A bipartisan “super committee” in Congress is considering adopting a new way of calculating the Consumer Price Index, which is used to calculate cost-of-living raises for many federally funded programs including Social Security. The new CPI calculation is intended to result in lower cost-of-living raises.
This is the latest of a series of changes in how the CPI is calculated—the previous one implemented during the Clinton administration—aimed at moving the index away from being an accurate measure of the cost of living needed to maintain a constant standard of living, thereby reducing benefit and wage increases indexed to inflation. (shadowstats.com)
On Nov. 8, the Associated Press reported that the new method of calculating the CPI would lower the expected income for Social Security recipients by at least $136 a year and in some cases by as much as $560 a year. Programs that could be affected by the proposed changes include, in addition to Social Security, veterans benefits, food stamps, Medicaid, school lunch programs, as well as pension plans for both federal workers and military personnel.
This new method of calculation is called the chained CPI. It is predicated on the assumption that, as the prices of certain items go up, consumers will switch to lower-cost alternatives. Therefore, according to this argument, the CPI in use currently overstates the increase in the cost of living. The example given in the AP article is this: “[I]f the price of beef increases while the price of pork does not, people will buy more pork. Or, as opponents mockingly argue, if the price of home heating oil goes up, people will turn down their heat and wear more sweaters.” (Associated Press, Nov. 7)
The Congressional super committee, composed of six Democrats and six Republicans, has been charged with producing a plan to reduce the government debt by $1.2 trillion over the next decade. Adopting the chained CPI would get them one-sixth of the way there.
Another effect of the chained CPI would be that people in lower income brackets would over time be moved into higher-taxed income brackets and lose their eligibility for federally funded assistance such as food stamp programs, school lunches and Medicaid. The plan is a stealth way of increasing taxes and lowering public funding; the authors of this plan hope it may not be noticed or felt until some years have passed.
The super committee seeks to craft raised taxes on the poor and fewer services in ways that will not be noticed immediately. They know that if they came right out and openly stated, “Hey folks, we are going gradually to raise taxes and by the way, decrease all services over the next decade or so,” they would be met with resistance.
At the same time, there is no indication that the super committee is considering slashing funding for bank bailouts, corporate tax breaks or imperialist wars and occupations. Nowhere is there any mention of raising taxes on the rich, nor is there any thought of increasing the funding for social services.
This only goes to underscore that Congress is well aware of who their masters are: the corporations and the 1 percent, not the increasingly impoverished 99 percent.
Attempting to reduce Social Security payments is a particularly heinous move. Social Security is a benefit that came out of the sharp class struggle of the 1930s during the Great Depression. Not only did it take the militant struggle of workers and unemployed people to wrest this benefit from the grudging hands of the corporate elite, but the money in the fund is in fact put in there directly from the incomes of the people receiving it.
Social Security is supposed to be a government-managed savings account to be apportioned out during retirement in amounts transparently related to the amount of money paid in during the lifetime of the recipient from that recipient’s paychecks. That the politicians of the ruling class are siphoning it off to keep the 1 percent from feeling any pain during this period of economic collapse, as well as to finance their wars, at the expense of the poorest and most vulnerable elements of the working class can only be characterized as a form of theft.
The decision-making process of the super committee highlights the way in which the agenda of public discourse about the budget is carefully constructed to only legitimize the concerns of the wealthy 1 percent. Yet the majority of people, the working class, will be negatively impacted by a reduction in cost-of-living increases in Social Security and other programs. What kind of democratic system is this?
The struggles of the 1930s showed that through concerted, persistent and well-organized mass struggle the ruling class can be forced to grant concessions rather than face the prospect of losing it all. For revolutionaries, the ultimate goal is to wrest control from these parasitic criminals and create a society where cutting Social Security benefits never makes it onto the agenda.
