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CA Vets, Seniors Want Congress to Break "Chained" CPI

PHOTO: An AARP analysis found California's veterans would lose more than $1 billion over ten years if Congress adopts the so-called "chained CPI" method of calculating cost-of-living increases.
PHOTO: An AARP analysis found California's veterans would lose more than $1 billion over ten years if Congress adopts the so-called "chained CPI" method of calculating cost-of-living increases.
March 25, 2013

SACRAMENTO, Calif. - Veterans' groups and senior advocates are urging Congress to reject a proposal they say would have a devastating effect on California's veterans. The so-called "chained CPI (Consumer Price Index)" is a new method of adjusting for inflation for calculating cost-of-living increases to Social Security and veterans' benefits.

According to Christina Clem, spokeswoman for AARP California, it's estimated that California's veterans would lose more than $1 billion over ten years, affecting almost two million vets.

"Which is why this is so important we go against the chained CPI and have Congress take Social Security, entitlement programs, and any change that they do to that, as its own separate issue," she said.

Supporters of the chained CPI estimate it would save the federal government up to $300 billion in the next decade.

The chained CPI determines cost-of-living increases by "chaining" costs within categories of products, using lower-priced items to create a lower average rise. This method assumes that, if inflation rises or benefit amounts drop, people can simply make less expensive choices. But Clem says the method is flawed because it's based on the purchasing habits of a younger population.

"What it doesn't take into account, particularly for older adults and veterans, is many of the things that they need on a daily basis, you cannot substitute with something that is cheaper; things like utilities, medical benefits, and prescription drugs," Clem stated.

AARP has an online calculator - at "aarp/org/whatyoulose" - to show Californians how much they would lose if Congress adopts the proposal. By entering their age and estimated annual benefit, users can see how much less they would receive over the years if chained CPI is adopted.

The AARP Chained CPI Calculator is at AARP.org.

Lori Abbott, Public News Service - CA