5 Reasons Why the Chained CPI Benefit Cuts Would Hurt People With Disabilities

Some in Washington are pushing a budget proposal that, by cutting Social Security benefits, would unfairly hurt people with disabilities. Called the "chained CPI," the proposal would change the yearly cost-of-living adjustment (COLA) for Social Security, reducing benefits by $127 billion over 10 years.

The benefit cut would start now and grow over time, making it increasingly hard for people with disabilities to afford to live in their homes and communities as they age.

Washington should address the nation’s budget challenges in responsible ways, not by cutting benefits for people with disabilities.

Here are the top five reasons why the chained CPI would hurt people with disabilities.

1. People with disabilities can least afford a cut in Social Security benefits. On average, people with disabilities receive only $13,560 in yearly Social Security benefits; 37 percent of people with disabilities depend on Social Security for nearly all of their family income (90 percent or more).

2. People with disabilities would face deep benefit cuts. The chained CPI would cut benefits more with every passing year, and many people with disabilities begin relying on Social Security payments at a young age. A 35-year-old disabled worker who receives average disability benefits would see his or her benefits reduced annually by $886 at 65 and $1,301 at 80.

3. People with disabilities have a greater chance of falling into poverty. Social Security keeps nearly 40 percent of people with disabilities age 18-plus and their families out of poverty. The benefit cut would force those already living on tight budgets stretched by rising prescription drug, utility and health care costs to cut back on vital needs.

4. The chained CPI is less accurate. The chained CPI assumes that when the cost of something you normally buy goes up, you will substitute a lower-cost item. This theory falls short because many people with disabilities spend a large share of their income (around $4,200 a year on average for Medicare beneficiaries with at least one disability) on health care — and its cost rises faster than inflation and doesn’t have lower-cost substitutes.

5. Disabled veterans would be hurt twice. Because Social Security and veterans benefits would both be cut by the chained CPI, disabled veterans would be hurt twice. By age 65, a 30-year-old veteran with severe disabilities would see his or her veterans benefits reduced by $3,286 a year and Social Security benefits reduced by $1,655 a year.