A Chained CPI Is Not Fair to America’s Veterans

A little-understood proposal to cut federal spending would
demand sacrifice from a group that has given more than its share -- our
nation's veterans, including those with severe disabilities and elderly
survivors of World War Two.

The proposal, known as the chained CPI, is touted as a more
accurate way to compute cost-of-living adjustments to federal benefits than the
current inflation index. Unfortunately, that’s not true for older Americans,
including many veterans and people with disabilities, whose hard-earned
benefits would no longer keep up with inflation if this proposal takes effect.

Even more troubling, permanent adjustments for the
cost-of-living take a bigger and bigger bite over time. The effect would be a
stealth and growing benefit cut for the rest of a veteran’s life.

“America’s heroes deserve better from a grateful and caring
nation,” declared Barry A. Jesinoski, executive director of Disabled American
Veterans, in a letter to Sen. Bernie Sanders of Vermont.

A chained CPI underestimates the health care spending of
seniors, as well as others who may have chronic conditions and disabilities,
because it is based on a younger, working population. Further, it overestimates
the ability of older veterans and many others to substitute services and
products when prices rise.  (While
veterans may qualify for Veterans Administration health care coverage, rising
health care costs have forced many to pay an increasing amount out of their own
pockets.)

Nationally, 23 million veterans would lose an estimated $19
billion over a 10-year period.  In NY
that would translate to a loss of $424 million for 951,000 veterans over the
next decade.

What do these statistics mean for an individual? Consider a
30-year-old veteran who has severe disabilities. Compared to current law, this
warrior’s VA benefits would be reduced by $1,425 a year at age 45, $2,341 at 55
and $3,231 at 65, according to the Congressional Budget Office.

Reductions would also build up for Social Security benefits,
which millions of veterans depend on as the foundation of their financial
well-being in old age. Under a chained CPI, a retiree who lives to age 92 would
actually lose a month’s worth of benefits each year.

For people who survive on modest, fixed incomes, every
dollar counts, and this proposal would mean real sacrifice. Under a chained
CPI, the outlook becomes bleaker the longer you live. That is because the
benefit cut grows over time, and the gap continues to widen between current law
and the benefit cut under a chained CPI. Adequate inflation protection is
crucial, especially for those who are unable to compensate for losses in their
purchasing power.

Now, I want to be clear about something: Veterans respect
the value of personal sacrifice. They know what it means to step up, and they
have proven this in their actions. Veterans also understand the need for fiscal
discipline. Their lives are testament to a belief in keeping America strong.

But budget decisions should be fair, and promises should be
kept. Reducing the cost-of-living adjustment by shifting to an improper formula
falls short on both counts. That is why the American Legion, Disabled American
Veterans, Iraq and Afghanistan Veterans of America, and more than a dozen other
veterans’ organizations oppose the chained CPI.

Surely, our great nation can find a way to strengthen its
finances without taking even more from those who already have given so much.