Ripping Off Needy Seniors Through The 'Chained CPI'

Basing Social Security cost-of-living increases on the chained consumer price index, which presumes people will trade down to cheaper goods as costs rise, would force elderly people on fixed incomes to forgo essentials.

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. That's the proposal to change the formula that determines annual cost-of-living increases for people on Social Security.

At the heart of this particular change is an inflation indicator known as the chained consumer price index. You may have heard the term bandied about, along with the claim that it's more accurate at measuring inflation than the plain-vanilla versions of the CPI used today for inflation adjustments in Social Security, the income tax and other federal programs.

First published by the Bureau of Labor Statistics in 2002, the chained CPI was designed to adjust for the ways real-life consumers compensate when....

[Read more...]