If a Republican president said they wanted to reduce the deficit by cutting Social Security payments, it would be no surprise. But coming from a Democrat, it should be shocking.
In the past two years, President Obama has offered Social Security cuts to Republicans in budget negotiations at least twice. And even though they have not so far been included in any deals, President Obama continues to express a willingness cut Social Security by using a regressive chained consumer price index (CPI) formula to calculate cost of living adjustments.
The chained CPI uses the substitution of cheaper goods and services for COLA calculations that compound every year, so benefit reductions accelerate over time.
In practice, the longer someone receives benefits under chained CPI, the lower their payments. Therefore, the oldest Social Security recipients will end up getting the smallest checks.
For those who survive only on Social Security payments, which average around $1100 a month, chained CPI could be economically devastating.
Democrats in both the House and Senate have criticized President Obama for putting chained CPI Social Security cuts on the table. However, this is an area that the president has signaled he is ready to sacrifice to satisfy the Republican thirst for entitlement cuts.