Middlebury While we admit that the news media’s obsession of late with reporting about the so-called fiscal cliff may be beating an already dead mule, there are some things to watch out for as we approach the fiscal day of decision Dec. 31.
A perfect storm of expiring tax and spending cuts is having everyone from retirees to millionaires scratching their heads with an uncertainty about the future that even the Mayan calendar can’t predict.
What does Washington’s seeming inability to agree on anything mean for us? And what do changes to Medicare and Social Security mean to a growing segment of the population—seniors, especially those getting by here in high-cost Vermont.
We asked Greg Marchildon, state director for AARP in Vermont, to give us some perspective, at least from the over-55 organization's viewpoint. We know not everyone will agree with its conclusions.
“In Vermont, 91,000 seniors currently receive Social Security with an average annual benefit of $14,000,” Marchildon said. “Social Security makes up about 59 percent of the typical older Vermonter’s income, lifting 38 percent of older Vermonters out poverty. In addition, it pumps $1.7 billion into the state economy. Changing the way cost of living adjustments—COLA—are calculated for Social Security beneficiaries by moving to a chained consumer price index, as is on the table in debt deal discussions, cuts benefits, taking roughly $270 million out of the pockets of Vermont Social Security beneficiaries over the next 10 years and $112 billion for beneficiaries nationwide.”
Marchildon also said that Social Security COLA understates what an average, older Vermonter spends and purchases each month.
“Assuming that most people receiving Social Security, who are already just getting by, will simply ‘trade down’ in their spending on prescription drugs, utilities and other fixed expenses for lower cost options is out of touch with reality,” he said. “Americans have worked too hard to earn their benefits to end up getting pushed over the edge in a fiscal cliff deal. Social Security is not a cause of the budget deficit and it shouldn’t be used to solve it.”