[Peace-discuss] Response from Rep. Rodney Davis on cutting Social Security with Chained CPI

[Robert Naiman]

[When we met with staff in his Champaign office, we asked that he respond
to us in writing stating what his position was on cutting Social Security
by means of Chained CPI. He did respond in writing, but he did not say what
his position was. Let's think about 1) ways to increase pressure on him to
take a position 2) nailing down his Democratic opponents on the issue,
which could help with 1).]

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May 8, 2013

Mr. Robert R. Naiman
802 E. California Ave
Urbana, IL 61801-4342

Dear Mr. Naiman,

Thank you for contacting me regarding your views on a chained consumer
price index for determining Social Security Cost of Living Adjustments
(COLA). I appreciate hearing from constituents in my district.

I believe we must keep the promises of Social Security and Medicare.
Current and near retirees should receive their full benefits while future
generations should have the peace of mind to know that these programs will
be there for them as well. Elected officials must rise above politics, keep
promises to current and near-retirees and save Social Security and Medicare
for our children and grandchildren.

As you may know, the COLA is tied to the increase of consumer prices
compared to the previous year, which is measured by the Consumer Price
Index for Urban wage Earners (CPI-W). This is intended to reflect the cost
of inflation. There is a misconception that the CPI-W does not include the
cost of food and energy, but they are included in determining Social
Security benefits.

There have been proposals to switch from the CPI-W to another measure, the
Chained Consumer Price Index for Urban Wage Earners. This attempts to
account for substation bias, which is when consumers purchase one set of
goods because they have slower rising prices over their equivalents. Some
economists believe this protects the standard of living by consumers during
a time of rising prices and because CPI-W does not account for substation
it can overstate how bad inflation is hurting consumers. As you know,
President Obama has proposed switching to the Chained Consumer Price Index
to make up for the deficit in the Social Security trust fund as part of his
Fiscal Year 2014 budget.

I understand that you oppose switching from CPI-W to C-CPI-U. Be assured I
will keep your opinion in mind if this issue ever goes before the full
House of Representatives for a vote.

Please let me know if my office can be of assistance to you in the future.
Also, if you are facing a challenge with a federal agency or are planning a
trip to our nation's capital and would like a tour, please call or visit my
website at www.rodneydavis.house.gov. It is truly an honor to represent you.

Sincerely,

Rodney Davis
Member of Congress
-- 
Robert Naiman
Policy Director
Just Foreign Policy
www.justforeignpolicy.org
naiman at justforeignpolicy.org
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