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Shows & Panels
The monster under your bed is real!
Tuesday - 2/25/2014, 2:00am EST
For some people, it was a shape-changing fiend under the bed. A toe-biter waiting for their feet to slip out of the covers. Two of my FNR colleagues said their private monsters lived in the closet. Another arranged her stuffed animals, like sentinels, to keep "it" from climbing into the bed.
(Mine, inspired by reading the classic comic "The Murders in the Rue Morgue" was a gorilla with a straight-edged razor who, every Tuesday night, tried to ambush me when I took out the trash! I was, suffice to say, the fastest trash- hauler in the neighborhood).
For many grown up Americans, who have forgotten their childhood demons, the new monster-under-the-bed, killer-in-the-closet is the horrific- sounding "chained CPI." The difference between it and your childhood fears is that it is really out there — under the bed and in the closet — ready to pounce.
Three of the largest retirement programs in the country are indexed to inflation as measured by the CPI-W index. They are Social Security, the Civil Service Retirement System and retired military pay. When the cost of living goes up, those retirees get an increase. Feds under the CSRS program get a full COLA. Those under the newer FERS retirement plan get a full COLA up to 2 percent, then a "diet COLA" after that. Most private-sector pensions plans (those that remain) are fixed. What you get the day you retired is what you continue to get 25 years later!
The Obama administration in previous years proposed adopting the chained CPI which, over a decade, would save the taxpayers billions of dollars. The President proposed it in his last budget. That's because the inflation adjustments it would produce would be slightly less (about 0.3 percent) each year than those triggered by the current CPI-W yardstick. Because the downsized adjustments would be so small, and in the future, backers said nobody would notice.
Lots of people, including professional groups that lobby for Social Security and federal-military retirees, did notice. Unions representing federal workers and groups who represent managers and executives did too. Most of them made killing the chained CPI concept a top priority. And it appears to have paid off. So far.
Although the Obama administration favored it and budgeted for it last year, congressional Democrats warned the White House that continuing to advocate the chained CPI could hurt the party in the November elections. As a result, the White House announced last week that the chained CPI proposal will not be in the budget the President sends Congress next week.
By disowning the chained CPI plan, the White House has tossed a true political hot potato (actually more like a six-pack of hand grenades) to Republicans who control the House. True fiscal conservatives, who believe the chained CPI to be a better measure of inflation, can stick with it. Because of political gerrymandering (by both parties) some House members can't lose. But many of their colleagues are not in safe-Democratic or can't-lose Republican districts where retirees, and their voting-age children, represent the swing vote.
The goal of groups opposing the chained CPI should be to reach out to GOP hardliners and convince them this is not the year to make a stand.
By some estimates, CSRS retirees could lose as much as $48,000 in future COLAs if the chained CPI is adopted. For a look at how much the chained CPI could cost you in retirement, click here.
NEARLY USELESS FACTOID
Compiled by Jack Moore
Eighteen-time Oscar nominee Meryl Streep has been thanked more times in Oscar acceptance speeches than God.
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