AARP released an editorial and fact sheet this week that examines the proposed budget reduction called “chained CPI.” This federal budget maneuver would tie the “chained” consumer price index (CPI) to Social Security’s cost of living adjustment (COLA). The Social Security COLA modifies Social Security benefit amounts each year, in order to meet increased living costs, as groceries, gas, health care and utility prices rise. The Chained CPI effect would recalculate the way Social Security calculates its annual cost of living adjustment.
Tying Social Security’s cost of living adjustment to the chained CPI would save the federal government an estimated $127 billion over the next decade.
AARP and others says that this would also disproportionately impact people with disabilities and the elderly, who are dependent on these benefits over a long period of time.