News / USA

    New Budget Cuts Cost of Living Adjustments for US Retirement Fund

    New Budget Cuts Cost of Living Adjustments for US Retirement Fundi
    X
    April 11, 2013 12:24 AM
    The White House released a new budget plan Wednesday that would reduce entitlement benefits for retired Americans. The budget proposal seeks to limit Cost of Living Adjustments (COLA) to Social Security by using a less generous formula to measure inflation for computing future benefit increases. Called "Chained CPI" -- some conservatives say the plan would save the government billions of dollars. But others say the proposed changes also place an unfair burden on people who can least afford it. Mil Arcega has more.
    The White House released a new budget plan Wednesday that would reduce entitlement benefits for retired Americans.  The budget proposal seeks to limit Cost of Living Adjustments (COLA) to Social Security by using a less generous formula to measure inflation for computing future benefit increases.  Called "Chained CPI" -- some conservatives say the plan would save the government billions of dollars. But others say the proposed changes also place an unfair burden on people who can least afford it.

    About 58 million Americans receive social security benefits.  Many live day-to-day on fixed incomes.

    "Everything is going up.  It's rising and there is not much you can do about it," Dennison said.

    Kay Dennison works part time at a retirement center in Maryland. She worries she could lose everything if her monthly checks don't keep up with inflation.

    "Probably my home, because everything is so tight and so high, and the mortgage rates.  We've been in our home 40 years and we still owe," Dennison said.

    The proposed changes to annual cost-of-living adjustments would save the government an estimated $130 billion over ten years.  But AARP, a seniors' advocacy group, says under the new formula the average retiree would get $220 less a year after five years and $862 less annually after 20 years.

    Economist Monique Morrissey at the Economic Policy Institute says reducing already meager benefits on average about $1,200 dollars a month, unfairly targets the most vulnerable Americans.

    "Poverty rates for the oldest, old are higher, incomes are lower, they've often used up other resources, they have more out of pocket expenses for healthcare. They're the last group you would ever want to target to take the brunt of these cuts," Morrissey said.

    With the U.S. population aging, social security now takes in less revenue than it spends.  Conservative economists say more cuts may be necessary to keep the program solvent.

    Charles Konigsberg at the Federal Budget Group says Americans have a choice: increase their contributions or face reduced benefits.  

    "The good news is that these problems can be solved if they're addressed now.  The longer we wait, the more difficult it is to fix the problem because the growth in spending accumulates over time," Konigsberg said.
     
    Retired educator Virginia Levy is more fortunate.  Her monthly social security checks help supplement her teacher's pension.

    "I'm worried more about future generations, what it's going to do to them.  My children are 40 and what's going to happen to them when they are retiring?  Their social security is going to be a fraction of what ours is," Levy said.

    Indeed, Monique Morrissey says the proposed changes will affect all Americans.

    "People think social security is for old people, they don't realize that the benefits that are being cut are really for young people who will be old at that point.  This one form of cut, by cutting the COLA, doing it immediately, affects both young and old people," Morrissey said.

    The president's proposed budget includes additional cuts to Medicare, and eliminates loopholes for wealthier Americans.  But with a mid-term election next year, analysts say it's unlikely Congress will approve the budget without making changes.

    You May Like

    Video As Refugees Perish, Greek Graveyards Fill

    Before burial at overflowing cemeteries, unidentified dead being swapped for DNA, in case some day relatives come to learn their fate

    Russian Opposition Leader Sues Putin for Conflict of Interest

    Alexei Navalny tells VOA in exclusive interview why transfer of $2 billion from country’s wealth fund to company with ties to President Putin’s son-in-law triggered lawsuit

    How Diversity Has Changed America

    Over the past four decades, the level of diversity in the United States has increased most in these four states

    Featured Videos

    Your JavaScript is turned off or you have an old version of Adobe's Flash Player. Get the latest Flash player.
    As Refugees Perish, Greek Graveyards Filli
    X
    Hamada Elsaram
    February 11, 2016 8:01 PM
    Aid workers on the Greek island of Lesbos say they are struggling to bury the increasing number of bodies of refugees that have been recovered or washed up ashore in recent months.  The graveyards are all full, they say, yet as tens of thousands of people clamor to get out of Syria, it is clear refugees will still be coming in record numbers. For VOA, Hamada Elrasam reports from Lesbos, Greece.
    Video

    Video As Refugees Perish, Greek Graveyards Fill

    Aid workers on the Greek island of Lesbos say they are struggling to bury the increasing number of bodies of refugees that have been recovered or washed up ashore in recent months.  The graveyards are all full, they say, yet as tens of thousands of people clamor to get out of Syria, it is clear refugees will still be coming in record numbers. For VOA, Hamada Elrasam reports from Lesbos, Greece.
    Video

    Video To Fight Zika, Scientists Target Mosquitoes

    Mosquitoes strike again. The Zika virus outbreak is just the latest headline-grabbing epidemic carried by these biting pests, but researchers are fighting back with new ways to control them. VOA's Steve Baragona takes a look.
    Video

    Video Mosul Refugees Talk About Life Under IS

    A top U.S. intelligence official told Congress this week that a planned Iraqi-led operation to re-take the city of Mosul from Islamic State militants is unlikely to take place this year. IS took over the city in June 2014, and for the past year and a half, Mosul residents have been held captive under its rule. VOA's Zana Omar talked to some families who managed to escape. Bronwyn Benito narrates his report.
    Video

    Video Scientists Make Progress Toward Better Diabetes Treatment, Cure

    Scientists at two of the top U.S. universities say they have made significant advances in their quest to find a more efficient treatment for diabetes and eventually a cure. According to the International Diabetes Federation, the disease affects more than 370 million people worldwide. VOA’s George Putic reports.
    Video

    Video NATO to Target Migrant Smugglers

    NATO has announced plans to send warships to the Aegean Sea to target migrant smugglers in the alliance's most direct intervention so far since a wave of people began trying to reach European shores.
    Video

    Video Russia's Catholics, Orthodox Hopeful on Historic Pope-Patriarch Meeting

    Russia's Catholic minority has welcomed an historic first meeting Friday in Cuba between the Pope and the Patriarch of Russia's dominant Orthodox Church. The Orthodox Church split with Rome in 1054 and analysts say politics, both church and state, have been driving the relationship in the centuries since. VOA's Daniel Schearf reports from Moscow.
    Video

    Video Used Books Get a New Life on the Streets of Lagos

    Used booksellers are importing books from abroad and selling them on the streets of Africa's largest city. What‘s popular with readers may surprise you. Chris Stein reports from Lagos.
    Video

    Video After NH Primaries All Eyes on South Carolina

    After Tuesday's primary in New Hampshire, US presidential candidates swiftly turned to the next election coming up in South Carolina. The so-called “first-in-the-South” poll may help further narrow down the field of candidates. Zlatica Hoke reports.
    Video

    Video US Co-ed Selective Service Plan Stirs Controversy

    Young women may soon be required to register with the U.S. Selective Service System, the U.S. government agency charged with implementing a draft in a national emergency. Top Army and Marine Corps commanders told the Senate Armed Services Committee recently that women should register, and a bill has been introduced in Congress requiring eligible women to sign up for the military draft. The issue is stirring some controversy, as VOA’s Bernard Shusman reports from New York.
    Video

    Video Lessons Learned From Ebola Might Help Fight Zika

    Now that the Ebola epidemic has ended in West Africa, Zika has the world's focus. And, as Carol Pearson reports, health experts and governments are applying some of the lessons learned during the Ebola crisis in Africa to fight the Zika virus in Latin America and the Caribbean.
    Video

    Video Smartphone Helps Grow Vegetables

    One day, you may be using your smartphone to grow your vegetables. A Taipei-based company has developed a farm cube — a small, enclosed ecosystem designed to grow plants indoors. The environment inside is automatically adjusted by the cube, but it can also be controlled through an app. VOA's Deborah Block has more on the gardening system.
    Video

    Video Illinois Voters Have Mixed Emotions on Obama’s Return to Springfield

    On the ninth anniversary of the launch of his quest for national office, President Barack Obama returned to Springfield, Illinois, to speak to the Illinois General Assembly, where he once served as state senator. His visit was met with mixed emotions by those with a front-row seat on his journey to the White House. VOA's Kane Farabaugh reports.
    Video

    Video Exhibit Turns da Vinci’s Drawings Into Real Objects

    In addition to being a successful artist, Renaissance genius Leonardo da Vinci designed many practical machines, some of which are still in use today, although in different forms. But a number of his projects were never realized — until today. VOA’s George Putic reports.
    Video

    Video Heated Immigration Debate Limits Britain’s Refugee Response

    Compared to many other European states, Britain has agreed to accept a relatively small number of Syrian refugees. Just over a thousand have arrived so far -- and some are being resettled in remote corners of the country. Henry Ridgwell reports on why Britain’s response has lagged behind its neighbors.
    Video

    Video Russia's Car Sales Shrink Overall, But Luxury and Economy Models See Growth

    Car sales in Russia dropped by more than a third in 2015 because of the country's economic woes. But, at the extreme ends of the car market, luxury vehicles and some economy brands are actually experiencing growth. VOA's Daniel Schearf reports from Moscow.