Commentary:
By Katie Hirning, California State
Director, AARP

Legislators in Washington, DC are floating a little-understood proposal to cut federal spending. It sounds innocent enough. Both sides agree on the idea. But this “minor tweak” would demand further sacrifice from a group that has already given more than its share to America: our nation’s veteran — including those with severe disabilities.

The proposal, known as the ‘chained CPI,’ assumes that when the cost of something you normally buy goes up, you will substitute a lower-cost item. The fatal flaw in this line of reasoning is that many seniors and older veterans spend a large portion of their income on basic goods like prescription drugs, utilities, and heath care – items that simply don’t have lower-cost substitutes. If this proposal takes effect, their hard-earned benefits would no longer keep up with the true cost of living.

The fact is that a chained CPI would amount to a significant benefit cut, not just a “technical adjustment” as some in Washington would like you to believe. Even more troubling, permanent cost-of-living cuts like chained CPI take a bigger and bigger bite over time, resulting in a “stealth” benefit cut that effectively increases for the rest of a veteran’s life.

AARP Executive Council member and San Diego County resident Bob Prath, a retired naval aviator, puts it this way:

“As a Navy veteran, when I hear politicians tell veterans, widows, and retirees that this escalating benefit reduction is a “technical change,” I can’t help but think that they are being shortsighted about the harm this could bring to older Americans.”

In California the impact of a chained CPI would be enormous. Almost 1.9 million veterans would lose an estimated $1.1 billion over a 10-year period. Nationally, that translates to a loss of $17 billion for 23 million veterans over the next decade.

What do these statistics mean for an individual? Consider a 30-year-old veteran who has severe disabilities. Compared to current law, this veteran’s VA benefits would be reduced by $1,425 a year at age 45, $2,341 at 55 and $3,231 at 65, according to the Congressional Budget Office.

Reductions would also build up for Social Security benefits, which millions of veterans depend on as the foundation of their financial well-being as they age.

For people who survive on modest, fixed incomes, every dollar counts — and this proposal would mean real sacrifice for those who can least afford it.

Under a chained CPI, the outlook becomes bleaker the longer you live. That’s because the benefit cut grows over time, and the gap continues to widen between current law and the benefit cut under a chained CPI. Adequate inflation protection is crucial, especially for those on fixed incomes who are unable to compensate for losses in their purchasing power.

Veterans respect the value of personal sacrifice. They put their lives on the line for this great nation, and knew their journey could be perilous. They know what it means to step up, and they have proven this time and again by their actions. Their sacrifices and commitment to duty are a powerful testament to a belief in keeping America strong.

This is exactly why the nation must keep its promises to them. Cutting the federal budget by shifting to an ill-reasoned and unfair formula like chained CPI amounts to breaking that promise. That is why the American Legion, Disabled American Veterans, Iraq and Afghanistan Veterans of America, and more than a dozen other veterans’ organizations oppose the chained CPI.

Surely, our nation can find a way to balance its books without taking even more from those who already have given so much.