That is a pretty simple and important question. Unfortunately, most voters are likely to go to the polls this fall without knowing the answer.
If the backdrop to this question is not immediately clear, then you should be very angry at the reporters who cover the campaign. One of the items that continuously comes up in reference to the budget deficit is President Obama's support for the plan put forward by the co-chairs of his deficit commission, Morgan Stanley director Erskine Bowles and former senator Alan Simpson. On numerous occasions, President Obama has indicated his support for this plan.
One of the items in the Bowles-Simpson plan is a reduction in the annual cost-of-living adjustment of roughly 0.3 percentage points. This would be accomplished by using a different index that, by design, would show a lower measured rate of inflation. It is important to recognize that this is an annual cut that would accumulate over time. After a retiree has been receiving benefits for ten years, the cut would be 3.0 percent; after 20 years. it would be 6 percent. If a typical retiree lives long enough to get benefits for 20, years the average benefit cut over their years of retirement would be 3 percent.