AARP concerned about possiblity of Chained CPI

By Adam Chick

February 20, 2013 Updated Feb 21, 2013 at 2:56 AM EDT

Binghamton, NY (WBNG Binghamton) Concerns about changing the formula for the social security cost of living increase has groups like the AARP speaking out on behalf of senior citizens and veterans.

Members met at the American Legion Post in Binghamton to discuss the possibility of making adjustments based on a Chained CPI or Consumer Price Index.

They're appealing to Congressman Richard Hanna to work against the idea.

Chained CPI is an alternate way to measure inflation. It assumes if the price of a good goes up, consumers will look to substitute a similar, cheaper product.

If applied to social security, it could slow the increase in benefits related to inflation over time.

"This all has come about because of the national budget process. AARP sees this not as a minor tweak of Social Security, but in fact it will be a major cut to Social Security," said Erin Mitchell, associate state director of AARP.

The AARP gave an example of how veterans benefits would be impacted if tied to a Chained CPI over time.

A 30-year-old veteran would receive $1,400 less in benefits.
At age 45 it would be $2,300 less and at age 55 they would receive around $3,000 less.