Why was the Consumer Price Index for the Elderly (CPI-E) started in 1983?
In 1981 Social Security was in crisis. The Social Security Trust Fund was so broke, that the government had to transfer money out of the Medicare Trust Fund in order to pay Social Security benefits, because the rest of the federal budget was also in deficit. Congress had already cut benefits and enacted one of the largest payroll tax hikes in history aimed at keeping the system solvent just a few years earlier in 1977. But inflation skyrocketed-growing from 5.9% to 14.3% continuing to erode the Trust Fund. The Reagan Administration proposed more benefit cuts including a reduction in benefits for early retirement at age 62, an altered benefit formula for future retirees, and a 3-month delay in Cost-of-Living Adjustments (COLA). As you could imagine, this set off an uproar in Congress where members of both parties were besieged by calls from angry constituents fearing cuts to their benefits. The Consumer Price Index for the Elderly (CPI-E) was established in the amendments to The Older A
