A plan expected to be included in President Barack Obama’s budget proposal this week could change how Social Security benefits are calculated for people with disabilities.
Obama is reportedly set to include a proposal to change the way that annual cost-of-living adjustments for Social Security benefits are figured in the coming years. The plan — expected to be part of the budget road map the president is scheduled to release on Wednesday — is said to be a compromise in exchange for Republicans agreeing to new taxes in efforts to reduce the nation’s deficit.
The Social Security change known as “chained CPI” would have the effect of reducing the increases that Social Security and Supplemental Security Income beneficiaries typically receive year-over-year to account for inflation.
The idea behind chained CPI is that people can make small sacrifices to account for rising costs, opting to buy hamburgers instead of steak, for example.
But disability advocates are lining up against the approach, saying that it does not properly account for the true situation facing many people with disabilities who rely on Social Security benefits to meet basic food and housing costs. In a letter sent to Obama late last year, more than three dozen national disability organizations asked the president to oppose a switch to chained CPI calling Social Security benefits “already very modest.”
“What we’re concerned about is that beneficiaries would be forced to make very painful decisions, choosing to take medications or buy that bag of groceries,” said T.J. Sutcliffe, a policy advocate at The Arc. “Cuts (under chained CPI) are cumulative so they start out low, but they add up quickly.”
Under chained CPI, Sutcliffe said that beneficiaries would likely see a 0.3 percent reduction to their cost-of-living adjustment on average in the first year as compared to the current method of calculation. Over about 30 years, the change would mean that a beneficiary would lose about one month’s worth of benefits, she said.