U.S. Senator Barbara A. Mikulski (D-Md.) yesterday  joined with Senator Tom Harkin (D-Iowa) to introduce a Senate resolution fighting against cuts to Social Security benefits for seniors and disabled veterans through using the Chained Consumer Price Index (Chained CPI) to calculate cost-of-living adjustments. 

“Chained CPI will fundamentally restructure Social Security and chain our seniors to poverty,” Senator Mikulski said. “Using Chained CPI to calculate the cost of living assumes that when prices go up, consumers will substitute lower cost items. But consumers have no negotiating power when the costs of their housing, energy or health care go up. You can’t substitute your insulin for an apricot. Protecting Social Security preserves the social contract we have with our seniors. We must ensure the safety and solvency of Social Security so that benefits are based on the reality of how our seniors live and what their costs are. Social Security must be undeniable, reliable and inflation proof.”

Since 1975, Social Security benefits have automatically increased when prices rise so that seniors will have the same purchasing power with their benefits year after year. These adjustments help keep Social Security a guaranteed, lifetime and inflation-proof benefit. But several of the proposals for reducing the deficit that have been released include plans to change the way benefit increases are calculated so that benefits will fall further and further behind as prices rise each year.

Among the highlights of the Concurrent Resolution:

  • The Social Security program has no borrowing authority, has accumulated assets of $2,700,000,000,000, and, therefore, does not contribute to the Federal budget deficit;

  • The Board of Trustees of the Federal Old-Age and Survivors Insurance Trust Fund projects that the Trust Fund can pay full benefits through 2032;

  • The Congressional Budget Office has estimated that using the Chained CPI to calculate Social Security COLAs would reduce Social Security benefits by 0.25 percent per year, resulting in a reduction in outlays of $127,000,000,000 over the first decade;

  • Reductions in Social Security benefits from using the Chained CPI to calculate Social Security COLAs would continue to compound over time, and the AARP Public Policy Institute estimates that the reductions would grow to 3 percent after 10 years and 8.5 percent after 30 years;

  • Social Security Works estimates that using the Chained CPI to calculate Social Security COLAs would reduce annual Social Security benefits of the average earner by $658 at age 75, $1,