‘Cliff’ talks aimed at Social Security worry Connecticut AARP

Washington – Social Security was supposed to be protected from automatic spending cuts that will go into effect on Jan. 1 unless Congress acts to find other savings. But the invulnerability of the Depression-era program for the elderly is showing cracks.

Republicans in Congress have proposed limiting the annual Social Security cost-of-living adjustments as part of a plan  to avoid the so-called “fiscal cliff” that brings automatic cuts and the expiration of a series of tax breaks.

That has groups like Connecticut’s AARP very worried.

“Americans have worked too hard to earn their benefits to end up getting pushed over the edge in a fiscal cliff deal,” said Connecticut AARP lobbyist John Erlingheuser. “Social Security is not a cause of the budget deficit.”

House Speaker John Boehner has recommended changing the way Social Security cost-of-living increases are calculated – and raising the eligibility age of Medicare from 65 to 67 — as part of a plan to cut the deficit $1.4 billion over 10 years.

He proposes abandoning the way cost-of-living adjustments have been determined since they were introduced to the Social Security program in 1975. That’s by determining inflation using the Consumer Price Index that tracks price hikes of a number of goods. Boehner, and many economists, believe the CPI overstates the effect of inflation and prefer a different index, the chained CPI, which takes into account substitutions to cheaper goods that people make when prices rise.

President Obama rejected Boehner’s overall plan to cut the deficit. But the president has said he’d consider moving to a chained CPI.

And former White House chief of staff William Daley said he thinks a preliminary agreement to use chained CPI could be a starting point in negotiations between Republicans and Democrats.

The AARP is not pleased.

The Connecticut AARP says such a change would take roughly $1.42 billion out of the pockets of Connecticut Social Security beneficiaries over the next 10 years — and $112 billion for beneficiaries nationwide.

“The current Social Security COLA already understates what an average older resident in Connecticut spends and purchases each month,” Erlingerheuser said. “Assuming that most people receiving Social Security, who are already just getting by, will simply ‘trade down’ in their spending on prescription drugs, utilities and other fixed expenses for lower cost options is out of touch with reality.”

AARP Connecticut says 472,762 seniors currently receive Social Security for an average annual benefit of $15,500.

All members of Connecticut’s House delegation except Rep. Jim Himes, D-4th District, signed a letter this week asking Boehner to drop his plans for Social Security.

“He’s still studying the idea of chained CPI and just doesn’t feel like he understands it well enough to make a firm judgment yet,” said Himes press secretary Elizabeth Kerr. “Also, he’s been very clear that everything should be on the table in deficit negotiations.”

The letter to Boehner signed by Reps. Joe Courtney, D-2nd District; John Larson, D-1st District; Rosa DeLauro, D-3rd District, and Chris Murphy, D-5th District, pointed out Social Security had taken in much more money than it has paid out and operates in a “fiscally responsible manner.”

“Social Security is not welfare,” the letter said. “Seniors earned their benefits by working hard and paying into the system.”

The Connecticut lawmakers did not, however, lobby President Obama about keeping the Social Security cost-of-living formula intact.