Several years ago, a poll by U.S. News and World Report found that Americans consider the 1935 Social Security Act to be one of the most beloved and popular laws ever enacted in our country.

Similarly, a recent survey by the Associated Press–NORC Center for Public Affairs Research found strong opposition to any changes in calculating Social Security benefits that could reduce benefits, including proposed changes to the method for calculating cost-of-living adjustments.

That poll also found that Americans support keeping the current retirement age.Only 10 percent of respondents said the age to qualify for full Social Security benefits should be higher than the current 67.

And there was strong support for bolstering the system’s solvency by increasing the cap on earnings subject to Social Security taxes so that higher earners pay more.

It is easy to understand why Americans love Social Security: The program works.

Last year, Social Security payments kept more than 15 million Americans out of poverty, census data shows.

(Census data also, by the way, revealed that out-of-pocket medical costs are the most common cause of poverty. This shows how important it is that Obamacare is increasing the number of people with health insurance.)

A proposed change to Social Security

There is discussion in Washington about changing how the Social Security cost-of-living adjustment is calculated. The current calculation is based on the Consumer Price Index for Urban Wage Earners and Clerical Workers (CPI-W), but there is a proposal to switch to a chained CPI.

The chained CPI carries the assumption that when prices rise consumers will substitute other goods and services that cost less. This understates the effect of inflation on retirees because elderly people have less opportunity for switching to lower-cost goods and services, such as their out-of-pocket expenses for medical care.

The net effect of a chained CPI would be to lower cost-of-living increases to Social Security recipients, gradually eroding their purchasing power and standard of living. In contrast, there is a proposal to switch to the CPI-E, an experimental price index for the elderly that more accurately measures the inflation experienced by older Americans.

Watch for a big fight on this early next year when the next federal budget crisis occurs.

Losses, wins in pension battles

Public employees suffered two recent losses in battles against pension cuts. In Detroit, a judge ruled that the city could cut its public employees’ pensions as part of its reorganization under bankruptcy. And in Illinois, the Legislature approved cutting cost-of-living adjustments for state employees’ pensions and increasing the retirement age.

In both Detroit and Illinois, the governments are, in effect, trying to cheat public employees out of their deferred compensation. Such attacks on pensions could lead to more elderly people falling into poverty despite having worked at jobs that they thought promised retirement security. The situation is different in New York City, where our pension system is very well-funded and the city’s fiscal situation is very strong.

There has been one recent win. As we reported in our last column, Cincinnati held a referendum on whether to close the city’s pension system to new employees beginning Jan. 1, 2014 and put new employees into a defined contribution plan similar to our Tax-Deferred Annuity,

We are happy to report that by a vote of about 4 to 1, Cincinnati citizens showed their appreciation of their public employees. The campaign led by labor unions and the Alliance for Retired Americans (ARA) defeated the anti-worker proposal. Congratulations to our brothers and sisters in Cincinnati!