How Chained CPI saves Social Security

[cthulu2016]

(The headline is sarcastic.)

This budget expects the new improved CPI to save (reduce benefits by) $130 billion over ten years.

I'm sure there's some dynamic curve of effect, but in back-of-the-envelope terms that would be $13 billion/year.

SS trustees estimate that the first year of SS shortfall will be 2033. The first year shortfall is estimated to be around $650 billion.

Either the CPI change has no effect on the sustainability of SS (extending it by like 100 days or something) or else it has very substantial future effects that are not well depicted by the ten year window of this budget.

I do not know which of those is the case.

[upaloopa]

1. It is nothing more than a move toward right wing ideology.

As Rachael said to David Axlerod last night. If you really wanted to save Social Security you would raise the cap on earnings. He had no answer or no real reason to put the chained CPI in the budget other than to coddle to the right. Basically Seniors get thrown under the bus in hopes that Repubs will allow tax increases.

[JaneyVee]

2. The moral argument is even deeper than the economic argument.

Why are we punishing those who did nothing to cause a global financial meltdown while Wall St. and the rich (who DID cause a global financial meltdown) go un-punished? It goes against everything humanity stands for. Fairness.

[JustAnotherGen]

3. Simpler solution

Tax me.


If you believe this - the joke is on you. Because come Friday May 17 - that's the last time my employer collects funds from me for SS in 2013. I max out. So I get 6.5 months of working, earning, etc. etc. without having to pay in.

Hows that Chained CPI looking to you now?

Because to me it looks stupid becauseit would be easier to just tax high earners - like myself. But nobody in Washington has the brass ovaries to get it done.


Regardless - this budget won't pass anyways.

[Festivito]

4. Compounded interest should double the money every seven years more or less.

In 20 years we're looking at just under 2 7-year doublings. 150B$ by 2020 becomes 300B$ in 2027, which becomes 600B$ by 2024. Close at least, and this comes from an assumed interest rate.

Paying monthly as opposed to every seven years accrues more interest than just having 150B$ at the end of seven years. So, that could make up the difference.

[cthulu2016]

6. The 2033 shortfall is just for 2033

Your point is sound, but I think it means we would have accrued cumulative savings by 2033 to extend the trust-fund by 10 or 12 months total, as a one-time thing.

(The total savings for the next year, 2034 would be $13 billion, or whatever, versus a shortfall of about a trllion.)

[Wellstone ruled]

5. Untill we get changes in lobbying,there will never be a end to the assult on

Seniors or others that are relying on some type of support or needs. My local community is probably dependent to the tune of 75-80% on Social Security. In saying that,this City is as Red as they come. Go figure,all we hear is that Black Guy in the White is going to steal their guns and my SS checks,oh,forgot,they owe their allegiance to Temple Square. Hypocrites.

[Marrah_G]

7. man...............

I saw your three subject lines and thought you had lost your damn mind.