Friday, April 5, 2013

Obama puts cuts to Social Security and Medicare back on the table (video)

I've known cuts to Social Security and Medicare under the Obama Administration were inevitable, so the president's latest offer to the Republicans doesn't surprise me; I am left wondering, though, if this is the change we can believe in that Obama promised in 08:

Robert Reich, Chancellor's Professor of Public Policy, University of California at Berkeley; Author, 'Beyond Outrage', explains what Obama's latest attempt to negotiate with the Republicans means for senior citizens:

The White House and prominent Democrats are talking about reducing future Social Security payments by using a formula for adjusting for inflation that's stingier than the current one. It'scalled the "Chained CPI." I did this video so you can understand it -- and understand why it's so wrongheaded. 

Even Social Security's current inflation adjustment understates the true impact of inflation on the elderly. That's because they spend 20 to 40 percent of their incomes on health care, and health-care costs have been rising faster than inflation. So why adopt a new inflation adjustment that's even stingier than the current one?

Social Security benefits are already meager for most recipients. The median income of Americans over 65 is less than $20,000 a year. Nearly 70 percent of them depend on Social Security for more than half of this. The average Social Security benefit is less than $15,000 a year.

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