Comments of Virginia P. Reno: Response to the Ways and Means Committee on Chained CPI and Other Benefit Adjustments

Comments of Virginia P. Reno, Vice President for Income Security Policy at the National Academy of Social Insurance, submitted to the House Ways and Means Committee in response to its request for comments on 'entitlement reform' proposals. The comments are based on several NASI research publications on related topics.

The first set of comments (“Response to the Ways and Means Committee on COLA Proposals: Chained CPI Would Not Strengthen Social Security”) focuses on the chained CPI. In short, NASI’s research finds that the chained CPI understates the price increases experienced by seniors and disabled Americans – who make up the vast majority of Social Security beneficiaries – because they spend more of their budgets on health care costs. Key points include:

• The chained CPI would result in substantial benefit cuts for beneficiaries, especially as they grow older.
• Older beneficiaries rely more heavily on Social Security than do younger beneficiaries.
• NASI’s public opinion research finds that, given a range of policy options, Americans prefer to gradually raise Social Security taxes and to improve benefits slightly for vulnerable groups.

The second set of comments (“Cutting Benefits Doesn’t Strengthen Social Security: Americans Prefer to Improve and Pay for It”) focuses on other benefit adjustments. In short, a package of benefit cuts is neither necessary nor desirable, and Americans report that they prefer to pay for and improve Social Security. Key points include:

• Social Security’s modest benefits are the main source of income for most seniors.
• Social Security is efficient and affordable.
• Benefits are already being cut more than many people realize.
• Americans are willing to pay more to preserve Social Security; they favor a Social Security package that increases taxes in two ways, raises benefits in two ways, and does not cut benefits.

Download the comments below.