It took only two days into the latest self-inflicted congressional crisis before Republicans on Capitol Hill resuscitated their zombie-like "grand bargain" scheme. Since their plan to defund Obamacare hasn't worked and the government shut down because of it, the GOP has now pivoted to the next best thing on their ideological wish list, benefit cuts for millions of middle-class Americans who depend on Social Security and Medicare.
The GOP's political gamesmanship and stated goal of "getting something" from this debacle has shifted the House leadership's attention to so-called "entitlement reform," which means benefit cuts targeting seniors including: Social Security Chained CPI, extending means testing in Medicare to the middle class, raising the retirement and eligibility ages, and ending traditional Medicare in favor of Rep. Paul Ryan's "Couponcare" plan. Each of these ideas shares the same fundamental flaw, requiring the still struggling middle-class to pay down our deficit while giving the wealthiest Americans a pass. However, the Chained CPI plan to change the formula which calculates the cost of living adjustment for seniors, veterans and people with disabilities is the most insidious of these proposals. Here's why the Chained CPI is so devastating, not only to seniors but to our economy as well.
While some in Washington portray this benefit cut as nothing more than a "technical tweak," the truth is that it would be a benefit cut imposed on the oldest and most vulnerable Americans who would be least able to afford it. In our new National Committee Foundation report, produced in consultation with economist Dean Baker, we've also clearly shown that the Chained CPI will have a huge impact on local businesses, state economies and our national economic recovery. "The Chained CPI: Shackling America's Economic Recovery," provides a detailed look at what the adoption of a stingier cost of living adjustment really means for communities and states. This study uses the Congressional Budget Office projections for cuts to national spending to estimate cuts that would be made in each congressional district, based on the Social Security Administration's data on Social Security spending by congressional district. It also makes projections for the economic impact on the reduction in output as well as the jobs lost in each district. The results are striking.
The negative impact of the Chained CPI should not be ignored or trivialized. This new analysis clearly illustrates just how harmful this COLA cut will be to seniors as well as state economies and local businesses. Adoption of this so-called "tweak" could mean the loss of $31 billion in economic output and more than 200,000 jobs nationwide. Washington's blind determination to cut Social Security benefits in the name of deficit reduction must be stopped and those who continue to peddle the Chained CPI should now explain to American workers, retirees and their families how losing billions of dollars in economic output and hundreds of thousands of jobs is a 'modest adjustment' we should accept.
While Washington's well-financed austerity lobby has downplayed the economic impact of losing billions in benefits spent in local communities due to the chained-CPI, step outside the Beltway and state lawmakers and business owners alike understand what this benefit cut would mean. That's why this study applies these calculations to each congressional district. It's time members of Congress see in clear dollars and cents what the Chained CPI actually means to their communities and constituents. Many districts with large populations of retirees would be especially hard-hit by these cuts.
In Florida's 16th congressional district, which includes Sarasota and other cities along the Gulf Coast, the benefit cuts would be $6.1 million in 2015, $53.3 million in 2020, and $87.7 million in 2023. This implies a loss of output in the district of $8.9 million in 2015, $80.2 million in 2020, and $127.2 million in 2023. The job loss would be 70 in 2015, 550 in 2020, and 780 in 2023.
In Pennsylvania's 12th congressional district, a largely rural area in the southwest corner of the states, the benefit cuts would be $5.0 million in 2015, $44.9 million in 2020, and $71.3 million in 2023. This implies a loss of output in the district of $7.2 million in 2015, $65.2 million in 2020, and $103.3 million in 2023. The job loss would be 60 in 2015, 440 in 2020, and 630 in 2023.
Given the economy's slow rebound, is this really their plan to strengthen America? Is there any community which can afford to lose millions of dollars and hundreds of jobs over the next decade? This is also at stake if the chained CPI is adopted.
Real dollars, real jobs and real damage to our economy.