State Social Security recipients will likely get one of the smallest cost-of-living increases in program history next year, a fact local AARP officials say underscores their opposition to a proposal to re-tool how those increases are calculated.
With Washington politicians debating whether to include Social Security and Medicare reform as part of budget negotiations set to commence later this year, AARP representatives say they would prefer Congress get its short-term budget fixed first, before turning to entitlement reform.
"We've been very clear that Social Security is not a piggy bank," AARP state director Gaylene Miller said. "It needs to have its own conversation, it shouldn't be part of some political bargain or backroom deal."
Washington began pulling itself back off a ledge Thursday, after pushing the nation to the financial brink with a 16-day government shutdown and near-default on U.S. debt.
Senate Majority Leader Harry Reid, D-Nevada, and Minority Leader Mitch McConnell, R-Ky., were able to negotiate and push through a last-minute compromise that funds the government through Jan. 15, and lifts the so-called debt ceiling until Feb. 7.
The deal, which was pushed heavily by a bipartisan group of 14 senators, including Sen. Joe Manchin, D-W.Va., also calls for Congressional leaders to appoint a committee to finally come together an negotiate a compromise budget that will keep the government running for the rest of the fiscal year.
However, there was debate among lawmakers Thursday morning as to whether this committee should start simple and craft a one-year budget plan, or work on some type of "grand bargain," that not only works to balance the budget over several years, but also reform the country's health care and retiree programs.
One popular proposal, which President Barack Obama included in his budget proposal earlier this year, was the changed the way the government calculates inflation for these programs, moving it to the so-called chained-CPI calculation.
Currently, the government uses the Consumer Price Index for urban workers to calculate annual inflation, or cost-of-living adjustments, for government programs, including Social Security.
The chained-CPI is a separate calculation that factors in a consumer's ability to substitute between higher and lower-cost goods, and therefore leads to smaller inflation measurements. Those narrower measurements would mean smaller cost-of-living adjustments, therefore saving the government money.
AARP opposes switching to the chained CPI measure, and Miller said recent inflation projections support the organization's position.
The U.S. government was supposed to release its latest cost-of-living adjustment for Social Security this month. But due to the current government shutdown, that didn't happen.