New formula could cut future benefits, raise taxes
WASHINGTON (AP) — Just as millions of Social Security recipients are about to get their first benefit increase in three years, Congress is looking at reducing future raises by adopting a new measure of inflation that would also increase taxes for most families.
If the new measure is used across the government, a wide range of retirement and veterans' benefits would increase by smaller amounts each year. Over time fewer people would qualify for Medicaid, Head Start, food stamps, school lunch programs and home heating assistance.
Despite fierce opposition from seniors groups, the proposal is gaining momentum in part because it would let policymakers gradually cut benefits and increase taxes in a way that might not be readily apparent to most Americans.