The Obama administration took its highly unpopular chained CPI proposal off the table Thursday, causing a host of Democrats and other progressives to give a collective shout of approval.
"This is a huge progressive victory -- and greatly increases Democratic chances of taking back the House and keeping the Senate. Now, the White House should join Elizabeth Warren and others in pushing to expand Social Security benefits to keep up with the rising cost of living," said Stephanie Taylor, cofounder of the Progressive Change Campaign Committee, an organization dedicated to electing progressive politicians.
Adopting this lowered way of calculating cost-of-living adjustments, or COLAs, for Social Security and other benefits would have lowered the shortfall in Social Security funding by about 20 percent. That's according to Voice of the People, a nonpartisan organization working to give Americans a voice in the policymaking process.
A lowered COLA would not cut Social Security, but its effect would compound over time by slowing the increase in benefits. Voice of the People calculates that after 10 years, the average monthly benefit would be $35 less than it would have been under the current COLA. And after 30 years, average monthly benefits would be $107 less than they would be under the current method -- a relatively small impact on most people's retirement planning.
The Obama administration told The Associated Press that the administration hadn't totally removed the proposal from consideration but wouldn't push it as part of the 2015 budget proposal, which is expected to be announced next month.
Nancy Altman, co-director of Social Security Works, an organization whose mission is to protect Social Security, said this was the right thing to do. "We should be talking about expanding Social Security, not cutting it," she added. "The president is moving in the right direction. We think cutting Social Security would increase wealth inequality and worsen the impending retirement crisis."
The office of House Speaker John Boehner, R-Ohio, criticized President Barack Obama's decision, stating, "This reaffirms what has become all too apparent: The president has no interest in doing anything, even modest, to address our looming debt crisis."