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Protecting The Vulnerable From the Chained CPI.

I. 9.4 million low-income Social Security recipients will not be protected from the chained cpi.

There is probably a special level in Hell for Liberal Enablers who offer false reassurance that ‘vulnerable groups’ will be protected from the benefit-eroding consequences of the chained cpi. The idea that the most vulnerable elderly, the disabled and Vets must receive shielding and protection from the cutting effects of the chained cpi, proves that it is destructive and not a ‘mere technical adjustment’.

9.4 million low-income Social Security recipients won’t be protected from the chained cpi and will continue to live on reduced benefits, below or near the Federal poverty line.  They did not qualify to be called a ‘vulnerable group’. Here’s Nancy Altman’s testimony from April 18th on this issue:

“In addition, the benefit cut in the form of the chained CPI creates a substantial burden on the poorest in

society. For that reason, the Administration budget proposes to exempt means-tested programs from the

switch to the chained CPI, but this still leaves many poor and near poor unprotected. The Supplemental

Security Income program (“SSI”) is a program for the aged, blind, and disabled who have extremely

limited income and assets. If an individual receives Social Security, because he or she worked a

sufficient number of quarters to qualify, the SSI benefit is reduced dollar for dollar after disregarding the

first $20. There are 2.8 million people who receive income from both Social Security and SSI – the socalled

dual eligibles – so part of their income will still be subject to the benefit cut. Moreover, because

the SSI income and asset limits are so meager, there are 9.4 million poor or near poor who receive only

Social Security, and so would be subject to the cut imposed by the chained CPI.4”—N. Altman, Co-Director of Social Security Works.

I wrote to the actuaries at Social Security and asked what the median benefit is for retired workers. The median is the halfway point under which 50% of all retired workers’ benefits lie. Above the median is where the other 50% of the beneficiaries lie and receive higher benefits.

Snapshot Soc Sec stats

They kindly wrote back and sent me a chart. The median monthly benefit is $1275.03.   The average benefit is 1265.00 per month, meaning an average yearly benefit of around 15,180. That is not a lot of money to live on, especially if your benefit was one of the low monthly benefit amounts.

I asked how the income groups clump together among Social Security beneficiaries and if there is a scatter graph of all beneficiaries. What I found was a breakdown of beneficiaries by benefit amounts. This chart is for December, 2012.  I cannot reproduce the graph here, but I can pull out some generalities for all ages and retired workers of both sexes:

Retired workers receiving 100-199 per month numbered, 39,889. 200-299 a month, 317,943,; 300-399 a month, 640,520; 400-499 a month, 712,898; 500-599 a month, 1,208,363; 600-699 a month, 1,919,175; 700-799 a month, 2,389,353; 800-899 a month, 2,439,243; 900-999 a month, 2,240,767; 1000-1099 a month, 2,191,373; 1100-1199 a month, 2,287,391; and finally reaching the median benefit zone, 1200-1299 a month, 2,419,385………

Low income retirees get hammered.

Let’s pretend that nine million of those below the median are exempted by virtue of being in a protected group a la Sperling-Obama. That leaves around nine million unprotected and living between almost nothing at 100 to 199 per month and almost something at 1200 to 1299 per month.

The problem I see is that many people who are receiving benefits below the median are vulnerable to impoverishment through the chained cpi since their benefit level is very low to begin with.

Women receive significantly lower benefit amounts.

Another area of concern is the difference between the sexes on two different charts. The largest number of female beneficiaries (you can see this by looking at the millions category) starts in the lower benefits ranges, when compared to the men’s chart. Men’s number jump to millions of beneficiaries in the monthly benefit of 1200-1299. Women’s numbers jump to the millions in the 600-699 monthly benefit. Imagine getting cut by the chained cpi when your benefit started at 600-699 d0llars a month. Slave wages. Slave benefits. The AARP has a nice post about the detrimental impact of the chained cpi on women.

The chart reflects economic classes in our society.

The income/benefits of the lower-middle and middle class clump together at between 500-2100 a month, above a low-benefit  group of lower beneficiaries. Fewer people receive the top benefit amounts as they taper from 2100 to 2900 or more. A good scatter graph would illustrate the clumping of different groups within the larger group of  36.7 million retired worker beneficiaries.

II.  The Social Security portion of Retirement incomes is Crucial To The Three Lowest  Income Quintiles.

In a related article about the importance of Social Security in the New York Times, I found a National Academy of Social Insurance chart of Retirement Incomes  by Income Quintiles: (The related article is titled: Budget Negotiating Chip Has Big Downside For Old and Poor.)

Nasi chart-SS% of each income quintile

Updated: The three lowest quintiles demonstrate the large portion of personal income represented by retirement income from Social Security benefits. Any cuts to benefits appear to harm these first three groups more than the top two income quintiles. The chart includes people who are still working (see the grey area for Earnings) and does not describe how many individuals are in each quintile. An expert has written that if earnings are omitted, dependence upon Social Security is high even amongst high income quintiles. Thank you for that correction. Again, a scatter graph of benefit amounts is needed to answer the question of where the beneficiaries are clumped together.

Please note the slideshow of data by techgeek15 linked in his/her comment. The difference between male and female benefits’ patterns is stunning.



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