OPPOSITION TO PROPOSED CHAINED CONSUMER PRICE INDEX

WHEREAS, a proposal under consideration by the federal government for a chained consumer price index (CPI) would lower the formula for the Social Security cost-of-living adjustment that helps retirees cope with inflation, and would immediately cut the benefits to Social Security recipients; and

WHEREAS, proponents have falsely presented this as a mere technical change with no harm to current retirees; and

WHEREAS, proponents of a chained CPI claim that seniors will easily be able to adjust to a lower benefit by buying cheaper, generic products while these proponents ignore the escalating costs of prescription drugs, other healthcare and housing; and

WHEREAS, despite false claims by proponents of a chained CPI that it would not affect current retirees, a chained CPI would result in an immediate reduction for Social Security beneficiaries. The organization Social Security Works estimates that a retiree who was age 65 in 2011 would lose more than $6,000 over 15 years. The Alliance for Retired Americans projects the reduction in benefits would worsen over the long term, with annual losses of $560 when retirees are age 75, $984 at age 85 and a $1,392 loss at age 95; and

WHEREAS, the chained CPI is in fact a back-door way of trying to balance the budget on the backs of America's seniors in spite of the fact that the federal budget deficit has actually been declining over the last few years, rendering such draconian measures cruel and unnecessary; and

WHEREAS, Sen. Tom Harkin, (D-Iowa) has sponsored a resolution to express the sense of some in Congress that the chained CPI should not be used to calculate Social Security cost-of-living adjustments, and has proposed legislation called the Rebuild America Act, S.2252, which would require the establishment of a price index that accurately reflects costs for Social Security beneficiaries. This proposed consumer price index for the elderly (CPI-E) would be used to compute the cost-of-living adjustment and would consider the costs of medicine and housing to ensure that seniors are able to keep pace with inflation:

RESOLVED, that the American Federation of Teachers proclaims its support of the efforts by Sen. Tom Harkin and other progressive members of Congress to defeat the proposal for a chained CPI and joins with the Alliance for Retired Americans, the NEA and the national AFL-CIO in calling for a CPI-E that reflects the real costs faced by retirees.