As a result of inflation, people on fixed incomes find that their incomes decline in value over time. One extremely important feature of Social Security is that its benefits are adjusted every year automatically to offset increases in inflation so that the modest, but vital, benefits do not erode over time. It is important to understand that these adjustments are not increases. They are intended to simply allow people to tread water, to maintain their purchasing power.
Unfortunately, the government’s cost of living adjustment for Social Security is based on inflation experienced by workers, not by retirees and people with disabilities who are unable to work. Older people and people with disabilities have, on average, higher health care costs. Those costs tend to rise considerably faster than overall inflation. For that and other reasons, Social Security beneficiaries generally experience higher costs of living than workers, so Social Security adjustments are often inappropriately low. Consequently, Social Security beneficiaries are not even treading water, but rather losing ground.
That is why Democrats who want to expand Social Security propose a more generous, accurate measure of inflation. In contrast, Republicans think that even the current inadequate measure is too generous. They want to enact a stingier measure, the chained CPI, which would cause Social Security’s modest benefits to erode even faster.
Everyone who cares about Social Security must fight for a more accurate measure and for those who support it. We all must resist Republican efforts to enact a stingier measure.