We Kossacks used to love Nancy Pelosi. We wanted her to be Speaker again. Not today. Today the former Speaker was excoriated in the comments to Joan McCarter's Front Page post about Rep. Pelosi's remarks on the chained CPI proposal. It is appropriate that our community have a strong focus on preserving the integrity of Social Security. It is inarguable that the change to chained CPI would contract the amounts of future benefits to retirees. Fighting back should be our first impulse. Many Kossacks argue well that current benefits aren't enough and any roll back of future benefits is unacceptable.
That, however, is not what the argument is about in Washington. I too am vexed that chained cpi got into the mix with so little fuss, a lagniappe , as it were, Nevertheless, Former Speaker Pelosi was simply making an accurate point about the legislation being bargained over. Further given her position, she was the most appropriate to address the matter.
Here is the "tax law" truth behind her statement: whether or not we adopt chained cpi, we are leaving social security benefits untouched. Benefits are totally separate from the cost of living provisions and controlled by separate laws.
I used to study tax law. For a while, I practiced tax law. Follow me out into the tall grass and I'll refer you to a statutory example of what I'm talking about.
When Nancy Pelosi says chained CPI is not a benefit cut, what she means is there is no talk of changing parts of the law like 42 USC Section 415:
(a)(1)(A) he primary insurance amount of an individual shall (except as otherwise provided in this section) be equal to the sum of—This statute, those to which it refers and those others upon which it depends, establishes the amount of a retiree's benefit. Their are lots of ways for Congress to tinker with primary benefits in order to cut the future overall Social Security expenditure. From Section 415, for example, its easy to tinker with the formula for average indexed monthly earnings or with what constitutes earnings., No one is talking about this kind of benefit cut. The benefit every one qualifies for upon retirement remains unchanged. Obviously, tinkering with future adjustments to benefits as the chained cpi proposal does slowly, relelative to current law, impoverishes retirees over time. But it is still different, legislatively, from how Congress would go about enacting direct cuts to primary benefits
(i) 90 percent of the individual’s average indexed monthly earnings (determined under subsection (b)) to the extent that such earnings do not exceed the amount established for purposes of this clause by subparagraph (B),
(ii) 32 percent of the individual’s average indexed monthly earnings to the extent that such earnings exceed the amount established for purposes of clause (i) but do not exceed the amount established for purposes of this clause by subparagraph (B), and
(iii) 15 percent of the individual’s average indexed monthly earnings to the extent that such earnings exceed the amount established for purposes of clause (ii),
Politically, it is only good sense to point out this distinction and this time Nancy Pelosi gets the job of making the lemonade. Maybe, too, Kossacks shouldn't be too quick to throw Madam Pelosi under the bus. She may yet come in handy to causes many of us cherish.