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White House Budget Rejects Chained CPI for Social Security Disability

Posted on Apr 30, 2013

The consumer price index (CPI) measures the changes in the prices of goods and services purchased by American households. It is used to calculate changes in the cost of living and to determine cost-of-living increases for government benefits.

Currently, the government uses a standard CPI that is based directly on the change in the cost of certain goods. However, politicians of both parties have suggested using a chained CPI to calculate cost-of-living increases in an effort to balance the budget and bring down the deficit. A chained CPI assumes that people will make small sacrifices to adjust for inflation. For example, a family that eats steak once a week will save steak for special occasions and have hamburger instead. While the difference between using a standard CPI compared to a chained CPI for cost-of-living increases is only a few dollars a month, the difference adds up over time. This can be disastrous for a severely disabled person who is already struggling to get by.

On April 10, White House officials announced that programs that require income eligibility would be exempt from a change to chained CPI when determining cost-of-living increases for Social Security benefits. When talking about his budget, the President said, “I don’t believe that all these ideas are optimal, but I’m willing to accept them as part of a compromise—if, and only if, they contain protections for the most vulnerable Americans.” SSDI, SSI, and food stamps will be exempted. The one million adults with lifelong disabilities who receive benefits through the Disabled Adult Child program will be affected.

The president also wants to increase funding for housing for people with disabilities by $20 million and vocational rehabilitation by $71.1 million.

Please contact us for help with your own SSDI or SSI needs.

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John L. Keefe
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Founding Attorney of Keefe Disability Law