On March 22, 2013, the Senate voted to block cuts in benefits for Social Security and disabled veterans. An amendment to the non-binding FY 2014 Senate Budget Resolution opposes switching from the current method of measuring inflation to a so-called chained consumer price index. The amendment was offered by Sen. Bernie Sanders (I-VT) and passed on a voice vote. The entire resolution was passed on March 23, 50-49.
“The time has come for the Senate to send a very loud and clear message to the American people: We will not balance the budget on the backs of disabled veterans who have lost their arms, their legs and their eyesight defending our country,” Sanders said.
Currently, Social Security retirement and disability, federal and military retirement, veterans’ compensation and pension benefits are typically increased by a cost of living adjustment [COLA] formula. The COLA is based on a consumer price index or CPI that measures inflation in the costs of goods and services. Many deficit and debt reduction proponents believe that changing the COLA formula by using a different consumer price index, called the chained CPI, would reduce government spending by reducing future cost-of-living increases in federal benefit programs.
Retirees and disabled Americans receiving Social Security would be affected by the switch to a chained CPI, including nine million veterans. A veteran with average earnings retiring at age 65 would get nearly a $600 benefit cut at age 75 and a $1,000 cut at age 85. By age 95, when Social Security benefits are probably needed the most, that veteran would face a cut of $1,400 – a reduction of 9.2 percent.
The proposed change would also affect more than 3.2 million disabled veterans by reducing future disability compensation benefits from the Department of Veterans Affairs. Veterans who started receiving VA disability benefits at age 30 would have their benefits reduced by $1,425 at age 45, $2,341 at age 55, and $3,231 at age 65 (these amounts are cumulative, not annual.) For low income veterans with non-service-connected disabilities on VA pension, their benefits would be reduced by $353 at age 75 and by $696 at age 85. Benefits for more than 350,000 surviving spouses and children also would be cut.
President Obama included the chained CPI in his proposed federal budget, released April 10, 2013. According to the National Committee to Preserve Social Security and Medicare, however, the President's budget excludes Supplemental Security Income and veterans VA pension from the application of the chained CPI. These are both means-tested programs for low income elderly or people [including veterans] with disabilities. This would appear to mean that, in addition to Social Security retirement benefits, Social Security Disability Insurance, veterans service-connected compensation and Dependency and Indemnity Compensation [for survivors] benefits will be subject to the chained CPI.
Learn more about Paralyzed Veterans of America's efforts on Capitol Hill