I'm ticked off, and you will be too!

How would you like to see your monthly Social Security check SHRINK by 3%? If you currently receive $1500/month, that would mean a DECREASE of $45 each month, or $540 each year. Well, get ready because that seems about ready to happen!

According to a piece by Dean Baker in yesterday's Huffington Post: "If anyone still questioned who owns Washington, the Congressional supercommittee charged with reducing projected deficits by $1.2 trillion seems determined to end any doubts. According to press accounts, both the Republicans and Democrats on the committee support a plan to reduce average Social Security benefits by 3 percent."

"This particular cut is especially pernicious since it will hit the oldest and poorest beneficiaries hardest. A person who is in their 90s and has been getting benefits for 30 years would see a reduction in benefits of close to 9 percent under the new cost-of-living adjustment formula apparently supported by members of the committee."

The claim is that the current method used to calculate the "cost of living" increase for Social Security recipients is overly generous. The claim is that when the price of apples, for example, in the "basket of goods" used to figure the consumer price index goes up, we don't continue to buy apples but, instead, purchase a less expensive fruit.

While this may be true, let's think about the things that seniors purchase. Look back over your expenses for the last year and I'll bet you find a large amount of your spending was on medical/dental expenses and prescription drugs. When medical costs go up, do you switch to the less expensive witch doctor? When prescription drug prices rise, do you switch to the less expensive herbal medicines? I didn't think so.

Notice that the 3% reduction is for the folks newest to Social Security. The older folks who have been receiving benefits for the longest time would have their benefits recalculated from the time they began receiving Social Security using the stingier cpi formula, thus the 9% benefit reduction for the 90-year-old mentioned above.

By the way, let's remember that Social Security has not contributed one penny to the deficit! It currently has a surplus which will allow current benefits to be paid for the next 25 years, and at a level of 75% of current benefits beyond that. If we simply remove the cap on earnings subject to Social Security taxes (currently at $109,000) any Social Security funding problem disappears.

Is Social Security an overly generous program? According to Jeff Madrick: " The average payment is $14,000 a year. It is getting less generous. It used to replace 55 percent of retirement income, but benefits were reduced in the 1980s. It now covers on average 41 percent of retirement income. In 2031, it will cover 32 percent of retirement income."

Madrick continues: "What will drive future budget deficits is Medicare and Medicaid, not Social Security, and for the umpteenth time, the reason is that overall health costs are expected to rise quickly. This means we have to reform our uniquely inefficient healthcare system. Congress is, as usual, diverting us from the real issues. No wonder Americans like Occupy Wall Street."

Who's on the "supercommittee?" Click here for a CNN/Money post giving information about the committee members.