[Congressional Record Volume 159, Number 50 (Monday, April 15, 2013)]
[House]
[Page H1996]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




                              CHAINED CPI

  The SPEAKER pro tempore. The Chair recognizes the gentleman from 
Oregon (Mr. DeFazio) for 5 minutes.
  Mr. DeFAZIO. Mr. Speaker, there's a lot of talk in Washington, D.C., 
about something called chained CPI. A lot of people don't know what 
that means. We have assurances from the White House and the Republicans 
who originated this idea. It's an innocuous sort of little change to 
Social Security, veterans benefits, and other programs, because we 
overstate inflation in the CPI.
  Actually, particularly for seniors, the reverse is true. The consumer 
price index, as measured, significantly understates inflation that 
impacts seniors because seniors have a different buying pattern than 
20-year-olds. They're not out buying the latest iPhone. They're buying 
a lot of medical care, going up much faster than measured inflation, 
pharmaceuticals going up at phenomenal, obscene rates. Housing, energy, 
and all those things make up a bigger percentage of their budget in 
retirement.
  For years, I have proposed legislation to accurately measure the cost 
of living for seniors, which actually would increase their annual cost-
of-living adjustments. But now come the White House and the Republicans 
to say we're overstating inflation. Let's just use chained CPI, it 
doesn't matter, it's all about substitution. If they can't afford beef, 
they'll do chicken; if they can't do chicken, they'll do pasta; if they 
can't do pasta, they'll buy dog food; if they can't afford that, 
they'll starve. That's kind of the bottom line of these pointy-headed 
economists out there on how these sort of weird theories work.
  Here's a graphic that demonstrates this a little better. This shows 
for a retired single woman, widowed or otherwise, how much food would 
be lost on an annual basis with chained CPI as it eats away at the 
annual adjustments and the things that she purchases go up faster and 
faster.

                              {time}  1210

  Each shopping cart represents a weekly food budget of $53. That's not 
exactly living high on the hog here. At 65, she loses 2 weeks of food. 
And a woman retiring at age 65 this year has a life expectancy of 20 
years. That means at age 85, with this new device, the chained CPI, she 
would lose 16 weeks worth of her food budget. That's 16 weeks.
  Everybody, as they get older, works through their savings and other 
means of support. And if you live too long, you're going to have a 
really hard time making ends meet. If we chain the CPI, it will get 
even harder for the next generation of seniors.
  There's kind of a mixed message here. Republicans want to cut 
entitlements. They never supported Social Security and Medicare, but 
they just want to cut them to make sure they're there in the future. 
Well, If you chain the CPI, Social Security, which is supposed to have 
adequate benefits to pay full guaranteed benefits until 2033, would 
pick up 2 years. So we cut benefits for 100 percent of seniors retiring 
now and in the future, and Social Security would last 2 years longer. 
That doesn't exactly save Social Security, does it?
  On the converse, with my plan, where we lift the cap so that people 
who earn a $1 million or $2 million or one of those hedge fund guys 
earning a billion dollars a year would pay Social Security tax on all 
of his or her income, we add 50 years to the life of Social Security. 
That's about as far as you can measure it into the future.
  If they wanted to save Social Security, if that's what the White 
House is up to, if that's what the Republicans are up to, it's a much 
better way to do it without penalizing seniors. But that's not really 
what it's about. It's to take a program, Social Security, which is 
self-funding, doesn't draw on the general fund, doesn't create any 
deficit, it's to take money from Social Security and use it elsewhere 
to plug holes in our budget.
  That's not right. It's the highest tax paid by many American workers 
to the Federal Government. Almost half of workers pay more in Social 
Security taxes, particularly the self-employed, than they do income 
taxes to the Federal Government. And if you earn over $112,000 a year, 
your tax rate goes down. If you get $1,200,000, your tax rate is one-
tenth that of someone who earns $50,000 a year; $12 million, one one-
hundredth; and those billionaires are paying less than 1 second's wages 
in Social Security taxes.
  If you want to fix the program, lift the cap and make everybody pay 
the same percentage of their income into Social Security, but don't 
pretend by taking food out of the mouths of seniors in the future that 
you're fixing the problem for full funding of Social Security beyond 
2033. You're not. That's a lie. Admit what you're doing. You want to 
cut benefits to seniors, to veterans and other working Americans with 
this chained CPI artifice.

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