Monterey, CA Veterans Groups Lobbying Hard Against A Switch To The Chained CPI (C-CPI)

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I wrote recently on my blog about the Obama administration's plan to switch Social Security recipients from having their checks indexed to the Consumer Price Index (CPI) to the chained CPI (C-CPI).  Such a move will put a dent in the pocketbooks of seniors because the C-CPI makes a strange assumption.  It calculates that if the price of goods and services go up for one product, consumers simply switch to another to save money.  The most popular example used is if the price of steak goes up, people will start eating chicken instead.  The problem is, many seniors living on a fixed income spend most of it on things like housing, medical bills and energy costs.  There aren't easy substitutes for these things.  Granted, seniors could switch from one apartment to another apartment which is cheaper, but I don't think that was the intent of those who made the C-CPI index.  Many veterans, unfortunately, are in a similar pickle as seniors, and in many cases it's even worse.  Because they will likely live longer, a switch to the CCPI could cost veterans a huge loss in disability payments over their lifetime.  Lobbyists for veterans are descending on Washington D.C. in droves to lobby against a change to the C-CPI.  Although it's admirable, I don't see much hope.  Politicians seem intent on moving ahead with switching to the C-CPI.    If the government proceeds with its plan to link payments to the C-CPI, it will take a disproportionate toll on veterans, according to a study by the American Association of Retired Persons (AARP).  23 million veterans would lose $17 billion in benefits according to the AARP calculations.  The youngest disabled would be hit the hardest.  A 30-year old veteran would lose about $100,000 in disability payments, according to the study.  A 65-year old who is not a veteran, in contrast, would lose only $3,900 in benefits over the next decade.  In either case, it's a huge amount of money.  The stakes are high and politicians don't have any easy answers.

Please note that this blog reflects my personal opinion and may or may not reflect the opinion of Hands to Help Seniors and the individual members comprising the Board of Governors.