Letter to the President about Chained CPI

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December 20, 2012

The President
The White House
1600 Pennsylvania Ave., NW
Washington, DC 20500

The Honorable Harry Reid
Majority Leader
United States Senate
Washington, DC 20510

The Honorable John A. Boehner
United States House of Representatives
Washington, DC 20515

The Honorable Mitch McConnell
Minority Leader
United States Senate
Washington, DC 20510

The Honorable Nancy Pelosi
Minority Leader
United States House of Representatives
Washington, DC 20515

Dear Mr. President, Leader Reid, Leader McConnell, Speaker Boehner, and Leader Pelosi,

I am writing on behalf of the National Council on Disability (NCD), an independent federal agency that advises Congress and the Administration regarding laws, policies, practices, and procedures that impact people with disabilities.  

Recent reports on the ongoing “fiscal cliff” negotiations have suggested consideration of a proposal to utilize a “chained CPI” inflation index for the Social Security Administration and the tax code. Such a proposal would reduce the rate of growth in benefits to seniors and people with disabilities through the Old-Age and Survivors Insurance (OASI), Disability Insurance (DI) and Supplemental Security Income (SSI) programs. NCD is concerned about the impact this change would have on the disability and aging communities. Many people with disabilities face extreme poverty and a further reduction in benefits would place at risk a lifeline for a population with access to few other resources for income support.

In recognition of the potential hardship such a change might have on seniors and people with disabilities, we encourage consideration of the following three policy options should a “chained CPI” inflation index be incorporated into an agreement.

  • Any proposal that reduces future benefits should specifically exempt Supplemental Security Income (SSI) beneficiaries. People with disabilities receiving SSI are subject to both asset and income limitations that preclude saving for future expenses or building other sources of income. As such, they are particularly vulnerable to lower benefit levels.
  • We urge consideration of the use of a progressive indexing formula for the OASI and DI programs, ensuring that low-income populations will not be adversely impacted by the change.
  • Any change to the Social Security program should incorporate one of the most long standing needed program reforms – changing the asset limit faced by SSI recipients. Although some cost implications exist, providing SSI beneficiaries additional flexibility in accumulating savings will enhance the likelihood that such individuals will be able to enter the workforce and no longer be dependent on income support. The best reforms are those that enhance the ability of beneficiaries to find and maintain employment, thereby improving both their quality of life and the solvency of the programs under question. We urge negotiators to consider raising the current SSI asset limit and/or index the cap to inflation.

NCD has recently initiated a project examining policy options aimed at enhancing employment opportunities for current and potential SSDI and SSI beneficiaries. As you consider these issues in the future, NCD is ready to assist the Administration and Congress as it pursues responsible ways to reduce the deficit and debt while continuing our ongoing commitment to seniors, people with disabilities and low-income Americans. 

Very Respectfully,

Jonathan M. Young, Ph.D., J.D.
Chairman, National Council on Disability