As expected, the President proposed modest cuts in Social Security benefits in the Budget released today. Liberals were incensed. When the proposal was first leaked, Stephanie Taylor of the Progressive Change Campaign Committee expressed the left wing’s angst, and a threat: ‘You can’t call yourself a Democrat and support Social Security benefit cuts. The president is proposing to steal thousands of dollars from grandparents and veterans by cutting cost-of-living adjustments, and any congressional Democrat who votes for such a plan should be ready for a primary challenge.’ The specific proposal to “steal thousands of dollars from grandparents” would basically cut a few tenths of a percent off the annual adjustment to Social Security Benefits (and many other revenue and outlay programs) by replacing the standard inflation measure with an alternative called the “chain-weighted Consumer Price Index (CPI).” Unlike Classic CPI, the new measure accounts for the fact that when prices rise unevenly, consumers will substitute cheaper items for those whose prices rise. As a result, the real burden of inflation is less than measured by the static CPI market basket. Most economists think this version is a better overall measure of the true cost of living.
Source: FULL ARTICLE at Forbes Latest