By: Bill Schammert
A proposal in President Obama's 2014 budget could reduce Social Security payouts by the thousands over a long period of time. It all centers around a little-known term called the Chained CPI.
Tuesday, dozens rallied against the proposal at the Federal Building in downtown Lincoln.
Here are the basics.
Social Security payouts are adjusted every year based on the Consumer Price Index, or, cost of living increases due to inflation.
But, a change to that formula would reduce that increase. The Chained CPI formula takes into account that if the price of one item goes up, many will switch, and buy a cheaper item. Basically, if beef prices go up, more people will buy chicken.
"They want to use voodoo math and come up with less benefits for retirees and future retirees," John Morrissey said.
Morrissey was one of about 70 people hanging onto a chain, protesting the cuts along Centennial Mall and O Street in downtown Lincoln on Tuesday.
"The older population spends more money on Health care than the younger population, and [the new formula] doesn't account for that," James Bowers, another protestor, said.
If it goes into effect, it would only cost Social Security recipients about $4.00 a month, or $50 in the first year. But, a study by the AARP says that would compound every year, and cost beneficiaries thousands over a 30-year span.
Al Mumm is the president of the Nebraska Alliance for Retired Americans. He says there's no need for an adjustment and the Social Security trust fund is in good shape.
"Balancing the budget on the backs of senior citizens is not the way to go," Mumm said.
Supporters of the new formula disagree. They argue, the current formula is outdated and doesn't reflect actual cost of living increases.