July 15th, 2011|
“Of all the ways policymakers in Washington show they have absolutely no conception of how their tinkerings with the federal budget affect average Americans, one stands alone,” writes Michael Hiltzik. “That’s the proposal to change the formula that determines annual cost-of-living increases for people on Social Security.”
Some lawmakers have suggested that the chained consumer price index (CPI) formula be used instead of the agency’s current method for calculating COLA (Cost of Living Adjustment).
Unlike the consumer price index that’s traditionally been used to calculate benefit increases, the chained CPI formula takes into consideration the economy at large—assuming that as prices of goods and services rise consumers will make substitutions and spend less money.
The chained CPI and the traditional CPI tend to differ by two- to three-tenths of a percentage point annually. According to the Los Angeles Times, this would be enough to cut seniors’ benefits by nearly 10 percent over 30 years.
Do you support the use of the chained CPI formula to calculate inflation?
If you need help with your Social Security Disability benefits, contact the Social Security Disability lawyers at Fleschner, Stark, Tanoos & Newlin.