In Opposition to the Chained CPI

Statement by Senator Bernard Sanders
In Opposition to the Chained CPI
Washington, D.C.
January 31, 2013

Let me begin by thanking Senators Sheldon Whitehouse from Rhode Island; Jeff Merkley from Oregon; Richard Trumka, the President of the AFL-CIO; Nancy LeaMond, the Executive Vice President of the AARP; Tom Tarantino, the Chief Policy Officer of the Iraq and Afghanistan Veterans of America; Terry O’Neill, the President of the National Organization for Women; and Peter Berns, the CEO of the Arc of the United States for being here today. Let me also thank all of the veterans organizations for being with us today including: the American Legion; the Veterans of Foreign Wars; the Disabled American Veterans; Gold Star Wives; the Paralyzed Veterans of America; the Military Order of Purple Hearts; Vets First; Veterans for Common Sense; the Association of the United States Navy; the National Guard Association; AMVETS; the National Association of Uniform Services; the Fleet Reserve Association; the Vietnam Veterans of America; the Blinded Veterans Association; the Naval Enlisted Reserves Association; the Reserve Officers Association; and the Jewish War Veterans.

On this day, 73 years ago, Ida May Fuller of Ludlow, Vermont, received the first Social Security check in this country. At the time, critics of Social Security told us we could not afford it.  They told us that Social Security would go broke, that it could not possibly succeed.  These critics were wrong 73 years ago and they are wrong today. For more than seven decades, through good economic times and bad, Social Security has always been there for the American people.  It has always paid 100 percent of promised benefits owed to every eligible American since Ida May Fuller received that first check on January 31, 1940. Social Security is the most successful government program in the history of this country.  Before Social Security, nearly half of all senior citizens living in this country lived in poverty.  Today, only 8.7 percent of seniors live in poverty. Social Security has not contributed a nickel to the deficit. In fact, it has a $2.8 trillion surplus.

Despite the enormous success of Social Security, my Republican friends in Congress (and some Democrats) are attempting to use the deficit crisis as an excuse to cut Social Security benefits.  That is wrong.

So, we are here today to tell the White House and the leadership in Congress: do not balance the budget on the backs of the elderly. Do not balance the budget on the backs of disabled veterans who have lost their arms, legs, and eyesight defending our country. Do not balance the budget on the backs of working families. Do not adopt the so-called chained-CPI.

My Republican friends and some Democrats have said that lowering Cost-Of-Living Adjustments (COLAs) through the adoption of a chained-CPI would be a “minor tweak” in benefits. But, let’s be clear: for millions of Americans the chained CPI is not a minor tweak.  It is a significant benefit cut that will make it harder for the elderly, permanently disabled veterans, and working families to feed their families, heat their homes, pay for their prescription drugs, and make ends meet.   The chained-CPI is bad for senior citizens.  Under the chained CPI, average seniors who retire at age 65 would see their Social Security benefits cut by more than $650 a year when they reach 75 and over $1,000 a year once they turn 85.

While that may not seem like a lot of money to a Wall Street billionaire, it is a lot of money for a senior citizen trying to survive on $14,000 a year.  Today, two-thirds of senior citizens rely on Social Security for over half of their income.  The chained CPI would be a disaster for senior citizens.

And, a chained CPI would do more than just cut Social Security.  It would also cut the benefits of more than 3.2 million disabled veterans in this country.  Under the chained CPI, permanently disabled veterans who started receiving disability benefits from the Veterans Administration at age 30 would see their benefits cut by more than $1,400 a year at age 45, $2,300 a year at age 55 and $3,200 a year at age 65.

I challenge anyone who supports a chained CPI to go to Walter Reed. Visit with the men and women who have lost their legs, lost their arms or lost their eyesight as a result of their service in Afghanistan or Iraq.  We made a promise to these veterans. Cutting their cost-of-living adjustments would be reneging on those promises.

Finally, the chained CPI would be a disaster for working families.  Adopting the chained CPI would amount to an across-the-board tax increase that would disproportionately impact the middle class and the most vulnerable.

According to the Joint Committee on Taxation, switching to a chained CPI would increase taxes by more than $59 billion over the next decade. More than three-quarters of the new revenue raised by the chained CPI would come from Americans making less than $200,000 a year. Those making between $30,000 and $40,000 would be hit the hardest, while those making more than $1 million would see virtually no change.  What about President Obama’s promise that there would be no income tax increases for people making less than $250,000 a year?

Deficit reduction is important, but we must not balance the budget on the backs of the elderly, the veterans, the children, the sick and the most vulnerable people in America.