fresh voices from the front lines of change







African Americans in retirement or on disability would be hit particularly hard by a proposal to use the “chained CPI” to limit cost-of-living adjustments to Social Security benefits, according to a new study released by the Center for Global Policy Solutions.

Changing the inflation adjustment from the commonly used Consumer Price Index to the chained CPI, which incorporates how consumers respond to inflation by switching to lower-priced alternatives, would cut benefits to all seniors by more than $4,600 over the first 10 years, and $28,000 over 30 years. That would hit African-American retirees, who rely more heavily on Social Security benefits than white households, especially hard. Forty-seven percent of African-American seniors rely on Social Security for more than 90 percent of their income; for 40 percent of seniors, Social Security is their only source of income.

Those in the African-American community who receive Social Security benefits due to disability or death would also feel a disproportionate impact. The report pointed out that:

  • While 10 percent of the U.S. workforce are African Americans, they make up 19 percent of disabled workers receiving benefits.
  • African-American children are twice as likely to receive survivor benefits from Social Security as white children.
  • Though 15 percent of the nation’s children are African American, they are 21 percent of the children receiving disability benefits.

The median wealth of African-American households amounts to only a nickel for every dollar of the median wealth of white households, according to the report. With a wealth gap so large, many more white households will be able to offset the cuts in Social Security than African Americans.

“As a result of racial wealth disparities, African Americans will be negatively affected by implementation of the chained CPI regardless of the non-means tested federal program from which they receive their benefits,” said Maya Rockeymoore, president and CEO of the Center for Global Policy Solutions. “With precious few other assets to help meet expenses, African Americans will experience deeper economic pain as a result of the chained CPI.”

It is troubling enough to think that those who need the protection of Social Security the most, the elderly, are going to be hurt by the switch, but knowing that many of the youth who also receive the benefits of Social Security are going to be hit should make the case against using the chained CPI as a panacea to our deficit problems. It is unfair to place the saddle of debt burden on the backs of those who need it the most.

There are other solutions that will allow America to save money as well as protect the achievements of Franklin Roosevelt and Lyndon Johnson, Rockeymoore points out: “The President and Congress should identify reforms—like lifting Social Security’s cap on taxable wages—that strengthen the program’s solvency while providing a basis for ensuring that benefits work for those who need them most.”

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