My grandmother was born in 1907 and died in 2008 – just a few months shy of her 101st birthday. My grandfather died in 1971. For those 37 years of her widowhood, Social Security was all of Grandma’s income, except for $50 a month she received from my grandfather’s pension.
Her Social Security benefits weren’t much, but they allowed her to live in simple dignity, and to make small gifts to her church, favorite charities and to her grandchildren and eventually great-grandchildren. Social Security also meant my parents could focus on putting their kids through college and saving for their own retirement, rather than worrying about supporting her financially.
Critical to my Grandma’s financial security were the cost of living adjustments Congress authorized in 1972. They increased her meager income upward a little each year, keeping pace with the rising cost of food, rent, utilities, and health care.
But now it sounds as if President Obama and Speaker Boehner are discussing plans to scale back those cost of living adjustments by implementing the Chained CPI, which is widely opposed. So what would it mean for people like my grandmother if President Obama and Congress agree to change Social Security’s cost of living formula?
For the widow who receives $1,190 per month in Social Security in 2012, it means she’d get $55 less per month after 10 years, $164 less after 20 years, and if she lives for 37 more years like my grandma did, $468 less per month.*
Most elderly widows rely on Social Security like my grandma did. Most of them have barely enough to get by already.
There are better courses for our nation to follow, and I have written about the right budget deal for the middle class before. If we want to include Social Security, then we should be talking about scrapping the cap on who pays into the system and improving benefits rather than slashing them.
More and more people live to be 100 each year. They deserve some dignity.
* The chained CPI is only available back to 2000. These figures assume that the differences over the past decade between chained CPI and the current CPI-W measure that Social Security uses carry forward.