LETTER: Adjustments should be shared by all
To the Editor:
I was appalled to read that the president's budget proposes to use the chained CPI instead of the consumer Price Index to calculate the cost-of-living adjustments for Social Security. We are told that the chained CPI is a more accurate way for measuring inflation because, "if prices rise people will choose a cheaper substitute, i.e. if beef becomes more expensive people will buy chicken."
What happens if chicken becomes more expensive, are they expected to buy dog food? It sounds like voodoo economics and seems a cynical and hypocritical way to reduce Social Security payments without appearing to do so.
Apparently the proponents of chained CPI are unaware that most of the expenditures that people have are fixed and cannot be changed to something cheaper. Examples are mortgage payments, rent payments, property taxes, insurance for cars, house, or apartment, the cost of medical care and prescriptions not covered by insurance, heating costs and utilities. In winter, are the elderly expected to turn down the thermostat to 60 degrees if the price of gas or heating oil goes up? Or skip using the air conditioner when it's 90 degrees outside because the cost of electricity has risen?
There are a number of methods that can fix Social Security without penalizing Social Security recipients. The Senate Special Committee on Aging in its 2010 report lists a number of ways that could be used to eliminate the Social Security shortfall. At the top of the list is the Earnings Cap. If it were removed entirely it would solve 95 percent of the shortfall.
This would be very popular with all those workers who now must pay Social Security taxes on their entire income if they earn less than $113,700, while the people who earn more than $113,700 pay no tax on their income above $113,700. Another proposal is raising Social Security taxes by 1.1 percent, which would reduce the shortfall by 104 percent.
I think this would be accepted by workers if they would have an iron-clad guarantee that they will receive their full Social Security pension when they retire. There are several other methods in the Senate Special Committee's report which could be used singly or in various combinations to eliminate the shortfall. For instance, Social Security taxes could be raised by only half a percent and the rest of the shortfall could be solved by raising the Earnings Cap substantially or some other combination of methods.
We all know that adjustments to Social Security have to be made, but this can be done in a way that shares the pain among all the stakeholders. All it takes is fairness and goodwill.