Obama proposes revising the way Social Security benefits get adjusted each year to help retirees cope with inflation, as part of 'fiscal cliff' talks. Here's how 'chained CPI' would alter the status quo.
President Obama's latest bargaining position in fiscal talks with Republicans contains this controversial element: revising the way Social Security benefits get adjusted each year to help recipients cope with inflation.
Mr. Obama's move is an overture to Republicans who support the idea, as the two sides try to broker a deal that reduces future federal deficits with a mix of tax hikes and spending cuts.
So what is the "chained CPI," the revised consumer price index that Obama says could replace the current system?
Details will come in a moment, but first this point: A lot of people don't like the president's idea.
RECOMMENDED: 'Fiscal cliff' 101: 5 basic questions answered
As news of the proposal emerged, the idea was swiftly met by opposition from interest groups opposed to benefit cuts in Social Security, the widely popular program on which millions of Americans rely for retirement income.
"Almost every elected official just spent an entire election season saying they wouldn't cut the benefits of those 55 and older," Alex Lawson, director of Social Security Works, said in a statement released Tuesday morning. "The truth is the chained CPI hits everyone's benefits on day one. It hits the oldest of the old and disabled veterans the hardest."
Obama and everyone in Congress know that alterations to Social Security aren't politically easy. Some lawmakers want the program left out of the negotiations entirely as Congress weighs what to do about the "fiscal cliff," the set of tax hikes and federal spending cuts set to occur in the new year if no new legislation is passed.