CHAINED CONSUMER PRICE INDEX

Using a more accurate cost-of-living adjustment for federal benefit payments and tax brackets would cut the federal deficit by perhaps $300 billion over the next 10 years. The "chained" CPI would rise by about 0.25 percent less each year, producing slightly smaller annual cost-of-living increases for Social Security. The $21 average increase that Social Security retirees saw in January would have been $2.40 less using chained CPI. After 10 years of reduced cost-of-living increases, a Social Security beneficiary would be getting about 3 percent less per month than under the current system. At age 95, a Social Security pensioner retiring today would receive about 8 percent less. This would also be true for annual cost-of-living adjustments for retired federal workers, retired military and veterans' benefits.

On the tax side, using "chained" CPI to adjust federal income-tax brackets for inflation would bring in an additional $72 billion in revenue without any increase in rates. That's because bracket thresholds would rise more slowly, leaving more income in brackets taxed at higher rates. The traditional CPI tallies up the current prices of items in a "market basket" of goods and services bought by the average consumer in any given month. But what goes into the market baskets of real-life consumers today isn't necessarily what went in when the Bureau of Labor Statistics surveyed consumers to find out what they were buying.

Those who oppose using the "chained" CPI for adjusting Social Security pensions regularly point to yet another cost index, the CPI-E (for "elderly"), which attempts to measure rising costs for persons age 62 and over.

Since 2006, the CPI-E has risen at the same rate as the CPI-U (all urban consumers), the index most commonly cited in news stories and used to adjust income-tax brackets. It has risen slower than the CPI-W (urban and clerical workers), the index used to calculate Social Security cost-of-living increases.

The fact is, economists generally find no solid evidence that the cost of living for seniors really does rise faster than for others. Over that most recent five-year period, the CPI-E and CPI-U both rose at an annual rate of 2.3 percent, while the CPI-W increased 2.4 percent.

Note, the cost of living for any individual or family may go up faster or slower than the national average.

CLIMATE CHANGE

Sens. Bernie Sanders (I-Vt.) and Barbara Boxer (D-Calif.) introduced comprehensive legislation Feb. 14 on climate change. Under the legislation, a fee on carbon pollution emissions would fund historic investments in energy efficiency and sustainable energy technologies such as wind, solar, geothermal and biomass.

"The leading scientists in the world who study climate change now tell us that their projections in the past were wrong; that, in fact, the crisis facing our planet is much more serious than they had previously believed," said Sanders.

The proposal legislation would provide rebates to consumers to offset any efforts by oil, coal or gas companies to raise prices.

"Pricing carbon is an important tool to address climate change, and this legislation ensures that working families aren't penalized by dedicating three-fifths of revenues to a per-capita family refund. This will protect families at the same time we seek to protect the climate," said Tyson Slocum, Public Citizen's energy program director.

(http://www.factcheck.org/ http://www.sanders.senate.gov/)