Are Social Security recipients with average benefit of $14,800/ yr the new "lucky ducks"?

[PA Democrat]

I seen some pretty ignorant and callous remarks on Democratic Underground justifying the chained CPI or pooh-poohing the impact. Please consider the following FACTS:

- As of June 2012, the average Social Security retirement benefit was $1,234 a month (about $14,800 a year).

- Current Social Security benefits replace only about 41% of past earnings.

- The United States ranks 30th among 34 developed countries in the % of a median worker’s earnings that the
public-pension system replaces.

- Medicare Part B premiums which have be growing a rate higher than inflation are deducted from SS payments.

- For 65% of elderly beneficiaries, Social Security provides the majority of their cash income.

- For 36% of elderly beneficiaries, Social Security provides more than 90% of their income.

- For 24% of elderly beneficiaries, Social Security is the sole source of retirement income.

- Social Security lifted 1.1 million children out of poverty in 2011

- 8% of children under the age of 18 lived in families that received income from Social Security in 2011

- Social Security can pay full benefits through 2033 without any changes

- Social Security contribute $0 to the current budget deficit.

- Social Security which is intended to protect our most vulnerable citizens is funded through a REGRESSIVE tax.

- Income above $113,700 is not subject to the Social Security tax.

- CPI under-values health care expenditures by seniors.

http://www.cbpp.org/cms/?fa=view&id=3261

[jambo101]

1. What are the numbers?

If i were relying solely on this $1,234 per month in my retirement how much of a cut to that figure are we talking about if this CPI change goes through?

[PA Democrat]

2. Here is an analysis

http://www.thenation.com/blog/173786/top-5-myths-about-chained-cpi-debunked#

[DCBob]

35. bit misleading.. that graph shows cummulative amounts.

The yearly cuts would amount to an average of less than $1000 per year. Still significant but not that extreme.

[PA Democrat]

36. How is the graph "misleading" when it is clearly labeled "cumulative"?

Last edited Sat Apr 13, 2013, 10:14 AM - Edit history (1)

ACk! Extra "l" in labeled.

[DCBob]

40. misleading in that it makes the cuts appear worse than they really are.

why didnt they just graph yearly amounts? Seems the more logical way to do it.

[PA Democrat]

43. I disagree and so did the Nation magazine apparently.

It is not misleading to depict how much your total benefit shrinks with the chained CPI. Of course if you want to downplay the impact I can see where it would be advantageous to show only yearly amounts.

[DCBob]

44. I disagree. How is showing your yearly loss downplaying anything?

Loss per year is clear. There is no confusion at all. That graph can be easily misread and misunderstood.

[Yo_Mama]

3. Probably 5 to 6% over a decade

It's accumulative. Even losing $300 to $600 a year when your income is less than 15K a year is significant. A loss of $50 a month is $600 a year. This won't be negligible.

C-CPI-U would also raise taxes on everyone, most immediately and significantly lower income earners.

So it's not just the old farts who will get hosed.

[PA Democrat]

4. Yes. Here's another graph of the impact on taxes:

The chained CPI makes the income tax less progressive.

http://www.thenation.com/blog/173786/top-5-myths-about-chained-cpi-debunked#

[Yo_Mama]

11. Yes, it DOES make the income tax less progressive.

A very good point that should be publicized.

Inflation measures are used to adjust the standard deduction each year and tax brackets each year. Thus the effect will be to charge higher tax rates to lower income households, and again, the effect is accumulative.

Mind you, C-CPI-U is probably a more accurate inflation calculation for upper income people, but this whole thing is a farce for lower income households.

The reason SS COLAs are currently calculated using a special index (CPI-W) is that it used to be that everyone knew that inflation rates were different for lower income people. The CPI-W is calculated using a different income level (workers) who have different purchasing patterns because they have lower incomes. CPI-W shows higher inflation than even CPI-U (national average), that is true. And it shows even higher inflation when compared to C-CPI-U. But that is because changes in buying patterns usually show up first in goods with higher profit margins that can more easily be adjusted downward.

The real change is not the chaining, but the shift from CPI-W to CPI-U. CPI-U presumes higher income levels and thus different types of purchases. The hedonics of cheaper iPhones means nothing to an older couple trying to decide whether they can heat their house in the winter! They are not buying all that stuff.

When you are already at a minimal living standard, it's not a question of shifting from an expensive cut of beef to a cheaper type of beef, or even to chicken.

To use another example, older people often own homes. Well, the increase in property taxes for most of them over the last 10 years alone has already outrun all their accumulated COLAs.

If you calculated a separate inflation index for retirees over the last decade, their inflation rate would have been close to 5% a year rather than 2.5%. Most of their expenses go into the "unavoidable" category.

Many retirees are now cutting back on heating and prescription medicine to get by. This is unconscionable, and the public discussion of it is deeply dishonest.

[PA Democrat]

14. Great post, Yo_Mama

Our municipality has almost doubled sewage rates in the last year. Trash removal fees have increased 25% over 2 years. Our governor wants to raise the gas tax while he gives out more corporate tax breaks.

My heart goes out to people living on a fixed income.

[Cal Carpenter]

13. Thanks for posting these graphs

Maybe the visual will help people understand why people are worried about this possibility, and why they are so upset that it is even being thrown on the table.

Regardless of whether or not it is in the final budget, this needs to be discussed, not dismissed. And along with the stats in the OP, it's clear that with or without Chained CPI our nation's so-called safety net is all bark and no bite.

As more and more people (sadly) have gotten closer to the edge of economic security, these things become more obvious.

We must talk about it and keep talking about these *systemic* problems, despite those who would prefer we remain silent or marginalized.

[avaistheone1]

18. True. This is a huge loss from those least able to afford it.

Those losses will be more like $600 to $700 per year which is like taking away one Social Security check each and ever year.

[magical thyme]

6. think about how much it costs to live today

How far does $1,234.00 per month go *today* to live, including the cost of rent, utilities, food and medicare. Is anything left over? Because whatever is leftover is exactly how much you can cut before you are choosing between a roof over your head, food on your plate, and health care. Don't forget to factor in the unexpected expenses, such as Depends or some other aspect to being elderly that you are totally oblivious to until you are living it.

And remember that chained CPI presumes you have money to burn on replacing clothes, so can choose cheaper clothes and/or wait until they are sale.

It presumes you eat expensive foods, so can choose to eat cheaper foods.

That if you have a pet as a companion, you can dump that pet in a shelter and have no companionship at all.

It presumes you drive a gas guzzler and can switch to a car with better mileage.

Or that you can pack up and move to a "walking city" that automatically has the same or lower rent. Or that if you own too big a house, you can sell in any market and downsize. And that in doing so, you can leave family and friends behind and live as an elderly stranger in a strange place.

It makes a lot of very wrong-headed assumptions about the real basic costs of living today.

[AnotherMcIntosh]

25. Or, if they "have a pet as a companion," they could get smaller pets that consume less.

Get rid of the dog and get a parakeet.

[JoeBlowToo]

27. Or they could eat the dog...

tastes a lot like hamster.

[OwnedByCats]

38. Nobody should have to give up their

pet. If you are the type of person who considers that pet a family member, or they benefit from the company of a pet because they don't receive many visitors, it can be traumatizing. A pet is for life, or it should be.

Not to mention there are already enough homeless pets in shelters as it is. The thought of people on SS maybe having to sacrifice a pet because of cuts makes me very angry. Them having to sacrifice anything they need or something they enjoy that wouldn't ordinarily break their budget makes me angry. They should be getting enough to live comfortably on.

The ones who least can afford to sacrifice should be protected.

[PA Democrat]

5. Question for people who are OK with the chained CPI:

If this were proposed by a Republican would you support it?

[RKP5637]

9. All Dems would be screaming their heads off, but since it's a Dem, some give him a free pass. If

Bush had proposed this, Dems would have been screaming mutiny.

[SammyWinstonJack]

37. Of course they wouldn't and they know it! Admitting that isn't an option

tho', since Obama can do no wrong.

[OwnedByCats]

39. Oh hell no

I don't care who proposes this, they are wrong no matter what letter is after their name.

But yeah if this was Bush, everyone who seems to have no problem with Obama doing it would want Bush stripped, tarred and feathered - and rightly so. They wouldn't be grasping at straws to try and justify even the very suggestion of chaining CPI. Quite frankly, there is no justification - especially during a time when the cost of living is skyrocketing more and more.

You can't be a hypocrite and expect to be taken seriously.

[RKP5637]

7. Meanwhile, cost of living goes up and up. Go USA, you can make it to #34 at the bottom. n/t

[n2doc]

8. According to the rah rah club, yes!

They need to suck it up and sacrifice! Only those in the very bottom, most poor, category will be protected by the Great One. I've also been told no elderly starve in this country due to lack of income. So everything is hunky dory!

[RKP5637]

10. Ain't America just the best place in the entire universe! Go USA! Go USA! Go USA! And then in

a few more years the R's when back in office, and they will be, can hack it to death even more. Most Americans today don't get it that they will likely be living in poverty. It's the American way. Americans get fucked over all the time and say thank you.

[whathehell]

26. The US has the smallest safety net in the Industrialized West, yet they want to cut even more..

It is utterly unconscionable and it's urgent that we stop it NOW before it gets any worse.

[Tom Rinaldo]

12. No. But they are becomeing are the new "Welfare Cheats"

Greedy old people. What do they expect? Food AND housing AND heat?

[Dragonfli]

16. Earned Benefit Queens

I heard this one old lady that collects 30 SS checks under 30 names and drives a Rolls Royce!

Most elderly and disabled live in mansions and it's their greed that's caused the deficit. It may rely on a trust fund that isn't part of the deficit but the TV says these greedy earned benefit queens take up half the budget so it's stealing money or sumpin from the budget to drive the deficit!

Everyone knows this stuff!

[PA Democrat]

17. Someone saw some senior citizens at a CASINO!!

I read it right here on DU.

Will we have reports of what is in the grocery carts of Senior citizens next? How dare grandma buy the quilted Charmin rather than the generic toilet paper!

[Dragonfli]

19. I don't want to gossip, but I saw some old people at the International Tops!

That is a special Tops that sells more international cuisine - Reggiano Parmesan, caviar and expensive forner stuff I aint seen afore. They even have a large lobster tank! All this fancy food costs way more than what they should be buying at Aldis.

They are spending us into debt so fast that if we don't fix it soon our job makers may stop making record profits every year and the way trickle down works, if the billionaires lose money we get our pay cut.

We were only a few more decades away from the time all the wealth will trickle down, but for us to see any rain their profits must increase each and every quarter. These freeloaders are the reason our trickle hasn't downed on us yet.
The basdids.

[aandegoons]

15. Isn't obvious when we as Americans make more than 14k we have too much.

And when we make more than 250k we have too little.

[Cal Carpenter]

32. Ain't that the truth

Well put.

[n2doc]

33. You nailed it

We must mine all the money out of the middle (how dare they want anything but the minimum), and give it to the rich and the military. But we are Compassionate!(tm) and will Protect! the Neediest among us. So everything is great!

[Coyotl]

20. They are "luckier" than those surviving on $7,000 a year!

Half of the social security recipients receive below the average!

[valerief]

21. You'd think we were getting Medicare for All with all their chained CPI bullshit, but we're not

getting dickwad!!!!

[snappyturtle]

22. Parts A,B & D cost me $300.00 per month. The Part D

fries me since now I pay more for the drugs I'm on (2)
than I did with a simple Walgreen prescription card.
So, I use the Walgreen card and pay Part D 'in case'
I would in the future need really expensive medications....
because if I didn't purchase it there's a big penalty...get
this...for life...monthly. This isn't directed at you but to
those who think seniors should be swimming in $ with
SS.

[AnotherMcIntosh]

23. It's not just that "Income above $113,700" is exempt from the SS tax. Income from capital gains,

which is where the rich and super-rich make most of their money, is fully exempt from that tax.

[PA Democrat]

24. Great points.

[woo me with science]

31. Thank you.

[Fuddnik]

28. Sure they are!!!!

Double that for a couple, that's almost $30,000 per year! They're dining on lobster, filet mignon, and champagne every night!





When my employer decided to do a bankruptcy for profit, steal our pensions, cut off our insurance and stick their golden parachutes in an untouchable trust fund about 12 years ago, I was pulling down approx $80k per year with lots of overtime. Plus my wife's meager income.

That was just enough to get by on. And CPI calculations are already rigged to the hilt, and they want to make it worse. In Florida, over the last 10 years, my homeowners insurance has gone up almost 400%. Electric over 100%. Gas (car) 300%. Funny, but 12 years ago, gas was under $1.00 a gallon, and we had two Jeep SUV's. Now it costs more to fill up the Prius (11.5 gallon tank)

Also, under the current CPI calculations, we've gotten nearly nothing in increases for the last 4 years.

[RebelOne]

29. I am one of the 24%. n/t

[RKP5637]

30. Once the barrier is broken it will all come tumbling down, like a leaking dam. n/t

[SammyWinstonJack]

34. Yeah well. apparently this proposal by a 'democratic' president is nothing to worry about.

It won't pass and even if it does, it would be as bad as we think.

Just you wait and see.

[hobbit709]

41. $14,800 is $3,500 more than I get.

[Oilwellian]

42. Excellent post and chocked full of good stats

This will be very helpful information to include in a video I'm creating on this issue. I think Dems will be shocked to see the entire leadership of our party are on video stating they support these proposed cuts by Obama. The only one I can't find on record is Harry Reid. Interesting, eh? Perhaps he's the one we should focus on and get answers from. Would he allow these cuts up for a vote on the Senate floor??