare Part D by 2015, which would reduce seniors’ often burdensome out-of-pocket health care expenses.”

A Snap Shot of Other Aging Budget Issues
Howard Bedlin, Vice President for Public Policy and Advocacy at the National Council on Aging (NCOA), in a written statement calls Obama’s budget proposal a “mixed-bag” when it comes to seniors.”

Bedlin acknowledges that the recently released Obama budget eliminates the sequester cuts to critical programs like Meals on Wheels and other Older Americans Act services, elderly housing, and other vital senior services. “It is unfortunate that cuts are proposed for low-income energy assistance and senior job training and placement programs,” he says.
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According to Bedlin, the President’s budget also protects SNAP (Food Stamps) and Medicaid, in sharp contrast to the drastic cuts approved in the Republican-controlled House budget proposal. “Cuts in Medicaid would be devastating to the millions of vulnerable seniors who rely on the program for long-term care and Medicare low-income protections,” he says.
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Meanwhile, a major concern for NCOA with the President’s budget surrounds Medicare and Social Security. While the organization supports some of the Medicare reductions, the proposed $370 billion in additional cuts are “excessive and several will harm” beneficiaries (more than half having incomes below 200 percent of the poverty line), says Bedlin, these cuts in addition to the $716 billion in Medicare cuts under health reform and significant reductions in spending growth over the past three years.

Also, the proposed new home health co-payment will fall primarily on lower-income older women with multiple chronic health conditions, and lead to premature nursing home placement, predicts Bedlin. “The proposed increase in the Medicare Part B deductible would be especially harmful and unaffordable to millions of seniors with incomes just above the federal poverty line ($958 per month),” he says.

Finally, Bedlin notes that the proposed Medigap surcharge would penalize seniors for decisions made by their doctors, cause major market disruption, and seriously confuse many current policy holders. The proposal to further increase Medicare premiums based on income could result in those with incomes of about $47,000 being forced to pay more.

NCOA joined AARP and NCPSSM and virtually every other national aging organization in opposing the President’s proposal to cut the Social Security Cost of Living Adjustment (COLA) through the use of a “chained” CPI.

A Final Note… With Obama’s proposed budget now thrown in the ring with the House and Senate budgets already drafted and voted on, will Congressional gridlock keep the Democratic President, the GOP-Controlled House and Democratic Senate from working together to hammer out a consensus, bipartisan compromise? Only time will tell if elected lawmakers clearly get the message from the American people, “put the people first and not your political party.”

Herb Weiss, LRI ’12, is a Pawtucket-based freelance writer covering aging, health care and medical issues. He can be reached at hweissri@aol.com.

Older Voters Must Rise Above Negative Campaign Advertising

Published on November 2, 2012, Pawtucket Times

With the 1^st Congressional seat up for grabs, the National Republican Congressional Committee (NRCC) and the Democratic Congressional Committee (DCCC) have the OceanState on their radar screen, hoping to sway voters to their chosen candidates. Political funds coming from these “Inside the Beltway” political groups come because of the tightness of the race and these committees are picking up the tabs for large blocks of local television advertising to mount concentrated negative ad campaigns. According to WPRI 12, NRCC is buying $280,000 in advertising compared to the DCCC’s $315,000.

t’s a Close Call

According to an exclusive WPRI 12 poll, this television station reported last Tuesday that David Cicilline, the incumbent Democratic Congressman has a “razor thin” lead of only 1-point between him (43%) and his independent Republican Challenger, Brendan Doherty, (42%) just one week before next Tuesday’s election. The pollsters say that independent Candidate David Vogel’s 6% following with 8% undecided make this election race just too close to call. This poll was based on interviews with 300 registered voters in the First Congressional District.

With polls showing the race becoming a dead heat, both Democrats and Republicans are taking their gloves off.

Freshman Congressman Cicilline’s 30-second ad seeks to firmly tie the GOP Congressional Candidate, Doherty to the House Republican leadership, who want to privatize Social Security, derail ObamaCare, and repackage Medicare.

Cicilline campaign ads have questioned his Republican challenger’s ability to represent his constituency in a Republican-controlled House, captured by a radical Tea Party who philosophically opposes political compromise. Doherty has vehemently denied this, calling himself a “centralist,” “independent thinker,” one who can work with those across the aisle.

Meanwhile, according to the Providence Journal, the House Majority Political Action Committee, a Democratic “super Pac,” plans to spend $75,000 on direct-mail flyers to oppose GOP’s Doherty’s efforts to go to Congress. This follows on the heels of the Rhode Island GOP’s mailing of negative campaign materials attacking the Cicilline’s integrity, his work as a criminal defense attorney and his statements about the ffiscal health of his City as he left office.

An October 30, 2012 posting of “On Politics with Ian Donnis and Scott MacKay,” gives their political junkie readers insight into Doherty’s move to play “good cop, bad cop” in his advertising playbook. Not so surprising with his law enforcement background in the waning days of his first political campaign.

A Tale of Two 30-Second Ads

Highly-regarded Investigative writers Donnis and MacKay reveal that while on the same day that the NRCC savagely attacked Cicilline in a 30-second spot titled “Set Free,” for being a criminal defense attorney who “represented child predators, murders, and violent attackers”, while Doherty ran his own political ad, paid for by his Doherty for Congress, opposing Washington attack ads and mudslinging.

Donnis and MacKay, whose Commentaries are reported on the Rhode Island Public Radio, also noted in their blog that the Providence Journal’s PolitiFact found that Cicilline, who served in the Rhode Island General Assembly for four terms, supported a crime bill as a state representative “contrary to the message being offered in part by the NRCC.”

In Doherty’s 30-second spot, “What is Right,” the GOP Challenger says, “Washington has gotten so bad they will say just about anything whether it is true or not.” Doherty’s wife, Michelle responds: “People are so tired of that,” adding “We can’t begin to solve our problems until we get rid of that kind of stuff.”

Doherty, the former Colonel of the Rhode Island State Police who is running in his first political race, replied: “I agree. She is always right.” He goes on to pledge to create jobs, lower the national debt and to support the Social Security and Medicare programs.

Why approve a message that Rhode Island voters are tired of being misinformed by those in Washington when you don’t stand up and tell the NRCC to shelf their negative ad campaign?

Scott Davis, who lives on the East Side of Providence and is a neighbor of Cicilline, disagrees with the NRCC’s attempt to savagely attack the Democratic Congressman for choosing to defend criminals in his law practice, over a decade ago.

Davis states, “My understanding is that Cicilline focused primarily on immigration law. In any event, to pass judgment on him for defending criminals is to question the foundation of our judicial system as mandated in our constitution,” he said.

According to Davis, “Defending criminals protects the rights of the wrongfully accused and only the best lawyers have the fortitude to make the moral separation necessary to ensure justice.”

“What I find far more troubling is with the NRCC attacking the Congressman because of his clients with Doherty’s apparent blessings,” says the owner of Rhode Island Antiques Mall. “The former law officer demonstrates that apparently he either doesn’t understand or agree with the basic elements of a democracy, yet he’s asking us to allow him to represent us in the running of ours.”

Of course, occasionally we’ve read about an innocent person who spends years in jail only to later be released because of new evidence. When this it oftentimes makes headlines in local or national publications. Or perhaps investigative shows like CBS’s 60 Minutes or Dateline NBC, might detail particular cases.

According to the Death Penalty Information Center, since 1973, 141 people in 26 states were released from death row with evidence of their innocence. I wonder how many of these “innocent” individuals were profiled in a negative 30-second spot to attack a political candidate.

As the WPRI 12 poll reflects in the 1^st Congressional District, most of the voters have already aligned themselves to either Cicilline or Doherty with Vogel being the potential spoiler. The election will go to the candidate who can bring home the uncommitted independent voter in the remaining final days of the campaign.

Taking the Power Back from Political Candidates

Historically, nationwide aging baby boomers and seniors have played a major role in electing political candidates, for they have consistently voted in larger percentages than other age groups. This year the political fate of Cicilline and Doherty may well rest on these voters.

By now, political candidates have mailed campaign literature to the voters of the 1^st Congressional District hoping to bring home their final political message to influence their votes. Combine this with the mudslinging and negative campaigning, the political advisors of both candidates will now look to see if the polls move.

For older voters it’s now more important than ever to read between the lines in the campaign literature you receive or the television ads that you watch. An educated voter who strives to understand the multitude of domestic and foreign issues that must be addressed by the next Congress will make his or her own decision as to whom they support, rather than be influenced by negative 30-second ads or campaign materials paid for by Washington, DC-based political groups.

It’s time for aging baby boomers and seniors to rise above negative campaigning and political innuendos being slung by the political candidates, by turning away from calculated misinformation they want to feed you. Base your vote at your polling site on the facts, yes, just the plain facts.

Herb Weiss, LRI ’12, is a Pawtucket-based freelance writer who covers aging, health care and medical issues. He can be reached at hweissri@aol.com.