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Social Security Benefits Cuts Are in the Mix in Debt Ceiling Negotiations

Social Security cuts CPI chart COLA

Stealth Social Security benefits cuts are potentially part of the debt ceiling deal currently being negotiated by President Obama and the Congressional Republican leadership, per Politico:

Already on the table are more than $1 trillion in discretionary 10-year spending cuts and hundreds of billions more in changes affecting farm subsidies, college aid and retirement benefits for federal workers. Additional savings from health care programs like Medicare and Medicaid are in the offing, as well as a potential $300 billion change in the government’s inflation calculator affecting Social Security benefits and some revenues.

Changing the inflation calculation for Social Security benefits from CPI to chained CPI is a benefit cut by stealth.  Using the low inflation number would result in slightly smaller Social Security benefits every year. While the cuts would take place in small yearly increments, the cumulative effect would be that over a seniors lifetime they would get tens of thousands less from Social Security (PDF ).
Congress is in full-blown austerity mode right now and any deal that comes out of these negotiations is likely going to be bad news for regular people. That is why I suspect any deal will be reached at the last minute, so Congress will “need” to quickly pass the bill with effectively no public debate or time for scrutiny.
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Jon Walker

Jon Walker

Jonathan Walker grew up in New Jersey. He graduated from Wesleyan University in 2006. He is now living in the Washington DC area. He created a politics and policy blog, The Walker Report (