Why does an individual’s Social Security benefits increase over time?

Why would those increases be tied to the CPI?

Why might tying Social Security increases to the CPI be increasing benefits by too large an amount? (that is, explain why the cost of living might be increasing slower than the CPI would indicate)

Based on what we’ve learned in class, which side of the debate would you take and why? (the why is more important than which side).

If the Social Security increases were changed to the lower amounts, what effects would that have on the government’s budget?

2/23/14, 9:28 PM Obama’s Budget Omits Trims to Social Security – NYTimes.com
Page 1 of 3 http://www.nytimes.com/2014/02/21/us/politics/obamas-2015-budget-to-sidestep-bipartisan-ofers.html

http://nyti.ms/1cv1Tfb

POLITICS
Obama’s Budget Omits Trims to Social Security
By MICHAEL D. SHEAR FEB. 20, 2014
WASHINGTON — President Obama’s forthcoming budget plan will not include a
proposal to trim cost-of-living increases in Social Security checks, the gesture of
bipartisanship he made to Republicans last year in a failed strategy to reach a
“grand compromise” on reducing projected federal debt.
White House officials said on Thursday that since Republicans in Congress
have shown no willingness to meet the president’s offer on social programs by
closing loopholes for corporations and wealthy Americans, the proposed budget
for the 2015 fiscal year will not assume a path to an agreement that no longer
appears to exist.
Instead, officials said the president would offer a spending blueprint in the
next two weeks that represented his vision for how to invest in the programs that
they say will increase opportunity for the middle class.
“There was a point in time when there was a little bit more optimism about
the willingness of Republicans to budge on closing some tax loopholes,” said
Josh Earnest, a White House deputy press secretary. “But over the course of the
last year, they’ve refused to do that.”
Republicans seized on the change as evidence that Mr. Obama had strayed
from any commitment to reduce the nation’s deficit over the next decade.
“This reaffirms what has become all too apparent: The president has no
interest in doing anything, even modest, to address our looming debt crisis,” said
Brendan Buck, a spokesman for the House speaker, John A. Boehner of Ohio.
But the Republican Party’s critique of Mr. Obama as being unwilling to trim
entitlements comes as some of its own congressional candidates signaled their
2/23/14, 9:28 PM Obama’s Budget Omits Trims to Social Security – NYTimes.com
Page 2 of 3 http://www.nytimes.com/2014/02/21/us/politics/obamas-2015-budget-to-sidestep-bipartisan-ofers.html
line of attack for the coming midterm elections: assailing the president’s health
care law for reductions in entitlement spending.
Statements from the National Republican Congressional Committee last
week attacked Democrats for “gutting” Medicare Advantage, a subsidized
alternative to traditional Medicare. Last week’s Republican address, delivered by
Representative Tom Rooney of Florida, accused Democrats of “wiping out
seniors’ options” by reducing funding for Medicare Advantage.
On Thursday, Democrats who had opposed Mr. Obama’s earlier willingness
to compromise on the cost-of-living adjustments for Social Security payments
hailed his decision.
“Middle-class Americans need retirement security they can depend on, and
that starts with keeping Social Security’s promises,” Senator Jeff Merkley,
Democrat of Oregon, said in a statement.
White House officials said the president remained open to the idea of
slowing the growth of the Social Security payments if Republicans change their
minds. But senior officials said Thursday that they have no reason to believe that
will happen before midterm elections this fall.
The budget plan, which will be out in early March, a month late, will abide
by the overall spending guidelines agreed to by Republicans and Democrats late
last year. But included in those spending limits will be a $56 billion proposal to
increase spending on some of Mr. Obama’s key initiatives, officials said.
Mr. Earnest said that would include spending on manufacturing “hubs” that
the president has promoted over the last year; additional government programs
aimed at helping people develop new skills; and funding for early childhood
education programs like preschool.
Mr. Earnest said this new spending would be offset by revenue increases,
and cuts in other parts of the budget.
“This initiative that the president will propose will be fully paid for,” Mr.
Earnest said. White House officials declined to describe the revenue increases,
but said they would include closing corporate loopholes, a move the president
has supported in the past.
Mr. Buck criticized the $56 billion proposal as another effort by the
2/23/14, 9:28 PM Obama’s Budget Omits Trims to Social Security – NYTimes.com
Page 3 of 3 http://www.nytimes.com/2014/02/21/us/politics/obamas-2015-budget-to-sidestep-bipartisan-ofers.html
president to spend more taxpayer money than the government can afford.
“The one and only idea the president has to offer is even more job-destroying tax hikes, and that nonstarter won’t do anything to save the
entitlement programs that are critical to so many Americans,” Mr. Buck said.
“With three years left in office, it seems the president is already throwing in the
towel.”
Administration officials said Thursday that the budget would include
proposals to make good on the president’s campaign promise to eliminate
provisions of the tax code that allow corporations to shift profits overseas to
evade their obligations.
Democrats say such provisions are loopholes, and Mr. Obama’s calls to end
them are a perennially popular line with voters of both parties and among
independents. Democrats and Republicans agree there is virtually no chance
again this year of a bipartisan overhaul of the corporate tax code, despite claims
by both parties to be in favor of such change.
The proposed changes to the overseas tax provisions would raise additional
revenues of several billion dollars a year.
Correction: February 24, 2014
An article on Friday about trims to President Obama’s forthcoming budget plan
misstated part of the name of a Republican group that last week criticized
Democrats for “gutting” Medicare Advantage, a subsidized alternative to
traditional Medicare. It is the National Republican Congressional Committee,
not the National Republican Campaign Committee.
Jackie Calmes contributed reporting.
A version of this article appears in print on February 21, 2014, on page A15 of the New York edition with the
headline: President’s Budget Omits Trims to Social Security .
© 2014 The New York Times Company